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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-1879
Janus Investment Fund
(Exact name of registrant as specified in charter)
151 Detroit Street, Denver, Colorado 80206
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
Stephanie Grauerholz-Lofton, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-333-3863
Date of fiscal year end: 10/31
Date of reporting period: 4/30/09
Item 1 — | Reports to Shareholders |
2009 Semiannual Report
Janus Growth Funds
Janus Fund
Janus Enterprise Fund
Janus Orion Fund
Janus Research Fund
Janus Triton Fund
Janus Twenty Fund
Janus Venture Fund
Janus Global Life Sciences Fund
Janus Global Technology Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199janus.gif)
Table of Contents
Janus Growth Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 4 | |
Management Commentary and Schedules of Investments | ||
Janus Fund | 5 | |
Janus Enterprise Fund | 13 | |
Janus Orion Fund | 21 | |
Janus Research Fund | 30 | |
Janus Triton Fund | 39 | |
Janus Twenty Fund | 46 | |
Janus Venture Fund | 53 | |
Janus Global Life Sciences Fund | 63 | |
Janus Global Technology Fund | 71 | |
Statements of Assets and Liabilities | 80 | |
Statements of Operations | 82 | |
Statements of Changes in Net Assets | 84 | |
Financial Highlights | 86 | |
Notes to Schedules of Investments | 91 | |
Notes to Financial Statements | 97 | |
Additional Information | 112 | |
Explanations of Charts, Tables and Financial Statements | 115 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders (unaudited)
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. During the past six months we have seen some of the most challenging market and economic conditions in a generation. Throughout these turbulent times, we have maintained our disciplined, long-term investment approach and research-driven philosophy.
As a result, our long-term results generally remained strong relative to our peers. For the one-year period ended April 30, 2009, 50% of Janus retail funds ranked within Lipper’s top two quartiles. Looking longer-term, 85% of our funds achieved first- or second-quartile Lipper rankings for the three-year period and 86% ranked in Lipper’s top two quartiles for the five-year period ended April 30, 2009. (Lipper rankings are based on total returns. See complete rankings on page 3.)
Major Market Themes
Despite a relatively strong finish, most markets were modestly lower as the most recent six-month period (ended April 30, 2009) came to a close. Consequences from the credit crisis and recession concerns dictated market performance for much of the period. U.S. markets reached 12-year lows and most global markets declined to 5-year lows in March, before rallying late in the period.
The U.S. economy was still in the throes of a recession at period end. Declining asset values in U.S. residential real estate continued to weigh on financial institutions and their ability to extend credit to consumers. Compounding the headwinds for the consumer was a labor market that continued to struggle with more than 5.7 million jobs lost since January 2008. However, late in the period, some signs emerged that the rate of decline in the U.S. economy could be slowing. Retail sales improved through April (though they remained at low absolute levels) and mortgage applications were on the rise in March and April. A slowing in the rate of decline in U.S. manufacturing and consumer confidence indicators provided some additional support to the equity markets.
Improving credit markets, better-than expected earnings reports from some large banks and easing of accounting rules for banks’ troubled assets, also helped to fuel the late period rally, suggesting to the market that the ailing banking industry could be on the mend. Financials remained the worst performing global sector during the six-month period, despite leading the rally off of the March lows. Materials and information technology outperformed, posting modest gains while growth stocks significantly outperformed value stocks. Stocks of mid-sized companies were the strongest performers in the period while large-cap stocks topped small-caps. Within fixed income, the flight-to-quality that was strongly evident in the second half of 2008 finally eased beginning in January. Driven by the performance of the lower quality debt, high-yield corporate spreads relative to Treasuries narrowed. Long-term government bond yields rebounded from historic lows reached in December.
Outlook
At the end of the period, we were encouraged by the slowing in the rate of decline in the U.S. and global economies and the continued progress toward normalization in the credit markets. Though we were pleased to see stocks on the rise, we believe it may be some time before credit markets return to normal and the economy and equity markets fully recover.
We think the moves to date by central banks and governments worldwide will help the global economy recover. However, their actions will likely take time to work and could, in the longer term, fuel inflation. That said, we are not overly concerned about inflation rising over the near term, nor do we believe economic growth will necessarily return to the rapid pace of recent years. Looking forward, the economy will likely be characterized by de-leveraging across consumers and businesses, and a higher personal savings rate.
Given that we have not seen a significant differentiation of fundamentals expressed in stock prices yet, we feel the opportunities for bottom-up, research-driven security selection are tremendous. Our unconstrained approach to research fosters an entrepreneurial culture that encourages our investment team to “go anywhere” to find the most compelling investment ideas around the globe. And we believe we have the right team in place to take advantage of this period in history.
We sincerely appreciate your continued investment in Janus funds. We recognize the confidence that you have placed in us
Janus Growth Funds April 30, 2009 1
Continued
and we continue in our quest to deliver strong, consistent fund performance to you, our investors.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
The opinions are those of the authors as of April 30, 2009 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Past performance is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Rankings discussed do not indicate positive fund performance. Most funds have experienced negative or poor short-term performance.
2 Janus Growth Funds April 30, 2009
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/09 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 52 | 435/844 | 40 | 284/724 | 39 | 233/610 | 60 | 184/310 | 15 | 3/20 | 47 | 380/808 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 52 | 286/550 | 10 | 43/476 | 8 | 30/393 | 77 | 142/184 | 32 | 14/43 | 25 | 130/528 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 96 | 438/457 | 22 | 77/349 | 4 | 10/290 | N/A | N/A | 25 | 43/174 | 86 | 381/443 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 80 | 672/844 | 19 | 132/724 | 12 | 72/610 | 44 | 134/310 | 4 | 3/87 | 17 | 118/710 | |||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 3 | 15/587 | 1 | 5/501 | N/A | N/A | N/A | N/A | 1 | 1/443 | 1 | 4/508 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 80 | 668/844 | 1 | 1/724 | 1 | 2/610 | 21 | 63/310 | 5 | 2/40 | 35 | 283/824 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 48 | 279/587 | 36 | 176/501 | 34 | 136/408 | 65 | 132/204 | 10 | 1/10 | 27 | 77/286 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Global Healthcare/Biotechnology Funds | 75 | 39/51 | 45 | 21/46 | 54 | 24/44 | 19 | 3/15 | 15 | 2/13 | 29 | 15/51 | |||||||||||||
Janus Global Technology Fund (12/98) | Global Science & Technology Funds | 18 | 14/81 | 16 | 12/76 | 28 | 19/69 | 29 | 6/20 | 25 | 5/19 | 25 | 19/76 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 3 | 12/524 | 2 | 4/385 | 1 | 2/290 | 11 | 15/148 | 4 | 1/27 | 1 | 2/346 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 98 | 736/756 | 41 | 247/612 | 5 | 21/460 | N/A | N/A | 18 | 38/213 | 18 | 38/213 | |||||||||||||
Janus Research Core Fund(1)(2) (6/96) | Large-Cap Core Funds | 88 | 802/914 | 83 | 646/783 | 21 | 136/650 | 25 | 90/360 | 4 | 8/212 | 82 | 722/884 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 57 | 514/914 | 73 | 567/783 | 26 | 169/650 | 30 | 105/360 | 8 | 6/81 | 48 | 417/884 | |||||||||||||
INTECH Risk-Managed Core Fund(3) (2/03) | Multi-Cap Core Funds | 55 | 415/756 | 58 | 354/612 | 37 | 167/460 | N/A | N/A | 42 | 157/377 | 42 | 157/377 | |||||||||||||
Perkins Mid Cap Value Fund - Investor Shares(1)(4)(5) (8/98) | Mid-Cap Value Funds | 9 | 27/320 | 4 | 10/256 | 4 | 6/192 | 3 | 2/67 | 4 | 2/56 | 4 | 2/56 | |||||||||||||
Perkins Small Cap Value Fund - Investor Shares(4)(6) (10/87) | Small-Cap Core Funds | 1 | 7/763 | 2 | 7/614 | 8 | 39/496 | 14 | 32/231 | 6 | 7/125 | 6 | 7/125 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 5 | 25/583 | 4 | 16/482 | 5 | 20/402 | 21 | 44/209 | 10 | 2/20 | 6 | 32/535 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 11 | 50/457 | 15 | 55/387 | 14 | 46/334 | 9 | 18/203 | 6 | 5/92 | 16 | 51/325 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 1 | 1/260 | 2 | 4/214 | 3 | 5/179 | 8 | 7/90 | 16 | 4/24 | 5 | 12/254 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 8 | 40/506 | 21 | 79/380 | 56 | 165/297 | N/A | N/A | 11 | 21/206 | 43 | 145/342 | |||||||||||||
Janus Global Research Fund(1) (2/05) | Global Funds | 56 | 280/506 | 10 | 35/380 | N/A | N/A | N/A | N/A | 6 | 18/321 | 6 | 18/321 | |||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 46 | 541/1,197 | 2 | 12/894 | 1 | 2/707 | 3 | 10/369 | 2 | 2/107 | 1 | 2/647 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 68 | 344/506 | 57 | 216/380 | 91 | 271/297 | 91 | 140/153 | 39 | 7/17 | 62 | 371/599 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 75 | 504/677 | 14 | 75/539 | N/A | N/A | N/A | N/A | 8 | 38/533 | 8 | 38/533 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 32 | 167/524 | 6 | 23/385 | N/A | N/A | N/A | N/A | 5 | 19/380 | 5 | 19/380 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 32 | 133/428 | 10 | 33/335 | N/A | N/A | N/A | N/A | 5 | 13/317 | 5 | 13/317 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Formerly named Janus Fundamental Equity Fund. | |
(3) | Formerly named INTECH Risk-Managed Stock Fund. | |
(4) | Rating is for the Investor Share class only; other classes may have different performance characteristics. | |
(5) | Formerly named Janus Mid Cap Value Fund. | |
(6) | Formerly named Janus Small Cap Value Fund. |
*Closed to new investors.
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc., a wholly-owned subsidiary of Reuters, is a nationally recognized organization that ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
Janus Growth Funds April 30, 2009 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ manager as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs (1) transaction costs, such as underlying funds’ redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in a 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-month period from November 1, 2008 to April 30, 2009.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, 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 first line 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 second line of the table in each example 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.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive Janus Triton Fund’s total operating expenses, excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least March 1, 2010. Expenses in the example reflect application of this waiver. Had the waiver not been in effect, your expenses would have been higher. More information regarding the waiver is available in the Fund’s prospectus.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is 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.
4 Janus Growth Funds April 30, 2009
Janus Fund (unaudited) | Ticker: JANSX |
Fund Snapshot
This Fund seeks to invest in the common equity of large capitalization companies with strong track records of healthy free cash flow growth and prudent capital allocation. We focus on companies that demonstrate “smart growth” – sustainable growth that creates value for equity holders.
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
lead co-portfolio manager
![(DANIEL RIFF PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199priffdan.jpg)
Daniel Riff
co-portfolio manager
Performance Review
For the six-month period ended April 30, 2009, Janus Fund returned 0.09%, outperforming its primary benchmark, the Russell 1000® Growth Index, which returned -1.52%. The Fund also outperformed its secondary benchmark, the S&P 500® Index, which returned -8.53%.
Economic Summary
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
The Fund’s outperformance was largely driven by our holdings in information technology and consumer staples. Our healthcare holdings underperformed on a relative basis, as did our selections within consumer discretionary. Healthcare was largely hurt as the threat of aggressive healthcare reform weighed on the sector. Compounding the sell off was the late period shift out of typically defensive areas in favor of taking on more risk.
Consumer Staples and Technology Company Lead Contributors
Global brewer Anheuser-Busch InBev, a result of Belgium-based InBev’s acquisition of American brewer Anheuser-Busch, was the largest individual contributor during the period. The stock struggled late in 2008 amid concerns over the combined company’s ability to service the increased debt load. The stock price rebounded off of its November lows and continued to trend higher through April as Anheuser-Busch InBev made good progress towards selling off assets to pay down acquisition-related debt. At the end of the period, we remained attracted to the company’s potential pricing power in the U.S. market given the consolidated competitive landscape and management’s emphasis on returns on invested capital.
The second largest contributor was Apple, Inc., which also rebounded late in the period. Despite a weak economy, the technology company posted solid quarterly results that showed better-than-expected non-U.S. demand for its iPod music players, Macintosh computers and iPhones. While we recognize the economically sensitive nature of this company, we felt the valuation at period end underestimated the long-term growth profile of its consumer-electronic products lineup. We also believe demographic trends and Apple’s popularity among the younger population represents a favorable tailwind for the company.
Goldman Sachs, an investment bank, rebounded off depressed levels in the fourth quarter of 2008, as investors viewed it among the survivors of the financial crisis. We believe Goldman Sachs is poised to capture market share in the U.S. and gain pricing power in the dramatically changed competitive landscape for the investment banking business.
Janus Growth Funds April 30, 2009 5
Janus Fund (unaudited)
Select Healthcare Holdings and Financials Diminished Performance
Celgene Corp. was the Fund’s largest detractor during the period, hurt in February, along with many healthcare names, after the U.S. Administration proposed aggressive healthcare reform. The stock suffered another decline in early April after the company said it expects 2009 profits to be at the lower end of its previous forecast. While we reduced our healthcare position overall, we added to our position in Celgene, because we think the company will continue to generate returns on its single source, cancer-fighting drug Revlimid.
Despite rebounding late in the period, Microsoft Corp. finished lower, hurt in January by a disappointing earnings report. The company’s results for its March quarter were generally in line with overall expectations and provided some fuel for continued strength as investors became more optimistic about the macro-outlook. While the software giant was relatively inexpensive at period end given its roughly 10% free cash flow yield, we reduced our position in the company. Our view that it is not likely to be a relative outperformer over the long-term and there were better risk/reward opportunities.
JPMorgan Chase was impacted by general negative investor sentiment towards the financials sector during much of the period. While we recognize near-term earnings could be pressured from rising real estate losses and weak capital markets, we believe the company has been reasonably proactive in building capital and reserves to offset potential credit losses. Looking ahead, we expect JPMorgan to grow its earnings power by taking market share and making value accretive acquisitions.
Other Changes to the Fund
Overall, we have been looking at a wider range of potential outcomes (positive and negative) across our holdings and any potential investment opportunity. As a result of the potential for aggressive U.S. Government healthcare reform, we reduced our exposure in many of our healthcare holdings during the period, although we still had a slight overweight relative to the benchmark. Across the portfolio we were favoring companies (both new and existing positions) that we believed had overly pessimistic expectations priced in at period end. During the period, we added to early cycle technology names and some consumer-related stocks which we believe have less exposure to discretionary spending.
Under certain circumstances and market conditions, we may initiate positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Outlook
In our view, fiscal and monetary stimuli and other U.S. Government plans have been steps in the right direction. We believe this flood of liquidity should eventually help normalize credit markets and spark economic activity. However, we think the economic environment is likely to remain difficult over the near term as credit markets still have room to improve and we don’t see an imminent rebound in consumer spending. We also believe earnings power and returns seem unlikely to reach previous cycle highs coming out of the current economic contraction. Within this environment, we are favoring names we believe have company-specific drivers trading at overly punitive valuations; we are avoiding names that we believe require a strong macro-economic tailwind to perform well.
Thank you for your investment in Janus Fund.
6 Janus Growth Funds April 30, 2009
(unaudited)
Janus Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Anheuser-Busch InBev N.V. | 1.82% | |||
Apple, Inc. | 0.76% | |||
Goldman Sachs Group, Inc. | 0.52% | |||
Marvell Technology Group, Ltd. | 0.48% | |||
Kla-Tencor Corp. | 0.44% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -0.87% | |||
Microsoft Corp. | -0.60% | |||
JPMorgan Chase & Co. | -0.52% | |||
Berkshire Hathaway, Inc. – Class B | -0.50% | |||
Devon Energy Corp. | -0.50% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Information Technology | 3.03% | 27.68% | 29.49% | |||||||||
Consumer Staples | 1.53% | 15.47% | 14.12% | |||||||||
Telecommunication Services | 0.42% | 2.40% | 0.76% | |||||||||
Consumer Discretionary | 0.10% | 4.52% | 9.65% | |||||||||
Materials | -0.14% | 3.47% | 3.81% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Health Care | -2.08% | 17.50% | 15.53% | |||||||||
Financials | -0.99% | 7.00% | 3.47% | |||||||||
Energy | -0.80% | 8.72% | 8.56% | |||||||||
Utilities | -0.58% | 3.28% | 1.94% | |||||||||
Industrials | -0.24% | 9.96% | 12.68% |
* | 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. |
Janus Growth Funds April 30, 2009 7
Janus Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Anheuser-Busch InBev N.V. Brewery | 5.9% | |||
Apple, Inc. Computers | 4.0% | |||
Cisco Systems, Inc. Networking Products | 3.2% | |||
Crown Castle International Corp. Wireless Equipment | 2.9% | |||
Occidental Petroleum Corp. Oil Companies – Exploration and Production | 2.8% | |||
18.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p07.gif)
Emerging markets comprised 1.9% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t07.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c07.gif)
8 Janus Growth Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m07.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Fund | 0.09% | –33.05% | –2.07% | –3.70% | 11.95% | 0.88% | |||||||
Russell 1000® Growth Index | –1.52% | –31.57% | –2.39% | –4.40% | N/A** | ||||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 9.53% | ||||||||
Lipper Quartile | – | 3rd | 2nd | 3rd | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 435/844 | 233/610 | 184/310 | 3/20 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of the expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 9
Janus Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 5, 1970 | |
** | Since inception return is not shown for the index because the index’s inception date, December 31, 1978, differs significantly from the Fund’s inception date. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,000.90 | $ | 4.47 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.33 | $ | 4.51 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.90%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
10 Janus Growth Funds April 30, 2009
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 95.2% | ||||||||||||
Aerospace and Defense – 1.6% | ||||||||||||
791,792 | Lockheed Martin Corp. | $ | 62,179,426 | |||||||||
1,096,278 | Northrop Grumman Corp. | 53,005,041 | ||||||||||
115,184,467 | ||||||||||||
Agricultural Chemicals – 1.3% | ||||||||||||
421,194 | Monsanto Co. | 35,755,159 | ||||||||||
697,954 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 60,366,041 | ||||||||||
96,121,200 | ||||||||||||
Applications Software – 1.8% | ||||||||||||
1,947,932 | Citrix Systems, Inc.* | 55,574,500 | ||||||||||
3,762,834 | Microsoft Corp. | 76,235,017 | ||||||||||
131,809,517 | ||||||||||||
Athletic Footwear – 0.7% | ||||||||||||
1,339,026 | Adidas A.G.** | 50,490,298 | ||||||||||
Beverages – Non-Alcoholic – 0.6% | ||||||||||||
1,010,010 | Coca-Cola Co. | 43,480,931 | ||||||||||
Brewery – 5.9% | ||||||||||||
13,980,829 | Anheuser-Busch InBev N.V.** | 426,657,015 | ||||||||||
10,090,764 | Anheuser-Busch InBev N.V. – VVPR Strips*,** | 26,698 | ||||||||||
426,683,713 | ||||||||||||
Casino Hotels – 0.9% | ||||||||||||
7,360,109 | Crown, Ltd.** | 36,750,903 | ||||||||||
727,771 | Wynn Resorts, Ltd.* | 28,550,456 | ||||||||||
65,301,359 | ||||||||||||
Computers – 7.1% | ||||||||||||
2,299,291 | Apple, Inc.* | 289,319,786 | ||||||||||
1,625,407 | Hewlett-Packard Co. | 58,482,144 | ||||||||||
1,276,359 | International Business Machines Corp. | 131,733,012 | ||||||||||
553,212 | Research In Motion, Ltd. (U.S. Shares)* | 38,448,234 | ||||||||||
517,983,176 | ||||||||||||
Consumer Products – Miscellaneous – 0.9% | ||||||||||||
1,319,234 | Kimberly-Clark Corp. | 64,827,159 | ||||||||||
Cosmetics and Toiletries – 1.3% | ||||||||||||
1,573,009 | Colgate-Palmolive Co. | 92,807,531 | ||||||||||
Diversified Operations – 2.9% | ||||||||||||
1,842,547 | Danaher Corp. | 107,678,447 | ||||||||||
1,760,189 | Illinois Tool Works, Inc. | 57,734,199 | ||||||||||
1,685,226 | Tyco International, Ltd. (U.S. Shares) | 40,040,970 | ||||||||||
205,453,616 | ||||||||||||
E-Commerce/Services – 1.2% | ||||||||||||
5,313,297 | eBay, Inc.* | 87,510,002 | ||||||||||
Electric Products – Miscellaneous – 0.6% | ||||||||||||
1,278,791 | Emerson Electric Co. | 43,530,046 | ||||||||||
Electronic Components – Semiconductors – 0.7% | ||||||||||||
2,804,747 | Texas Instruments, Inc. | 50,653,731 | ||||||||||
Electronic Connectors – 1.0% | ||||||||||||
2,047,479 | Amphenol Corp. – Class A | 69,286,689 | ||||||||||
Electronic Measuring Instruments – 0.0% | ||||||||||||
58 | Keyence Corp.** | 10,237 | ||||||||||
Enterprise Software/Services – 2.7% | ||||||||||||
10,021,961 | Oracle Corp. | 193,824,726 | ||||||||||
Finance – Investment Bankers/Brokers – 3.5% | ||||||||||||
1,149,621 | Goldman Sachs Group, Inc. | 147,726,298 | ||||||||||
3,131,360 | JPMorgan Chase & Co. | 103,334,880 | ||||||||||
251,061,178 | ||||||||||||
Food – Miscellaneous/Diversified – 0.9% | ||||||||||||
1,990,462 | Nestle S.A. | 64,755,953 | ||||||||||
Food – Retail – 1.7% | ||||||||||||
24,259,071 | Tesco PLC** | 120,400,556 | ||||||||||
Forestry – 0.8% | ||||||||||||
1,582,985 | Weyerhaeuser Co. | 55,816,051 | ||||||||||
Gold Mining – 0.6% | ||||||||||||
1,042,690 | Newmont Mining Corp. | 41,957,846 | ||||||||||
Independent Power Producer – 0.7% | ||||||||||||
2,841,527 | NRG Energy, Inc.* | 51,090,655 | ||||||||||
Industrial Gases – 1.5% | ||||||||||||
1,458,114 | Praxair, Inc. | 108,789,886 | ||||||||||
Internet Security – 1.1% | ||||||||||||
4,446,775 | Symantec Corp.* | 76,706,869 | ||||||||||
Investment Management and Advisory Services – 1.1% | ||||||||||||
2,095,073 | T. Rowe Price Group, Inc. | 80,702,212 | ||||||||||
Medical – Biomedical and Genetic – 4.3% | ||||||||||||
4,087,428 | Celgene Corp.* | 174,614,924 | ||||||||||
2,929,083 | Gilead Sciences, Inc.* | 134,152,001 | ||||||||||
308,766,925 | ||||||||||||
Medical – Drugs – 2.2% | ||||||||||||
1,270,898 | Roche Holding A.G. | 160,640,076 | ||||||||||
Medical – HMO – 2.3% | ||||||||||||
7,115,288 | UnitedHealth Group, Inc. | 167,351,574 | ||||||||||
Medical Products – 2.6% | ||||||||||||
1,780,841 | Baxter International, Inc. | 86,370,789 | ||||||||||
3,149,080 | Covidien, Ltd. | 103,856,658 | ||||||||||
190,227,447 | ||||||||||||
Metal Processors and Fabricators – 1.1% | ||||||||||||
1,049,101 | Precision Castparts Corp. | 78,535,701 | ||||||||||
Multi-Line Insurance – 1.4% | ||||||||||||
2,120,024 | ACE, Ltd. (U.S. Shares) | 98,199,512 | ||||||||||
Multimedia – 1.3% | ||||||||||||
3,803,707 | Liberty Media Corp. – Entertainment – Class A* | 92,620,265 | ||||||||||
Networking Products – 3.2% | ||||||||||||
11,849,671 | Cisco Systems, Inc.* | 228,935,644 | ||||||||||
Oil and Gas Drilling – 0.3% | ||||||||||||
777,643 | Helmerich & Payne, Inc. | 23,966,957 | ||||||||||
Oil Companies – Exploration and Production – 6.2% | ||||||||||||
2,233,671 | EOG Resources, Inc. | 141,793,435 | ||||||||||
3,585,769 | Occidental Petroleum Corp. | 201,842,936 | ||||||||||
2,939,188 | XTO Energy, Inc. | 101,872,256 | ||||||||||
445,508,627 | ||||||||||||
Oil Companies – Integrated – 2.5% | ||||||||||||
2,251,176 | Hess Corp. | 123,341,933 | ||||||||||
1,763,577 | Petroleo Brasileiro S.A. (ADR) | 59,203,280 | ||||||||||
182,545,213 | ||||||||||||
Reinsurance – 1.7% | ||||||||||||
39,844 | Berkshire Hathaway, Inc. – Class B* | 122,121,860 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 11
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Retail – Building Products – 0.5% | ||||||||||||
1,373,772 | Home Depot, Inc. | $ | 36,157,679 | |||||||||
Retail – Discount – 1.3% | ||||||||||||
1,805,313 | Wal-Mart Stores, Inc. | 90,987,775 | ||||||||||
Retail – Drug Store – 2.5% | ||||||||||||
5,683,275 | CVS Caremark Corp.** | 180,614,480 | ||||||||||
Retail – Office Supplies – 0.5% | ||||||||||||
1,696,455 | Staples, Inc. | 34,980,902 | ||||||||||
Retail – Restaurants – 0.7% | ||||||||||||
924,364 | McDonald’s Corp. | 49,259,358 | ||||||||||
Semiconductor Components/Integrated Circuits – 2.4% | ||||||||||||
8,717,838 | Marvell Technology Group, Ltd.* | 95,721,862 | ||||||||||
46,231,664 | Taiwan Semiconductor Manufacturing Co., Ltd. | 77,260,840 | ||||||||||
172,982,702 | ||||||||||||
Semiconductor Equipment – 2.0% | ||||||||||||
5,297,328 | KLA-Tencor Corp. | 146,947,879 | ||||||||||
Telecommunication Equipment – Fiber Optics – 1.2% | ||||||||||||
5,817,013 | Corning, Inc. | 85,044,730 | ||||||||||
Tobacco – 0.3% | ||||||||||||
1,467,865 | Altria Group, Inc. | 23,970,235 | ||||||||||
Toys – 0.5% | ||||||||||||
137,180 | Nintendo Co., Ltd.** | 36,708,808 | ||||||||||
Transportation – Railroad – 1.1% | ||||||||||||
2,037,088 | Canadian National Railway Co. (U.S. Shares) | 82,339,097 | ||||||||||
Transportation – Services – 2.2% | ||||||||||||
688,878 | C.H. Robinson Worldwide, Inc. | 36,620,754 | ||||||||||
2,290,043 | United Parcel Service, Inc. – Class B | 119,860,851 | ||||||||||
156,481,605 | ||||||||||||
Web Portals/Internet Service Providers – 2.3% | ||||||||||||
281,246 | Google, Inc. – Class A* | 111,364,979 | ||||||||||
3,689,869 | Yahoo!, Inc.* | 52,728,228 | ||||||||||
164,093,207 | ||||||||||||
Wireless Equipment – 5.5% | ||||||||||||
8,580,924 | Crown Castle International Corp.* | 210,404,256 | ||||||||||
3,378,817 | QUALCOMM, Inc. | 142,991,535 | ||||||||||
4,872,296 | Telefonaktiebolaget L.M. Ericsson – Class B | 42,054,277 | ||||||||||
395,450,068 | ||||||||||||
Total Common Stock (cost $7,398,541,065) | 6,861,677,930 | |||||||||||
Corporate Bonds – 0.3% | ||||||||||||
Electric – Integrated – 0.3% | ||||||||||||
$ | 13,482,000 | Energy Future Holdings Corp. 10.8750%, 11/1/17 | 9,201,465 | |||||||||
23,052,000 | Texas Competitive Electric Holdings Co. LLC, 10.2500%, 11/1/15 | 13,082,010 | ||||||||||
Total Corporate Bonds (cost $37,187,577) | 22,283,475 | |||||||||||
Money Market – 3.9% | ||||||||||||
280,510,490 | Janus Cash Liquidity Fund LLC, 0% (cost $280,510,490) | 280,510,490 | ||||||||||
Total Investments (total cost $7,716,239,132) – 99.4% | 7,164,471,895 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.6% | 40,780,207 | |||||||||||
Net Assets – 100% | $ | 7,205,252,102 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 36,750,902 | 0.5% | |||||
Belgium | 426,683,714 | 6.0% | ||||||
Bermuda | 199,578,520 | 2.8% | ||||||
Brazil | 59,203,280 | 0.8% | ||||||
Canada | 181,153,372 | 2.5% | ||||||
Germany | 50,490,298 | 0.7% | ||||||
Japan | 36,719,045 | 0.5% | ||||||
Sweden | 42,054,277 | 0.6% | ||||||
Switzerland | 363,636,511 | 5.1% | ||||||
Taiwan | 77,260,840 | 1.1% | ||||||
United Kingdom | 120,400,556 | 1.7% | ||||||
United States†† | 5,570,540,580 | 77.7% | ||||||
Total | $ | 7,164,471,895 | 100.0% |
†† | Includes Short-Term Securities (73.8% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
Australian Dollar 5/14/09 | 4,300,000 | $ | 3,121,432 | $ | (123,472) | |||||||
Australian Dollar 6/18/09 | 5,500,000 | 3,982,240 | (130,315) | |||||||||
Australian Dollar 6/25/09 | 17,600,000 | 12,737,264 | (235,984) | |||||||||
British Pound 5/14/09 | 7,000,000 | 10,352,120 | (328,750) | |||||||||
British Pound 6/18/09 | 30,000,000 | 44,365,301 | (482,801) | |||||||||
British Pound 6/25/09 | 12,900,000 | 19,077,148 | (166,908) | |||||||||
Euro 5/14/09 | 89,400,000 | 118,262,312 | 2,695,888 | |||||||||
Euro 6/18/09 | 37,500,000 | 49,598,175 | (1,014,300) | |||||||||
Euro 6/25/09 | 114,000,000 | 150,772,195 | (2,287,193) | |||||||||
Japanese Yen 5/14/09 | 198,000,000 | 2,008,401 | 7,276 | |||||||||
Japanese Yen 6/18/09 | 950,000,000 | 9,642,083 | 48,432 | |||||||||
Japanese Yen 6/25/09 | 960,000,000 | 9,744,706 | 193,183 | |||||||||
Total | $ | 433,663,377 | $ | (1,824,944) |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Growth Funds April 30, 2009
Janus Enterprise Fund (unaudited) | Ticker: JAENX |
Fund Snapshot
This Fund invests in medium-sized companies that have grown large enough to be well established but are small enough to still have room to grow in our view.
![(BRIAN DEMAIN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pdemainb.jpg)
Brian Demain
portfolio manager
Performance Overview
During the six-months ended April 30, 2009, Janus Enterprise Fund returned 0.73%. Meanwhile, the Fund’s primary benchmark, the Russell Midcap® Growth Index, returned 2.71%. The Fund’s secondary benchmark, the S&P MidCap 400 Index, returned -0.18% for the same time period.
Economic Overview
The economy entered a new phase of a prolonged recession following the bankruptcy of Lehman Brothers last September. During the six-month period covered in this report, the economy declined at an unprecedented rate and capital markets froze. Businesses and consumers effectively deferred whatever expenditures, either capital or operating, that could be deferred, until they saw a floor to economic activity. This led to the two steepest quarters of Gross Domestic Product (GDP) decline since 1980. Recent macroeconomic data points, including consumer confidence, manufacturing Purchasing Managers Index (PMI), and existing home sales indicated to us that the economy, while not delivering robust growth, may not be declining at the same precipitous rate at which it had been during the fourth quarter 2008 and the early part of the first quarter 2009.
The Fund did not perform as well as we had hoped it would during this challenging period. Exposure to companies that required healthy capital markets for their businesses to succeed negatively impacted performance. Businesses require the capital markets for different reasons. Some businesses require access to the capital markets to roll over existing debt maturities, some businesses require access to the capital markets to fund their growth, and some require access to the capital markets for their customers to finance purchases. Stocks of businesses that fall under each of these categories struggled during the six-month period. While we believed the Fund was positioned well for a normal recessionary environment, it was not well positioned for the financial crisis that occurred. Stocks of businesses with cash flows that have historically been somewhat insulated from the economic cycle, but with some debt, performed well through the early part of 2008 but struggled once the financial crisis began as the market became concerned about these businesses’ ability to refinance maturing debt. During the period, on a stock-by-stock basis, we assessed the risk and reward in the securities that depended on the capital markets. We exited some positions, added to others, and left others untouched.
Looking at the portfolio at period end, we believe we owned a collection of businesses that have the resources to make investments today that will position the companies well to grow in an economic rebound.
Select Healthcare and Energy Stocks Topped the List of Detractors
Biotechnology holding Celgene Corp. declined amid worries over potential healthcare reform in the U.S. Specifically, concerns over possible reductions in Medicare and Medicaid reimbursement and higher corporate tax rates gave investors a reason to shy away from the group overall. We think Celgene’s key cancer drug Revlimid has great growth potential with high barriers to entry given the longer treatment cycles. We also believe its business model is becoming more predictable given signs that the patient population is continuing their use of Revlimid for a multi-year period.
Forest Oil, an oil exploration and production company specializing in oil and natural gas, was impacted by weak commodity prices with natural gas prices falling more than 50% from the peak in early July. We recognize the potential for further weakness in this name should natural gas prices decline further. Nevertheless, we think the company has a solid management team with a track record for increasing production while spending within their cash flow. Nevertheless, we reduced our position in the company, allocating the assets to what we believe are more attractive risk/reward opportunities.
Within technology, Microsemi Corp. declined during the period amid concern over the CEO’s credibility and potential slowing in overall technology spending. An anticompetitive lawsuit also provided a negative backdrop for the stock. While we continue to like the fundamentals of the company’s business, we felt the credibility issue of the CEO caused too much near-term uncertainty, so we exited the position.
Technology, Consumer Discretionary and Materials Stocks Aided Performance
CommScope, an information technology company involved in providing infrastructure solutions for communication and wireless networks, struggled early in the period amid
Janus Growth Funds April 30, 2009 13
Janus Enterprise Fund (unaudited)
disappointing quarterly results and a weak outlook. In addition, the company had been a relative underperformer given its leverage profile and concerns over its debt obligations and covenants. We maintained our conviction in the name throughout, believing the market’s reaction was excessive and that the company was undervalued. As the period came to a close, CommScope’s stock price rose sharply on an upbeat profit forecast and a reduction in investors’ concern about the company’s leverage profile.
Hong Kong-based apparel outsourcer Li & Fung rose during the period on the announcement of several contract wins. While many of its clients, mostly U.S. based retailers, have had a difficult time due to the slowdown in consumer spending, we believe Li & Fung has been able offset some of the weaker demand with market share gains. At the end of the period, we continued to be attracted to the company’s economies of scale, balance sheet health, and organic growth potential.
In the back half of 2008 as the credit crisis froze credit in global markets and caused a rapid deceleration in the global economy, Potash Corporation of Saskatchewan fell on investor concern that farmers would scale back their fertilizer purchases. Given our history and knowledge of the company, we felt the stock had been overly punished. We opened a position in the stock which provided a boost to relative performance for the period.
Outlook
With economic activity no longer declining at a very rapid clip through the end of April, the paralysis that seemed to have gripped the economy and financial markets appeared to be easing in our view. Fiscal stimulus, a necessary inventory restocking and the resumption of normal economic behavior by consumers and businesses could contribute to a better outlook for GDP for the rest of 2009, and potentially some GDP growth going forward. Over a multiyear period, we think the global economy could go through a difficult period of relatively modest growth. As the American consumer likely continues to save more and potentially consumes less, we believe the global economy that has been designed to serve that consumer must reinvent itself. Specifically, the American economy will need to produce and export more and emerging economies will need to focus on domestic consumption, rather than export-driven growth in our view.
The capital markets, including the stock market, have responded favorably since hitting a period low in early March. We think good companies can access the capital markets, and financing has become somewhat more available. However, the recovery is still at an early stage in our opinion. Economic activity is by no means robust in our view, and the state of the capital markets, while healing through April, were still fragile and we do not think the market and economy were out of the woods just yet.
Through this difficult period, our team of tenured research analysts continues to do thorough research on what we view to be the best midcap growth companies. In this environment, we were finding secular growth companies with what we consider to be favorable competitive dynamics, strong management and historically high returns on capital trading at reasonable valuations at period end. While stocks have bounced off of their lows, valuations on quality companies were still attractive to us as long-term investors. We believe the best businesses will use a period like this to become stronger, and that these companies should thrive as the economy potentially returns to a period of growth.
Thank you for your investment in Janus Enterprise Fund.
14 Janus Growth Funds April 30, 2009
(unaudited)
Janus Enterprise Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
CommScope, Inc. | 1.01% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.68% | |||
Li & Fung, Ltd. | 0.63% | |||
Crown Castle International, Corp. | 0.48% | |||
Symantec Corp. | 0.44% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -1.02% | |||
Forest Oil Corp. | -0.95% | |||
Microsemi Corp. | -0.95% | |||
CapitalSource, Inc. | -0.76% | |||
Sandridge Energy, Inc. | -0.58% |
5 Top Performers – Sectors*
Fund Weighting | Russell Midcap® Growth | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 2.66% | 22.93% | 20.13% | |||||||||
Consumer Discretionary | 1.97% | 11.43% | 18.36% | |||||||||
Telecommunication Services | 1.28% | 5.93% | 2.84% | |||||||||
Materials | 1.04% | 5.41% | 4.50% | |||||||||
Consumer Staples | 0.15% | 2.36% | 4.65% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell Midcap® Growth | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Energy | -2.13% | 7.66% | 9.05% | |||||||||
Financials | -1.77% | 10.39% | 5.57% | |||||||||
Health Care | -1.12% | 12.86% | 13.80% | |||||||||
Utilities | -0.33% | 1.18% | 3.62% | |||||||||
Industrials | -0.23% | 19.85% | 17.48% |
* | 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. |
Janus Growth Funds April 30, 2009 15
Janus Enterprise Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Crown Castle International Corp. Wireless Equipment | 3.2% | |||
Celgene Corp. Medical – Biomedical and Genetic | 2.9% | |||
Atmel Corp. Semiconductor Components/Integrated Circuits | 2.4% | |||
CommScope, Inc. Telecommunication Equipment | 2.3% | |||
Equinix, Inc. Web Hosting/Design | 2.2% | |||
13.0% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p06.gif)
Emerging markets comprised 0.7% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t06.gif)
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16 Janus Growth Funds April 30, 2009
(unaudited)
Performance
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Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Enterprise Fund | 0.73% | –37.21% | 2.07% | –1.81% | 7.96% | 0.92% | |||||||
Russell Midcap® Growth Index | 2.71% | –35.66% | –0.76% | 0.02% | 6.93% | ||||||||
S&P MidCap 400 Index | –0.18% | –31.84% | 0.56% | 4.86% | 10.07% | ||||||||
Lipper Quartile | – | 3rd | 1st | 4th | 2nd | ||||||||
Lipper Ranking – based on total return for Mid-Cap Growth Funds | – | 286/550 | 30/393 | 142/184 | 14/43 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 17
Janus Enterprise Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,007.80 | $ | 5.18 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.64 | $ | 5.21 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.04% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses include effect of contractual waivers by Janus Capital. |
18 Janus Growth Funds April 30, 2009
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 97.9% | ||||||||||||
Advertising Sales – 1.5% | ||||||||||||
1,178,685 | Lamar Advertising Co. – Class A* | $ | 19,919,777 | |||||||||
Aerospace and Defense – 1.2% | ||||||||||||
611,510 | Empresa Brasileira de Aeronautica S.A. (ADR) | 9,918,692 | ||||||||||
184,515 | TransDigm Group, Inc.* | 6,483,857 | ||||||||||
16,402,549 | ||||||||||||
Aerospace and Defense – Equipment – 1.2% | ||||||||||||
203,515 | Alliant Techsystems, Inc.* | 16,209,970 | ||||||||||
Agricultural Chemicals – 1.8% | ||||||||||||
273,430 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 23,648,961 | ||||||||||
Agricultural Operations – 0.4% | ||||||||||||
8,392,800 | Chaoda Modern Agriculture Holdings Ltd. | 4,781,661 | ||||||||||
Airlines – 1.5% | ||||||||||||
739,476 | Ryanair Holdings PLC (ADR)*,** | 20,224,669 | ||||||||||
Apparel Manufacturers – 1.1% | ||||||||||||
252,310 | VF Corp. | 14,954,414 | ||||||||||
Applications Software – 1.3% | ||||||||||||
610,105 | Citrix Systems, Inc.* | 17,406,296 | ||||||||||
Auction House – Art Dealer – 1.2% | ||||||||||||
725,195 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 16,244,368 | ||||||||||
Batteries and Battery Systems – 1.3% | ||||||||||||
312,583 | Energizer Holdings, Inc.* | 17,911,006 | ||||||||||
Casino Hotels – 0.9% | ||||||||||||
2,296,105 | Crown, Ltd.** | 11,465,038 | ||||||||||
Cellular Telecommunications – 1.2% | ||||||||||||
447,250 | Leap Wireless International, Inc.* | 16,132,308 | ||||||||||
Commercial Services – 1.1% | ||||||||||||
527,032 | Iron Mountain, Inc.* | 15,015,142 | ||||||||||
Commercial Services – Finance – 1.4% | ||||||||||||
314,317 | Global Payments, Inc. | 10,077,003 | ||||||||||
303,091 | Paychex, Inc. | 8,186,488 | ||||||||||
18,263,491 | ||||||||||||
Computer Services – 0.3% | ||||||||||||
102,890 | IHS, Inc. – Class A* | 4,255,530 | ||||||||||
Computers – 1.2% | ||||||||||||
127,352 | Apple, Inc.* | 16,024,702 | ||||||||||
Computers – Peripheral Equipment – 0.9% | ||||||||||||
854,700 | Logitech International S.A. (U.S. Shares)* | 11,384,604 | ||||||||||
Consulting Services – 0.4% | ||||||||||||
407,664 | Gartner, Inc.* | 5,507,541 | ||||||||||
Containers – Metal and Glass – 3.6% | ||||||||||||
627,365 | Ball Corp. | 23,664,208 | ||||||||||
1,009,325 | Owens-Illinois, Inc.* | 24,617,436 | ||||||||||
48,281,644 | ||||||||||||
Decision Support Software – 1.6% | ||||||||||||
1,007,819 | MSCI, Inc.* | 21,154,121 | ||||||||||
Distribution/Wholesale – 2.0% | ||||||||||||
9,352,720 | Li & Fung, Ltd. | 26,327,797 | ||||||||||
Diversified Operations – 0.1% | ||||||||||||
12,063,586 | Polytec Asset Holdings, Ltd. | 705,567 | ||||||||||
Electric Products – Miscellaneous – 0.9% | ||||||||||||
372,172 | AMETEK, Inc. | 11,987,660 | ||||||||||
Electronic Components – Miscellaneous – 0.9% | ||||||||||||
693,530 | Tyco Electronics, Ltd. | 12,095,163 | ||||||||||
Electronic Components – Semiconductors – 0.6% | ||||||||||||
4,939,014 | ARM Holdings PLC | 8,668,204 | ||||||||||
Electronic Connectors – 2.2% | ||||||||||||
859,940 | Amphenol Corp. – Class A | 29,100,370 | ||||||||||
Electronic Measuring Instruments – 1.4% | ||||||||||||
879,380 | Trimble Navigation, Ltd.* | 18,853,907 | ||||||||||
Entertainment Software – 0.5% | ||||||||||||
346,125 | Electronic Arts, Inc.* | 7,043,644 | ||||||||||
Fiduciary Banks – 0.9% | ||||||||||||
226,295 | Northern Trust Corp. | 12,301,396 | ||||||||||
Finance – Other Services – 0.8% | ||||||||||||
48,140 | CME Group, Inc. | 10,655,789 | ||||||||||
Independent Power Producer – 0.4% | ||||||||||||
281,255 | NRG Energy, Inc.* | 5,056,965 | ||||||||||
Instruments – Controls – 0.6% | ||||||||||||
128,650 | Mettler-Toledo International, Inc.* | 7,928,700 | ||||||||||
Instruments – Scientific – 1.5% | ||||||||||||
576,144 | Thermo Fisher Scientific, Inc.* | 20,211,132 | ||||||||||
Internet Security – 1.6% | ||||||||||||
1,247,425 | Symantec Corp.* | 21,518,081 | ||||||||||
Investment Management and Advisory Services – 2.2% | ||||||||||||
223,838 | Eaton Vance Corp. | 6,126,446 | ||||||||||
1,098,580 | National Financial Partners Corp. | 7,755,975 | ||||||||||
414,480 | T. Rowe Price Group, Inc. | 15,965,769 | ||||||||||
29,848,190 | ||||||||||||
Machinery – General Industrial – 2.0% | ||||||||||||
591,655 | Roper Industries, Inc. | 26,973,551 | ||||||||||
Machinery – Pumps – 0.9% | ||||||||||||
496,605 | Graco, Inc. | 11,714,912 | ||||||||||
Medical – Biomedical and Genetic – 6.5% | ||||||||||||
923,719 | Celgene Corp.*,** | 39,461,275 | ||||||||||
110,795 | Genzyme Corp.* | 5,908,697 | ||||||||||
383,432 | Gilead Sciences, Inc.* | 17,561,186 | ||||||||||
187,055 | Millipore Corp.* | 11,054,951 | ||||||||||
231,255 | Myriad Genetics, Inc.* | 8,970,381 | ||||||||||
132,770 | Vertex Pharmaceuticals, Inc.* | 4,091,971 | ||||||||||
87,048,461 | ||||||||||||
Medical – Drugs – 0.5% | ||||||||||||
192,385 | Shire PLC (ADR) | 7,170,189 | ||||||||||
Medical Instruments – 1.1% | ||||||||||||
101,405 | Intuitive Surgical, Inc.* | 14,574,941 | ||||||||||
Medical Products – 2.5% | ||||||||||||
520,105 | Covidien, Ltd. | 17,153,062 | ||||||||||
260,615 | Henry Schein, Inc.* | 10,695,640 | ||||||||||
151,896 | Varian Medical Systems, Inc.* | 5,068,770 | ||||||||||
32,917,472 | ||||||||||||
Metal Processors and Fabricators – 1.4% | ||||||||||||
254,450 | Precision Castparts Corp. | 19,048,127 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 19
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Networking Products – 1.1% | ||||||||||||
698,695 | Juniper Networks, Inc.* | $ | 15,126,747 | |||||||||
Oil Companies – Exploration and Production – 3.5% | ||||||||||||
378,220 | EOG Resources, Inc. | 24,009,405 | ||||||||||
264,375 | Forest Oil Corp.* | 4,230,000 | ||||||||||
443,299 | Ultra Petroleum Corp. (U.S. Shares)* | 18,973,197 | ||||||||||
47,212,602 | ||||||||||||
Oil Companies – Integrated – 1.8% | ||||||||||||
429,055 | Hess Corp. | 23,507,923 | ||||||||||
Oil Field Machinery and Equipment – 0.2% | ||||||||||||
115,180 | Dresser-Rand Group, Inc.* | 2,836,883 | ||||||||||
Physical Practice Management – 1.0% | ||||||||||||
381,484 | Mednax, Inc.* | 13,695,276 | ||||||||||
Pipelines – 1.3% | ||||||||||||
439,061 | Kinder Morgan Management LLC* | 17,931,251 | ||||||||||
Real Estate Management/Services – 1.0% | ||||||||||||
403,630 | Jones Lang LaSalle, Inc. | 13,025,140 | ||||||||||
Reinsurance – 1.9% | ||||||||||||
8,329 | Berkshire Hathaway, Inc. – Class B* | 25,528,385 | ||||||||||
Retail – Apparel and Shoe – 2.9% | ||||||||||||
2,845,700 | Esprit Holdings, Ltd. | 17,443,709 | ||||||||||
632,032 | Nordstrom, Inc. | 14,302,884 | ||||||||||
350,210 | Urban Outfitters, Inc.* | 6,825,593 | ||||||||||
38,572,186 | ||||||||||||
Retail – Office Supplies – 0.9% | ||||||||||||
586,585 | Staples, Inc. | 12,095,383 | ||||||||||
Retail – Regional Department Stores – 0.9% | ||||||||||||
266,095 | Kohl’s Corp.* | 12,067,408 | ||||||||||
Semiconductor Components/Integrated Circuits – 2.9% | ||||||||||||
8,217,017 | Atmel Corp.* | 31,553,345 | ||||||||||
865,447 | Cypress Semiconductor Corp.* | 6,862,995 | ||||||||||
38,416,340 | ||||||||||||
Semiconductor Equipment – 2.0% | ||||||||||||
943,190 | Kla-Tencor Corp. | 26,164,091 | ||||||||||
Telecommunication Equipment – 2.3% | ||||||||||||
1,241,170 | CommScope, Inc.* | 31,153,367 | ||||||||||
Telecommunication Equipment – Fiber Optics – 0.8% | ||||||||||||
771,625 | Corning, Inc. | 11,281,158 | ||||||||||
Telecommunication Services – 4.3% | ||||||||||||
1,095,395 | Amdocs, Ltd. (U.S. Shares)* | 22,926,617 | ||||||||||
982,381 | SAVVIS, Inc.* | 11,179,496 | ||||||||||
2,602,775 | Time Warner Telecom, Inc. – Class A* | 23,919,501 | ||||||||||
58,025,614 | ||||||||||||
Toys – 1.9% | ||||||||||||
1,697,558 | Mattel, Inc. | 25,395,468 | ||||||||||
Transportation – Railroad – 1.2% | ||||||||||||
398,305 | Canadian National Railway Co. (U.S. Shares) | 16,099,488 | ||||||||||
Transportation – Services – 2.1% | ||||||||||||
259,230 | C.H. Robinson Worldwide, Inc. | 13,780,667 | ||||||||||
422,985 | Expeditors International of Washington Inc. | 14,681,809 | ||||||||||
28,462,476 | ||||||||||||
Transportation – Truck – 1.5% | ||||||||||||
464,465 | Con-way, Inc. | 11,509,442 | ||||||||||
257,550 | Landstar System, Inc. | 9,171,356 | ||||||||||
20,680,798 | ||||||||||||
Vitamins and Nutrition Products – 0.4% | ||||||||||||
173,355 | Mead Johnson Nutrition Co. – Class A* | 4,897,279 | ||||||||||
Web Hosting/Design – 2.2% | ||||||||||||
420,511 | Equinix, Inc.* | 29,532,488 | ||||||||||
Wireless Equipment – 3.2% | ||||||||||||
1,734,780 | Crown Castle International Corp.* | 42,536,805 | ||||||||||
Total Common Stock (cost $1,474,704,130) | 1,311,182,566 | |||||||||||
Money Market – 3.0% | ||||||||||||
40,145,322 | Janus Cash Liquidity Fund LLC, 0% (cost $40,145,322) | 40,145,322 | ||||||||||
Total Investments (total cost $1,514,849,451) – 100.9% | 1,351,327,888 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.9)% | (12,219,280) | |||||||||||
Net Assets – 100% | $ | 1,339,108,608 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 11,465,038 | 0.9% | |||||
Bermuda | 73,019,732 | 5.4% | ||||||
Brazil | 9,918,692 | 0.7% | ||||||
Canada | 74,966,014 | 5.5% | ||||||
Cayman Islands | 5,487,228 | 0.4% | ||||||
Guernsey | 22,926,617 | 1.7% | ||||||
Ireland | 20,224,669 | 1.5% | ||||||
Switzerland | 11,384,604 | 0.8% | ||||||
United Kingdom | 15,838,393 | 1.2% | ||||||
United States†† | 1,106,096,901 | 81.9% | ||||||
Total | $ | 1,351,327,888 | 100.0% |
†† | Includes Short-Term Securities (78.9% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S.$ | Gain/(Loss) | |||||||||
Australian Dollar 5/14/09 | 3,500,000 | $ | 2,540,701 | $ | (100,501) | |||||||
Australian Dollar 6/18/09 | 2,700,000 | 1,954,918 | (63,973) | |||||||||
Australian Dollar 6/25/09 | 6,390,000 | 4,624,495 | (85,678) | |||||||||
Euro 6/18/09 | 11,756,365 | 15,549,180 | (317,986) | |||||||||
Euro 6/25/09 | 2,800,000 | 3,703,177 | (56,177) | |||||||||
Total | $ | 28,372,471 | $ | (624,315) |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Growth Funds April 30, 2009
Janus Orion Fund (unaudited) | Ticker: JORNX |
Fund Snapshot
This focused growth Fund seeks a small number of well-researched companies, hand-picked for their ability to create value for shareholders over the long-term and that trade at a discount to their intrinsic value.
![(JOHN EISINGER PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199peisingj.jpg)
John Eisinger
portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, the Fund returned 1.55%, outperforming its primary benchmark, the Russell 3000® Growth Index, which returned -1.68% and its secondary benchmark, the S&P 500® Index, which returned -8.53% for the same period.
Investment Philosophy and Process
We believe in taking focused positions in a small number of stocks where the investment team has a high level of conviction. By uncovering what we see as discrepancies between current stock prices and true intrinsic value through deep, fundamental research, we seek to generate strong, risk-adjusted returns over the long term. Simply put we look for mispriced companies that we think can grow and add value over time as defined by consistently positive economic profit margins on growing capital bases. Special situations and turnarounds are attractive to us as well, as long as we believe the companies will be value creators in a reasonable time horizon.
The Fund is a focused growth fund, which means it will typically hold between 20 and 50 stocks with at least 80% invested in the top 20 to 30 positions. Focusing on a core group of holdings is important to us, because we believe that is the best way to generate alpha (returns in excess of its underlying benchmark.) The ability to invest with conviction comes from the intensive analysis our research department conducts.
Economic Environment
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. Starting in the middle of March, the stock market rebounded from extremely oversold conditions driven by early signs the decline in the economy was stabilizing. The U.S. market’s recovery off 12-year lows only partially erased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April driven by broadly better-than-expected earnings although corporate profits were slowing. While the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
The Fund used derivatives, such as buying put options or selling call options, to both hedge market exposure and express views on stocks. An example of this over the past six months was the buying of put option contracts on the S&P 500® Index in an attempt to lessen the impact of a downward move in the overall market. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Investment Approach
As stated above the Fund looks to invest in companies that are both mispriced currently and that create value for shareholders over the long-term. Primarily we define adding value as generating returns on capital in excess of a firm’s cost of capital. This is generally defined as achieving positive economic profit margins. To find companies that are or can create value we thoroughly analyze all aspects of a potential investment, from the industry to the specific drivers of revenue and cost. We then quantify all of our research into a model which we use to estimate future cash flows. Using our estimates of future cash flows we are able to determine what we think a business is worth today and whether or not it is mispriced. However, it is not just about picking attractive stocks, but putting them together in an effort to form a diversified portfolio that balances individual stock risk and reward as well as overall portfolio diversification. Stocks we believe have the best risk/reward profiles are at the top of the portfolio. To diversify the portfolio we focus on minimizing the correlation of each stock within the portfolio. Again, it is not
Janus Growth Funds April 30, 2009 21
Janus Orion Fund (unaudited)
enough to just put together undervalued stocks, but rather to try to put together a portfolio of undervalued stocks that together act in different ways in all markets. We believe this is diversification.
Performance
As stated above, the goal of the Fund is to find and invest in stocks across all market caps that we think are incorrectly priced by the market (discrepancies between current stock prices and true intrinsic value). During the period covered in this report, the Fund’s outperformance was largely driven by our holdings in information technology and consumer staples. Our holdings within financials, combined with an overweight to the group, weighed on relative results.
Contributors to Performance
Global brewer Anheuser-Busch InBev, a result of Belgium-based InBev’s acquisition of American brewer Anheuser-Busch, was the largest individual contributor during the period. The stock price rebounded off of its November lows and trended higher through the end of April as Anheuser-Busch InBev made progress towards selling off assets and paying down acquisition-related debt. While the slowing economic environment could mean lower beer consumption, we continue to be attracted to the company’s strong brands, pricing power, incentive structure, and ability to generate strong returns on its invested capital.
Within financials, Goldman Sachs rebounded off depressed levels in the fourth quarter of 2008, as investors viewed it as a “survivor” of the financial crisis. We believe the company’s results will benefit as they gain market share from weakened competitors. Further, we believe the company will achieve returns on equity at or near historic levels, which suggest the stock remains undervalued. Finally, we think the company’s balance sheet risk is under control and management is correctly focused on paying back TARP money to limit government involvement in their operations. We think this should further their competitive advantage.
VistaPrint Ltd., an online printing company focused on low-cost products, also contributed to performance as it continued to demonstrate strong fundamentals. The company raised its guidance above Wall Street’s expectations and posted better-than-expected earnings during the period. While we believe the company’s differentiated business model of leveraging high volume production to serve customers that place low volume orders should still benefit returns over the longer term, we trimmed the position on the stock’s strength.
Detractors from Performance
CapitalSource, a middle market lender to small and mid-sized businesses, was the top detractor during the period amid concerns over potential near-term debt covenant violations. We think the company was in a good capital position at period end, but questions surrounding its liquidity remained. Given the increased uncertainty surrounding CapitalSource, we trimmed the position to accurately reflect in our view the risk/reward. At today’s valuation, we think there is potential upside longer term given the company’s strong credit culture and niche market position.
Also in financials, Bank of America was a top detractor, suffering from uncertainty over its potential need to raise additional capital. While we think Bank of America has a diversified commercial and retail franchise, we became uncomfortable with the level of uncertainty surrounding its capital position and given the potential for sizeable write downs and the concern about government involvement changing “rules of the game,” we exited the position.
Celgene Corp. was hurt in February, along with many healthcare names, after the U.S. Administration proposed aggressive healthcare reform. The stock suffered another decline in early April after the company said it expects 2009 profits to be at the lower end of its forecast. Longer term, we think Celgene will continue to benefit from its cancer-fighting drug Revlimid, which is still early in its global launch cycle, and that the impact of government intervention on the company will be less than the market is forecasting. However, we did trim our holdings in favor of what we believed were better risk/reward opportunities.
Outlook
We continue to take a balanced approach in our view on the global economy and equity markets. We think the U.S. economy was in the process of stabilizing through period end, but do not expect high future economic growth. Longer term, we are concerned about the impact of massive fiscal and monetary stimulus on inflation and the U.S. dollar. Within the equity markets, we believe there remains a high level of uncertainty in certain sectors like healthcare as the U.S. government releases more details on its reform programs. Despite this we have been able to find many undervalued securities in our view, which we have added to the portfolio. We believe many companies are doing the right thing to optimize their businesses to the current level of demand, which should benefit margins and returns for many of them. However, because there remains a substantial amount of uncertainty and fear in the markets these
22 Janus Growth Funds April 30, 2009
(unaudited)
same stocks continue to trade below our estimate of intrinsic value. Therefore, we are taking advantage of this discrepancy to initiate several new positions in the Fund. While we expect continued volatility, we think focusing on quality stock specific ideas will give us the best opportunity to generate strong long-term performance.
Thank you for your continued investment in Janus Orion Fund.
Janus Orion Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Anheuser-Busch Inbev N.V. | 2.76% | |||
Goldman Sachs Group, Inc. | 2.10% | |||
VistaPrint, Ltd. | 1.37% | |||
Tyco Electronics, Ltd. | 1.16% | |||
Apple, Inc. | 1.03% |
5 Bottom Performers – Holdings
Contribution | ||||
CapitalSource, Inc. | -3.15% | |||
Bank of America Corp. | -1.76% | |||
Celgene Corp. | -1.75% | |||
Anglo Irish Bank Corp. | -1.17% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | -0.99% |
5 Top Performers – Sectors*
Fund Weighting | Russell 3000® Growth | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 6.80% | 19.57% | 29.00% | |||||||||
Consumer Staples | 2.40% | 9.67% | 13.33% | |||||||||
Consumer Discretionary | 1.54% | 8.43% | 9.88% | |||||||||
Telecommunication Services | 0.40% | 5.32% | 0.81% | |||||||||
Utilities | 0.01% | 0.01% | 1.86% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 3000® Growth | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | -5.17% | 20.42% | 3.60% | |||||||||
Health Care | -1.40% | 12.31% | 16.30% | |||||||||
Materials | -0.77% | 5.43% | 3.74% | |||||||||
Industrials | -0.61% | 10.57% | 13.08% | |||||||||
Energy | -0.15% | 8.42% | 8.41% |
* | 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. |
Janus Growth Funds April 30, 2009 23
Janus Orion Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Goldman Sachs Group, Inc. Finance – Investment Banks/Brokers | 5.3% | |||
Crown Castle International Corp. Wireless Equipment | 4.6% | |||
Morgan Stanley Finance – Investment Banks/Brokers | 4.3% | |||
Illinois Tool Works, Inc. Diversified Operations | 4.2% | |||
Anheuser-Busch InBev N.V. Brewery | 3.9% | |||
22.3% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p02.gif)
Emerging markets comprised 4.3% of total net assets.
* Includes Securities Sold Short of (1.8)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c02.gif)
24 Janus Growth Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m02.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Orion Fund | 1.55% | –43.65% | 3.62% | –3.41% | 0.94% | ||||||
Russell 3000® Growth Index | –1.68% | –31.46% | –2.32% | –7.53% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –3.90% | |||||||
Lipper Quartile | – | 4th | 1st | 1st | |||||||
Lipper Ranking – based on total return for Multi-Cap Growth Funds | – | 438/457 | 10/290 | 43/174 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Annual expense ratios include dividends or interest on short sales, which are paid to the lender of borrowed securities. Such expenses will vary depending on whether the securities the Fund sells short pay dividends or interest and the amount of such dividends or interest.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 25
Janus Orion Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
A hedging strategy is one that attempts to minimize or protect against loss by strategically using instruments in the market to offset counterbalancing one transaction against another. Hedging does not prevent a negative event from happening. It attempts to reduce the impact of the event. A reduction in such risk usually means a reduction in potential profits. Hedging, for the most part, is a technique not by which you will necessarily make money but by which you can reduce potential loss.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – June 30, 2000
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,014.10 | $ | 4.94 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.99%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
26 Janus Growth Funds April 30, 2009
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Common Stock – 92.0% | ||||||||||||
Advertising Sales – 2.8% | ||||||||||||
4,275,206 | Lamar Advertising Co. – Class A*,£ | $ | 72,250,981 | |||||||||
Aerospace and Defense – 1.0% | ||||||||||||
2,005,038 | Spirit Aerosystems Holdings, Inc.* | 25,564,235 | ||||||||||
Agricultural Chemicals – 0.3% | ||||||||||||
325,660 | Intrepid Potash, Inc.* | 8,040,545 | ||||||||||
Athletic Footwear – 0.5% | ||||||||||||
312,605 | Adidas A.G.** | 11,787,314 | ||||||||||
Brewery – 3.9% | ||||||||||||
3,220,421 | Anheuser-Busch InBev N.V.** | 98,278,522 | ||||||||||
Building Products – Wood – 2.2% | ||||||||||||
6,322,489 | Masco Corp.** | 56,017,253 | ||||||||||
Casino Hotels – 1.5% | ||||||||||||
8,036,812 | Melco Crown Entertainment, Ltd. (ADR)* | 36,567,495 | ||||||||||
Commercial Banks – 4.2% | ||||||||||||
11,675,914 | CapitalSource, Inc.£ | 36,078,574 | ||||||||||
7,279,971 | ICICI Bank, Ltd.** | 70,078,679 | ||||||||||
106,157,253 | ||||||||||||
Computers – 2.7% | ||||||||||||
544,540 | Apple, Inc.* | 68,519,468 | ||||||||||
Containers – Metal and Glass – 1.5% | ||||||||||||
1,555,498 | Owens-Illinois, Inc.* | 37,938,596 | ||||||||||
Diversified Operations – 4.2% | ||||||||||||
3,208,875 | Illinois Tool Works, Inc.** | 105,251,100 | ||||||||||
Electronic Components – Miscellaneous – 2.2% | ||||||||||||
3,136,079 | Tyco Electronics, Ltd. | 54,693,218 | ||||||||||
Electronic Components – Semiconductors – 1.8% | ||||||||||||
8,493,265 | ON Semiconductor Corp.* | 46,033,496 | ||||||||||
Electronic Connectors – 2.2% | ||||||||||||
1,653,370 | Amphenol Corp. – Class A | 55,950,041 | ||||||||||
Electronic Measuring Instruments – 1.0% | ||||||||||||
1,222,143 | Trimble Navigation, Ltd.* | 26,202,746 | ||||||||||
Fiduciary Banks – 1.4% | ||||||||||||
645,099 | Northern Trust Corp. | 35,067,582 | ||||||||||
Finance – Investment Bankers/Brokers – 12.0% | ||||||||||||
1,032,620 | Goldman Sachs Group, Inc.** | 132,691,669 | ||||||||||
797,825 | Greenhill & Co., Ltd. | 61,855,372 | ||||||||||
4,589,270 | Morgan Stanley** | 108,490,343 | ||||||||||
303,037,384 | ||||||||||||
Gold Mining – 2.0% | ||||||||||||
1,243,290 | Newmont Mining Corp.** | 50,029,990 | ||||||||||
Hotels and Motels – 1.0% | ||||||||||||
1,173,455 | Starwood Hotels & Resorts Worldwide, Inc. | 24,478,271 | ||||||||||
Internet Gambling – 1.9% | ||||||||||||
12,388,805 | PartyGaming PLC** | 48,294,390 | ||||||||||
Internet Security – 2.2% | ||||||||||||
3,177,425 | Symantec Corp.* | 54,810,581 | ||||||||||
Medical – Biomedical and Genetic – 3.3% | ||||||||||||
1,477,990 | Celgene Corp.* | 63,139,732 | ||||||||||
661,030 | Vertex Pharmaceuticals, Inc.* | 20,372,945 | ||||||||||
83,512,677 | ||||||||||||
Medical – Drugs – 0.8% | ||||||||||||
170,900 | Roche Holding A.G. | 21,601,568 | ||||||||||
Medical Instruments – 1.9% | ||||||||||||
336,015 | Intuitive Surgical, Inc.* | 48,295,436 | ||||||||||
Medical Products – 0.8% | ||||||||||||
383,645 | Johnson & Johnson | 20,087,652 | ||||||||||
Oil Companies – Exploration and Production – 6.8% | ||||||||||||
1,442,555 | Anadarko Petroleum Corp.** | 62,116,417 | ||||||||||
1,088,485 | Occidental Petroleum Corp.** | 61,270,821 | ||||||||||
1,130,650 | Ultra Petroleum Corp. (U.S. Shares)* | 48,391,820 | ||||||||||
171,779,058 | ||||||||||||
Oil Companies – Integrated – 1.6% | ||||||||||||
727,565 | Hess Corp. | 39,863,286 | ||||||||||
Printing – Commercial – 2.2% | ||||||||||||
1,593,313 | VistaPrint, Ltd.*,£ | 54,730,302 | ||||||||||
Real Estate Management/Services – 2.7% | ||||||||||||
2,096,604 | Jones Lang LaSalle, Inc.**,£ | 67,657,411 | ||||||||||
Real Estate Operating/Development – 0.7% | ||||||||||||
4,881,849 | Rossi Residencial S.A.** | 16,862,458 | ||||||||||
Retail – Apparel and Shoe – 0% | ||||||||||||
19,060 | J. Crew Group, Inc.* | 328,023 | ||||||||||
Retail – Building Products – 1.0% | ||||||||||||
1,204,395 | Lowe’s Cos., Inc. | 25,894,493 | ||||||||||
Retail – Drug Store – 3.0% | ||||||||||||
2,374,300 | CVS Caremark Corp. | 75,455,254 | ||||||||||
Semiconductor Components/Integrated Circuits – 3.6% | ||||||||||||
12,429,164 | Atmel Corp.*,** | 47,727,990 | ||||||||||
1,593,515 | Cypress Semiconductor Corp.*,£ | 12,636,574 | ||||||||||
2,715,750 | Marvell Technology Group, Ltd.* | 29,818,935 | ||||||||||
90,183,499 | ||||||||||||
Semiconductor Equipment – 2.4% | ||||||||||||
1,151,180 | KLA-Tencor Corp. | 31,933,733 | ||||||||||
1,023,170 | Lam Research Corp.*,** | 28,525,980 | ||||||||||
60,459,713 | ||||||||||||
Toys – 3.1% | ||||||||||||
294,200 | Nintendo Co., Ltd.** | 78,726,718 | ||||||||||
Transportation – Railroad – 0.9% | ||||||||||||
4,211,080 | All America Latina Logistica S.A. (GDR)** | 21,827,952 | ||||||||||
Veterinary Diagnostics – 0.1% | ||||||||||||
133,810 | VCA Antech, Inc.* | 3,347,926 | ||||||||||
Wireless Equipment – 4.6% | ||||||||||||
4,793,211 | Crown Castle International Corp.*,** | 117,529,534 | ||||||||||
Total Common Stock (cost $2,369,668,426) | 2,323,113,421 | |||||||||||
Preferred Stock – 1.3% | ||||||||||||
Metal – Copper – 1.3% | ||||||||||||
492,200 | Freeport-McMoRan Copper & Gold, Inc., convertible, 6.7500% (cost $26,005,698) | 33,100,450 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 27
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Purchased Options – Calls – 1.0% | ||||||||||||
20,097 | CVS/Caremark Corp. (LEAPS) expires January 2010 exercise price $30.00 | $ | 10,172,599 | |||||||||
4,925 | Occidental Petroleum Corp. (LEAPS) expires January 2011 exercise price $30.00 | 13,445,250 | ||||||||||
600 | PNC Bank Corp. expires January 2010 exercise price $2.50 | 0 | ||||||||||
6,781 | UnitedHealth Group, Inc. expires January 2010 exercise price $30.00 | 1,416,415 | ||||||||||
Total Purchased Options – Calls (Premiums received $25,686,492) | 25,034,264 | |||||||||||
Purchased Options – Puts – 0% | ||||||||||||
600 | S&P 500® Index** expires May 2009 exercise price $825.00 (Premiums received $985,800) | 534,000 | ||||||||||
Money Market – 5.0% | ||||||||||||
127,553,219 | Janus Cash Liquidity Fund LLC, 0% (cost $127,553,219) | 127,553,219 | ||||||||||
Total Investments (total cost $2,549,899,635) – 99.3% | 2,509,335,354 | |||||||||||
Securities Sold Short – (1.8)% | ||||||||||||
Coal – (0.3)% | ||||||||||||
(246,395 | ) | Peabody Energy Corp. | (6,502,364) | |||||||||
Diversified Operations – (1.5)% | ||||||||||||
(3,011,055 | ) | General Electric Co. | (38,089,846) | |||||||||
Total Securities Sold Short (proceeds $41,974,845) | (44,592,210) | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 2.5%** | 62,769,956 | |||||||||||
Net Assets – 100% | $ | 2,527,513,100 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Belgium | $ | 98,278,522 | 3.9% | |||||
Bermuda | 139,242,454 | 5.5% | ||||||
Brazil | 38,690,409 | 1.5% | ||||||
Canada | 48,391,820 | 1.9% | ||||||
Cayman Islands | 36,567,495 | 1.5% | ||||||
Germany | 11,787,314 | 0.5% | ||||||
Gibraltar | 48,294,390 | 1.9% | ||||||
India | 70,078,679 | 2.8% | ||||||
Japan | 78,726,718 | 3.2% | ||||||
Switzerland | 21,601,568 | 0.9% | ||||||
United States†† | 1,917,675,985 | 76.4% | ||||||
Total | $ | 2,509,335,354 | 100.0% |
†† | Includes Short-Term Securities (71.3% excluding Short-Term) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (44,592,210) | 100.0% | |||||
Total | $ | (44,592,210) | 100.0% |
Financial Futures – Short | ||||||
797 Contracts | Russell 2000 Mini expires June 2009, principal amount $36,454,350, value $38,789,990 cumulative depreciation | $ | (2,335,640) | |||
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
Brazilian Real 5/14/09 | 24,500,000 | $ | 11,174,934 | $ | (462,210) | |||||||
Brazilian Real 6/18/09 | 4,900,000 | 2,214,721 | (8,010) | |||||||||
Brazilian Real 6/25/09 | 3,700,000 | 1,669,819 | (16,188) | |||||||||
British Pound 5/14/09 | 7,400,000 | 10,943,670 | (76,030) | |||||||||
British Pound 6/18/09 | 9,485,000 | 14,026,829 | (152,646) | |||||||||
British Pound 6/25/09 | 8,800,000 | 13,013,868 | (113,860) | |||||||||
Euro 5/14/09 | 7,800,000 | 10,318,188 | 235,212 | |||||||||
Euro 6/18/09 | 9,600,000 | 12,697,133 | (259,661) | |||||||||
Euro 6/25/09 | 24,400,000 | 32,270,540 | (272,730) | |||||||||
Indian Rupee 5/14/09 | 519,000,000 | 10,363,143 | (261,936) | |||||||||
Indian Rupee 6/25/09 | 355,000,000 | 7,058,145 | (61,692) | |||||||||
Japanese Yen 5/14/09 | 1,553,000,000 | 15,752,764 | 57,070 | |||||||||
Japanese Yen 6/18/09 | 2,600,000,000 | 26,388,859 | 132,552 | |||||||||
Japanese Yen 6/25/09 | 2,869,000,000 | 29,122,458 | 577,335 | |||||||||
Total | $ | 197,015,071 | $ | (682,794) |
Schedule of Written Options – Calls | Value | |||
S&P 500® Index expires May 2009 1,882 contracts exercise price $920.00 (Premiums Received $1,424,956) | $ | (1,424,956) | ||
Schedule of Written Options – Puts | ||||
CVS/Caremark Corp. (LEAPS) expires January 2010 20,097 contracts exercise price $20.00 | $ | (1,396,038) | ||
J. Crew Group, Inc. expires June 2009 8,344 contracts exercise price $15.00 | (780,665) | |||
Occidental Petroleum Corp. (LEAPS) expires January 2011 4,925 contracts exercise price $30.00 | (1,674,500) | |||
S&P 500® Index expires May 2009 600 contracts exercise price $775.00 | (168,000) | |||
Total Written Options – Puts | ||||
(Premiums received $8,475,273) | $ | (4,019,203) | ||
See Notes to Schedules of Investments and Financial Statements.
28 Janus Growth Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Total Return Swaps outstanding at 4/30/09
Notional | Return Paid | Return Received | Unrealized | ||||||||||||
Counterparty | Amount | by the Fund | by the Fund | Termination Date | Appreciation/(Depreciation) | ||||||||||
Credit Suisse | $ | 36,881,733 | Credit Suisse Custom Retail Basket Index | 1-month LIBOR plus 30 basis points | 4/27/10 | $ | 885,254 | ||||||||
Goldman Sachs | 56,522,454 | Goldmas Sachs Custom Energy Basket Index | 1-month LIBOR plus 40 basis points | 4/8/10 | 4,599,133 | ||||||||||
Total | $ | 5,484,387 | |||||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 29
Janus Research Fund (unaudited) | Ticker: JAMRX |
Fund Snapshot
This Fund seeks to provide investors with broad exposure to what our research team feels are the most dynamic growth opportunities, regardless of company size.
Team Based Approach
Led by Jim Goff
Director of Research
Led by Jim Goff
Director of Research
Performance Overview
For the six-month period ended April 30, 2009, Janus Research Fund returned 2.82%, outperforming its primary benchmark, the Russell 1000® Growth Index, which returned -1.52% and its secondary benchmark, the S&P 500® Index, which returned -8.53%.
Economic Overview
The first quarter ended with a market rally after two difficult months. We think the market also reflected a slightly more rational atmosphere, where investors began to distinguish between high quality, enduring business models and those that will likely struggle in the global recession. Such an environment was a welcome change from the turmoil and intense volatility in the second half of 2008. We believe a long-term fundamental approach should do better when investors distinguish between quality companies. Our focus is on companies that we think have long-term competitive advantages and reasonable growth prospects, but trade at attractive valuations.
We remained disciplined during the market turmoil of the past six months. We did not stray from our core belief that the market ultimately will reward companies with superior business models, quality managements and value-additive returns on invested capital. Our ability to buy these companies at attractive valuations added to our long-term confidence.
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
Investment Process
Since February 1, 2006, Janus Research Fund has been team managed, representing the best ideas from Janus’ more than 30 equity analysts, overseen by Director of Research Jim Goff. Individual analysts primarily drive stock selection, with debate and oversight provided by each one of the seven global sector research teams. We employ an unconstrained fundamental bottom-up research approach that we believe provides the best opportunity for generating Fund’s outperformance over the long term. We foster an entrepreneurial culture that encourages our analysts to “go anywhere” to find the most compelling investment ideas and marry that with a disciplined approach to valuation. We strive to keep the Fund sector-neutral compared to its primary benchmark. With this in mind, the Fund’s outperformance during the period relative to the Russell 1000® Growth Index was driven by our holdings within technology and consumer sectors. As a group, poor relative performance among our healthcare selections weighed on comparable returns.
Under certain circumstances and market conditions, we may initiate positions in derivative securities to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
30 Janus Growth Funds April 30, 2009
(unaudited)
Contributors to Fund Performance
An information technology company involved in providing infrastructure solutions for communication and wireless networks, CommScope was weak early in the period amid disappointing quarterly results and a weak outlook. In addition, the company had been a relative underperformer given its leverage profile and concerns over its debt obligations and covenants. We maintained our conviction in the name throughout, believing the market’s reaction was excessive and that the company was undervalued. As the period came to a close, CommScope’s stock price rose sharply, making it the top contributor to relative performance during the period. The move can be largely attributed to the company’s relatively upbeat profit forecast and the notion that the risk of it violating its covenants may have lessened. Near term, we think infrastructure spending in the wireless space will come back and that CommScope is well positioned to profit from it.
Marvell Technology Group, Ltd., a semiconductor company specializing in storage and communication solutions for primarily communication devices, benefited from a solid quarterly earnings release during the period and general strength among semiconductor stocks. The company has been gaining market share in storage space, drives and enterprise solutions. We think the company’s low power chips will continue to gain market share given the benefits they can have for battery life on mobile devices.
Corning, a maker of specialty glass, rebounded after weakness during the second half of 2008, when the company gave very weak guidance for its liquid crystal display (LCD) glass business. During the first quarter of 2009, the company stated its LCD business was not performing as poorly as earlier feared. In particular, end market data for flat-panel TV sales were better than expected. We believe Corning was the best-positioned producer of glass for TV and computer monitors and that its stock was undervalued as of period end.
Detractors to Fund Performance
Celgene Corp., a biotechnology company was hurt by the negative backdrop for the overall healthcare sector during the period. We think Celgene will continue to benefit from its cancer-fighting drug Revlimid, which is still early in its launch cycle. We do not believe the company faces a strong threat from generics. We like its historically high incremental margins and pipeline of drugs. Given our estimate of its growth prospects, we thought its valuation at period end was quite attractive.
Casino owner and operator MGM Mirage has been negatively impacted by its leveraged balance sheet in a time of tight credit and declining fundamentals in the gaming industry, as consumers have reduced their spending. In particular, investors have worried about the company’s ability to meet several large upcoming debt maturities. We decided to exit our position to invest in other companies that had better risk-reward profiles in our view.
Within technology, Microsemi Corp. declined during the period after it was disclosed that the CEO misstated his credentials. Potential slowing in overall technology spending and an anticompetitive lawsuit also provided a negative backdrop for the stock. While we continue to like the fundamentals of the company’s business, we felt the issues around the CEO caused too much near-term uncertainty, so we exited the position.
Outlook
As the half-year ended, the rate of decline in the U.S. and global economies was slowing and we were seeing some improvement in the credit markets. Economic reports in recent months have shown mixed data, an improvement from the stream of negative reports in late 2008. While encouraging, we do not anticipate robust economic growth for several years. With companies and individuals reducing debt levels and with increased government intervention in the economy, we see a muted rather than sharp economic recovery. We believe that a slower growth environment will increase the importance of stock picking over sector allocation in finding companies that may be well suited to gain share and profits in a slow-growth environment. We believe that the Janus bottom-up research driven process will help lead us to these opportunities.
The Fund remained sector-neutral and we expect stock selection to be a key driver of returns going forward. Looking ahead, we will continue to invest with conviction in areas where we feel we can develop an edge through research. Through our valuation discipline and focus on risk management, we remain committed to delivering superior long-term results for our clients.
Thank you for your investment in Janus Research Fund.
Janus Growth Funds April 30, 2009 31
Janus Research Fund (unaudited)
Janus Research Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
CommScope, Inc. | 0.85% | |||
Marvell Technology Group, Ltd. | 0.68% | |||
Corning, Inc. | 0.53% | |||
Apple, Inc. | 0.51% | |||
Tyco Electronics, Ltd. | 0.47% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -0.51% | |||
MGM Mirage | -0.49% | |||
Microsemi Corp. | -0.45% | |||
Genzyme Corp. | -0.40% | |||
Whitting Petroleum Corp. | -0.39% |
4 Top Performers – Sectors*,†
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Technology | 4.50% | 25.97% | 25.88% | |||||||||
Communications | 0.99% | 5.98% | 6.06% | |||||||||
Consumer | 0.25% | 20.26% | 19.89% | |||||||||
Industrials | 0.24% | 16.75% | 16.60% |
3 Bottom Performers – Sectors*,†
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Healthcare | -1.46% | 16.33% | 16.59% | |||||||||
Energy | -0.54% | 10.56% | 10.46% | |||||||||
Financials | -0.45% | 4.46% | 4.52% |
* | 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. |
† | The sectors listed above reflect those covered by the seven analyst teams who comprise the Janus Research Team. |
32 Janus Growth Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Apple, Inc. Computers | 2.5% | |||
QUALCOMM, Inc. Wireless Equipment | 1.9% | |||
CommScope, Inc. Telecommunication Equipment | 1.9% | |||
Owens-Illinois, Inc. Containers – Metal and Glass | 1.6% | |||
KLA-Tencor Corp. Semiconductor Equipment | 1.6% | |||
9.5% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p03.gif)
Emerging markets comprised 1.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c03.gif)
Janus Growth Funds April 30, 2009 33
Janus Research Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m03.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Research Fund | 2.82% | –37.03% | –0.58% | –2.94% | 8.56% | 1.06% | |||||||
Russell 1000® Growth Index | –1.52% | –31.57% | –2.39% | –4.40% | 5.30% | ||||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 6.36% | ||||||||
Lipper Quartile | – | 4th | 1st | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 672/844 | 72/610 | 134/310 | 3/87 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
See important disclosures on the next page.
34 Janus Growth Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 6, 1993 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – May 3, 1993
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,028.20 | $ | 4.48 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.38 | $ | 4.46 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.89%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2009 35
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 98.4% | ||||||||||||
Advertising Sales – 0.5% | ||||||||||||
759,080 | Lamar Advertising Co. – Class A* | $ | 12,828,452 | |||||||||
Aerospace and Defense – 1.9% | ||||||||||||
504,220 | Northrop Grumman Corp. | 24,379,037 | ||||||||||
1,702,370 | Spirit Aerosystems Holdings, Inc.* | 21,705,218 | ||||||||||
46,084,255 | ||||||||||||
Aerospace and Defense – Equipment – 0.8% | ||||||||||||
402,445 | United Technologies Corp. | 19,655,414 | ||||||||||
Agricultural Chemicals – 0.9% | ||||||||||||
249,240 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 21,556,768 | ||||||||||
Apparel Manufacturers – 1.1% | ||||||||||||
467,325 | VF Corp. | 27,698,353 | ||||||||||
Applications Software – 1.1% | ||||||||||||
975,655 | Citrix Systems, Inc.* | 27,835,437 | ||||||||||
Athletic Footwear – 1.0% | ||||||||||||
444,705 | NIKE, Inc. – Class B | 23,333,671 | ||||||||||
Automotive – Cars and Light Trucks – 0.7% | ||||||||||||
467,572 | Bayerische Motoren Werke A.G.** | 16,103,296 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.6% | ||||||||||||
410,560 | PACCAR, Inc. | 14,550,246 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.8% | ||||||||||||
1,071,165 | Johnson Controls, Inc. | 20,362,847 | ||||||||||
Batteries and Battery Systems – 1.0% | ||||||||||||
417,070 | Energizer Holdings, Inc.* | 23,898,111 | ||||||||||
Beverages – Non-Alcoholic – 0.9% | ||||||||||||
465,435 | PepsiCo, Inc. | 23,160,046 | ||||||||||
Brewery – 0.6% | ||||||||||||
472,221 | Anheuser-Busch InBev N.V.** | 14,410,905 | ||||||||||
244,927 | Anheuser-Busch InBev N.V. – VVPR Strips*,** | 648 | ||||||||||
14,411,553 | ||||||||||||
Building – Residential and Commercial – 1.2% | ||||||||||||
60,655 | NVR, Inc.* | 30,653,217 | ||||||||||
Building Products – Cement and Aggregate – 1.3% | ||||||||||||
1,211,350 | CRH PLC** | 31,498,084 | ||||||||||
Building Products – Wood – 0.7% | ||||||||||||
1,881,482 | Masco Corp. | 16,669,931 | ||||||||||
Cable Television – 0.6% | ||||||||||||
2,010,071 | British Sky Broadcasting Group PLC** | 14,310,747 | ||||||||||
Casino Hotels – 0.6% | ||||||||||||
2,806,409 | Crown, Ltd. | 14,013,116 | ||||||||||
Chemicals – Diversified – 1.0% | ||||||||||||
470,933 | Bayer A.G.** | 23,321,459 | ||||||||||
Chemicals – Specialty – 0.3% | ||||||||||||
11,455,000 | Huabao International Holdings, Ltd. | 8,112,525 | ||||||||||
Commercial Banks – 0.1% | ||||||||||||
547,634 | Barclays PLC** | 2,227,547 | ||||||||||
Commercial Services – Finance – 0.2% | ||||||||||||
�� | 349,870 | Western Union Co. | 5,860,323 | |||||||||
Computers – 3.9% | ||||||||||||
482,734 | Apple, Inc.* | 60,742,418 | ||||||||||
486,565 | Research In Motion, Ltd. (U.S. Shares)* | 33,816,268 | ||||||||||
94,558,686 | ||||||||||||
Computers – Peripheral Equipment – 1.1% | ||||||||||||
2,097,643 | Logitech International S.A.*,** | 27,909,144 | ||||||||||
Consumer Products – Miscellaneous – 1.3% | ||||||||||||
644,855 | Kimberly-Clark Corp. | 31,688,175 | ||||||||||
Containers – Metal and Glass – 2.5% | ||||||||||||
957,000 | Crown Holdings, Inc.* | 21,101,850 | ||||||||||
1,643,900 | Owens-Illinois, Inc.* | 40,094,721 | ||||||||||
61,196,571 | ||||||||||||
Cosmetics and Toiletries – 1.2% | ||||||||||||
507,985 | Colgate-Palmolive Co. | 29,971,115 | ||||||||||
Decision Support Software – 0.3% | ||||||||||||
336,130 | MSCI, Inc.* | 7,055,369 | ||||||||||
Diversified Operations – 3.0% | ||||||||||||
482,940 | Danaher Corp. | 28,223,013 | ||||||||||
684,545 | Illinois Tool Works, Inc. | 22,453,076 | ||||||||||
5,784,250 | Keppel Corp., Ltd. | 23,140,627 | ||||||||||
73,816,716 | ||||||||||||
E-Commerce/Services – 0.8% | ||||||||||||
1,234,815 | eBay, Inc.* | 20,337,403 | ||||||||||
Electric – Generation – 0.6% | ||||||||||||
2,234,240 | AES Corp.* | 15,796,077 | ||||||||||
Electronic Components – Miscellaneous – 1.0% | ||||||||||||
1,343,320 | Tyco Electronics, Ltd. | 23,427,501 | ||||||||||
Electronic Components – Semiconductors – 1.5% | ||||||||||||
20,798,401 | ARM Holdings PLC** | 36,502,181 | ||||||||||
Electronic Connectors – 1.1% | ||||||||||||
770,345 | Amphenol Corp. – Class A | 26,068,475 | ||||||||||
Enterprise Software/Services – 1.2% | ||||||||||||
1,522,705 | Oracle Corp. | 29,449,115 | ||||||||||
Fiduciary Banks – 0.2% | ||||||||||||
76,567 | Northern Trust Corp. | 4,162,182 | ||||||||||
Finance – Investment Bankers/Brokers – 1.3% | ||||||||||||
103,450 | Goldman Sachs Group, Inc. | 13,293,325 | ||||||||||
376,695 | JPMorgan Chase & Co. | 12,430,935 | ||||||||||
179,460 | Morgan Stanley | 4,242,434 | ||||||||||
189,156 | optionsXpress Holdings, Inc. | 3,113,508 | ||||||||||
33,080,202 | ||||||||||||
Finance – Other Services – 0.4% | ||||||||||||
39,380 | CME Group, Inc. | 8,716,763 | ||||||||||
Food – Miscellaneous/Diversified – 1.5% | ||||||||||||
496,175 | General Mills, Inc. | 25,151,111 | ||||||||||
351,160 | Nestle S.A.** | 11,424,333 | ||||||||||
36,575,444 | ||||||||||||
Food – Retail – 0.4% | ||||||||||||
2,159,345 | Tesco PLC** | 10,717,077 | ||||||||||
Hotels and Motels – 0.8% | ||||||||||||
931,185 | Starwood Hotels & Resorts Worldwide, Inc. | 19,424,519 | ||||||||||
Independent Power Producer – 0.7% | ||||||||||||
956,997 | NRG Energy, Inc.* | 17,206,806 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
36 Janus Growth Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Internet Security – 1.3% | ||||||||||||
1,896,085 | Symantec Corp.* | $ | 32,707,466 | |||||||||
Machinery – General Industrial – 0.6% | ||||||||||||
325,935 | Roper Industries, Inc. | 14,859,377 | ||||||||||
Medical – Biomedical and Genetic – 5.1% | ||||||||||||
779,447 | Celgene Corp.* | 33,297,975 | ||||||||||
555,184 | Genzyme Corp.* | 29,607,963 | ||||||||||
710,948 | Gilead Sciences, Inc.* | 32,561,418 | ||||||||||
880,560 | OSI Pharmaceuticals, Inc.* | 29,560,399 | ||||||||||
125,027,755 | ||||||||||||
Medical – Drugs – 3.1% | ||||||||||||
1,526,929 | Grifols S.A.** | 26,809,546 | ||||||||||
1,176,980 | Merck & Co., Inc. | 28,529,994 | ||||||||||
163,881 | Roche Holding A.G.** | 20,714,374 | ||||||||||
76,053,914 | ||||||||||||
Medical Products – 2.7% | ||||||||||||
976,915 | Covidien, Ltd. | 32,218,657 | ||||||||||
1,009,457 | Hospira, Inc.* | 33,180,851 | ||||||||||
65,399,508 | ||||||||||||
Multi-Line Insurance – 0.4% | ||||||||||||
223,060 | ACE, Ltd. (U.S. Shares)** | 10,332,139 | ||||||||||
Multimedia – 1.3% | ||||||||||||
2,012,385 | News Corp. – Class A | 16,622,301 | ||||||||||
2,293,515 | WPP PLC** | 15,681,682 | ||||||||||
32,303,983 | ||||||||||||
Networking Products – 1.7% | ||||||||||||
1,283,715 | Cisco Systems, Inc.* | 24,801,373 | ||||||||||
796,410 | Juniper Networks, Inc.* | 17,242,277 | ||||||||||
42,043,650 | ||||||||||||
Oil and Gas Drilling – 1.1% | ||||||||||||
888,975 | Helmerich & Payne, Inc. | 27,398,210 | ||||||||||
Oil Companies – Exploration and Production – 1.8% | ||||||||||||
314,370 | Devon Energy Corp. | 16,300,085 | ||||||||||
500,150 | Occidental Petroleum Corp. | 28,153,443 | ||||||||||
44,453,528 | ||||||||||||
Oil Companies – Integrated – 2.7% | ||||||||||||
716,545 | Hess Corp. | 39,259,500 | ||||||||||
818,350 | Petroleo Brasileiro S.A. (ADR) | 27,472,010 | ||||||||||
66,731,510 | ||||||||||||
Oil Field Machinery and Equipment – 1.4% | ||||||||||||
529,419 | Cameron International Corp.* | 13,542,537 | ||||||||||
410,795 | National Oilwell Varco, Inc.* | 12,438,873 | ||||||||||
1,231,969 | Wellstream Holdings PLC** | 9,377,176 | ||||||||||
35,358,586 | ||||||||||||
Physical Practice Management – 1.5% | ||||||||||||
1,011,765 | Mednax, Inc.* | 36,322,364 | ||||||||||
Pipelines – 0.4% | ||||||||||||
254,459 | Kinder Morgan Management LLC* | 10,392,106 | ||||||||||
Power Converters and Power Supply Equipment – 0.5% | ||||||||||||
3,502,509 | JA Solar Holdings Co., Ltd. (ADR)* | 12,293,807 | ||||||||||
Property and Casualty Insurance – 0.2% | ||||||||||||
129,180 | Chubb Corp. | 5,031,561 | ||||||||||
Real Estate Management/Services – 0.2% | ||||||||||||
361,195 | Mitsubishi Estate Co., Ltd.** | 4,713,598 | ||||||||||
Real Estate Operating/Development – 0.7% | ||||||||||||
3,593,000 | CapitaLand, Ltd. | 6,618,038 | ||||||||||
4,138,000 | Hang Lung Properties, Ltd. | 11,667,819 | ||||||||||
18,285,857 | ||||||||||||
REIT – Warehouse/Industrial – 0.2% | ||||||||||||
647,831 | ProLogis | 5,901,740 | ||||||||||
Retail – Apparel and Shoe – 2.4% | ||||||||||||
1,409,600 | Esprit Holdings, Ltd. | 8,640,634 | ||||||||||
262,066 | Inditex S.A.** | 11,181,533 | ||||||||||
1,130,330 | Ltd. Brands, Inc. | 12,908,369 | ||||||||||
550,910 | Nordstrom, Inc. | 12,467,093 | ||||||||||
670,275 | Urban Outfitters, Inc.* | 13,063,659 | ||||||||||
58,261,288 | ||||||||||||
Retail – Consumer Electronics – 0.7% | ||||||||||||
198,315 | Best Buy Co., Inc. | 7,611,330 | ||||||||||
192,860 | Yamada Denki Co., Ltd.** | 8,900,191 | ||||||||||
16,511,521 | ||||||||||||
Retail – Discount – 1.4% | ||||||||||||
683,435 | Wal-Mart Stores, Inc. | 34,445,124 | ||||||||||
Retail – Drug Store – 1.4% | ||||||||||||
1,081,247 | CVS Caremark Corp. | 34,362,030 | ||||||||||
Retail – Jewelry – 0.5% | ||||||||||||
397,545 | Tiffany & Co. | 11,504,952 | ||||||||||
Retail – Regional Department Stores – 1.0% | ||||||||||||
543,760 | Kohl’s Corp.* | 24,659,516 | ||||||||||
Semiconductor Components/Integrated Circuits – 2.5% | ||||||||||||
7,529,679 | Atmel Corp.* | 28,913,967 | ||||||||||
3,020,975 | Marvell Technology Group, Ltd.* | 33,170,306 | ||||||||||
62,084,273 | ||||||||||||
Semiconductor Equipment – 1.6% | ||||||||||||
1,435,765 | KLA-Tencor Corp. | 39,828,121 | ||||||||||
Soap and Cleaning Preparations – 0.5% | ||||||||||||
280,520 | Reckitt Benckiser Group PLC** | 11,044,012 | ||||||||||
Telecommunication Equipment – 2.9% | ||||||||||||
2,426,445 | Arris Group, Inc.* | 25,890,168 | ||||||||||
1,817,955 | CommScope, Inc.* | 45,630,671 | ||||||||||
71,520,839 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 0.9% | ||||||||||||
1,590,540 | Corning, Inc. | 23,253,695 | ||||||||||
Telecommunication Services – 2.0% | ||||||||||||
1,075,495 | Amdocs, Ltd. (U.S. Shares)*,** | 22,510,110 | ||||||||||
1,147,710 | SAVVIS, Inc.* | 13,060,940 | ||||||||||
1,363,294 | Time Warner Telecom, Inc. – Class A* | 12,528,672 | ||||||||||
48,099,722 | ||||||||||||
Tobacco – 1.2% | ||||||||||||
1,829,120 | Altria Group, Inc. | 29,869,530 | ||||||||||
Toys – 1.6% | ||||||||||||
1,311,900 | Mattel, Inc. | 19,626,024 | ||||||||||
76,300 | Nintendo Co., Ltd.** | 20,417,568 | ||||||||||
40,043,592 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 37
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Transportation – Services – 2.8% | ||||||||||||
505,180 | C.H. Robinson Worldwide, Inc. | $ | 26,855,369 | |||||||||
413,925 | Expeditors International of Washington, Inc. | 14,367,337 | ||||||||||
511,680 | United Parcel Service, Inc. – Class B | 26,781,331 | ||||||||||
68,004,037 | ||||||||||||
Web Portals/Internet Service Providers – 1.5% | ||||||||||||
51,430 | Google, Inc. – Class A* | 20,364,737 | ||||||||||
1,138,730 | Yahoo!, Inc.* | 16,272,452 | ||||||||||
36,637,189 | ||||||||||||
Wireless Equipment – 3.9% | ||||||||||||
1,063,085 | Crown Castle International Corp.* | 26,066,844 | ||||||||||
1,107,975 | QUALCOMM, Inc. | 46,889,501 | ||||||||||
2,601,764 | Telefonaktiebolaget L.M. Ericsson – Class B | 22,456,621 | ||||||||||
95,412,966 | ||||||||||||
Total Common Stock (cost $2,837,144,161) | 2,416,957,985 | |||||||||||
Money Market – 1.5% | ||||||||||||
38,477,741 | Janus Cash Liquidity Fund LLC, 0% (cost $38,477,741) | 38,477,741 | ||||||||||
Total Investments (total cost $2,875,621,902) – 99.9% | 2,455,435,726 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 1,606,431 | |||||||||||
Net Assets – 100% | $ | 2,457,042,157 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 14,013,116 | 0.6% | |||||
Belgium | 14,411,553 | 0.6% | ||||||
Bermuda | 105,569,622 | 4.3% | ||||||
Brazil | 27,472,009 | 1.1% | ||||||
Canada | 55,373,035 | 2.3% | ||||||
Cayman Islands | 12,293,807 | 0.5% | ||||||
Germany | 39,424,755 | 1.6% | ||||||
Guernsey | 22,510,110 | 0.9% | ||||||
Hong Kong | 11,667,819 | 0.5% | ||||||
Ireland | 31,498,084 | 1.3% | ||||||
Japan | 34,031,358 | 1.4% | ||||||
Jersey | 15,681,682 | 0.6% | ||||||
Singapore | 29,758,666 | 1.2% | ||||||
Spain | 37,991,079 | 1.5% | ||||||
Sweden | 22,456,621 | 0.9% | ||||||
Switzerland | 70,379,990 | 2.9% | ||||||
United Kingdom | 84,178,739 | 3.4% | ||||||
United States†† | 1,826,723,681 | 74.4% | ||||||
Total | $ | 2,455,435,726 | 100.0% |
†† | Includes Short-Term Securities (72.8% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/09 | 6,000,000 | $ | 8,873,246 | $ | (61,646) | |||||||
British Pound 6/18/09 | 17,700,000 | 26,175,528 | (284,853) | |||||||||
British Pound 6/25/09 | 8,100,000 | 11,978,674 | (104,803) | |||||||||
Euro 5/14/09 | 5,800,000 | 7,672,499 | 174,901 | |||||||||
Euro 6/18/09 | 4,300,000 | 5,687,257 | (116,306) | |||||||||
Euro 6/25/09 | 28,200,000 | 37,296,280 | (565,779) | |||||||||
Japanese Yen 5/14/09 | 400,000,000 | 4,057,376 | (29,990) | |||||||||
Japanese Yen 6/25/09 | 749,000,000 | 7,602,900 | 150,723 | |||||||||
Swiss Franc 5/14/09 | 17,600,000 | 15,427,320 | 189,361 | |||||||||
Swiss Franc 6/18/09 | 16,000,000 | 14,033,408 | (280,023) | |||||||||
Total | $ | 138,804,488 | $ | (928,415) |
See Notes to Schedules of Investments and Financial Statements.
38 Janus Growth Funds April 30, 2009
Janus Triton Fund (unaudited) | Ticker: JATTX |
Fund Snapshot
A growth Fund that focuses on small- and mid-sized companies believed to have solid growth potential.
![(CHAD MEADE PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pmeadech.jpg)
Chad Meade
co-portfolio manager
![(BRIAN SCHAUB PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pschaubb.jpg)
Brian Schaub
co-portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, Janus Triton Fund returned 11.98%. Over the same time frame, the Fund’s benchmark, the Russell 2500tm Growth Index, returned 0.69%.
Economic Overview
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
Throughout these turbulent markets, we have continued to seek high-quality companies that we believe have competitive advantages, large addressable markets and strong business models. We look for recurring revenues, strong operating leverage and high returns on capital. The Fund’s outperformance during the period was largely driven by our selections within information technology, energy and industrials. Our relative weightings to consumer discretionary and materials held back relative results.
Key Contributors
VistaPrint, an online printing company, rose after reporting better-than-expected results in its December 2008 quarter. The company demonstrated strong organic growth in a difficult economic environment, which was particularly noteworthy given that its clients have traditionally been small businesses and individual consumers. We continue to be impressed with the company’s differentiated business model and technological expertise which allows it to manage thousands of small-volume orders using high-volume printing presses. This creates unusual scale and a sustainable competitive advantage in our view. On the heels of the better-than-expected quarter we pared back our position.
World Fuel Services, a leading fuel intermediary to the marine and aviation markets, was a top contributor during the period. World Fuel’s strong balance sheet and comprehensive credit monitoring has allowed the company to expand its overall market position at more attractive unit economics. As a result, World Fuel has delivered significant earnings growth and cash flow generation over the past several quarters. We continue to appreciate the asset-light nature of World Fuel’s intermediary business model and believe the company still trades at an attractive valuation at period end, offering a favorable risk/reward in our view.
MarketAxess, which offers a multi-dealer-to-client electronic platform for bond trading to institutional and broker-dealer clients, benefited from the general rise in financial stocks late in the period as well as better-than-expected quarterly results. Their services include price discovery and trade execution, which can help reduce the need for bond trading firms to maintain an inventory of securities, something that has come to the forefront during the recent credit crisis.
Key Detractors
Within technology, analog semiconductor manufacturer Microsemi Corp. declined during the period amid concern over the CEO’s credibility and potential slowing in overall technology spending. An anticompetitive lawsuit also
Janus Growth Funds April 30, 2009 39
Janus Triton Fund (unaudited)
provided a negative backdrop for the stock. While we continue to like the fundamentals of the company’s business, we felt the credibility issue of the CEO caused too much near-term uncertainty, so we exited the position.
ConMed Corp., a medical technology company that provides consumable products and medical equipment, has been negatively impacted by the slowdown in hospital equipment spending. We continue to like the company for its steady free-cash-flow generation potential historically diversified revenue stream and leadership position in many of its markets.
Shares of Standard Parking, an asset-light parking lot operator, were under pressure during the period following news that its majority owner, Steamboat Industries, may need to sell a large portion of its investment in the company. The move by Steamboat could potentially result in a secondary offering of Standard, which would likely pressure existing shares down. While this may represent a near-term headwind for the company’s stock price, we believe, longer term, Standard’s cash flow potential remains intact and that the company was trading at an attractive free cash flow yield at period end.
Outlook
We continue to be concerned about the macroeconomic environment and believe that the pace of any recovery is likely to be slow. While many macroeconomic variables like home prices, unemployment claims and consumer confidence were stabilizing, they still remained at depressed levels. We are closely watching our proprietary surveys of transportation activity to gauge the pace and breadth of any recovery in the domestic economy. Independent of the economic environment, we believe we can continue to find attractive investment opportunities in the small-to-mid cap space that possess competitive advantage, large addressable markets and strong business models.
Thank you for your investment in Janus Triton Fund.
Janus Triton Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
VistaPrint, Ltd. | 2.39% | |||
World Fuel Services Corp. | 1.44% | |||
MarketAxess Holdings, Inc. | 1.14% | |||
National CineMedia, Inc. | 1.09% | |||
CommScope, Inc. | 1.00% |
5 Bottom Performers – Holdings
Contribution | ||||
Microsemi Corp. | -0.98% | |||
Conmed Corp. | -0.61% | |||
Standard Parking Corp. | -0.50% | |||
Sequenom, Inc. | -0.47% | |||
Terremark Worldwide, Inc. | -0.44% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2500tm | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Information Technology | 8.07% | 28.65% | 19.72% | |||||||||
Consumer Discretionary | 2.44% | 8.04% | 15.45% | |||||||||
Financials | 2.29% | 8.32% | 5.75% | |||||||||
Energy | 1.19% | 8.86% | 7.00% | |||||||||
Telecommunication Services | 0.67% | 4.13% | 1.26% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2500tm | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Industrials | -0.24% | 29.43% | 19.03% | |||||||||
Health Care | -0.18% | 12.16% | 22.64% | |||||||||
Utilities | 0.00% | 0.00% | 0.87% | |||||||||
Consumer Staples | 0.00% | 0.00% | 3.74% | |||||||||
Materials | 0.02% | 0.42% | 4.53% |
* | 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. |
40 Janus Growth Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Amphenol Corp. – Class A Electronic Connectors | 2.6% | |||
Dresser-Rand Group, Inc. Oil Field Machinery and Equipment | 2.6% | |||
CoStar Group, Inc. Commercial Services | 2.5% | |||
DTS, Inc. Audio and Video Products | 2.5% | |||
World Fuel Services Corp. Retail – Petroleum Products | 2.3% | |||
12.5% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p04.gif)
Emerging markets comprised 0.4% of total net assets.
*Includes Securities Sold Short of (0.9)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c04.gif)
Janus Growth Funds April 30, 2009 41
Janus Triton Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m04.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Triton Fund | 11.98% | –22.77% | 3.42% | 1.21% | 1.21% | ||||||
Russell 2500tm Growth Index | 0.69% | –32.98% | –3.80% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Small-Cap Growth Funds | – | 15/587 | 1/443 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. The expense waiver shown reflects the application of such limit. Total returns shown include fee waivers, if any, and without such waivers, total returns would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
Annual expense ratios include dividends or interest on short sales, which are paid to the lender of borrowed securities. Such expenses will vary depending on whether the securities the Fund sells short pay dividends or interest and the amount of such dividends or interest.
See important disclosures on the next page.
42 Janus Growth Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – February 25, 2005
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,119.80 | $ | 6.57 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.60 | $ | 6.26 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.25%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. |
Janus Growth Funds April 30, 2009 43
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 85.4% | ||||||||||||
Advertising Sales – 0.9% | ||||||||||||
91,338 | Lamar Advertising Co. – Class A* | $ | 1,543,612 | |||||||||
Aerospace and Defense – 1.1% | ||||||||||||
55,505 | TransDigm Group, Inc.* | 1,950,446 | ||||||||||
Auction House – Art Dealer – 1.9% | ||||||||||||
150,105 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 3,362,352 | ||||||||||
Audio and Video Products – 2.5% | ||||||||||||
165,139 | DTS, Inc.* | 4,400,954 | ||||||||||
Commercial Banks – 0.6% | ||||||||||||
333,506 | CapitalSource, Inc. | 1,030,534 | ||||||||||
Commercial Services – 5.7% | ||||||||||||
120,695 | CoStar Group, Inc.* | 4,471,750 | ||||||||||
136,635 | Iron Mountain, Inc.* | 3,892,731 | ||||||||||
114,352 | Standard Parking Corp.* | 1,742,724 | ||||||||||
10,107,205 | ||||||||||||
Commercial Services – Finance – 4.7% | ||||||||||||
204,105 | Euronet Worldwide, Inc.* | 3,302,419 | ||||||||||
35,755 | Interactive Data Corp. | 803,772 | ||||||||||
39,935 | Morningstar, Inc.* | 1,584,221 | ||||||||||
151,640 | Riskmetrics Group, Inc.* | 2,637,020 | ||||||||||
8,327,432 | ||||||||||||
Computer Software – 0.9% | ||||||||||||
125,030 | Omniture, Inc.* | 1,540,370 | ||||||||||
Decision Support Software – 1.8% | ||||||||||||
155,121 | MSCI, Inc.* | 3,255,990 | ||||||||||
Diagnostic Kits – 0.9% | ||||||||||||
39,960 | Idexx Laboratories, Inc.* | 1,570,428 | ||||||||||
Distribution/Wholesale – 1.1% | ||||||||||||
64,236 | MWI Veterinary Supply, Inc.* | 1,996,455 | ||||||||||
Diversified Operations – 0.3% | ||||||||||||
976,000 | Melco International Development, Ltd. | 479,152 | ||||||||||
Electronic Components – Semiconductors – 1.5% | ||||||||||||
1,481,291 | ARM Holdings PLC | 2,599,736 | ||||||||||
Electronic Connectors – 2.6% | ||||||||||||
134,980 | Amphenol Corp. – Class A | 4,567,723 | ||||||||||
Electronic Measuring Instruments – 1.5% | ||||||||||||
120,974 | Trimble Navigation, Ltd.* | 2,593,683 | ||||||||||
Enterprise Software/Services – 1.0% | ||||||||||||
64,580 | Concur Technologies, Inc.* | 1,748,181 | ||||||||||
Filtration and Separations Products – 1.3% | ||||||||||||
67,500 | Donaldson Co., Inc. | 2,226,825 | ||||||||||
Finance – Other Services – 1.7% | ||||||||||||
306,016 | MarketAxess Holdings, Inc.* | 2,934,693 | ||||||||||
Footwear and Related Apparel – 1.0% | ||||||||||||
83,155 | Wolverine World Wide, Inc. | 1,732,119 | ||||||||||
Human Resources – 1.4% | ||||||||||||
124,080 | Resources Connection, Inc.* | 2,425,764 | ||||||||||
Internet Applications Software – 1.8% | ||||||||||||
175,360 | DealerTrack Holdings, Inc.* | 2,661,965 | ||||||||||
1,117 | e-Seikatsu Co., Ltd. | 508,779 | ||||||||||
3,170,744 | ||||||||||||
Investment Management and Advisory Services – 1.0% | ||||||||||||
32,890 | Eaton Vance Corp. | 900,199 | ||||||||||
22,200 | T. Rowe Price Group, Inc. | 855,144 | ||||||||||
1,755,343 | ||||||||||||
Machinery – General Industrial – 3.3% | ||||||||||||
67,165 | Roper Industries, Inc. | 3,062,052 | ||||||||||
73,805 | Wabtec Corp. | 2,814,923 | ||||||||||
5,876,975 | ||||||||||||
Medical – Biomedical and Genetic – 0.7% | ||||||||||||
31,485 | Myriad Genetics, Inc.* | 1,221,303 | ||||||||||
Medical – Drugs – 0.7% | ||||||||||||
416,514 | Achillion Pharmaceuticals, Inc.* | 708,074 | ||||||||||
216,485 | Array BioPharma, Inc.* | 634,301 | ||||||||||
1,342,375 | ||||||||||||
Medical Information Systems – 1.1% | ||||||||||||
63,160 | Athenahealth, Inc.* | 2,008,488 | ||||||||||
Medical Instruments – 3.7% | ||||||||||||
192,315 | Conmed Corp.* | 2,561,636 | ||||||||||
16,305 | Intuitive Surgical, Inc.* | 2,343,518 | ||||||||||
30,020 | Techne Corp. | 1,717,744 | ||||||||||
6,622,898 | ||||||||||||
Medical Products – 1.9% | ||||||||||||
303,443 | TomoTherapy, Inc.* | 782,883 | ||||||||||
51,520 | Varian Medical Systems, Inc.* | 1,719,222 | ||||||||||
36,660 | Vnus Medical Technologies, Inc.* | 812,019 | ||||||||||
3,314,124 | ||||||||||||
Multimedia – 0.9% | ||||||||||||
31,060 | FactSet Research Systems, Inc. | 1,664,505 | ||||||||||
Oil Companies – Exploration and Production – 0.7% | ||||||||||||
154,655 | SandRidge Energy, Inc.* | 1,261,985 | ||||||||||
Oil Field Machinery and Equipment – 2.6% | ||||||||||||
184,140 | Dresser-Rand Group, Inc.*,** | 4,535,368 | ||||||||||
Pipelines – 1.3% | ||||||||||||
55,747 | Kinder Morgan Management LLC* | 2,276,707 | ||||||||||
Power Converters and Power Supply Equipment – 0.5% | ||||||||||||
37,505 | SunPower Corp. – Class B* | 951,127 | ||||||||||
Printing – Commercial – 1.5% | ||||||||||||
77,315 | VistaPrint, Ltd.*,** | 2,655,770 | ||||||||||
Real Estate Management/Services – 1.7% | ||||||||||||
93,185 | Jones Lang LaSalle, Inc. | 3,007,080 | ||||||||||
Real Estate Operating/Development – 0.4% | ||||||||||||
97,170 | Rodobens Negocios Imobiliarios S.A. | 644,155 | ||||||||||
Recreational Vehicles – 1.1% | ||||||||||||
55,990 | Polaris Industries, Inc. | 1,872,866 | ||||||||||
Retail – Apparel and Shoe – 2.0% | ||||||||||||
191,895 | bebe Stores, Inc. | 1,765,434 | ||||||||||
88,755 | Urban Outfitters, Inc.* | 1,729,835 | ||||||||||
3,495,269 | ||||||||||||
Retail – Catalog Shopping – 0.9% | ||||||||||||
40,880 | MSC Industrial Direct Co. – Class A | 1,669,948 | ||||||||||
Retail – Petroleum Products – 2.3% | ||||||||||||
106,948 | World Fuel Services Corp. | 4,077,927 | ||||||||||
Schools – 0.9% | ||||||||||||
8,690 | Strayer Education, Inc. | 1,645,973 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
44 Janus Growth Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Semiconductor Components/Integrated Circuits – 3.3% | ||||||||||||
1,053,390 | Atmel Corp.* | $ | 4,045,017 | |||||||||
216,175 | Cypress Semiconductor Corp.* | 1,714,268 | ||||||||||
5,759,285 | ||||||||||||
Telecommunication Equipment – 1.7% | ||||||||||||
120,155 | CommScope, Inc.* | 3,015,891 | ||||||||||
Telecommunication Services – 1.6% | ||||||||||||
49,100 | Amdocs, Ltd. (U.S. Shares)* | 1,027,663 | ||||||||||
156,905 | SAVVIS, Inc.* | 1,785,579 | ||||||||||
2,813,242 | ||||||||||||
Theaters – 1.0% | ||||||||||||
124,095 | National CineMedia, Inc. | 1,803,100 | ||||||||||
Therapeutics – 1.0% | ||||||||||||
279,675 | MannKind Corp.* | 1,143,870 | ||||||||||
41,835 | Theravance, Inc.* | 599,496 | ||||||||||
1,743,366 | ||||||||||||
Transportation – Marine – 1.1% | ||||||||||||
364,690 | Horizon Lines, Inc. – Class A | 1,940,151 | ||||||||||
Transportation – Services – 1.6% | ||||||||||||
81,465 | Expeditors International of Washington, Inc. | 2,827,650 | ||||||||||
Transportation – Truck – 2.6% | ||||||||||||
103,055 | Forward Air Corp. | 1,717,927 | ||||||||||
58,280 | Landstar System, Inc. | 2,075,351 | ||||||||||
27,495 | Old Dominion Freight Line, Inc.* | 773,984 | ||||||||||
4,567,262 | ||||||||||||
Water Treatment Systems – 1.0% | ||||||||||||
110,690 | Nalco Holding Co. | 1,806,461 | ||||||||||
Web Hosting/Design – 2.1% | ||||||||||||
52,290 | Equinix, Inc.* | 3,672,327 | ||||||||||
Wireless Equipment – 3.0% | ||||||||||||
120,320 | Crown Castle International Corp.* | 2,950,246 | ||||||||||
94,260 | SBA Communications Corp. – Class A* | 2,375,352 | ||||||||||
5,325,598 | ||||||||||||
Total Common Stock (cost $156,280,896) | 150,738,917 | |||||||||||
Money Market – 14.5% | ||||||||||||
25,522,851 | Janus Cash Liquidity Fund LLC, 0% (cost $25,522,851) | 25,522,851 | ||||||||||
Total Investments (total cost $181,803,747) – 99.9% | 176,261,768 | |||||||||||
Securities Sold Short – (0.9)% | ||||||||||||
Retail – Restaurants – (0.9)% | ||||||||||||
50,510 | BJ’s Restaurants, Inc.* | (832,910) | ||||||||||
21,010 | Buffalo Wild Wings, Inc.* | (820,230) | ||||||||||
Total Securities Sold Short (proceeds $1,384,102) | (1,653,140) | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.0% | 1,818,042 | |||||||||||
Net Assets – 100% | $ | 176,426,670 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 2,655,770 | 1.5% | |||||
Brazil | 644,155 | 0.4% | ||||||
Canada | 3,362,352 | 1.9% | ||||||
Guernsey | 1,027,663 | 0.6% | ||||||
Hong Kong | 479,152 | 0.3% | ||||||
Japan | 508,779 | 0.3% | ||||||
United Kingdom | 2,599,736 | 1.5% | ||||||
United States†† | 164,984,161 | 93.5% | ||||||
Total | $ | 176,261,768 | 100.0% |
†† | Includes Short-Term Securities (79.1% excluding Short-Term Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (1,653,140) | 100.0% | |||||
Total | $ | (1,653,140) | 100.0% |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 45
Janus Twenty Fund (unaudited) (closed to new investors) | Ticker: JAVLX |
Fund Snapshot
This high conviction Fund invests primarily in companies we believe have sustainable competitive positions with large and growing addressable markets.
![(RON SACHS PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psachsro.jpg)
Ron Sachs
portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, the Fund returned 3.89% versus a return of -1.52% for the Fund’s primary benchmark, the Russell 1000® Growth Index. The Fund’s secondary benchmark, the S&P 500® Index, returned -8.53% for the period.
Due to certain circumstances and market conditions, we initiated positions in futures contracts in order to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Economic Review
Continuing fallout from the credit crisis and concerns that the recession may be deep and prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
The Fund’s outperformance was largely driven by our holdings within information technology and consumer staples. Meanwhile, our healthcare holdings performed relatively poorly, as did our selections within materials.
Select Technology, Consumer Staples and Telecommunication Companies Aided Results
Research In Motion (RIM), a maker of the popular Blackberry mobile device, was hurt by delayed product launches and concerns over competition and profitability early in the year. We added to our position on the weakness given our continued positive view of the company’s competitive position in key markets and growth potential. The stock rebounded strongly in April, benefiting from robust volume growth during its latest quarterly results that exceeded analysts’ estimates. New product introductions hurt margins, but the recent results showed a recovery in gross margins, which we had anticipated. Couple this with market share gains and growing usage of mobile data services worldwide, we think RIM still represented an attractive growth opportunity at period end.
Global brewer Anheuser-Busch InBev, a result of Belgium-based InBev’s acquisition of American brewer Anheuser-Busch, was the second largest individual contributor during the quarter. The stock struggled for much of 2008 amid concerns over the combined company’s ability to service and restructure its debt. We were attracted to the company’s pricing power given its lineup of strong brands in consolidated markets such as the U.S. and Brazil. The stock price rebounded off of its November lows and continued to trend higher through April as Anheuser-Busch InBev continued to make good progress towards selling off assets and paying down acquisition-related debt.
Apple Inc. was another technology name that benefited from a late-period rebound. Despite a weak economy, the company posted strong quarterly results during the period that showed better-than-expected demand for its iPod players, Macintosh computers and iPhones. We believe the investment community overestimated the economic sensitivity of Apple’s business. We think it will continue to grow globally over the long term given its small market share in some important product and geographic markets. In addition, we
46 Janus Growth Funds April 30, 2009
(unaudited)
were attracted to its large cash position and free cash flow yield at period end.
Select Biotechnology, Agriculture and Energy Holdings were Among the Top Detractors
Celgene Corp. was the Fund’s largest detractor during the period, hurt in February, along with many healthcare names, after the U.S. Administration proposed aggressive healthcare reform. The stock suffered another decline in early April after the company said it expects 2009 profits to be at the lower end of its previous forecast. We think Celgene will continue to benefit from its cancer-fighting drug Revlimid, which is still early in its global launch cycle, has an attractive growth profile, and could maintain pricing power, even in an environment of more aggressive healthcare reform. As such, we added to our position.
Potash Corporation suffered early in the period from weakness in commodity prices, as farmers reduced fertilizer purchases to better manage their costs in light of tighter credit conditions and reduced prices for their products. We think Potash is a low-cost provider in a capacity-constrained market (potash). Because demand for Potash’s key product fell significantly in a way that was inconsistent with our investment thesis, we exited the position in December.
Oil and gas company Hess Corp. was a victim of the collapse in crude oil prices as the company’s results were highly leveraged to oil prices. We exited the position early in the period because of Hess’ economic sensitivity and the fact that the company has little control over pricing. In fact, we reduced much of our exposure to energy given our view that the economy could continue to struggle over the near term.
Outlook
Looking ahead, the economic environment is likely to remain difficult over the near term. The recession has spread globally and credit markets, though improved, were not fully and freely functioning at period end, despite continuing government efforts. We are encouraged by the relatively broad market rebound late in the period. Despite this, stock prices of what we believe are many quality companies at period end appeared to reflect a deeper and longer downturn than we think was justified by the economic fundamentals. Other asset classes also represented attractive opportunities at period end as well in our view, so we recognize the potential competition for investment dollars. Regardless, we remain focused on companies we think are likely to emerge from the current environment in a stronger position and that are attractively valued.
Thank you for your investment in Janus Twenty Fund. We look forward to reporting results in the future.
Janus Growth Funds April 30, 2009 47
Janus Twenty Fund (unaudited)
Janus Twenty Fund At A Glance
5 Top Perfomers – Holdings
Contribution | ||||
Research In Motion, Ltd. (U.S. Shares) | 3.64% | |||
Anheuser-Busch InBev N.V. | 2.05% | |||
Apple, Inc. | 1.57% | |||
Bunge, Ltd. | 0.66% | |||
ABB, Ltd. | 0.62% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -3.00% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | -2.13% | |||
Hess Corp. | -0.90% | |||
Monsanto Co. | -0.54% | |||
CME Group, Inc. | -0.42% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Information Technology | 6.32% | 32.59% | 29.49% | |||||||||
Consumer Staples | 3.37% | 14.15% | 14.12% | |||||||||
Industrials | 0.56% | 7.11% | 12.68% | |||||||||
Telecommunication Services | 0.08% | 2.96% | 0.76% | |||||||||
Utilities | 0.00% | 0.00% | 1.94% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Health Care | -2.79% | 24.66% | 15.53% | |||||||||
Materials | -1.84% | 8.30% | 3.81% | |||||||||
Energy | -0.90% | 1.75% | 8.56% | |||||||||
Financials | -0.45% | 6.65% | 3.47% | |||||||||
Consumer Discretionary | -0.34% | 1.82% | 9.65% |
* | 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. |
48 Janus Growth Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Research In Motion, Ltd. (U.S. Shares) Computers | 9.7% | |||
Apple, Inc. Computers | 8.9% | |||
Gilead Sciences, Inc. Medical – Biomedical and Genetic | 7.2% | |||
CVS Caremark Corp. Retail – Drug Store | 6.6% | |||
Celgene Corp. Medical – Biomedical and Genetic | 6.5% | |||
38.9% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p09.gif)
Emerging markets comprised 4.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t09.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c09.gif)
Janus Growth Funds April 30, 2009 49
Janus Twenty Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m09.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Twenty Fund(1) | 3.89% | –37.01% | 4.97% | –1.75% | 11.46% | 0.86% | |||||||
Russell 1000® Growth Index | –1.52% | –31.57% | –2.39% | –4.40% | 8.64% | ||||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 9.41% | ||||||||
Lipper Quartile | – | 4th | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 668/844 | 2/610 | 63/310 | 2/40 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
50 Janus Growth Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – April 30, 1985
(1) Closed to new investors.
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,038.90 | $ | 4.40 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.48 | $ | 4.36 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2009 51
Janus Twenty Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 92.5% | ||||||||||||
Aerospace and Defense – 1.0% | ||||||||||||
15,103,950 | BAE Systems PLC | $ | 79,426,030 | |||||||||
Agricultural Chemicals – 4.3% | ||||||||||||
2,433,600 | Monsanto Co. | 206,588,304 | ||||||||||
593,401 | Syngenta A.G. | 126,642,822 | ||||||||||
333,231,126 | ||||||||||||
Agricultural Operations – 1.5% | ||||||||||||
2,417,105 | Bunge, Ltd. | 116,045,211 | ||||||||||
Brewery – 4.8% | ||||||||||||
12,087,797 | Anheuser-Busch InBev N.V. | 368,886,809 | ||||||||||
2,849,864 | Anheuser-Busch InBev N.V. – VVPR Strips* | 7,540 | ||||||||||
368,894,349 | ||||||||||||
Cellular Telecommunications – 0.6% | ||||||||||||
1,414,990 | America Movil S.A.B. de C.V. – Series L (ADR) | 46,482,422 | ||||||||||
Computers – 18.6% | ||||||||||||
5,438,170 | Apple, Inc.* | 684,284,931 | ||||||||||
10,826,290 | Research In Motion, Ltd. (U.S. Shares)*,** | 752,427,156 | ||||||||||
1,436,712,087 | ||||||||||||
Diversified Minerals – 1.9% | ||||||||||||
8,731,840 | Cia Vale do Rio Doce (ADR) | 144,162,678 | ||||||||||
Engineering – Research and Development Services – 4.1% | ||||||||||||
22,762,362 | ABB, Ltd. | 321,732,920 | ||||||||||
Enterprise Software/Services – 4.8% | ||||||||||||
19,134,583 | Oracle Corp. | 370,062,835 | ||||||||||
Entertainment Software – 1.0% | ||||||||||||
3,832,235 | Electronic Arts, Inc.* | 77,985,982 | ||||||||||
Finance – Investment Bankers/Brokers – 4.8% | ||||||||||||
1,349,710 | Goldman Sachs Group, Inc. | 173,437,735 | ||||||||||
6,028,700 | JPMorgan Chase & Co. | 198,947,100 | ||||||||||
372,384,835 | ||||||||||||
Finance – Other Services – 1.8% | ||||||||||||
615,555 | CME Group, Inc. | 136,253,099 | ||||||||||
Medical – Biomedical and Genetic – 13.7% | ||||||||||||
11,794,828 | Celgene Corp.* | 503,875,052 | ||||||||||
12,155,465 | Gilead Sciences, Inc.* | 556,720,297 | ||||||||||
1,060,595,349 | ||||||||||||
Medical – Drugs – 1.4% | ||||||||||||
858,563 | Roche Holding A.G. | 108,521,396 | ||||||||||
Medical – HMO – 1.4% | ||||||||||||
4,648,100 | UnitedHealth Group, Inc. | 109,323,312 | ||||||||||
Multi-Line Insurance – 1.0% | ||||||||||||
1,639,480 | ACE, Ltd. (U.S. Shares) | 75,940,714 | ||||||||||
Multimedia – 1.3% | ||||||||||||
12,361,680 | News Corp. – Class A | 102,107,477 | ||||||||||
Networking Products – 4.3% | ||||||||||||
17,248,615 | Cisco Systems, Inc.* | 333,243,242 | ||||||||||
Oil Companies – Integrated – 1.7% | ||||||||||||
3,821,930 | Petroleo Brasileiro S.A. (ADR) | 128,302,190 | ||||||||||
Optical Supplies – 2.0% | ||||||||||||
1,654,390 | Alcon, Inc. (U.S. Shares) | 152,220,424 | ||||||||||
Retail – Drug Store – 6.6% | ||||||||||||
16,084,520 | CVS Caremark Corp. | 511,166,046 | ||||||||||
Retail – Regional Department Stores – 0.8% | ||||||||||||
1,416,695 | Kohl’s Corp.* | 64,247,118 | ||||||||||
Soap and Cleaning Preparations – 0.9% | ||||||||||||
1,863,590 | Reckitt Benckiser Group PLC | 73,369,137 | ||||||||||
Telecommunication Equipment – Fiber Optics – 1.1% | ||||||||||||
6,008,190 | Corning, Inc. | 87,839,738 | ||||||||||
Transportation – Services – 1.4% | ||||||||||||
2,123,970 | United Parcel Service, Inc. – Class B | 111,168,590 | ||||||||||
Web Portals/Internet Service Providers – 4.2% | ||||||||||||
819,466 | Google, Inc. – Class A* | 324,483,952 | ||||||||||
Wireless Equipment – 1.5% | ||||||||||||
4,624,320 | Crown Castle International Corp.* | 113,388,326 | ||||||||||
Total Common Stock (cost $6,102,750,109) | 7,159,290,585 | |||||||||||
Money Markets – 7.1% | ||||||||||||
550,331,623 | Janus Cash Liquidity Fund LLC, 0% (cost $550,331,623) | 550,331,623 | ||||||||||
Total Investments (total cost $6,653,081,732) – 99.6% | 7,709,622,208 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.4% | 29,135,416 | |||||||||||
Net Assets – 100% | $ | 7,738,757,624 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Belgium | $ | 368,894,349 | 4.8% | |||||
Bermuda | 116,045,211 | 1.5% | ||||||
Brazil | 272,464,867 | 3.5% | ||||||
Canada | 752,427,155 | 9.8% | ||||||
Mexico | 46,482,422 | 0.6% | ||||||
Switzerland | 785,058,276 | 10.2% | ||||||
United Kingdom | 152,795,167 | 2.0% | ||||||
United States†† | 5,215,454,761 | 67.6% | ||||||
Total | $ | 7,709,622,208 | 100.0% |
†† | Includes Short-Term Securities (60.5% excluding Short-Term Securities) |
Financial Futures – Long | ||||||
11,346 Contracts | S&P 500® E-mini Futures expires June 2009 principal amount $484,695,492, value $493,551,000 cumulative appreciation | $ | 8,855,508 | |||
See Notes to Schedules of Investments and Financial Statements.
52 Janus Growth Funds April 30, 2009
Janus Venture Fund (unaudited) (closed to new investors) | Ticker: JAVTX |
Fund Snapshot
This growth Fund focuses on small companies, where there’s less Wall Street coverage and more opportunity for a research edge.
![(WILL BALES PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pbaleswi.jpg)
Will Bales
portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, Janus Venture Fund returned 6.14%. Meanwhile, the Fund’s primary and secondary benchmarks, the Russell 2000® Growth Index and the Russell 2000® Index, returned -3.77% and -8.40%, respectively.
Economic Overview
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ending April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows, only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
Given the market sell off, we were able to invest in what we viewed as high-quality businesses whose market capitalization moved back down into the small cap market. In addition, we opportunistically invested in companies that we thought could rebound from depressed valuation levels that were pricing in little or no growth over a multi-year horizon. The Fund’s outperformance during the period was largely driven by our selections within information technology and energy. Our overweight to technology also provided a boost to relative results. In terms of detractors, our holdings within consumer discretionary and healthcare hurt comparable returns, although relative weightings to each group offset some of the weakness.
The Fund employed some basic derivative strategies during the six-month period. These strategies included selling put and call options at or around our research-driven target prices to generate income and exercise price discipline for purchases and sales of the underlying securities. We also utilized long put options in some cases to hedge downside risk in individual positions. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Select Technology and Energy Holdings Aided Performance
VistaPrint, an online printing company focused on low-cost products, rose after reporting better-than-expected results in its December 2008 quarter. The company demonstrated strong organic growth in a difficult economic environment, which was particularly impressive given that its clients generally have been small businesses and individual consumers. We like the company’s differentiated business model of managing thousands of small-volume orders using high-volume printing presses, which provides unusual scale and, in our view, a competitive advantage.
World Fuel Services, a supplier of fuel to marine and airline users, was a top contributor during the period boosted by a strong earnings report. Over the past year, we think World Fuel’s competitive positioning and pricing power has improved, as a number of competitors have exited the business. We also believe the company has an attractive business model and the valuation offered a favorable risk/reward at the end of the period.
CommScope, an information technology company involved in providing infrastructure solutions for communication and wireless networks, struggled early in the period amid disappointing quarterly results and a weak outlook. In addition, the company had been a relative underperformer given its leverage profile and concerns over its debt obligations and covenants. We took advantage of this weakness to initiate a
Janus Growth Funds April 30, 2009 53
Janus Venture Fund (unaudited)
position in the name, believing the market’s reaction was excessive and that the company was undervalued. As the period came to a close, CommScope’s stock price rose sharply on an upbeat profit forecast and a reduction in concern about the company’s leverage profile.
Consumer Discretionary and Healthcare Holdings Weighed on Performance
LHC Group, a provider of skilled home-based healthcare services, declined significantly during the period, as worries increased that proposed changes to healthcare spending by the Obama Administration could negatively impact the company. We feel the proposed changes will not be as severe as the market was pricing in at period end. In addition, we view LHC’s business model as one that may actually help reduce healthcare costs across the board, for patients and the government.
Film studio Lions Gate declined after announcing weaker-than-expected box office proceeds from its Punisher 2 movie. We added to our position on the weakness as we believe the company’s attractive asset mix, growth potential and inexpensive valuation will benefit Fund performance over the longer term.
International hotel and resort real estate company Kingdom Hotels’ stock price declined amid a difficult credit market environment and the global economic slowdown. Despite the weak environment, the company’s geographically diverse operations (Middle East, North America and Asia) have been performing relatively well. We remained attracted to the company’s portfolio of resort assets at period end and we believe the real estate was getting little credit in the stock valuation. In addition, we believe Kingdom Hotels’ recently announced buyback program will be largely accretive to earnings, potentially benefiting shareholders.
Outlook
Even though the equity markets recovered somewhat in March and in April, we do not believe economic conditions have improved substantially given the ongoing uncertainty of the banking industry. Near-term corporate earnings continue to be a worry, but we believe earnings comparisons could start to improve towards the end of this year. We continue to favor companies we think have high-quality management teams, sustainable revenue and earnings growth and attractive risk-reward profiles.
Thank you for your investment in Janus Venture Fund.
54 Janus Growth Funds April 30, 2009
(unaudited)
Janus Venture Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
VistaPrint, Ltd. | 2.87% | |||
World Fuel Services Corp. | 1.20% | |||
CommScope, Inc. | 1.19% | |||
Ultimate Software Group, Inc. | 1.06% | |||
Smith & Wesson Holding Corp. | 1.04% |
5 Bottom Performers – Holdings
Contribution | ||||
LHC Group, Inc. | -0.96% | |||
Lions Gate Entertainment Corp. (U.S. Shares) | -0.87% | |||
Kingdom Hotel Investments (GDR) | -0.86% | |||
Microsemi Corp. | -0.57% | |||
Psychiatric Solutions, Inc. | -0.47% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Information Technology | 8.01% | 37.97% | 22.66% | |||||||||
Energy | 0.67% | 3.65% | 6.48% | |||||||||
Consumer Discretionary | 0.66% | 17.58% | 12.88% | |||||||||
Telecommunication Services | 0.58% | 1.81% | 1.45% | |||||||||
Materials | 0.10% | 0.04% | 2.74% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Health Care | -2.44% | 20.17% | 26.37% | |||||||||
Industrials | -1.19% | 14.63% | 18.23% | |||||||||
Financials | -0.10% | 3.91% | 5.31% | |||||||||
Consumer Staples | -0.05% | 0.24% | 3.04% | |||||||||
Utilities | 0.00% | 0.00% | 0.85% |
* | 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. |
Janus Growth Funds April 30, 2009 55
Janus Venture Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
VistaPrint, Ltd. Printing – Commercial | 3.8% | |||
CoStar Group, Inc. Commercial Services | 3.6% | |||
Ultimate Software Group, Inc. Enterprise Software/Services | 3.4% | |||
Solera Holdings, Inc. Transactional Software | 2.9% | |||
Equinix, Inc. Web Hosting/Design | 2.9% | |||
16.6% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p05.gif)
Emerging markets comprised 0.8% of total net assets.
* Includes Securities Sold Short of (1.6)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t05.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c05.gif)
56 Janus Growth Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m05.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Venture Fund(1) | 6.14% | –33.38% | –1.34% | 0.34% | 10.22% | 0.90% | |||||||
Russell 2000® Growth Index | –3.77% | –30.36% | –1.67% | –1.06% | 5.62% | ||||||||
Russell 2000® Index | –8.40% | –30.74% | –1.45% | 2.53% | 7.94% | ||||||||
Lipper Quartile | – | 2nd | 2nd | 3rd | 1st | ||||||||
Lipper Ranking – based on total return for Small-Cap Growth Funds | – | 279/587 | 136/408 | 132/204 | 1/10 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Annual expense ratios include dividends or interest on short sales, which are paid to the lender of borrowed securities. Such expenses will vary depending on whether the securities the Fund sells short pay dividends or interest and the amount of such dividends or interest.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 57
Janus Venture Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – April 30, 1985
(1) Closed to new investors.
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,061.00 | $ | 4.96 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.98 | $ | 4.86 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.97%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
58 Janus Growth Funds April 30, 2009
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Common Stock – 100.2% | ||||||||||||
Advertising Agencies – 0.3% | ||||||||||||
539,695 | MDC Partners, Inc. – Class A (U.S. Shares)* | $ | 2,218,146 | |||||||||
Advertising Sales – 0.1% | ||||||||||||
34,360 | Lamar Advertising Co. – Class A* | 580,684 | ||||||||||
Applications Software – 0.5% | ||||||||||||
1,581,188 | inContact, Inc.*,£ | 3,794,851 | ||||||||||
Auction House – Art Dealer – 0.7% | ||||||||||||
254,330 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 5,696,992 | ||||||||||
Audio and Video Products – 1.7% | ||||||||||||
502,725 | DTS, Inc.* | 13,397,621 | ||||||||||
Automotive – Truck Parts and Equipment – Replacement – 0.3% | ||||||||||||
588,688 | Motorcar Parts of America, Inc.*,£ | 2,584,340 | ||||||||||
Beverages – Non-Alcoholic – 0.2% | ||||||||||||
355,070 | Heckmann Corp.* | 1,871,219 | ||||||||||
Broadcast Services and Programming – 0% | ||||||||||||
9,700 | Genius Products, Inc. – Private Placement*,£ | 53,350 | ||||||||||
Casino Hotels – 0.5% | ||||||||||||
1,451,136 | Century Casinos, Inc.*,£ | 3,642,351 | ||||||||||
Casino Services – 0.1% | ||||||||||||
482,833 | PokerTek, Inc.*,£ | 564,915 | ||||||||||
Commercial Services – 5.4% | ||||||||||||
741,815 | CoStar Group, Inc.*,** | 27,484,245 | ||||||||||
268,355 | HMS Holdings Corp.* | 8,045,283 | ||||||||||
2,346,939 | Intermap Technologies Corp.*,£ | 3,934,516 | ||||||||||
229,805 | Providence Service Corp.* | 2,256,685 | ||||||||||
41,720,729 | ||||||||||||
Commercial Services – Finance – 3.2% | ||||||||||||
230,180 | Bankrate, Inc.* | 5,754,500 | ||||||||||
645,080 | Euronet Worldwide, Inc.* | 10,437,395 | ||||||||||
472,565 | Riskmetrics Group, Inc.* | 8,217,905 | ||||||||||
24,409,800 | ||||||||||||
Computer Graphics – 0.4% | ||||||||||||
817,532 | Monotype Imaging Holdings, Inc.* | 3,033,044 | ||||||||||
Computer Services – 1.1% | ||||||||||||
3,140,420 | LivePerson, Inc.*,£ | 8,353,517 | ||||||||||
Computer Software – 1.4% | ||||||||||||
853,050 | Omniture, Inc.*,** | 10,509,576 | ||||||||||
Consulting Services – 2.4% | ||||||||||||
263,911 | Huron Consulting Group, Inc.* | 12,654,533 | ||||||||||
1,961,073 | Information Services Group, Inc.*,£ | 5,804,776 | ||||||||||
18,459,309 | ||||||||||||
Consumer Products – Miscellaneous – 2.6% | ||||||||||||
983,640 | Jarden Corp.*,** | 19,771,164 | ||||||||||
Decision Support Software – 0.8% | ||||||||||||
311,425 | MSCI, Inc.* | 6,536,811 | ||||||||||
Distribution/Wholesale – 0.8% | ||||||||||||
210,556 | MWI Veterinary Supply, Inc.* | 6,544,080 | ||||||||||
Diversified Operations – 1.5% | ||||||||||||
867,990 | Digital Domain – Private Placement*,°° ,§ | 7,291,116 | ||||||||||
302,885 | Barnes Group, Inc. | 4,288,852 | ||||||||||
11,579,968 | ||||||||||||
Drug Delivery Systems – 0.6% | ||||||||||||
904,930 | I-Flow Corp.* | 4,524,650 | ||||||||||
E-Commerce/Services – 0.1% | ||||||||||||
1,836,265 | Kowabunga!, Inc.* | 275,440 | ||||||||||
2,691,158 | Workstream, Inc. (U.S. Shares)*,£ | 861,170 | ||||||||||
1,136,610 | ||||||||||||
Educational Software – 0.4% | ||||||||||||
112,335 | Rosetta Stone, Inc.* | 3,364,433 | ||||||||||
Electronic Components – Miscellaneous – 0.6% | ||||||||||||
541,525 | Harbin Electric – Private Placement* | 4,321,370 | ||||||||||
Electronic Components – Semiconductors – 0.1% | ||||||||||||
28,670 | Monolithic Power Systems, Inc.* | 530,395 | ||||||||||
Electronic Connectors – 1.0% | ||||||||||||
232,565 | Amphenol Corp. – Class A | 7,870,000 | ||||||||||
E-Marketing/Information – 0.7% | ||||||||||||
356,440 | Constant Contact, Inc.* | 5,678,089 | ||||||||||
Enterprise Software/Services – 5.1% | ||||||||||||
282,535 | Concur Technologies, Inc.* | 7,648,222 | ||||||||||
262,550 | MedAssets, Inc.* | 4,526,362 | ||||||||||
229,245 | Salary.com, Inc.* | 506,631 | ||||||||||
1,409,050 | Ultimate Software Group, Inc.*,**,£ | 26,391,506 | ||||||||||
39,072,721 | ||||||||||||
E-Services/Consulting – 1.5% | ||||||||||||
804,165 | GSI Commerce, Inc.* | 11,427,185 | ||||||||||
Finance – Investment Bankers/Brokers – 0.9% | ||||||||||||
417,485 | optionsXpress Holdings, Inc. | 6,871,803 | ||||||||||
Finance – Other Services – 0% | ||||||||||||
24,020 | MarketAxess Holdings, Inc.* | 230,352 | ||||||||||
Firearms and Ammunition – 3.1% | ||||||||||||
1,512,505 | Smith & Wesson Holding Corp.* | 10,844,661 | ||||||||||
1,052,040 | Sturm Ruger & Co., Inc.£ | 12,950,612 | ||||||||||
23,795,273 | ||||||||||||
Gambling – Non-Hotel – 0.4% | ||||||||||||
907,650 | Great Canadian Gaming Corp.* | 2,868,265 | ||||||||||
Hotels and Motels – 1.3% | ||||||||||||
1,901,500 | Kingdom Hotel Investments (GDR)* | 4,563,600 | ||||||||||
445,760 | Morgans Hotel Group Co.* | 1,912,310 | ||||||||||
500,850 | Orient-Express Hotel, Ltd. – Class A | 3,240,500 | ||||||||||
9,716,410 | ||||||||||||
Human Resources – 1.6% | ||||||||||||
645,725 | Resources Connection, Inc.* | 12,623,924 | ||||||||||
Identification Systems and Devices – 0.8% | ||||||||||||
864,775 | L-1 Identity Solutions, Inc.* | 6,330,153 | ||||||||||
Internet Applications Software – 2.5% | ||||||||||||
638,620 | DealerTrack Holdings, Inc.* | 9,694,252 | ||||||||||
553,145 | Vocus, Inc.* | 9,403,465 | ||||||||||
�� | 19,097,717 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 59
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Internet Content – Information/News – 0.9% | ||||||||||||
1,640,185 | Health Grades, Inc.*,£ | $ | 5,248,592 | |||||||||
416,620 | TechTarget, Inc.* | 1,670,646 | ||||||||||
6,919,238 | ||||||||||||
Investment Companies – 0.2% | ||||||||||||
260,435 | UTEK Corp.* | 1,692,828 | ||||||||||
Investment Management and Advisory Services – 0.5% | ||||||||||||
140,395 | Eaton Vance Corp. | 3,842,611 | ||||||||||
Marine Services – 0.7% | ||||||||||||
1,548,955 | Odyssey Marine Exploration, Inc.* | 5,390,363 | ||||||||||
Medical – Biomedical and Genetic – 1.6% | ||||||||||||
359,330 | Acorda Therapeutics, Inc.* | 7,125,514 | ||||||||||
134,280 | Myriad Genetics, Inc.* | 5,208,721 | ||||||||||
12,334,235 | ||||||||||||
Medical – Nursing Homes – 0.6% | ||||||||||||
499,050 | Skilled Healthcare Group, Inc.* | 4,356,707 | ||||||||||
Medical – Outpatient and Home Medical Care – 1.7% | ||||||||||||
2,234,307 | Hythiam, Inc.* | 536,234 | ||||||||||
547,450 | LHC Group, Inc.* | 12,492,809 | ||||||||||
13,029,043 | ||||||||||||
Medical Information Systems – 1.1% | ||||||||||||
200,460 | Athenahealth, Inc.* | 6,374,628 | ||||||||||
154,480 | Phase Forward, Inc.* | 2,202,885 | ||||||||||
8,577,513 | ||||||||||||
Medical Instruments – 0.2% | ||||||||||||
140,679 | Conmed Corp.* | 1,873,844 | ||||||||||
Medical Labs and Testing Services – 1.6% | ||||||||||||
205,893 | Bio-Reference Labs, Inc.* | 5,285,273 | ||||||||||
235,792 | Genoptix, Inc.* | 6,856,832 | ||||||||||
12,142,105 | ||||||||||||
Medical Products – 1.8% | ||||||||||||
752,315 | PSS World Medical, Inc.* | 10,923,614 | ||||||||||
1,234,343 | TomoTherapy, Inc.* | 3,184,605 | ||||||||||
14,108,219 | ||||||||||||
Motion Pictures and Services – 1.9% | ||||||||||||
3,007,545 | Lions Gate Entertainment Corp. (U.S. Shares)* | 14,767,046 | ||||||||||
MRI and Medical Diagnostic Imaging Center – 0.1% | ||||||||||||
659,020 | RadNet, Inc.* | 1,014,891 | ||||||||||
Networking Products – 0.6% | ||||||||||||
388,915 | Switch & Data Facilities Co., Inc.* | 4,499,747 | ||||||||||
Oil Field Machinery and Equipment – 1.2% | ||||||||||||
363,625 | Dresser-Rand Group, Inc.* | 8,956,084 | ||||||||||
Patient Monitoring Equipment – 0.8% | ||||||||||||
310,630 | CardioNet, Inc.* | 6,445,573 | ||||||||||
Pharmacy Services – 3.2% | ||||||||||||
546,780 | Catalyst Health Solutions, Inc.* | 12,329,889 | ||||||||||
632,570 | SXC Health Solutions Corp. (U.S. Shares)*,** | 12,670,377 | ||||||||||
25,000,266 | ||||||||||||
Physical Practice Management – 1.1% | ||||||||||||
232,410 | Mednax, Inc.* | 8,343,519 | ||||||||||
Physical Therapy and Rehabilitation Centers – 0.9% | ||||||||||||
368,880 | Psychiatric Solutions, Inc.* | 7,152,583 | ||||||||||
Printing – Commercial – 3.8% | ||||||||||||
846,143 | VistaPrint, Ltd.*,** | 29,065,012 | ||||||||||
Private Corrections – 0.7% | ||||||||||||
345,795 | Geo Group, Inc.* | 5,750,571 | ||||||||||
Real Estate Management/Services – 0.8% | ||||||||||||
1,877,877 | LPS Brasil Consultoria de Imoveis S.A.* | 6,460,625 | ||||||||||
Retail – Apparel and Shoe – 2.2% | ||||||||||||
887,515 | American Apparel, Inc. | 5,990,726 | ||||||||||
1,159,450 | Bebe Stores, Inc. | 10,666,940 | ||||||||||
16,657,666 | ||||||||||||
Retail – Petroleum Products – 2.5% | ||||||||||||
515,130 | World Fuel Services Corp.** | 19,641,907 | ||||||||||
Schools – 3.7% | ||||||||||||
366,464 | American Public Education, Inc.* | 13,192,704 | ||||||||||
989,950 | Bridgepoint Education, Inc.* | 10,740,958 | ||||||||||
290,355 | Corinthian Colleges, Inc.* | 4,471,467 | ||||||||||
28,405,129 | ||||||||||||
Telecommunication Equipment – 3.3% | ||||||||||||
687,236 | Arris Group, Inc.* | 7,332,808 | ||||||||||
728,645 | CommScope, Inc.* | 18,288,990 | ||||||||||
25,621,798 | ||||||||||||
Telecommunication Services – 0.8% | ||||||||||||
515,205 | SAVVIS, Inc.* | 5,863,033 | ||||||||||
Theaters – 1.8% | ||||||||||||
961,147 | National CineMedia, Inc. | 13,965,466 | ||||||||||
Toys – 2.1% | ||||||||||||
539,320 | Marvel Entertainment, Inc.*,** | 16,093,309 | ||||||||||
Transactional Software – 3.8% | ||||||||||||
973,240 | Solera Holdings, Inc.*,** | 22,209,336 | ||||||||||
1,030,350 | Yucheng Technologies, Ltd. (U.S. Shares)*,£ | 7,346,395 | ||||||||||
29,555,731 | ||||||||||||
Transportation – Marine – 1.1% | ||||||||||||
1,671,033 | Horizon Lines, Inc. – Class A**,£ | 8,889,896 | ||||||||||
Transportation – Truck – 1.5% | ||||||||||||
340,065 | Forward Air Corp. | 5,668,884 | ||||||||||
199,915 | Old Dominion Freight Line, Inc.* | 5,627,607 | ||||||||||
11,296,491 | ||||||||||||
Water Treatment Systems – 1.0% | ||||||||||||
492,690 | Nalco Holding Co. | 8,040,701 | ||||||||||
Web Hosting/Design – 3.7% | ||||||||||||
316,192 | Equinix, Inc.*,** | 22,206,164 | ||||||||||
3,704,519 | NaviSite, Inc.*,£ | 1,407,717 | ||||||||||
957,080 | NIC, Inc.* | 5,168,232 | ||||||||||
28,782,113 | ||||||||||||
Wire and Cable Products – 0.5% | ||||||||||||
710,016 | Fushi Copperweld, Inc.* | 3,606,881 | ||||||||||
Wireless Equipment – 1.5% | ||||||||||||
469,400 | SBA Communications Corp. – Class A* | 11,828,880 | ||||||||||
Total Common Stock (cost $922,711,563) | 774,753,441 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
60 Janus Growth Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Promissory Note – 0.3% | ||||||||||||
Broadcast Services and Programming – 0.3% | ||||||||||||
2,000,000 | Genius Products, Inc. 5.0000%, expires 12/31/10°° ,§ (cost $2,000,000) | $ | 2,000,000 | |||||||||
Warrants – 0% | ||||||||||||
Automotive – Truck Parts and Equipment – Replacement – 0% | ||||||||||||
88,303 | Motorcar Parts of America, Inc. – Private Placement – expires 5/17/12*,°° ,§ | 7,700 | ||||||||||
Broadcast Services and Programming – 0% | ||||||||||||
374,388,259 | Genius Products, Inc. – Private Placement – expires 2/7/14*,ß,°° | 0 | ||||||||||
Casino Services – 0% | ||||||||||||
146,926 | PokerTek, Inc. – Private Placement – expires 4/23/12*,°° ,§ | 120,259 | ||||||||||
Networking Products – 0% | ||||||||||||
2,090 | Lantronix, Inc. – Private Placement – expires 2/9/11*,ß,°° | 16 | ||||||||||
Total Warrants (cost $911,295) | 127,975 | |||||||||||
Purchased Options – Calls – 0% | ||||||||||||
80,391 | Parent Co. (LEAPS) expires July 2009 exercise price $6.40ß,°° | 105 | ||||||||||
20,231 | Parent Co. (LEAPS) expires July 2009 exercise price $6.85ß,°° | 24 | ||||||||||
Total Purchased Options – Calls (premiums paid $286,075) | 129 | |||||||||||
Purchased Options – Puts – 0% | ||||||||||||
2,000 | Ultimate Software Group, Inc. expires May 2009 exercise price $15.00 (premiums paid $157,675) | 25,000 | ||||||||||
Total Investments (total cost $926,066,608) – 100.5% | 776,906,545 | |||||||||||
Securities Sold Short – (1.6)% | ||||||||||||
Apparel Manufacturers – (0.6)% | ||||||||||||
150,000 | Columbia Sportswear Co. | (4,608,000) | ||||||||||
Computers – Peripheral Equipment – (0.4)% | ||||||||||||
100,000 | Synaptics Inc.* | (3,248,000) | ||||||||||
Medical Information Systems – (0.3)% | ||||||||||||
50,000 | Cerner Corp.* | (2,690,000) | ||||||||||
Retail – Discount – (0.3)% | ||||||||||||
50,000 | Canadian Tire Corp. – Class A | (2,116,513) | ||||||||||
Total Securities Sold Short (proceeds $11,654,587) | (12,662,513) | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities** – 1.1% | 8,676,725 | |||||||||||
Net Assets – 100% | $ | 772,920,757 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 32,305,512 | 4.2% | |||||
Brazil | 6,460,625 | 0.8% | ||||||
Canada | 43,016,514 | 5.5% | ||||||
Cayman Islands | 4,563,600 | 0.6% | ||||||
United States | 683,213,899 | 87.9% | ||||||
Virgin Islands | 7,346,395 | 1.0% | ||||||
Total | $ | 776,906,545 | 100.0% |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
Canada | $ | (2,116,513) | 16.7% | |||||
United States | (10,546,000) | 83.3% | ||||||
Total | $ | (12,662,513) | 100.0% |
�� | ||||
Schedule of Written Options – Calls | Value | |||
Equinix, Inc. expires May 2009 500 contracts exercise price $65.00 | $ | (330,000) | ||
Equinix, Inc. expires May 2009 500 contracts exercise price $70.00 | (137,500) | |||
Ultimate Software Group, Inc. expires May 2009 2,000 contracts exercise price $20.00 | (65,000) | |||
VistaPrint, Ltd. expires May 2009 2,000 contracts exercise price $35.00 | (440,000) | |||
World Fuel Services Corp. expires May 2009 2,000 contracts exercise price $40.00 | (260,000) | |||
Total Written Options – Calls | ||||
(Premiums received $619,168) | $ | (1,232,500) | ||
Schedule of Written Options – Puts | ||||
American Public Education, Inc. expires May 2009 2,000 contracts exercise price $30.00 | $ | (44,200) | ||
Amphenol Corporation expires May 2009 2,000 contracts exercise price $25.00 | (15,000) | |||
Concur Technologies, Inc. expires May 2009 2,000 contracts exercise price $17.50 | (5,000) | |||
Genomic Health, Inc. expires May 2009 1,000 contracts exercise price $20.00 | (45,000) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 61
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Value | ||||
Genoptix, Inc. expires May 2009 2,000 contracts exercise price $25.00 | (60,000) | |||
LHC Group, Inc. expires May 2009 2,000 contracts exercise price $17.50 | (20,000) | |||
Myriad Genetics, Inc. expires May 2009 500 contracts exercise price $35.00 | (50,000) | |||
Myriad Genetics, Inc. expires May 2009 250 contracts exercise price $40.00 | (76,250) | |||
Polaris Industries, Inc. expires May 2009 2,000 contracts exercise price $17.50 | (10,000) | |||
Urban Outfitters, Inc. expires May 2009 2,000 contracts exercise price $12.50 | (5,000) | |||
World Fuel Services Corp. expires May 2009 1,000 contracts exercise price $25.00 | (1,800) | |||
Total Written Options – Puts | ||||
(Premiums received $1,255,015) | $ | (332,250) | ||
See Notes to Schedules of Investments and Financial Statements.
62 Janus Growth Funds April 30, 2009
Janus Global Life Sciences Fund (unaudited) | Ticker: JAGLX |
Fund Snapshot
This Fund seeks companies around the world that are addressing unmet medical needs and providing efficient healthcare solutions.
![(ANDY ACKER PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199packeran.jpg)
Andy Acker
portfolio manager
Performance Overview
Continuing fallout from the credit crisis and concerns about the length and severity of a global recession weighed on market performance for most of the six-month period ended April 30, 2009. Global markets started to bounce off nearly five-year lows reached in early March, though healthcare stocks generally lagged the recovery due to heightened uncertainty regarding the impact of potential U.S. healthcare reforms.
For the six-month period ended April 30, 2009, the S&P 500® Index (the Fund’s primary benchmark) declined 8.53%. Janus Global Life Sciences Fund outperformed this index with its 8.17% decline during the period. The Fund also outperformed the Morgan Stanley Capital International (MSCI) World Health Care Index (the Fund’s secondary benchmark), which declined 10.32% during the period.
Investment Strategy
The Fund seeks to uncover opportunities that span the life sciences spectrum, including stocks in the biotechnology, pharmaceuticals, health care services, and medical technology arenas. Our bottom-up fundamental approach utilizes extensive proprietary research in an effort to discover the best investment ideas across the globe.
Portfolio Composition
The portfolio includes companies that can be categorized into three conceptual groups: core growth, emerging growth and opportunistic investments. In general, about half of the portfolio is invested in core growth holdings (companies with dominant franchises that have historically generated strong, consistent free cash flow). Emerging growth companies (those with new products that we believe can drive earnings acceleration) typically represent 20-30% of the portfolio. The remaining weighting consists of opportunistic investments, exemplified by companies suffering from what we feel are short-term market misperceptions that should resolve over time.
Stocks That Aided Returns
A renewal of merger and acquisition activity among global pharmaceutical companies was a key theme during the period. Wyeth, a top 10 Fund holding, gained on news that it was being acquired by Pfizer in a cash-and-stock deal valued at $68 billion at the time of the offer. We had been positive on Wyeth due to its long-lived assets in animal health, biologics, vaccines and consumer products. We think Pfizer’s bid represented a fair price for Wyeth and believe the deal has a good chance of getting completed.
Schering-Plough Corp. rose during the period after Merck & Co. agreed to acquire the company for roughly $41 billion in cash and stock. Schering Plough was attractive to Merck due to its strong pipeline of new drugs and a number of solid pharmaceutical and animal health franchises with long patent lives remaining. We think the combination offers potential for significant synergies, which Merck estimates at $3.5 billion annually beyond 2011.
Theravance, Inc., a biopharmaceutical company, was another top contributor during the period. The company’s stock rose significantly following favorable late phase 2 trial data for the “Beyond Advair” program, partnered with GlaxoSmithKline. We believe this successor to Glaxo’s respiratory drug Advair has multi-billion dollar sales potential. We took some profits after the run-up in the stock but continue to like the long term prospects.
Stocks That Weighed on Returns
Molecular diagnostic company Sequenom, Inc. was our biggest disappointment during the period. The company had developed a highly promising, non-invasive diagnostic test that we believed had the potential to revolutionize the screening of Down syndrome. However, the company’s stock price declined sharply following news that some employees had mishandled test data, triggering an investigation. While the technique may still prove viable, we exited the position given the previously reported test results on which we based our investment decision could no longer be relied upon.
Biotechnology firm Celgene Corp., was hurt by the negative backdrop for the overall healthcare sector and by a lower-than-expected sales ramp of its key cancer franchises, particularly Revlimid. Sales were impacted by inventory destocking, slower-than-expected rollouts in international markets, and higher copay assistance program utilization due to economic weakness. Despite the volatility in the stock, we think the long-term growth prospects for Celgene’s blood cancer franchises remain robust, and we added to the position on weakness.
Janus Growth Funds April 30, 2009 63
Janus Global Life Sciences Fund (unaudited)
Xenoport, Inc., a biopharmaceutical company, fell during the period following a filing delay for Solzira, its lead drug targeted to treat restless leg syndrome, and a couple of other clinical trial setbacks. Xenoport’s core technology focuses on improving the bioavailability of existing drugs, potentially allowing for dosing benefits and extended patent life over existing formulations. While the setbacks were disappointing, the Solzira delay was primarily administrative and has already been corrected. Meanwhile, we still see significant value in the company’s pipeline and technology and added to the position on weakness.
Investment Risk Management
The Fund continues with its “value at risk” approach as part of a comprehensive risk management framework. This approach focuses our attention on downside risks, especially those arising from binary events (such as clinical trial announcements or regulatory decisions) that could lead to significant share price volatility. In practice, this means the position size of any one holding is limited so that, in a worst-case scenario, the estimated adverse impact from a particular event should not exceed 1% of the Fund’s performance. While the Fund makes an effort to manage risk, it does not guarantee the ability to control losses.
Looking Ahead
We believe the short-term outlook for the healthcare sector remains clouded by uncertainty related to the potential impacts from healthcare reform initiatives. Nevertheless, we believe political fears and five years of underperformance during the global economic boom have created many attractive buying opportunities within the healthcare sector.
We believe the long-term drivers of healthcare spending remain intact, including aging populations, rising life expectancies, and higher standards of living globally. Companies addressing high unmet medical needs or helping to mitigate the rise of healthcare costs should remain best positioned. We continue to focus on what we believe are the best risk/reward opportunities in the sector.
Thank you for your continued investment in Janus Global Life Sciences Fund.
64 Janus Growth Funds April 30, 2009
(unaudited)
Janus Global Life Sciences Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Wyeth | 0.75% | |||
Theravance, Inc. | 0.72% | |||
Schering-Plough Corp. | 0.70% | |||
Mylan, Inc. | 0.57% | |||
AMAG Pharmaceuticals, Inc. | 0.56% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -1.29% | |||
Sequenom, Inc. | -1.09% | |||
XenoPort, Inc. | -1.08% | |||
K-V Pharmaceutical Co. – Class A | -0.86% | |||
Genzyme Corp. | -0.77% |
5 Top Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Consumer Staples | 0.09% | 5.10% | 12.94% | |||||||||
Consumer Discretionary | 0.08% | -0.22% | 8.42% | |||||||||
Materials | 0.02% | 1.34% | 3.11% | |||||||||
Energy | 0.00% | 0.00% | 13.58% | |||||||||
Industrials | 0.00% | 0.00% | 10.51% |
5 Bottom Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Health Care | -5.52% | 92.98% | 15.02% | |||||||||
Financials | -0.99% | 0.80% | 11.74% | |||||||||
Utilities | 0.00% | 0.00% | 4.27% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.82% | |||||||||
Information Technology | 0.00% | 0.00% | 16.60% |
* | 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. |
Janus Growth Funds April 30, 2009 65
Janus Global Life Sciences Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Roche Holding A.G. Medical – Drugs | 4.1% | |||
Celgene Corp. Medical – Biomedical and Genetic | 3.8% | |||
Gilead Sciences, Inc. Medical – Biomedical and Genetic | 3.4% | |||
CVS Caremark Corp. Retail – Drug Store | 3.3% | |||
Wyeth Medical – Drugs | 3.2% | |||
17.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p01.gif)
Emerging markets comprised 3.8% of total net assets.
*Includes Securities Sold Short of (0.5)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c01.gif)
66 Janus Growth Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m01.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Global Life Sciences Fund | –8.17% | –27.26% | –1.32% | 4.74% | 4.88% | 0.98% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | –1.58% | ||||||||
Morgan Stanley Capital International World Health Care Index | –10.32% | –23.29% | –1.86% | –0.36% | –0.99% | ||||||||
Lipper Quartile | – | 3rd | 3rd | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Global Health/Biotechnology Funds | – | 39/51 | 24/44 | 3/15 | 2/13 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 67
Janus Global Life Sciences Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
This Fund invests in certain industry groups, which may react similarly to market developments (resulting in greater price volatility), and may have significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – December 31, 1998
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 919.40 | $ | 4.85 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.02%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
68 Janus Growth Funds April 30, 2009
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 95.6% | ||||||||||||
Agricultural Chemicals – 0.9% | ||||||||||||
58,701 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | $ | 5,077,049 | |||||||||
Chemicals – Diversified – 2.4% | ||||||||||||
276,496 | Bayer A.G.** | 13,692,585 | ||||||||||
Instruments – Scientific – 1.0% | ||||||||||||
168,723 | Thermo Fisher Scientific, Inc.* | 5,918,803 | ||||||||||
Life and Health Insurance – 1.4% | ||||||||||||
621,945 | Ondontoprev S.A. | 7,901,644 | ||||||||||
Medical – Biomedical and Genetic – 26.0% | ||||||||||||
455,145 | Acorda Therapeutics, Inc.* | 9,025,525 | ||||||||||
390,331 | Alexion Pharmaceuticals, Inc.* | 13,044,862 | ||||||||||
234,187 | AMAG Pharmaceuticals, Inc.* | 10,503,287 | ||||||||||
193,278 | Amgen, Inc.* | 9,368,185 | ||||||||||
588,494 | Arena Pharmaceuticals, Inc.* | 1,653,668 | ||||||||||
514,935 | Celgene Corp.* | 21,998,022 | ||||||||||
102,821 | Cougar Biotechnology, Inc.* | 3,590,509 | ||||||||||
1,271,821 | Fibrogen, Inc. – Private Placement*,°° ,§ | 7,440,153 | ||||||||||
319,808 | Genzyme Corp.* | 17,055,361 | ||||||||||
423,093 | Gilead Sciences, Inc.*,** | 19,377,659 | ||||||||||
1,046,496 | Human Genome Sciences, Inc.* | 2,291,826 | ||||||||||
922,041 | Incyte Corp., Ltd.* | 2,176,017 | ||||||||||
195,148 | Martek Biosciences Corp.* | 3,555,597 | ||||||||||
140,085 | Myriad Genetics, Inc.* | 5,433,897 | ||||||||||
258,187 | OSI Pharmaceuticals, Inc.* | 8,667,338 | ||||||||||
144,611 | United Therapeutics Corp.* | 9,083,017 | ||||||||||
148,430 | Vertex Pharmaceuticals, Inc.* | 4,574,613 | ||||||||||
148,839,536 | ||||||||||||
Medical – Drugs – 31.6% | ||||||||||||
288,398 | Abbott Laboratories | 12,069,456 | ||||||||||
874,717 | Achillion Pharmaceuticals, Inc.* | 1,487,019 | ||||||||||
510,206 | Array BioPharma, Inc.* | 1,494,904 | ||||||||||
380,896 | AstraZeneca PLC (ADR)** | 13,319,933 | ||||||||||
217,974 | Auxilium Pharmaceuticals, Inc.* | 4,991,605 | ||||||||||
206,600 | BioForm Medical, Inc.* | 231,392 | ||||||||||
394,273 | Bristol-Myers Squibb Co. | 7,570,042 | ||||||||||
377,901 | Forest Laboratories, Inc.* | 8,196,673 | ||||||||||
242,886 | GlaxoSmithKline PLC (ADR)** | 7,471,173 | ||||||||||
446,534 | Grifols S.A.** | 7,840,164 | ||||||||||
741,106 | Merck & Co., Inc. | 17,964,409 | ||||||||||
230,814 | Novartis A.G.** | 8,720,027 | ||||||||||
210,245 | Novo Nordisk A/S** | 9,977,611 | ||||||||||
520,590 | Pfizer, Inc. | 6,955,082 | ||||||||||
183,979 | Roche Holding A.G.** | 23,254,738 | ||||||||||
108,058 | Sanofi-Aventis S.A.** | 6,218,523 | ||||||||||
355,327 | Savient Pharmaceuticals, Inc.* | 1,876,127 | ||||||||||
480,687 | Schering-Plough Corp. | 11,065,415 | ||||||||||
173,561 | Shire PLC (ADR)** | 6,468,618 | ||||||||||
425,731 | Wyeth | 18,050,994 | ||||||||||
421,864 | XenoPort, Inc.* | 5,766,881 | ||||||||||
180,990,786 | ||||||||||||
Medical – Generic Drugs – 3.4% | ||||||||||||
8,364,183 | Mediquest Therapeutics – Private Placement*,°° ,§,£ | 2,509,255 | ||||||||||
442,008 | Mylan, Inc.* | 5,856,606 | ||||||||||
347,368 | Pharmstandard (GDR) (144A)*,** | 3,634,299 | ||||||||||
163,663 | Teva Pharmaceutical S.P. (ADR) | 7,183,169 | ||||||||||
19,183,329 | ||||||||||||
Medical – HMO – 3.3% | ||||||||||||
199,019 | Humana, Inc.* | 5,727,767 | ||||||||||
563,220 | UnitedHealth Group, Inc. | 13,246,934 | ||||||||||
18,974,701 | ||||||||||||
Medical Instruments – 4.4% | ||||||||||||
57,193 | Intuitive Surgical, Inc.* | 8,220,350 | ||||||||||
776,447 | Lifesync Holdings, Inc. – Private Placement*,°° ,§,£ | 1,692,654 | ||||||||||
178,304 | Medtronic, Inc. | 5,705,728 | ||||||||||
283,982 | St. Jude Medical, Inc.* | 9,519,077 | ||||||||||
25,137,809 | ||||||||||||
Medical Labs and Testing Services – 0.6% | ||||||||||||
216,490 | Diagnosticos da America S.A.* | 3,168,412 | ||||||||||
Medical Products – 8.1% | ||||||||||||
231,172 | Baxter International, Inc. | 11,211,842 | ||||||||||
332,744 | Covidien, Ltd. | 10,973,897 | ||||||||||
181,409 | Hospira, Inc.* | 5,962,914 | ||||||||||
159,752 | Johnson & Johnson | 8,364,615 | ||||||||||
209,250 | Stryker Corp. | 8,100,068 | ||||||||||
726,256 | TomoTherapy, Inc.* | 1,873,740 | ||||||||||
46,487,076 | ||||||||||||
Optical Supplies – 1.4% | ||||||||||||
88,806 | Alcon, Inc. (U.S. Shares)** | 8,171,040 | ||||||||||
Pharmacy Services – 1.9% | ||||||||||||
245,475 | Medco Health Solutions, Inc.* | 10,690,436 | ||||||||||
Physical Practice Management – 1.5% | ||||||||||||
234,759 | Mednax, Inc.* | 8,427,848 | ||||||||||
Retail – Drug Store – 3.3% | ||||||||||||
602,820 | CVS Caremark Corp.** | 19,157,620 | ||||||||||
Soap and Cleaning Preparations – 0.8% | ||||||||||||
120,665 | Reckitt Benckiser Group PLC** | 4,750,555 | ||||||||||
Therapeutics – 2.9% | ||||||||||||
338,015 | Onyx Pharmaceuticals, Inc.* | 8,754,589 | ||||||||||
2,919,304 | Portola Pharmaceuticals, Inc. – Private Placement*,°° ,§ | 4,130,815 | ||||||||||
252,430 | Theravance, Inc.* | 3,617,322 | ||||||||||
16,502,726 | ||||||||||||
Vitamins and Nutrition Products – 0.7% | ||||||||||||
148,226 | Mead Johnson Nutrition Co. – Class A* | 4,187,385 | ||||||||||
Total Common Stock (cost $605,513,223) | 547,259,340 | |||||||||||
Corporate Bond – 0.6% | ||||||||||||
REIT – Office Property – 0.6% | ||||||||||||
$ | 4,512,000 | Alexandria Real Estate Equities, Inc., 3.7000%, 1/15/27 (144A) (cost $3,267,038) | 3,468,600 | |||||||||
Preferred Stock – 0.3% | ||||||||||||
Medical – Generic Drugs – 0.3% | ||||||||||||
5,192,551 | Mediquest Therapeutics – Private Placement, Series A-1, 0%°° ,§ (cost $3,135,054) | 1,557,765 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 69
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Warrants – 0% | ||||||||||||
Medical – Generic Drugs – 0% | ||||||||||||
3,345,673 | Mediquest Therapeutics – expires 6/15/11*,°° ,§ | $ | 0 | |||||||||
803,980 | Mediquest Therapeutics – expires 6/15/12*,°° ,§ | 161 | ||||||||||
Total Warrants (total cost $94,065) – 0% | 161 | |||||||||||
Money Market – 3.2% | ||||||||||||
18,315,778 | Janus Cash Liquidity Fund LLC, 0% (cost $18,315,778) | 18,315,778 | ||||||||||
Total Investments (total cost $630,325,158) – 99.7% | 570,601,644 | |||||||||||
Securities Sold Short – (0.5)% | ||||||||||||
Medical – Drugs – (0.5)% | ||||||||||||
1,109,610 | UCB S.A. (proceeds 3,578,918)** | (2,984,339) | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.8% | 4,850,242 | |||||||||||
Net Assets – 100% | $ | 572,467,547 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 10,973,897 | 1.9% | |||||
Brazil | 11,070,056 | 1.9% | ||||||
Canada | 5,077,050 | 1.0% | ||||||
Denmark | 9,977,611 | 1.7% | ||||||
France | 6,218,523 | 1.1% | ||||||
Germany | 13,692,585 | 2.4% | ||||||
Israel | 7,183,169 | 1.3% | ||||||
Russia | 3,634,299 | 0.6% | ||||||
Spain | 7,840,164 | 1.4% | ||||||
Switzerland | 40,145,805 | 7.0% | ||||||
United Kingdom | 32,010,280 | 5.6% | ||||||
United States†† | 422,778,205 | 74.1% | ||||||
Total | $ | 570,601,644 | 100.0% |
†† | Includes Short-Term Securities (70.9% excluding Short-Term Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
Belgium | $ | (2,984,339) | 100.0% | |||||
Total | $ | (2,984,339) | 100.0% |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 6/18/09 | 5,422,000 | $ | 8,018,289 | $ | (87,258) | |||||||
British Pound 6/25/09 | 750,000 | 1,109,136 | (9,704) | |||||||||
Danish Krone 6/18/09 | 9,500,000 | 1,686,019 | (33,500) | |||||||||
Euro 6/18/09 | 6,468,000 | 8,554,693 | (174,947) | |||||||||
Euro 6/25/09 | 2,800,000 | 3,703,177 | (56,177) | |||||||||
Russian Rouble 6/18/09 | 104,300,000 | 3,105,484 | (43,241) | |||||||||
Swiss Franc 5/14/09 | 11,350,000 | 9,948,868 | 122,117 | |||||||||
Swiss Franc 6/18/09 | 6,700,000 | 5,876,490 | (117,260) | |||||||||
Total | $ | 42,002,156 | $ | (399,970) |
See Notes to Schedules of Investments and Financial Statements.
70 Janus Growth Funds April 30, 2009
Janus Global Technology Fund (unaudited) | Ticker: JAGTX |
Fund Snapshot
This Fund seeks to find and invest in undervalued technology companies that are winning in the product marketplace.
![(BARNEY WILSON PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pwilsonb.jpg)
Barney Wilson
portfolio manager
Performance Overview
During the six months ended April 30, 2009, Janus Global Technology Fund returned 13.46%. By comparison, the Fund’s primary benchmark, the S&P 500® Index, which returned -8.53%, and its secondary benchmark, the Morgan Stanley Capital International (MSCI) World Information Technology Index returned 5.66%.
Investment Strategy
Janus Global Technology Fund’s objective is to seek long-term growth of capital. We work closely with the Janus analysts covering technology and technology-related companies to identify high quality and innovative technology companies that are growing earnings and cash flow in excess of market expectations. While investing in the information technology sector can be more volatile than a broader market index, we believe the sector can provide an excellent opportunity for attractive investment returns if one can tolerate the volatility.
Three things are at the core of the Fund’s investment and portfolio construction philosophy: fundamental research, valuation analysis and diversification. First, in the intensive research that is a hallmark of Janus, we seek out the customers, competitors and suppliers of a company to develop our view of the future fundamental performance of that company. We try to anticipate material changes in industries and to understand which companies are going to win on a multi-year basis in the product marketplace and why. Second, in conducting our valuation analysis, we focus foremost on the value of the future cash flows of the company. Third, when constructing the Fund, we deliberately seek to control risk by diversifying across multiple dimensions, such as subsectors, geographies, market capitalizations and valuation ranges.
Due to certain circumstances and market conditions, we initiated positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Market Environment
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. Global markets bounced off of the roughly five-year lows reached in early March, though only partially eased the losses as most indices finished the period over 3% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. The rally received a further boost later in the month when the U.S. Federal Reserve (Fed) announced it would help the beleaguered U.S. housing market by buying up to $1.15 trillion in Treasuries, mortgage-backed securities and U.S. agency debt. Then, in early April, G20 leaders agreed to provide over $1 trillion in emergency aid for global economies. Both actions appeared to lift global markets through period end. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed by utilities and, then healthcare. Materials and information technology were the best relative performers. In local currency terms, emerging markets, which posted strong returns during the period, outperformed developed markets. U.S. stocks trailed much of the developed world for the period while Asia and Latin America led emerging markets higher thanks to strong returns in China and Brazil. In commodities, natural gas, oil and agricultural commodities suffered negatives returns, while precious metals generated strong returns. The Dollar Index finished the period lower overall, as the U.S. currency lagged the euro, although it was stronger relative to the Japanese yen and British pound.
Technology stocks outperformed the overall market during the six-month period which helped the Fund outperform its primary benchmark. The Fund’s outperformance relative to its secondary benchmark, the MSCI World Information Technology Index was largely driven by holdings within technology hardware and equipment. Software and services stocks also provided a boost to relative results. On the downside, we saw general weakness in our holdings within biotechnology and media.
Contributors to Fund Performance
CommScope, an information technology company involved in providing infrastructure solutions for communication and wireless networks, rose significantly during the period,
Janus Growth Funds April 30, 2009 71
Janus Global Technology Fund (unaudited)
making it the top contributor to relative performance during the period. The move can be largely attributed to the company’s relatively upbeat profit forecast and the notion that the risk of it violating its covenants may have lessened. We believe CommScope is a well-run component provider in wireless and cable and that the business remains fundamentally healthy with high free cash flows.
Tyco Electronics, Ltd. was a strong performer in the period, benefiting from good earnings results and the sale of its struggling wireless systems business. Long term we think Tyco is a leader in the fragmented connector business that has historically generated strong free cash flows.
Marvell Technology Group, a semiconductor company specializing in storage and communication solutions for primarily communication devices, benefited from a solid quarterly earnings release during the period and general strength among semiconductor stocks. The company has been gaining market share in storage space, drives and enterprise solutions. We think the company’s low power chips will continue to gain market share given the benefits they can have for battery life on mobile devices.
Detractors from Performance
Live Nation, a leading music promoter, declined on concerns over its merger with Ticket Master and a generally slowing concert business amid the recession. Investors were also worried about its ability to service its debt. We think the company will successfully manage through these near-term challenges and that its new software platform for ticketing and overall technology that enhances the live music performance for the consumer could drive strong growth over the long term. We added to our position during the period.
Despite rebounding late in the period, Microsoft Corp. finished lower, hurt in January by a disappointing earnings report. The company’s results for its March quarter were relatively in line with overall expectations and provided some fuel for continued strength as investors became more optimistic. While the software giant was relatively inexpensive at period end given its roughly 10% free cash flow yield, we reduced our position in the company in favor of what we believe to be better risk/reward opportunities elsewhere.
Energy Conversion Devices, a solar and battery technology company, fell early on amid weakness in oil prices and a difficult credit environment. Later in the period, the stock was hurt after the company announced delays in expansion plans and lowered its sales forecast amid weak demand. We trimmed the position given the difficult environment. Overall, the Fund had exposure to alternative energy companies over the past year, namely those involved with solar power technology. Many of these stocks have been hit hard with the sharp decline in energy prices and the credit crisis. A lot of what we would consider to be high-quality alternative energy stocks have declined on fears that their customers will not have access to capital to invest in alternative energy projects. While the U.S. Administration’s energy policies could provide support for these stocks, we have taken less favorable view on the group given the uncertainty over how long the sector’s economics could remain poor.
Looking Ahead
We focus on anticipating change, trying to determine which companies are going to win on a multi-year basis in the product marketplace, and on finding companies where we feel the price of the stock is below the value of the cash flows of the company. Our goal, regardless of the economic environment, will continue to be to leverage the strong, grassroots research foundation of Janus to uncover what we believe are the best investment opportunities for our shareholders.
Thank you for your investment in Janus Global Technology Fund.
72 Janus Growth Funds April 30, 2009
(unaudited)
Janus Global Technology Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
CommScope, Inc. | 2.75% | |||
Tyco Electronics, Ltd. | 1.50% | |||
Marvell Technology Group, Ltd. | 1.21% | |||
Apple, Inc. | 1.04% | |||
Research In Motion, Ltd. (U.S. Shares) | 0.96% |
5 Bottom Performers – Holdings
Contribution | ||||
Energy Conversion Devices | -0.64% | |||
Live Nation, Inc. | -0.56% | |||
Microsoft Corp. | -0.52% | |||
Nintendo Co., Ltd. | -0.45% | |||
Celgene Corp. | -0.43% |
5 Top Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 15.79% | 81.34% | 16.60% | |||||||||
Consumer Staples | 0.00% | 0.00% | 12.94% | |||||||||
Energy | 0.00% | 0.00% | 13.58% | |||||||||
Financials | 0.00% | 0.00% | 11.74% | |||||||||
Utilities | -0.06% | 0.45% | 4.27% |
5 Bottom Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Consumer Discretionary | -1.10% | 4.49% | 8.42% | |||||||||
Health Care | -0.39% | 6.13% | 15.02% | |||||||||
Industrials | -0.15% | 5.77% | 10.51% | |||||||||
Materials | -0.09% | 0.99% | 3.11% | |||||||||
Telecommunication Services | -0.07% | 0.83% | 3.82% |
* | 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. |
Janus Growth Funds April 30, 2009 73
Janus Global Technology Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
CommScope, Inc. Telecommunication Equipment | 4.8% | |||
Apple, Inc. Computers | 4.6% | |||
Oracle Corp. Enterprise Software/Services | 3.8% | |||
International Business Machines Corp. Computers | 3.4% | |||
Symantec Corp. Internet Security | 3.2% | |||
19.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20p08.gif)
Emerging markets comprised 0.9% of total net assets.
*Includes Securites Sold Short of (1.2)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20t08.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20c08.gif)
74 Janus Growth Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif20m08.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Global Technology Fund | 13.46% | –26.96% | 1.03% | –2.38% | 0.77% | 1.02% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | –1.58% | ||||||||
Morgan Stanley Capital International World Information Technology Index | 5.66% | –30.27% | –1.88% | –5.76% | –4.17% | ||||||||
Lipper Quartile | – | 1st | 2nd | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Global Science & Technology Funds | – | 14/81 | 19/69 | 6/20 | 5/19 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Annual expense ratios include dividends or interest on short sales, which are paid to the lender of borrowed securities. Such expenses will vary depending on whether the securities the Fund sells short pay dividends or interest and the amount of such dividends or interest.
See important disclosures on the next page.
Janus Growth Funds April 30, 2009 75
Janus Global Technology Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
This Fund may at times have significant exposure to certain industry groups, which may react similarly to market developments (resulting in greater price volatility). The Fund also may have significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
*The Fund’s inception date – December 31, 1998
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,134.60 | $ | 6.03 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.14 | $ | 5.71 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.14%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
76 Janus Growth Funds April 30, 2009
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 95.2% | ||||||||||||
Aerospace and Defense – 1.2% | ||||||||||||
45,160 | Lockheed Martin Corp. | $ | 3,546,415 | |||||||||
76,375 | Northrop Grumman Corp. | 3,692,731 | ||||||||||
7,239,146 | ||||||||||||
Applications Software – 3.4% | ||||||||||||
531,300 | Citrix Systems, Inc.* | 15,157,989 | ||||||||||
255,460 | Microsoft Corp. | 5,175,620 | ||||||||||
20,333,609 | ||||||||||||
Cable Television – 0.6% | ||||||||||||
498,060 | British Sky Broadcasting Group PLC** | 3,545,950 | ||||||||||
Chemicals – Diversified – 0.6% | ||||||||||||
76,400 | Shin-Etsu Chemical Co., Ltd.** | 3,699,473 | ||||||||||
Commercial Services – 1.2% | ||||||||||||
1,755,634 | Live Nation, Inc.* | 6,864,529 | ||||||||||
Computer Software – 0.6% | ||||||||||||
291,830 | Omniture, Inc.* | 3,595,346 | ||||||||||
Computers – 12.7% | ||||||||||||
216,878 | Apple, Inc.* | 27,289,758 | ||||||||||
359,505 | Hewlett-Packard Co. | 12,934,990 | ||||||||||
193,490 | International Business Machines Corp. | 19,970,103 | ||||||||||
208,830 | Research In Motion, Ltd. (U.S. Shares)* | 14,513,685 | ||||||||||
74,708,536 | ||||||||||||
Computers – Memory Devices – 0.9% | ||||||||||||
681,310 | Seagate Technology | 5,559,490 | ||||||||||
Computers – Peripheral Equipment – 0.4% | ||||||||||||
161,322 | Logitech International S.A.* | 2,146,389 | ||||||||||
Decision Support Software – 0.8% | ||||||||||||
633,585 | DemandTec, Inc.* | 4,574,484 | ||||||||||
E-Commerce/Services – 1.0% | ||||||||||||
361,005 | eBay, Inc.* | 5,945,752 | ||||||||||
Electric – Generation – 0.4% | ||||||||||||
326,345 | AES Corp.* | 2,307,259 | ||||||||||
Electronic Components – Miscellaneous – 3.0% | ||||||||||||
619,095 | Flextronics International, Ltd.* | 2,402,089 | ||||||||||
873,600 | Tyco Electronics, Ltd. | 15,235,584 | ||||||||||
17,637,673 | ||||||||||||
Electronic Components – Semiconductors – 4.2% | ||||||||||||
8,835,530 | ARM Holdings PLC** | 15,506,774 | ||||||||||
176,775 | Broadcom Corp. – Class A* | 4,099,412 | ||||||||||
1,133,895 | Micron Technology, Inc.* | 5,533,408 | ||||||||||
25,139,594 | ||||||||||||
Electronic Connectors – 2.4% | ||||||||||||
427,295 | Amphenol Corp. – Class A | 14,459,663 | ||||||||||
Electronic Forms – 0.3% | ||||||||||||
72,095 | Adobe Systems, Inc.* | 1,971,798 | ||||||||||
Electronic Measuring Instruments – 0.8% | ||||||||||||
209,284 | Trimble Navigation, Ltd.* | 4,487,049 | ||||||||||
Enterprise Software/Services – 9.4% | ||||||||||||
109,105 | Autonomy Corp. PLC*,** | 2,294,480 | ||||||||||
36,235 | BMC Software, Inc. | 1,256,267 | ||||||||||
453,790 | CA, Inc. | 7,827,878 | ||||||||||
423,465 | Concur Technologies, Inc.* | 11,463,197 | ||||||||||
657,410 | Lawson Software, Inc.* | 3,543,440 | ||||||||||
1,170,275 | Oracle Corp.** | 22,633,118 | ||||||||||
343,740 | Taleo Corp.* | 4,128,317 | ||||||||||
158,041 | Temenos Group A.G.* | 2,181,919 | ||||||||||
55,328,616 | ||||||||||||
Human Resources – 1.9% | ||||||||||||
1,268,530 | SuccessFactors, Inc.* | 11,048,896 | ||||||||||
Internet Applications Software – 3.2% | ||||||||||||
184,548 | DealerTrack Holdings, Inc.* | 2,801,439 | ||||||||||
947,280 | Vocus, Inc.* | 16,103,760 | ||||||||||
18,905,199 | ||||||||||||
Internet Content – Information/News – 0.3% | ||||||||||||
511,010 | TechTarget, Inc.* | 2,049,150 | ||||||||||
Internet Security – 3.2% | ||||||||||||
1,102,030 | Symantec Corp.* | 19,010,018 | ||||||||||
Life and Health Insurance – 0.6% | ||||||||||||
284,700 | Ondontoprev S.A. | 3,617,037 | ||||||||||
Machinery – General Industrial – 0.3% | ||||||||||||
5,552,000 | Shanghai Electric Group Co., Ltd. | 1,984,858 | ||||||||||
Medical – Biomedical and Genetic – 6.9% | ||||||||||||
47,745 | Alexion Pharmaceuticals, Inc.* | 1,595,638 | ||||||||||
351,296 | Celgene Corp.* | 15,007,366 | ||||||||||
104,300 | Genzyme Corp.* | 5,562,319 | ||||||||||
175,095 | Gilead Sciences, Inc.* | 8,019,351 | ||||||||||
183,480 | Myriad Genetics, Inc.* | 7,117,189 | ||||||||||
103,115 | Vertex Pharmaceuticals, Inc.* | 3,178,004 | ||||||||||
40,479,867 | ||||||||||||
Medical Instruments – 1.6% | ||||||||||||
66,720 | Intuitive Surgical, Inc.* | 9,589,666 | ||||||||||
Medical Products – 1.0% | ||||||||||||
72,665 | Baxter International, Inc. | 3,524,252 | ||||||||||
59,160 | Stryker Corp. | 2,290,084 | ||||||||||
5,814,336 | ||||||||||||
Multimedia – 1.9% | ||||||||||||
795,750 | News Corp. – Class A | 6,572,895 | ||||||||||
676,590 | WPP PLC | 4,626,117 | ||||||||||
11,199,012 | ||||||||||||
Networking Products – 3.4% | ||||||||||||
399,575 | Cisco Systems, Inc.* | 7,719,789 | ||||||||||
581,520 | Juniper Networks, Inc.* | 12,589,908 | ||||||||||
20,309,697 | ||||||||||||
Power Converters and Power Supply Equipment – 2.1% | ||||||||||||
1,382,000 | China High Speed Transmission Equipment Group Co., Ltd. | 2,483,384 | ||||||||||
43,890 | Energy Conversion Devices* | 806,698 | ||||||||||
515,345 | JA Solar Holdings Co., Ltd. (ADR)* | 1,808,861 | ||||||||||
113,690 | Vestas Wind Systems A/S* | 7,401,082 | ||||||||||
12,500,025 | ||||||||||||
Printing – Commercial – 0.7% | ||||||||||||
128,301 | VistaPrint, Ltd.* | 4,407,139 | ||||||||||
Retail – Consumer Electronics – 0.5% | ||||||||||||
60,200 | Yamada Denki Co., Ltd.** | 2,778,137 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2009 77
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Semiconductor Components/Integrated Circuits – 4.1% | ||||||||||||
3,677,075 | Atmel Corp.* | $ | 14,119,968 | |||||||||
909,460 | Marvell Technology Group, Ltd.* | 9,985,871 | ||||||||||
24,105,839 | ||||||||||||
Semiconductor Equipment – 0.8% | ||||||||||||
87,849 | ASML Holdings N.V. (U.S. Shares) | 1,858,006 | ||||||||||
101,550 | KLA-Tencor Corp.** | 2,816,997 | ||||||||||
4,675,003 | ||||||||||||
Telecommunication Equipment – 6.4% | ||||||||||||
498,065 | Arris Group, Inc.* | 5,314,354 | ||||||||||
1,121,370 | CommScope, Inc.* | 28,146,387 | ||||||||||
750,175 | Tellabs, Inc.* | 3,930,917 | ||||||||||
37,391,658 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 2.2% | ||||||||||||
908,020 | Corning, Inc.** | 13,275,252 | ||||||||||
Telecommunication Services – 3.3% | ||||||||||||
791,830 | Amdocs, Ltd. (U.S. Shares)*,** | 16,573,002 | ||||||||||
285,492 | SAVVIS, Inc.* | 3,248,899 | ||||||||||
19,821,901 | ||||||||||||
Toys – 1.4% | ||||||||||||
�� | 31,160 | Nintendo Co., Ltd.** | 8,338,289 | |||||||||
Web Portals/Internet Service Providers – 1.1% | ||||||||||||
463,760 | Yahoo!, Inc.* | 6,627,130 | ||||||||||
Wireless Equipment – 4.4% | ||||||||||||
378,700 | QUALCOMM, Inc. | 16,026,584 | ||||||||||
1,134,790 | Telefonaktiebolaget L.M. Ericsson (ADR) | 9,679,759 | ||||||||||
25,706,343 | ||||||||||||
Total Common Stock (cost $544,095,410) | 563,178,808 | |||||||||||
Money Market – 3.1% | ||||||||||||
18,213,183 | Janus Cash Liquidity Fund LLC, 0% (cost $18,213,183) | 18,213,183 | ||||||||||
Total Investments (total cost $562,308,593) – 98.3% | 581,391,991 | |||||||||||
Securities Sold Short – (1.2)% | ||||||||||||
E-Commerce/Products – (0.9)% | ||||||||||||
(64,565 | ) | Amazon.com, Inc.* | (5,198,774) | |||||||||
Software Tools – (0.3)% | ||||||||||||
(61,495 | ) | VMware, Inc. – Class A* | (1,603,790) | |||||||||
Total Securities Sold Short (proceeds $5,211,800) | (6,802,564) | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 2.9% | 17,224,821 | |||||||||||
Net Assets – 100% | $ | 591,814,248 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 29,628,594 | 5.1% | |||||
Brazil | 3,617,037 | 0.6% | ||||||
Canada | 14,513,685 | 2.5% | ||||||
Cayman Islands | 9,851,734 | 1.7% | ||||||
China | 1,984,858 | 0.3% | ||||||
Denmark | 7,401,082 | 1.3% | ||||||
Guernsey | 16,573,002 | 2.9% | ||||||
Japan | 14,815,899 | 2.5% | ||||||
Jersey | 4,626,117 | 0.8% | ||||||
Netherlands | 1,858,006 | 0.3% | ||||||
Singapore | 2,402,089 | 0.4% | ||||||
Sweden | 9,679,759 | 1.7% | ||||||
Switzerland | 4,328,309 | 0.7% | ||||||
United Kingdom | 21,347,204 | 3.7% | ||||||
United States†† | 438,764,616 | 75.5% | ||||||
Total | $ | 581,391,991 | 100.0% |
†† | Includes Short-Term Securities (72.3% excluding Short-Term Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (6,802,564) | 100.0% | |||||
Total | $ | (6,802,564) | 100.0% |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/09 | 3,100,000 | $ | 4,584,510 | $ | (30,410) | |||||||
British Pound 6/18/09 | 5,247,000 | 7,759,491 | (84,442) | |||||||||
Japanese Yen 5/14/09 | 587,000,000 | 5,954,200 | 21,571 | |||||||||
Japanese Yen 6/18/09 | 477,000,000 | 4,841,341 | 24,318 | |||||||||
Total | $ | 23,139,542 | $ | (68,963) |
See Notes to Schedules of Investments and Financial Statements.
78 Janus Growth Funds April 30, 2009
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Janus Growth Funds April 30, 2009 79
Statements of Assets and Liabilities
Janus | Janus | Janus | ||||||||||||||||
As of April 30, 2009 (unaudited) | Janus | Enterprise | Orion | Research | ||||||||||||||
(all numbers in thousands except net asset value per share) | Fund | Fund | Fund | Fund | ||||||||||||||
Assets: | ||||||||||||||||||
Investments at cost | $ | 7,716,239 | $ | 1,514,849 | $ | 2,549,900 | $ | 2,875,622 | ||||||||||
Unaffiliated investments at value | $ | 6,883,962 | $ | 1,311,183 | $ | 2,381,782 | $ | 2,416,958 | ||||||||||
Affiliated money market investments | 280,510 | 40,145 | 127,553 | 38,478 | ||||||||||||||
Cash | 5,957 | – | – | 154 | ||||||||||||||
Cash denominated in foreign currency(1) | 3,302 | 282 | – | 1,134 | ||||||||||||||
Restricted cash (Note 1) | 11,880 | – | 16,114 | – | ||||||||||||||
Deposits with broker for short sales | – | – | 41,975 | – | ||||||||||||||
Unrealized appreciation on swap contracts | – | – | 5,484 | – | ||||||||||||||
Receivables: | ||||||||||||||||||
Investments sold | 69,293 | 7,640 | 53,914 | 33,827 | ||||||||||||||
Fund shares sold | 2,862 | 1,108 | 1,113 | 975 | ||||||||||||||
Dividends | 16,421 | 576 | 5,860 | 5,294 | ||||||||||||||
Interest | 1,914 | – | – | – | ||||||||||||||
Non-interested Trustees’ deferred compensation | 174 | 33 | 61 | 60 | ||||||||||||||
Other assets | 98 | 15 | 26 | 55 | ||||||||||||||
Variation Margin | – | – | 167 | – | ||||||||||||||
Forward currency contracts | 2,945 | – | 1,002 | 515 | ||||||||||||||
Total Assets | 7,279,318 | 1,360,982 | 2,635,051 | 2,497,450 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Payables: | ||||||||||||||||||
Short sales, at value(2) | – | – | 44,592 | – | ||||||||||||||
Options written, at value(3) | – | – | 5,444 | – | ||||||||||||||
Due to Custodian | – | 4 | 402 | – | ||||||||||||||
Investments purchased | 60,461 | 4,644 | 47,152 | 20,249 | ||||||||||||||
Fund shares repurchased | 2,583 | 15,028 | 4,291 | 16,492 | ||||||||||||||
Advisory fees | 3,684 | 664 | 1,249 | 1,089 | ||||||||||||||
Transfer agent fees and expenses | 2,151 | 720 | 944 | 925 | ||||||||||||||
Non-interested Trustees’ fees and expenses | – | 3 | 12 | 6 | ||||||||||||||
Non-interested Trustees’ deferred compensation fees | 174 | 33 | 61 | 59 | ||||||||||||||
Foreign tax liability | – | – | 1,332 | – | ||||||||||||||
Accrued expenses and other payables | 243 | 153 | 374 | 145 | ||||||||||||||
Forward currency contracts | 4,770 | 624 | 1,685 | 1,443 | ||||||||||||||
Total Liabilities | 74,066 | 21,873 | 107,538 | 40,408 | ||||||||||||||
Net Assets | $ | 7,205,252 | $ | 1,339,109 | $ | 2,527,513 | $ | 2,457,042 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||
Capital (par value and paid-in surplus)* | $ | 13,251,799 | $ | 5,347,211 | $ | 4,936,593 | $ | 7,914,615 | ||||||||||
Undistributed net investment income/(loss)* | 26,274 | 895 | 17,548 | 11,406 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (5,519,154) | (3,844,844) | (2,389,010) | (5,047,884) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(4) | (553,667) | (164,153) | (37,618) | (421,095) | ||||||||||||||
Total Net Assets | $ | 7,205,252 | $ | 1,339,109 | $ | 2,527,513 | $ | 2,457,042 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 357,169 | 37,212 | 352,703 | 131,312 | ||||||||||||||
Net Asset Value Per Share | $ | 20.17 | $ | 35.99 | $ | 7.17 | $ | 18.71 |
* | See Note 3 in Notes to Financial Statements. |
(1) | Includes cost of $3,308,076, $282,246 and $1,035,033 for Janus Fund, Janus Enterprise Fund and Janus Research Fund, respectively. | |
(2) | Includes proceeds of $41,974,845, $1,384,102, $11,654,587, $3,578,918, and $5,211,799 on short sales for Janus Orion Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund, and Janus Global Technology Fund, respectively. | |
(3) | Includes premiums of $9,900,229, and $1,874,183 on written options for Janus Orion Fund and Janus Venture Fund, respectively. | |
(4) | Net of foreign taxes on investments of $1,332,375 for Janus Orion Fund. |
See Notes to Financial Statements.
80 Janus Growth Funds April 30, 2009
Janus | Janus | |||||||||||||||||||
Janus | Janus | Janus | Global Life | Global | ||||||||||||||||
Triton | Twenty | Venture | Sciences | Technology | ||||||||||||||||
Fund | Fund | Fund | Fund | Fund | ||||||||||||||||
$ | 181,804 | $ | 6,653,082 | $ | 926,067 | $ | 630,325 | $ | 562,309 | |||||||||||
$ | 150,739 | $ | 7,159,290 | $ | 776,907 | $ | 552,286 | $ | 563,179 | |||||||||||
25,523 | 550,332 | – | 18,316 | 18,213 | ||||||||||||||||
– | 29 | – | 1,625 | 110 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | – | 3,050 | – | – | ||||||||||||||||
1,384 | – | 11,654 | 3,579 | 5,212 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
1,954 | 20,957 | 5,736 | 5,662 | 16,837 | ||||||||||||||||
1,103 | 2,116 | 42 | 101 | 707 | ||||||||||||||||
93 | 15,528 | 32 | 1,130 | 957 | ||||||||||||||||
– | – | 20 | 49 | – | ||||||||||||||||
4 | 187 | 19 | 14 | 14 | ||||||||||||||||
1 | 32 | 23 | 4 | 1 | ||||||||||||||||
– | 511 | – | – | – | ||||||||||||||||
– | – | – | 122 | 46 | ||||||||||||||||
180,801 | 7,748,982 | 797,483 | 582,888 | 605,276 | ||||||||||||||||
1,653 | – | 12,663 | 2,984 | 6,803 | ||||||||||||||||
– | – | 1,565 | – | – | ||||||||||||||||
2 | – | 5,559 | – | – | ||||||||||||||||
1,947 | – | 3,221 | 5,740 | 5,508 | ||||||||||||||||
134 | 3,791 | 652 | 484 | 219 | ||||||||||||||||
412 | 3,895 | 379 | 304 | 288 | ||||||||||||||||
95 | 2,065 | 286 | 247 | 421 | ||||||||||||||||
4 | – | 6 | 2 | 3 | ||||||||||||||||
4 | 187 | 19 | 14 | 14 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
123 | 286 | 212 | 123 | 91 | ||||||||||||||||
– | – | – | 522 | 115 | ||||||||||||||||
4,374 | 10,224 | 24,562 | 10,420 | 13,462 | ||||||||||||||||
$ | 176,427 | $ | 7,738,758 | $ | 772,921 | $ | 572,468 | $ | 591,814 | |||||||||||
$ | 211,715 | $ | 7,742,542 | $ | 1,112,395 | $ | 1,298,679 | $ | 3,051,444 | |||||||||||
(351) | 2,707 | (1,808) | 1,774 | (627) | ||||||||||||||||
(29,125) | (1,071,746) | (187,800) | (668,449) | (2,476,421) | ||||||||||||||||
(5,812) | 1,065,255 | (149,866) | (59,536) | 17,418 | ||||||||||||||||
$ | 176,427 | $ | 7,738,758 | $ | 772,921 | $ | 572,468 | $ | 591,814 | |||||||||||
17,735 | 160,961 | 24,429 | 35,081 | 56,167 | ||||||||||||||||
$ | 9.95 | $ | 48.08 | $ | 31.64 | $ | 16.32 | $ | 10.54 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2009 81
Statements of Operations
Janus | Janus | Janus | ||||||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Janus | Enterprise | Orion | Research | ||||||||||||||
(all numbers in thousands) | Fund | Fund | Fund | Fund | ||||||||||||||
Investment Income: | ||||||||||||||||||
Interest | $ | 2,295 | $ | 48 | $ | 1,169 | $ | – | ||||||||||
Securities lending income | – | – | 31 | 3 | ||||||||||||||
Dividends | 55,801 | 7,015 | 27,687 | 21,654 | ||||||||||||||
Dividends from affiliates | 971 | 36 | 173 | 36 | ||||||||||||||
Foreign tax withheld | (2,653) | (48) | (474) | (351) | ||||||||||||||
Total Investment Income | 56,414 | 7,051 | 28,586 | 21,342 | ||||||||||||||
Expenses: | ||||||||||||||||||
Advisory fees | 21,353 | 3,786 | 7,158 | 6,293 | ||||||||||||||
Transfer agent expenses | 7,851 | 1,906 | 3,071 | 3,073 | ||||||||||||||
Registration fees | 114 | 81 | 116 | 60 | ||||||||||||||
Custodian fees | 72 | 51 | 180 | 27 | ||||||||||||||
Audit fees | 30 | 19 | 23 | 22 | ||||||||||||||
Postage fees | 391 | 192 | 371 | 292 | ||||||||||||||
Printing fees | 9 | 18 | 20 | 12 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 22 | 11 | 28 | 13 | ||||||||||||||
Short sales dividend expense | – | – | 69 | – | ||||||||||||||
Short sales interest expense | – | – | – | – | ||||||||||||||
Stock loan fees | – | – | – | – | ||||||||||||||
Other expenses | 181 | 69 | 108 | 91 | ||||||||||||||
Non-recurring costs (Note 2) | 1 | – | – | – | ||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (1) | – | – | – | ||||||||||||||
Total Expenses | 30,023 | 6,133 | 11,144 | 9,883 | ||||||||||||||
Expense and Fee Offset | (22) | (2) | (11) | (4) | ||||||||||||||
Net Expenses | 30,001 | 6,131 | 11,133 | 9,879 | ||||||||||||||
Less: Excess Expense Reimbursement | – | – | – | – | ||||||||||||||
Net Expenses after Expense Reimbursement | 30,001 | 6,131 | 11,133 | 9,879 | ||||||||||||||
Net Investment Income/(Loss) | 26,413 | 920 | 17,453 | 11,463 | ||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (1,463,649) | (233,997) | (1,161,122) | (517,248) | ||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | (37,133) | – | ||||||||||||||
Net realized gain/(loss) from short sales | – | – | 1,003 | – | ||||||||||||||
Net realized gain/(loss from swap contracts | – | – | 9,245 | 2,642 | ||||||||||||||
Net realized gain/(loss) from options contracts | 30,877 | – | (29,741) | 596 | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(1) | 1,372,697 | 232,945 | 1,208,306 | 549,811 | ||||||||||||||
Net Gain/(Loss) on Investments | (60,075) | (1,052) | (9,442) | 35,801 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (33,662) | $ | (132) | $ | 8,011 | $ | 47,264 |
(1) | Net of foreign taxes on investments of $1,332,375 for Janus Orion Fund. |
See Notes to Financial Statements.
82 Janus Growth Funds April 30, 2009
Janus | Janus | |||||||||||||||||||
Janus | Janus | Janus | Global Life | Global | ||||||||||||||||
Triton | Twenty | Venture | Sciences | Technology | ||||||||||||||||
Fund | Fund | Fund | Fund | Fund | ||||||||||||||||
$ | 1 | $ | 63 | $ | 20 | $ | 235 | $ | 1 | |||||||||||
4 | – | – | – | – | ||||||||||||||||
442 | 31,368 | 1,515 | 4,716 | 2,142 | ||||||||||||||||
21 | 2,717 | – | 63 | 76 | ||||||||||||||||
(5) | (1,923) | (4) | (242) | (80) | ||||||||||||||||
463 | 32,225 | 1,531 | 4,772 | 2,139 | ||||||||||||||||
389 | 21,648 | 2,123 | 1,888 | 1,547 | ||||||||||||||||
215 | 7,317 | 752 | 848 | 942 | ||||||||||||||||
7 | 97 | 26 | 25 | 17 | ||||||||||||||||
6 | 42 | 44 | 9 | 13 | ||||||||||||||||
19 | 23 | 19 | 21 | 25 | ||||||||||||||||
61 | 346 | 120 | 145 | 170 | ||||||||||||||||
66 | 8 | 17 | 14 | 21 | ||||||||||||||||
5 | 47 | 5 | 7 | 4 | ||||||||||||||||
– | – | 16 | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
1 | – | 26 | – | 1 | ||||||||||||||||
43 | 247 | 63 | 55 | 20 | ||||||||||||||||
N/A | – | – | – | – | ||||||||||||||||
N/A | – | – | – | – | ||||||||||||||||
812 | 29,775 | 3,211 | 3,012 | 2,760 | ||||||||||||||||
– | (5) | (1) | (1) | (2) | ||||||||||||||||
812 | 29,770 | 3,210 | 3,011 | 2,758 | ||||||||||||||||
(51) | – | – | – | – | ||||||||||||||||
761 | 29,770 | 3,210 | 3,011 | 2,758 | ||||||||||||||||
(298) | 2,455 | (1,679) | 1,761 | (619) | ||||||||||||||||
(21,058) | (114,838) | (145,538) | (71,327) | (134,462) | ||||||||||||||||
– | (53,867) | – | – | – | ||||||||||||||||
332 | – | 2,173 | – | 511 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
77 | 831 | (1,231) | – | 2,154 | ||||||||||||||||
39,898 | 424,610 | 186,798 | 16,058 | 200,024 | ||||||||||||||||
19,249 | 256,736 | 42,202 | (55,269) | 68,227 | ||||||||||||||||
$ | 18,951 | $ | 259,191 | $ | 40,523 | $ | (53,508) | $ | 67,608 | |||||||||||
See Notes to Financial Statements.
Janus Growth Funds April 30, 2009 83
Statements of Changes in Net Assets
For the six-month period ended April 30, 2009 (unaudited) | Janus | Janus | Janus | |||||||||||||||||||||||
and for the fiscal year ended October 31, 2008 | Fund | Enterprise Fund | Orion Fund | |||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 26,413 | $ | 66,354 | $ | 920 | $ | 736 | $ | 17,453 | $ | 31,451 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (1,463,649) | 797,191 | (233,997) | 338,257 | (1,161,122) | 482,892 | ||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | (37,133) | (5,595) | ||||||||||||||||||||
Net realized gain/(loss) from short sales | – | – | – | – | 1,003 | 1,365 | ||||||||||||||||||||
Net realized gain/(loss) from swap contracts | – | – | – | – | 9,245 | 18,339 | ||||||||||||||||||||
Net realized gain/(loss) from options contracts | 30,877 | (12,037) | – | – | (29,741) | 41,135 | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,372,697 | (5,806,130) | 232,945 | (1,295,005) | 1,208,306 | (3,127,027) | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (33,662) | (4,954,622) | (132) | (956,012) | 8,011 | (2,557,440) | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | (65,042) | (62,048) | – | – | (22,004) | (16,326) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | ||||||||||||||||||||
Net (Decrease) from Dividends and Distributions | (65,042) | (62,048) | – | – | (22,004) | (16,326) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | 626,233 | 1,410,540 | 134,228 | 649,837 | 119,093 | 1,524,851 | ||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 63,514 | 60,491 | – | – | 21,599 | 16,032 | ||||||||||||||||||||
Shares repurchased | (914,085) | (1,964,814) | (192,503) | (529,533) | (294,067) | (1,460,583) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (224,338) | (493,783) | (58,275) | 120,304 | (153,375) | 80,300 | ||||||||||||||||||||
Net Increase/Decrease in Net Assets | (323,042) | (5,510,453) | (58,407) | (835,708) | (167,368) | (2,493,466) | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 7,528,294 | 13,038,747 | 1,397,516 | 2,233,224 | 2,694,881 | 5,188,347 | ||||||||||||||||||||
End of period | $ | 7,205,252 | $ | 7,528,294 | $ | 1,339,109 | $ | 1,397,516 | $ | 2,527,513 | $ | 2,694,881 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 26,274 | $ | 64,903 | $ | 895 | $ | (25) | $ | 17,548 | $ | 22,099 |
* | See Note 3 in Notes to Financial Statements |
See Notes to Financial Statements.
84 Janus Growth Funds April 30, 2009
Janus | Janus | ||||||||||||||||||||||||||||||||||||||||||
Global | Global | ||||||||||||||||||||||||||||||||||||||||||
Janus | Janus | Janus | Janus | Life | Technology | ||||||||||||||||||||||||||||||||||||||
Research Fund | Triton Fund | Twenty Fund | Venture Fund | Sciences Fund | Fund | ||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||||||
$ | 11,463 | $ | 9,649 | $ | (298) | $ | (335) | $ | 2,455 | $ | 2,182 | $ | (1,679) | $ | (5,826) | $ | 1,761 | $ | 1,266 | $ | (619) | $ | (1,086) | ||||||||||||||||||||
(517,248) | (70,127) | (21,058) | (10,683) | (114,838) | 522,599 | (145,538) | (9,914) | (71,327) | 69,084 | (134,462) | 64,903 | ||||||||||||||||||||||||||||||||
– | – | – | – | (53,867) | (16,633) | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||
– | – | 332 | 2,299 | – | – | 2,173 | 585 | – | (2,017) | 511 | 4,175 | ||||||||||||||||||||||||||||||||
2,642 | (5,389) | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||
596 | – | 77 | 464 | 831 | – | (1,231) | 3,622 | – | – | 2,154 | 166 | ||||||||||||||||||||||||||||||||
549,811 | (1,963,789) | 39,898 | (69,480) | 424,610 | (5,301,020) | 186,798 | (872,722) | 16,058 | (305,197) | 200,024 | (498,155) | ||||||||||||||||||||||||||||||||
47,264 | (2,029,656) | 18,951 | (77,735) | 259,191 | (4,792,872) | 40,523 | (884,255) | (53,508) | (236,864) | 67,608 | (429,997) | ||||||||||||||||||||||||||||||||
(6,731) | (4,261) | (60) | – | (1,411) | (24,898) | – | – | (973) | – | – | (3,731) | ||||||||||||||||||||||||||||||||
– | – | – | (17,032) | – | – | – | (319,906) | – | – | – | – | ||||||||||||||||||||||||||||||||
(6,731) | (4,261) | (60) | (17,032) | (1,411) | (24,898) | – | (319,906) | (973) | – | – | (3,731) | ||||||||||||||||||||||||||||||||
106,534 | 853,392 | 53,353 | 109,888 | 229,216 | 1,011,075 | 10,455 | 31,117 | 20,649 | 124,073 | 24,376 | 81,328 | ||||||||||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 44 | 220 | 26 | 229 | ||||||||||||||||||||||||||||||||
6,570 | 4,054 | 59 | 16,261 | 1,381 | 24,383 | – | 308,642 | 956 | – | – | 3,662 | ||||||||||||||||||||||||||||||||
(287,116) | (1,239,247) | (18,728) | (60,418) | (420,858) | (1,315,914) | (38,937) | (138,884) | (47,806) | (128,325) | (33,525) | (146,246) | ||||||||||||||||||||||||||||||||
(174,012) | (381,801) | 34,684 | 65,731 | (190,261) | (280,456) | (28,482) | 200,875 | (26,157) | (4,032) | (9,123) | (61,027) | ||||||||||||||||||||||||||||||||
(133,479) | (2,415,718) | 53,575 | (29,036) | 67,519 | (5,098,226) | 12,041 | (1,003,286) | (80,638) | (240,896) | 58,485 | (494,755) | ||||||||||||||||||||||||||||||||
2,590,521 | 5,006,239 | 122,852 | 151,888 | 7,671,239 | 12,769,465 | 760,880 | 1,764,166 | 653,106 | 894,002 | 533,329 | 1,028,084 | ||||||||||||||||||||||||||||||||
$ | 2,457,042 | $ | 2,590,521 | $ | 176,427 | $ | 122,852 | $ | 7,738,758 | $ | 7,671,239 | $ | 772,921 | $ | 760,880 | $ | 572,468 | $ | 653,106 | $ | 591,814 | $ | 533,329 | ||||||||||||||||||||
$ | 11,406 | $ | 6,674 | $ | (351) | $ | 7 | $ | 2,707 | $ | 1,662 | $ | (1,808) | $ | (129) | $ | 1,774 | $ | 986 | $ | (627) | $ | (8) |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2009 85
Financial Highlights
For a share outstanding during the six-month period ended | ||||||||||||||||||||||||||
April 30, 2009 (unaudited) and through each fiscal year ended | Janus Fund | |||||||||||||||||||||||||
October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $20.35 | $33.66 | $27.43 | $24.44 | $22.69 | $22.52 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .08 | .18 | .16 | .09 | .02 | – | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | (.08) | (13.33) | 6.17 | 2.92 | 1.73 | .17 | ||||||||||||||||||||
Total from Investment Operations | – | (13.15) | 6.33 | 3.01 | 1.75 | .17 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.18) | (.16) | (.10) | (.02) | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.18) | (.16) | (.10) | (.02) | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $20.17 | $20.35 | $33.66 | $27.43 | $24.44 | $22.69 | ||||||||||||||||||||
Total Return** | 0.09% | (39.24)% | 23.12% | 12.31% | 7.71% | 0.75% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $7,205,252 | $7,528,294 | $13,038,747 | $11,208,629 | $11,142,921 | $13,277,473 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,758,102 | $10,973,577 | $11,816,878 | $11,232,055 | $12,310,464 | $15,433,191 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.90% | 0.88% | 0.88% | 0.90% | 0.88% | 0.90% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.90% | 0.87% | 0.87% | 0.90% | 0.87% | 0.90% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.79% | 0.60% | 0.52% | 0.34% | 0.07% | (0.17)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 84% | 95% | 32% | 69% | 78% | 21% | ||||||||||||||||||||
For a share outstanding during the six-month period ended | ||||||||||||||||||||||||||
April 30, 2009 (unaudited) and through each fiscal year ended | Janus Enterprise Fund | |||||||||||||||||||||||||
October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $35.71 | $59.39 | $45.65 | $39.48 | $33.73 | $30.02 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .05 | (.01) | (.04) | –(1) | –(1) | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .26 | (23.73) | 13.75 | 6.21 | 5.75 | 3.71 | ||||||||||||||||||||
Total from Investment Operations | .28 | (23.68) | 13.74 | 6.17 | 5.75 | 3.71 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $35.99 | $35.71 | $59.39 | $45.65 | $39.48 | $33.73 | ||||||||||||||||||||
Total Return ** | 0.78% | (39.87)% | 30.10% | 15.63% | 17.05% | 12.36% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,339,109 | $1,397,516 | $2,233,224 | $1,743,616 | $1,703,542 | $1,679,958 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,193,521 | $2,025,505 | $1,926,163 | $1,778,532 | $1,728,579 | $1,795,534 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 1.04% | 0.92% | 0.94% | 1.00% | 0.96% | 1.04% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 1.04% | 0.92% | 0.93% | 0.99% | 0.95% | 1.03% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.16% | 0.04% | (0.04)% | (0.24)% | (0.30)% | (0.46)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 45% | 69% | 32% | 40% | 28% | 27% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
86 Janus Growth Funds April 30, 2009
For a share outstanding during the six-month period ended April 30, | Janus Orion Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006(1) | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.14 | $13.57 | $9.49 | $7.80 | $6.25 | $5.64 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .08 | .03 | .04 | .03 | – | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .04 | (6.47) | 4.07 | 1.71 | 1.52 | .61 | ||||||||||||||||||||
Total from Investment Operations | .09 | (6.39) | 4.10 | 1.75 | 1.55 | .61 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.04) | (.02) | (.06) | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.06) | (.04) | (.02) | (.06) | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $7.17 | $7.14 | $13.57 | $9.49 | $7.80 | $6.25 | ||||||||||||||||||||
Total Return** | 1.41% | (47.21)% | 43.32% | 22.58% | 24.80% | 10.82% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,527,513 | $2,694,881 | $5,188,347 | $3,243,102 | $691,401 | $529,804 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,258,294 | $4,709,077 | $3,773,555 | $966,223 | $590,421 | $540,305 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.00%(4) | 0.94%(4) | 0.93% | 1.00% | 1.02% | 1.09% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.99%(4) | 0.94%(4) | 0.92% | 0.99% | 1.01% | 1.08% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.56% | 0.67% | 0.34% | 0.80% | 0.52% | (0.05)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 170% | 144% | 24% | 63% | 68% | 69% | ||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, | Janus Research Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.25 | $32.09 | $24.19 | $22.05 | $19.48 | $18.14 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .09 | .05 | .03 | .02 | .09 | – | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .42 | (13.86) | 7.89 | 2.18 | 2.51 | 1.34 | ||||||||||||||||||||
Total from Investment Operations | .51 | (13.81) | 7.92 | 2.20 | 2.60 | 1.34 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.03) | (.02) | (.06) | (.03) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.05) | (.03) | (.02) | (.06) | (.03) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $18.71 | $18.25 | $32.09 | $24.19 | $22.05 | $19.48 | ||||||||||||||||||||
Total Return** | 2.82% | (43.08)% | 32.76% | 10.00% | 13.35% | 7.39% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,457,042 | $2,590,521 | $5,006,239 | $3,876,997 | $4,473,431 | $4,471,514 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,247,886 | $4,097,719 | $4,266,701 | $4,052,013 | $4,447,616 | $5,007,156 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.89% | 1.06% | 1.01% | 0.98% | 0.93% | 0.97% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.89% | 1.05% | 1.00% | 0.97% | 0.92% | 0.97% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.03% | 0.24% | 0.11% | 0.11% | 0.42% | (0.26)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 77% | 102% | 72% | 147% | 38% | 43% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Effective October 31, 2006, Janus Olympus Fund merged into Janus Orion Fund. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.99% and 0.99%, respectively in 2009 and 0.93% and 0.92%, respectively in 2008, without the inclusion of dividends on short positions. |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2009 87
Financial Highlights (continued)
For a share outstanding during the six-month period ended April 30, | Janus Triton Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year or period ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005(1) | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.89 | $17.13 | $13.09 | $10.86 | $10.00 | |||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.02) | .02 | – | .01 | – | |||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | 1.08 | (6.36) | 4.22 | 2.27 | 0.86 | |||||||||||||||||||||
Total from Investment Operations | 1.06 | (6.34) | 4.22 | 2.28 | 0.86 | |||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | (.03) | – | |||||||||||||||||||||
Distributions (from capital gains)* | – | (1.90) | (.18) | (.02) | – | |||||||||||||||||||||
Return of Capital | N/A | –(2) | N/A | N/A | N/A | |||||||||||||||||||||
Total Distributions and Other | – | (1.90) | (.18) | (.05) | – | |||||||||||||||||||||
Net Asset Value, End of Period | $9.95 | $8.89 | $17.13 | $13.09 | $10.86 | |||||||||||||||||||||
Total Return** | 11.98% | (41.05)% | 32.57% | 21.06% | 8.60% | |||||||||||||||||||||
Net Assets, End of Period (in thousands) | $176,427 | $122,852 | $151,888 | $111,993 | $37,695 | |||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $123,073 | $143,209 | $120,057 | $105,268 | $25,904 | |||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 1.25%(5)(6) | 1.20%(5) | 1.13% | 1.11% | 1.27%(6) | |||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.25%(5) | 1.20%(5) | 1.11% | 1.09% | 1.25% | |||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.49)% | (0.23)% | (0.28)% | 0.12% | (0.24)% | |||||||||||||||||||||
Portfolio Turnover Rate*** | 75% | 88% | 93% | 262% | 48% | |||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, | Janus Twenty Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $46.29 | $74.70 | $52.93 | $47.63 | $39.60 | $34.06 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .01 | .15 | .32 | .10 | .03 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | 1.78 | (28.27) | 21.94 | 5.08 | 7.94 | 5.68 | ||||||||||||||||||||
Total from Investment Operations | 1.80 | (28.26) | 22.09 | 5.40 | 8.04 | 5.71 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01) | (.15) | (.32) | (.10) | (.01) | (.17) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.01) | (.15) | (.32) | (.10) | (.01) | (.17) | ||||||||||||||||||||
Net Asset Value, End of Period | $48.08 | $46.29 | $74.70 | $52.93 | $47.63 | $39.60 | ||||||||||||||||||||
Total Return** | 3.89% | (37.91)% | 41.95% | 11.35% | 20.31% | 16.85% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $7,738,758 | $7,671,239 | $12,769,465 | $9,582,463 | $9,612,503 | $9,023,479 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,923,748 | $11,801,120 | $10,355,207 | $9,511,589 | $9,458,921 | $9,319,532 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.87% | 0.85% | 0.88%(7) | 0.88%(7) | 0.86% | 0.89% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.87% | 0.84% | 0.88%(7) | 0.87%(7) | 0.86% | 0.89% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.07% | 0.02% | 0.22% | 0.60% | 0.21% | 0.06% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 50% | 42% | 20% | 41% | 44% | 14% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Period from February 25, 2005 (inception date) through October 31, 2005. | |
(2) | Return of Capital aggregated less than $.01 on a per share basis for the period ended October 31, 2008. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(5) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 1.25% and 1.25%, respectively, in 2009 and 1.16% and 1.16%, respectively, in 2008 without the inclusion of dividends on short positions. | |
(6) | The ratio was 1.33% in 2009 and 1.85% in 2005, before waiver of certain fees incurred by the Fund. | |
(7) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.86% and 0.86%, respectively, in 2007 and 0.87% and 0.87%, respectively, in 2006, without the inclusion of dividends on short positions. |
See Notes to Financial Statements.
88 Janus Growth Funds April 30, 2009
For a share outstanding during the six-month period ended April 30, | Janus Venture Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $29.82 | $79.09 | $65.75 | $56.82 | $51.57 | $47.77 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.07) | .07 | (.02) | (.06) | – | – | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | 1.89 | (34.87) | 20.85 | 11.92 | 5.25 | 3.80 | ||||||||||||||||||||
Total from Investment Operations | 1.82 | (34.80) | 20.83 | 11.86 | 5.25 | 3.80 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | (14.47) | (7.49) | (2.93) | – | – | ||||||||||||||||||||
Return of Capital | N/A | –(1) | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Total Distributions and Other | – | (14.47) | (7.49) | (2.93) | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $31.64 | $29.82 | $79.09 | $65.75 | $56.82 | $51.57 | ||||||||||||||||||||
Total Return** | 6.10% | (52.62)% | 34.68% | 21.69% | 10.18% | 7.95% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $772,921 | $760,880 | $1,764,166 | $1,398,455 | $1,293,150 | $1,327,088 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $668,832 | $1,268,992 | $1,549,495 | $1,353,079 | $1,367,775 | $1,355,755 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.97%(4) | 0.90%(4) | 0.88% | 0.91% | 0.87% | 0.90% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.97%(4) | 0.90%(4) | 0.87% | 0.91% | 0.87% | 0.90% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.51)% | (0.46)% | (0.49)% | (0.55)% | (0.64)% | (0.74)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 33% | 31% | 57% | 55% | 63% | 61% | ||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, | Janus Global Life Sciences Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.78 | $24.12 | $20.25 | $19.37 | $16.08 | $14.61 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .03 | – | – | – | – | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | (1.48) | (6.38) | 3.87 | .88 | 3.29 | 1.47 | ||||||||||||||||||||
Total from Investment Operations | (1.43) | (6.35) | 3.87 | .88 | 3.29 | 1.47 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.03) | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(5) | .01 | –(5) | –(5) | –(5) | –(5) | ||||||||||||||||||||
Total Distributions and Other | (.03) | .01 | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $16.32 | $17.78 | $24.12 | $20.25 | $19.37 | $16.08 | ||||||||||||||||||||
Total Return** | (8.06)% | (26.29)% | 19.11% | 4.54% | 20.46% | 10.06% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $572,468 | $653,106 | $894,002 | $982,030 | $1,149,666 | $1,183,496 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $596,886 | $835,370 | $874,776 | $1,101,726 | $1,181,741 | $1,288,416 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.02% | 0.98% | 1.01% | 1.02% | 0.97% | 1.02% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 1.02% | 0.97% | 0.99% | 1.01% | 0.96% | 1.01% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.59% | 0.15% | (0.27)% | (0.39)% | (0.49)% | (0.52)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 80% | 81% | 61% | 87% | 77% | 78% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Return of Capital aggregated less than $.01 on a per share basis for the period ended October 31, 2008. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.96% and 0.96%, respectively, in 2009 and 0.89% and 0.89%, respectively, in 2008 without the inclusion of dividends on short positions. | |
(5) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2009 89
Financial Highlights (continued)
For a share outstanding during the six-month period ended April 30, | Janus Global Technology Fund | |||||||||||||||||||||||||
2009 (unaudited) and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.29 | $16.51 | $12.23 | $10.88 | $9.70 | $10.44 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.01) | – | .06 | – | .01 | .02 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | 1.26 | (7.16) | 4.22 | 1.36 | 1.17 | (.76) | ||||||||||||||||||||
Total from Investment Operations | 1.25 | (7.16) | 4.28 | 1.36 | 1.18 | (.74) | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.06) | – | (.01) | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(1) | –(1) | –(1) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Total Distributions and Other | – | (.06) | – | (.01) | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $10.54 | $9.29 | $16.51 | $12.23 | $10.88 | $9.70 | ||||||||||||||||||||
Total Return** | 13.46% | (43.51)% | 35.00% | 12.48% | 12.16% | (7.09)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $591,814 | $533,329 | $1,028,084 | $914,349 | $993,663 | $1,255,023 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $489,827 | $828,435 | $915,092 | $999,147 | $1,109,908 | $1,480,508 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.14%(4) | 1.02%(4) | 1.04% | 1.13% | 1.04% | 1.07% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 1.14%(4) | 1.01%(4) | 1.03% | 1.11% | 1.03% | 1.07% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.26)% | (0.13)% | 0.40% | (0.30)% | 0.07% | (0.37)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 140% | 90% | 57% | 85% | 31% | 24% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 1.14% and 1.14%, respectively, in 2009 and 1.02% and 1.01%, respectively, in 2008 without the inclusion of dividends on short positions. |
See Notes to Financial Statements.
90 Janus Growth Funds April 30, 2009
Notes to Schedules of Investments (unaudited)
Lipper Global Health/Biotechnology Funds | Funds that invest at least 65% of their equity portfolios in shares of companies engaged in healthcare, medicine, and biotechnology. | |
Lipper Global Science and Technology Funds | Funds that invest at least 65% of their equity portfolio in science and technology stocks. | |
Lipper Large-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500® Index. | |
Lipper Mid-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. | |
Lipper Multi-Cap Growth Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating more than 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) above 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. | |
Lipper Small-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | |
London Interbank Offered Rate (LIBOR) | A daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). | |
Morgan Stanley Capital International World Health Care Index | Is a capitalization weighted index that monitors the performance of health care stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World Information Technology Index | Is a capitalization weighted index that monitors the performance of information technology stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Growth Index | Measures the performance of those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Index | Measures the performance of the 2,000 smallest companies in the Russell 3000® Index. |
Janus Growth Funds April 30, 2009 91
Notes to Schedules of Investments (unaudited) (continued)
Russell 2500TMGrowth Index | Measures the performance of those Russell 2500TM Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 3000® Growth Index | Measures the performance of those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000® Growth or the Russell 2000® Growth Indices. | |
Russell Midcap® Growth Index | Measures the performance of those Russell Midcap® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. | |
S&P MidCap 400 Index | An unmanaged group of 400 domestic stocks chosen for their market size, liquidity and industry group representation. | |
VVPR Strips | The VVPR strip is a coupon which, if presented along with the dividend coupon of the ordinary share, allows the benefit of a reduced withholding tax on the dividends paid by the company. This strip is quoted separately from the ordinary share and is freely negotiable. | |
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. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
LEAPS | Long-Term Equity Anticipation Securities | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
ß | Security is illiquid. |
92 Janus Growth Funds April 30, 2009
°° Schedule of Fair Valued Securities (as of April 30, 2009)
Value as a % | |||||||
Value | of Net Assets | ||||||
Janus Venture Fund | |||||||
Digital Domain – Private Placement | $ | 7,291,116 | 0.9% | ||||
Genius Products, Inc., 5.0000%, expires 12/31/10 | 2,000,000 | 0.3% | |||||
Genius Products, Inc. – Private Placement – expires 2/7/14 | - | 0.0% | |||||
Lantronix, Inc. – Private Placement – expires 2/9/11 | 16 | 0.0% | |||||
Motorcar Parts of America, Inc. – Private Placement – expires 5/17/12 | 7,700 | 0.0% | |||||
Parent Co. (LEAPS), expires July 2009, exercise price $6.40 | 105 | 0.0% | |||||
Parent Co. (LEAPS), expires July 2009, exercise price $6.85 | 24 | 0.0% | |||||
PokerTek, Inc. – Private Placement – expires 4/23/12 | 120,259 | 0.0% | |||||
$ | 9,419,220 | 1.2% | |||||
Janus Global Life Sciences Fund | |||||||
Fibrogen, Inc. | $ | 7,440,153 | 1.3% | ||||
Lifesync Holdings, Inc. – Private Placement | 1,692,654 | 0.3% | |||||
Mediquest Therapeutics – expires 6/15/11 | - | 0.0% | |||||
Mediquest Therapeutics – expires 6/15/12 | 161 | 0.0% | |||||
Mediquest Therapeutics – Private Placement | 2,509,255 | 0.4% | |||||
Mediquest Therapeutics – Private Placement, Series A-1 | 1,557,765 | 0.3% | |||||
Portola Pharmaceuticals, Inc.. – Private Placement | 4,130,815 | 0.7% | |||||
$ | 17,330,803 | 3.0% | |||||
Securities are valued at “fair value” pursuant to procedures adopted by the Funds’ trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2009)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Venture Fund | ||||||||||||
Digital Domain-Private Placement°° | 7/26/07 | $ | 7,291,119 | $ | 7,291,116 | 0.9% | ||||||
Genius Products, Inc., 5.0000%, expires 12/31/10°° | 2/19/09 | 2,000,000 | 2,000,000 | 0.3% | ||||||||
Motorcar Parts of America, Inc.-Private Placement-expires 5/17/12°° | 5/17/07 | 198,682 | 7,700 | 0.0% | ||||||||
PokerTek, Inc.-Private Placement-expires 4/23/12°° | 4/23/07 | 712,613 | 120,259 | 0.0% | ||||||||
$ | 10,202,414 | $ | 9,419,075 | 1.2% | ||||||||
Janus Global Life Sciences Fund | ||||||||||||
Fibrogen, Inc.-Private Placement | 12/28/04-11/8/05 | $ | 5,786,786 | $ | 7,440,153 | 1.3% | ||||||
Lifesync Holdings, Inc.-Private Placement | 5/31/06-2/19/08 | 5,869,428 | 1,692,654 | 0.3% | ||||||||
Mediquest Therapeutics-expires 6/15/11 | 5/11/06-6/15/06 | – | – | 0.0% | ||||||||
Mediquest Therapeutics-expires 6/15/12 | 10/12/07-5/08/08 | 94,066 | 161 | 0.0% | ||||||||
Mediquest Therapeutics-Private Placement | 5/11/06-6/15/06 | 5,018,510 | 2,509,255 | 0.4% | ||||||||
Mediquest Therapeutics-Private Placement, Series A-1 | 3/31/09 | 3,135,054 | 1,557,765 | 0.3% | ||||||||
Portola Pharmaceuticals, Inc.-Private Placement | 7/3/08 | 4,130,815 | 4,130,815 | 0.7% | ||||||||
$ | 24,034,659 | $ | 17,330,803 | 3.0% | ||||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2009. The issuer incurs all registration costs.
Janus Growth Funds April 30, 2009 93
Notes to Schedules of Investments (unaudited) (continued)
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the six-month period ended April 30, 2009. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Orion FundÏ | |||||||||||||||||||||
CapitalSource, Inc. | – | $ | – | 7,526,163 | $ | 115,099,489 | $ | (87,614,260) | $ | 994,204 | $ | 36,078,574 | |||||||||
Cypress Semiconductor Corp.* | 1,387,275 | 5,041,167 | 7,439,385 | 40,874,077 | 10,062,786 | – | 12,636,574 | ||||||||||||||
Jones Lang LaSalle, Inc. | 252,255 | 7,482,727 | – | – | – | 475,196 | 67,657,411 | ||||||||||||||
Lamar Advertising Co. – Class A | 2,160,655 | 29,690,281 | 186,110 | 10,076,173 | (6,726,214) | – | 72,250,981 | ||||||||||||||
Sotheby’s Holdings, Inc. – Class A | – | – | 5,604,913 | 146,189,748 | (96,968,096) | 783,151 | – | ||||||||||||||
SunPower Corp. – Class B*(1) | – | – | 2,560,458 | 139,136,425 | (72,112,602) | – | – | ||||||||||||||
VistaPrint, Ltd.* | – | – | 862,030 | 26,159,375 | (6,576,721) | – | 54,730,302 | ||||||||||||||
3,800,185 | $ | 42,214,175 | 24,179,059 | $ | 477,535,287 | $ | (259,935,107) | $ | 2,252,552 | $ | 243,353,842 | ||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Venture Fund | |||||||||||||||||||||
Century Casinos, Inc.* | – | $ | – | – | $ | – | $ | – | $ | – | $ | 3,642,351 | |||||||||
Genius Products, Inc. – Private Placement* (2) | – | – | – | – | – | – | 53,350 | ||||||||||||||
Health Grades, Inc.* | – | – | – | – | – | – | 5,248,592 | ||||||||||||||
Horizon Lines, Inc. – Class A | 40,335 | 162,516 | – | – | – | 363,190 | 8,889,896 | ||||||||||||||
inContact, Inc.* (3) | – | – | – | – | – | – | 3,794,851 | ||||||||||||||
Information Services Group, Inc.* | – | – | – | – | – | – | 5,804,776 | ||||||||||||||
Intermap Technologies Corp.* | – | – | – | – | – | – | 3,934,516 | ||||||||||||||
LivePerson, Inc.* | – | – | – | – | – | – | 8,353,517 | ||||||||||||||
Motorcar Parts of America, Inc.* | – | – | – | – | – | – | 2,584,340 | ||||||||||||||
NaviSite, Inc.* | – | – | – | – | – | – | 1,407,717 | ||||||||||||||
PokerTek, Inc.* | – | – | – | – | – | – | 564,915 | ||||||||||||||
Progressive Gaming International Corp.* | – | – | 681,705 | 13,547,452 | (13,506,482) | – | – | ||||||||||||||
Sturm Ruger and Co., Inc. | – | – | – | – | – | – | 12,950,612 | ||||||||||||||
Ultimate Software Group, Inc.* | – | – | – | – | – | – | 26,391,506 | ||||||||||||||
Workstream, Inc. (U.S. Shares)* | – | – | 1,848,289 | 9,410,691 | (9,327,668) | – | 861,170 | ||||||||||||||
Yucheng Technologies, Ltd. (U.S. Shares)* | – | – | – | – | – | – | 7,346,395 | ||||||||||||||
$ | 162,516 | $ | 22,958,143 | $ | (22,834,150) | $ | 363,190 | $ | 91,828,504 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Global Life Sciences Fund | |||||||||||||||||||||
Lifesync Holdings, Inc. -Private Placement* (4) | – | $ | – | – | $ | – | $ | – | $ | – | $ | 1,692,654 | |||||||||
Mediquest Therapeutics – Private Placement | – | – | – | – | – | – | 2,509,255 | ||||||||||||||
$ | – | $ | – | $ | – | $ | – | $ | 4,201,909 | ||||||||||||
(1) | Spun off from Cypress Semiconductor Corp. on 9/30/2008 with terms of .2743 shares for 1. | |
(2) | Reverse stock split 1:500 on 4/3/09. | |
(3) | On 1/2/09, UCN, Inc. changed its name to inContact, Inc. | |
(4) | In a corporate action merger on 3/10/09, 659,604 shares of GMP Companies, Inc. – Promissory Note were exchanged 1 for 1 for GMP Companies, Inc. and changed its name to Lifesync Holdings, Inc. |
94 Janus Growth Funds April 30, 2009
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 April 30, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of April 30, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Growth | |||||||||||
Janus Fund | $ | 5,786,718,989 | $ | 1,377,752,906 | $ | – | |||||
Janus Enterprise Fund | 1,204,477,041 | 146,850,847 | – | ||||||||
Janus Orion Fund | 1,919,088,326 | 564,678,764 | – | ||||||||
Janus Research Fund | 1,965,277,688 | 490,158,038 | – | ||||||||
Janus Triton Fund | 146,507,095 | 29,754,673 | – | ||||||||
Janus Twenty Fund | 5,761,756,640 | 1,947,865,568 | – | ||||||||
Janus Venture Fund | 749,635,318 | 17,954,982 | 9,291,116 | ||||||||
Specialty Growth | |||||||||||
Janus Global Life Sciences Fund | 407,885,010 | 145,385,830 | 17,330,804 | ||||||||
Janus Global Technology Fund | 491,086,300 | 90,305,691 | – | ||||||||
Investments in Purchased Options: | |||||||||||
Growth | |||||||||||
Janus Orion Fund | 13,445,250 | 12,123,014 | – | ||||||||
Janus Venture Fund | – | 25,129 | – | ||||||||
Investments in Securities Sold Short: | |||||||||||
Growth | |||||||||||
Janus Orion Fund | (44,592,210) | – | – | ||||||||
Janus Triton Fund | (1,653,140) | – | – | ||||||||
Janus Venture Fund | (10,546,000) | (2,116,513) | – | ||||||||
Specialty Growth | |||||||||||
Janus Global Life Sciences Fund | – | (2,984,339) | – | ||||||||
Janus Global Technology Fund | (6,802,564) | – | – | ||||||||
Other Financial Instruments(a): | |||||||||||
Growth | |||||||||||
Janus Fund | – | (1,824,944) | – | ||||||||
Janus Enterprise Fund | – | (624,315) | – | ||||||||
Janus Orion Fund | (2,335,640) | (642,566) | – | ||||||||
Janus Research Fund | – | (928,415) | – | ||||||||
Janus Twenty Fund | 8,855,508 | – | – | ||||||||
Janus Venture Fund | (1,030,000) | (534,750) | – | ||||||||
Specialty Growth | |||||||||||
Janus Global Life Sciences Fund | – | (399,970) | – | ||||||||
Janus Global Technology Fund | – | (68,963) | – | ||||||||
(a) | Other Financial Instruments include futures, forward currency, written option, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
Level 3 Valuation Reconciliation of Assets (as of the six-month period ended April 30, 2009)
Change in | |||||||||||||||||||||||
Accrued | Unrealized | Net | Transfers In | ||||||||||||||||||||
Balance as of | Discounts/ | Realized | Appreciation/ | Purchases/ | and/or Out of | Balance as of | |||||||||||||||||
October 31, 2008 | Premiums | Gain/(Loss) | (Depreciation)(a) | (Sales) | Level 3 | April 30, 2009 | |||||||||||||||||
Investments in Securities: | |||||||||||||||||||||||
Growth | |||||||||||||||||||||||
Janus Venture Fund | $ | 7,291,116 | $ | – | $ | – | $ | – | $ | 2,000,000 | $ | – | $ | 9,291,116 | |||||||||
Specialty Growth | |||||||||||||||||||||||
Janus Global Life Sciences Fund | $ | 26,186,663 | $ | – | $ | – | $ | (8,855,859) | $ | – | $ | – | $ | 17,330,804 | |||||||||
(a) | Included in “Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statements of Operations. |
Janus Growth Funds April 30, 2009 95
Notes to Schedules of Investments (unaudited) (continued)
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2009 are noted below.
Fund | Aggregate Value | ||||
Growth | |||||
Janus Fund | $ | 750,494,514 | |||
Janus Enterprise Fund | 42,369,707 | ||||
Janus Orion Fund | 903,982,879 | ||||
Janus Research Fund | 350,107,350 | ||||
Janus Triton Fund | 2,799,900 | ||||
Janus Twenty Fund | 556,000,000 | ||||
Janus Venture Fund | 87,567,090 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 126,588,429 | ||||
Janus Global Technology Fund | 47,350,103 | ||||
96 Janus Growth Funds April 30, 2009
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part 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. The Trust offers twenty-eight funds with differing investment objectives and policies. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified, as defined in the 1940 Act, with the exception of Janus Orion Fund and Janus Twenty Fund, which are classified as non-diversified. The Funds are no-load investments.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Short positions shall be valued in accordance with the same methodologies, except that in the event that a last sale price is not available, the latest ask price shall be used instead of a bid price. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. 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; and (iii) a non-significant event such as a market closing early or not opening, or a security trading halt. The Funds may use a systematic fair valuation model provided by an independent pricing service to value foreign equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the Funds’ Trustees.
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 Trust 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.
Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each fund in the Trust.
Securities Lending
Under procedures adopted by the Trustees, the Funds may seek to earn additional income by lending securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash,
Janus Growth Funds April 30, 2009 97
Notes to Financial Statements (unaudited) (continued)
U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in non-affiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedules of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statements of Operations (if applicable).
The Securities Lending Program was suspended and effective November 19, 2008, the Funds no longer had any securities on loan. Management continues to review the program and may resume securities lending.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds and certain pooled investment vehicles, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate.
The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Operations (if applicable).
Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts. Such collateral is in the possession of the Funds’ custodian.
On September 15, 2008, Lehman Brothers Holding, Inc. (Lehman) filed for Chapter 11 bankruptcy in U.S. Federal Court. A number of Lehman subsidiaries have subsequently filed bankruptcy or similar insolvency proceedings in the U.S. and other jurisdictions. Lehman’s bankruptcy caused the Funds to write-off Lehman foreign exchange currency gains and losses and the associated receivables and payables. The written-off gains and losses are included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Changes in Net Assets.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds 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 are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statements of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statements of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
98 Janus Growth Funds April 30, 2009
Swaps
The Funds may utilize swap agreements as a means to gain exposure to certain common stocks and/or to “hedge” or protect their portfolios from adverse movements in securities prices or interest rates. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Swap agreements entail the risk that a party will default on its payment obligation to a Fund. If the other party to a swap defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If a 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 contracts are reported as an asset or liability on the Statements of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statements of Operations (if applicable).
Various types of swaps such as credit default (funded and unfunded), equity, interest rate, and total return swaps are described below.
Credit default swaps are a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments.
Funded or unfunded credit default swaps are based on an index of credit default swaps (“CDXs”) or other similarly structured products. CDXs are designed to track segments of the credit default swap market and provide investors with exposure to specific reference baskets of issuers of bonds or loans. These instruments have the potential to allow an investor to obtain the same investment exposure as an investor who invests in an individual credit default swap, but with the potential added benefit of diversification. The CDX reference baskets are normally priced daily and rebalanced every six months in conjunction with leading market makers in the credit industry. The liquidity of the market for CDXs is normally subject to liquidity in the secured loan and credit derivatives markets. A Fund investing in CDXs is normally only permitted to take long positions in these instruments.
Equity swaps involve the exchange by two parties of future cash flow (e.g., one cash flow based on a referenced interest rate and the other based on the performance of stock or a stock index).
Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments).
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.
Options Contracts
The Funds may purchase or write covered and uncovered put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds may utilize American-style and European-style options. An American-style option is an option contract that can be exercised at any time between the time of purchase and the option’s expiration date. A European-style option is an option contract that can only be exercised on the option’s expiration date. The Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
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.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based
Janus Growth Funds April 30, 2009 99
Notes to Financial Statements (unaudited) (continued)
being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedules of Investments (if applicable). Options written are reported as a liability on the Statements of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statements of Operations (if applicable).
The Funds recognized realized gains/(losses) from written options contracts during the six-month period ended April 30, 2009 as indicated in the table below:
Fund | Gains/(Losses) | ||||
Growth | |||||
Janus Fund | $ | 33,886,432 | |||
Janus Orion Fund | 15,449,462 | ||||
Janus Research Fund | 596,108 | ||||
Janus Triton Fund | – | ||||
Janus Twenty Fund | 830,898 | ||||
Janus Venture Fund | (55,683) | ||||
Specialty Growth | |||||
Janus Global Technology Fund | 2,808,615 | ||||
The risk in writing call options is that the Funds give 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 Funds 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 Funds pay a premium whether or not the options are exercised. 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 Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2009 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Fund | ||||||||
Options outstanding at October 31, 2008 | 225,221 | $ | 28,187,292 | |||||
Options written | 15,995 | 2,863,193 | ||||||
Options closed | (8,035) | (2,394,591) | ||||||
Options expired | (233,181) | (28,655,894) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Fund | ||||||||
Options outstanding at October 31, 2008 | 171,298 | $ | 15,408,530 | |||||
Options written | 69,339 | 18,354,833 | ||||||
Options closed | (147,694) | (25,332,225) | ||||||
Options expired | (2,529) | (1,141,793) | ||||||
Options exercised | (90,414) | (7,289,345) | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Orion Fund | ||||||||
Options outstanding at October 31, 2008 | 95,579 | $ | 23,116,816 | |||||
Options written | 598,546 | 50,953,257 | ||||||
Options closed | (524,156) | (57,602,605) | ||||||
Options expired | (162,709) | (13,709,372) | ||||||
Options exercised | (5,378) | (1,333,140) | ||||||
Options outstanding at April 30, 2009 | 1,882 | $ | 1,424,956 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Orion Fund | ||||||||
Options outstanding at October 31, 2008 | 124,651 | $ | 23,311,865 | |||||
Options written | 56,866 | 12,171,742 | ||||||
Options closed | (117,554) | (22,814,062) | ||||||
Options expired | (28,448) | (3,969,692) | ||||||
Options exercised | (1,549) | (224,580) | ||||||
Options outstanding at April 30, 2009 | 33,966 | $ | 8,475,273 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Research Fund | ||||||||
Options outstanding at October 31, 2008 | – | $ | – | |||||
Options written | 9,608 | 705,748 | ||||||
Options closed | – | – | ||||||
Options expired | (8,089) | (596,107) | ||||||
Options exercised | (1,519) | (109,641) | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Triton Fund | ||||||||
Options outstanding at October 31, 2008 | 223 | $ | 77,380 | |||||
Options written | – | – | ||||||
Options closed | – | – | ||||||
Options expired | (223) | (77,380) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Twenty Fund | ||||||||
Options outstanding at October 31, 2008 | – | $ | – | |||||
Options written | 21,655 | 830,898 | ||||||
Options closed | – | – | ||||||
Options expired | (21,655) | (830,898) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
100 Janus Growth Funds April 30, 2009
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Venture Fund | ||||||||
Options outstanding at October 31, 2008 | 1,000 | $ | 250,000 | |||||
Options written | 27,170 | 2,787,964 | ||||||
Options closed | (1,000) | (117,999) | ||||||
Options expired | (17,500) | (2,110,242) | ||||||
Options exercised | (2,670) | (190,555) | ||||||
Options outstanding at April 30, 2009 | 7,000 | $ | 619,168 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Venture Fund | ||||||||
Options outstanding at October 31, 2008 | 3,000 | $ | 731,250 | |||||
Options written | 58,713 | 5,365,285 | ||||||
Options closed | (27,589) | (3,205,720) | ||||||
Options expired | (14,374) | (1,405,800) | ||||||
Options exercised | (3,000) | (230,000) | ||||||
Options outstanding at April 30, 2009 | 16,750 | $ | 1,255,015 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Global Technology Fund | ||||||||
Options outstanding at October 31, 2008 | 984 | $ | 783,985 | |||||
Options written | 32,223 | 4,034,644 | ||||||
Options closed | (23,687) | (2,941,486) | ||||||
Options expired | (9,319) | (1,815,805) | ||||||
Options exercised | (201) | (61,338) | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Global Technology Fund | ||||||||
Options outstanding at October 31, 2008 | – | $ | – | |||||
Options written | 14,055 | 755,321 | ||||||
Options closed | (14,055) | (755,321) | ||||||
Options expired | – | – | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of a Fund’s net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls. The Funds may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which a Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that a Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The Funds are also required to pay the lender of the security any dividends or interest that accrues on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, a Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Funds pay stock loan fees on assets borrowed from the security broker. As of April 30, 2009, Janus Orion Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund had deposits with brokers of $41,974,845, $1,384,102, $11,654,587, $3,578,918 and $5,211,799, respectively. The deposits represent restricted cash held as collateral in relation to short sales.
A Fund may also enter into short positions through derivative instruments such as option contracts, futures contracts and swap agreements which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
Foreign Currency Translations
The Funds do 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.
Janus Growth Funds April 30, 2009 101
Notes to Financial Statements (unaudited) (continued)
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Exchange-Traded Notes
The Funds may invest directly in exchange-traded notes (“ETN”), which are senior, unsecured, unsubordinated debt securities whose returns are linked to a particular index and provide exposure to the total returns of various market indices, including indices linked to stocks, bonds, commodities and currencies. This type of debt security differs from other types of bonds and notes. ETN returns are based upon the performance of a market index minus applicable fees; no period coupon payments are distributed and no principal protections exist. ETNs do not pay cash distributions. Instead, the value of dividends, interest, and investment gains are captured in the Funds’ total return. The Funds will invest in these securities when desiring exposure to debt securities or commodities. When evaluating ETNs for investment, Janus Capital will consider the potential risks involved, expected tax efficiency, rate of return, and credit risk. When the Funds invest in ETNs, they will bear their proportionate share of any fees and expenses borne by the ETN. There may be restrictions on the Funds’ right to redeem their investment in an ETN, which are meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to a 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 a Fund. A Fund may be unable to recover its investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded in a Fund’s Statement of Assets and Liabilities.
A 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 a Fund’s cash balances are invested in one or more money market funds, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A 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
102 Janus Growth Funds April 30, 2009
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 a Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Restricted Cash
As of April 30, 2009, Janus Fund, Janus Orion Fund and Janus Venture Fund had restricted cash in the amount of $11,880,000, $16,113,750 and $3,050,000, respectively. The restricted cash represents collateral received in relation to options contracts, swap agreements, futures contracts and short sales invested in by the Fund at April 30, 2009. The restricted cash is held at the Fund’s custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
Dividend Distributions
The Funds generally declare and distribute dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The 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 REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Funds’ tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2006-2008 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2009, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examinations in progress and are 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.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standard Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 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. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Various inputs are used in determining the value of the Funds’ investments defined
Janus Growth Funds April 30, 2009 103
Notes to Financial Statements (unaudited) (continued)
pursuant to SFAS No. 157. These inputs are summarized into three broad levels:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing a security and are developed based on market data obtained from sources independent of the reporting entity. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the security and would be based on the best information available in the circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of April 30, 2009 to value each Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if required) in the Notes to Schedules of Investments.
In April 2009, FASB issued FASB staff position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds’ financial statement disclosures.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
In September 2008, FASB issued a FASB Staff Position No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45” (the “Position”), which was effective for fiscal years ending after November 15, 2008. The Position amends FASB Statement No. 133 (“FAS 133”), Accounting for Derivative Instruments and Hedging Activities, and also amends FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The amendments to FAS 133 include required disclosure for (i) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. Management has evaluated the impact of SFAS No. 133-1 and FIN 45-4 and there is no impact on the Funds’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based on average daily net assets and calculated at the annual rate shown in the table below for each Fund.
Fund | Advisory Fee % | ||||
Growth | |||||
Janus Fund | 0.64% | ||||
Janus Enterprise Fund | 0.64% | ||||
Janus Orion Fund | 0.64% | ||||
Janus Research Fund | 0.64% | ||||
Janus Triton Fund | 0.64% | ||||
Janus Twenty Fund | 0.64% | ||||
Janus Venture Fund | 0.64% | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 0.64% | ||||
Janus Global Technology Fund | 0.64% | ||||
For Janus Research Fund, the investment advisory fee is determined by calculating a base fee rate and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate shown in the table
104 Janus Growth Funds April 30, 2009
above. The performance adjustment either increases or decreases the base fee rate depending on how well the Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||
Growth | |||||
Janus Research Fund | Russell 1000® Growth Index | ||||
Only the base fee rate applied until February 2007 for Janus Research Fund, at which time the calculation of the performance adjustment applies as follows:
(Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment)
The investment advisory fee paid to Janus Capital by the Fund listed above consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no performance adjustment will be made until the Fund’s performance-based fee structure has been in effect for at least 12 months. When the Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period is equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any applicable Performance Adjustment began February 2007 for the Janus Research Fund.
No Performance Adjustment is applied unless the difference between the Fund’s investment performance and the cumulative investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee Rate and the Performance Adjustment, net assets are averaged over different periods (average daily net assets during the previous month for the Base Fee Rate, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses, whereas the Fund’s benchmark index does not have any fees or expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund’s benchmark index. The Base Fee Rate is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it depends on the performance of the Fund relative to the record of the Fund’s benchmark index and future changes to the size of the Fund.
The Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as Advisory fees on the Statements of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment.
During the six-month period ended April 30, 2009, the following Fund recorded the Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Growth | |||||
Janus Research Fund | $ | (838,954) | |||
Until at least March 1, 2010, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Triton Fund by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses) exceed the following annual rate noted below. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Fund | Expense Limit % | ||||
Growth | |||||
Janus Triton Fund | 1.25% | ||||
Each Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted averaged annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.12% of net assets on the proportion of assets sold directly and 0.25% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for each of the Funds (excluding Janus Twenty Fund and Janus Venture Fund) for transfer agent services.
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 Funds. All deferred fees are
Janus Growth Funds April 30, 2009 105
Notes to Financial Statements (unaudited) (continued)
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 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 Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2009 on the Statements of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a 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 Statements of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statements 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. No deferred fees were distributed to any Trustee under the Deferred Plan during the six-month period ended April 30, 2009.
For the six-month period ended April 30, 2009, Janus Capital assumed $4,842 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the Statements of Operations.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer and compliance staff of the Trust. Total compensation of $63,757 was paid by the Trust during the six-month period ended April 30, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
A 2.00% redemption fee may be imposed on shares of Janus Global Life Sciences Fund and Janus Global Technology Fund held for 90 days or less. This fee is paid to the Funds rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Funds’ asset levels and cash flow due to short-term money movements in and out of the Funds. The redemption fee is accounted for as an addition to Paid-in-Capital. Total redemption fees received by the Funds for the six-month period ended April 30, 2009 are indicated in the table below:
Fund | Redemption Fee | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | $ | 43,416 | |||
Janus Global Technology Fund | 26,675 | ||||
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statements of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statements of Assets and Liabilities (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Assets and Liabilities (if applicable). The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Pursuant to the terms and conditions of an SEC exemptive order and the provisions of the 1940 Act, the Funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Funds may be used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Funds are 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.
During the six-month period ended April 30, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
106 Janus Growth Funds April 30, 2009
Purchases | Sales | Dividend | Value | |||||||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/09 | |||||||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||||||
Growth | ||||||||||||||||||
Janus Fund | $ | 1,149,496,377 | $ | (868,985,887) | $ | 183,966 | $ | 280,510,490 | ||||||||||
Janus Enterprise Fund | 92,600,322 | (52,455,000) | 15,328 | 40,145,322 | ||||||||||||||
Janus Orion Fund | 616,919,008 | (489,365,789) | 45,274 | 127,553,219 | ||||||||||||||
Janus Research Fund | 243,728,609 | (205,250,868) | 15,712 | 38,477,741 | ||||||||||||||
Janus Triton Fund | 47,625,293 | (22,102,442) | 9,117 | 25,522,851 | ||||||||||||||
Janus Twenty Fund | 729,364,857 | (179,033,234) | 40,302 | 550,331,623 | ||||||||||||||
Janus Venture Fund | 23,715,406 | (23,715,406) | 1,812 | – | ||||||||||||||
Specialty Growth | ||||||||||||||||||
Janus Global Life Sciences Fund | 95,176,149 | (76,860,371) | 10,789 | 18,315,778 | ||||||||||||||
Janus Global Technology Fund | 128,022,326 | (109,809,143) | 11,107 | 18,213,183 | ||||||||||||||
$ | 3,126,648,347 | $ | (2,027,578,140) | $ | 333,407 | $ | 1,099,070,207 | |||||||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||||||
Growth | ||||||||||||||||||
Janus Fund | $ | 366,807 | $ | (100,848,950) | $ | 203,856 | $ | – | ||||||||||
Janus Triton Fund | 2,812 | (829,871) | 681 | – | ||||||||||||||
Janus Twenty Fund | 2,917,774 | (725,016,610) | 1,670,148 | – | ||||||||||||||
Specialty Growth | ||||||||||||||||||
Janus Global Life Sciences Fund | 6,141 | (356,416) | 3 | – | ||||||||||||||
Janus Global Technology Fund | 37,840 | (10,605,601) | 9,304 | – | ||||||||||||||
$ | 3,331,374 | $ | (837,657,448) | $ | 1,883,992 | $ | – | |||||||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||||||
Growth | ||||||||||||||||||
Janus Fund | $ | 110,001,911 | $ | (373,682,163) | $ | 583,124 | $ | – | ||||||||||
Janus Enterprise Fund | 12,309,724 | (22,315,724) | 20,760 | – | ||||||||||||||
Janus Orion Fund | 47,129,488 | (161,259,488) | 127,516 | – | ||||||||||||||
Janus Research Fund | 41,277,446 | (90,713,446) | 20,029 | – | ||||||||||||||
Janus Triton Fund | 2,501,688 | (5,276,688) | 11,317 | – | ||||||||||||||
Janus Twenty Fund | 72,372,190 | (641,449,156) | 1,006,247 | – | ||||||||||||||
Janus Venture Fund | 8,009,852 | (10,215,852) | 1,827 | – | ||||||||||||||
Specialty Growth | ||||||||||||||||||
Janus Global Life Sciences Fund | 14,223,213 | (31,957,213) | 51,902 | – | ||||||||||||||
Janus Global Technology Fund | 22,099,256 | (43,954,256) | 56,070 | – | ||||||||||||||
$ | 329,924,768 | $ | (1,380,823,986) | $ | 1,878,792 | $ | – | |||||||||||
3. | 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 Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities, excluding securities sold short, for federal income tax purposes as of April 30, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals and passive foreign investment companies.
Janus Growth Funds April 30, 2009 107
Notes to Financial Statements (unaudited) (continued)
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Growth | ||||||||||||||||||
Janus Fund | $ | 7,828,494,490 | $ | 481,969,491 | $ | (1,145,992,086) | $ | (664,022,595) | ||||||||||
Janus Enterprise Fund | 1,516,668,528 | 187,195,499 | (352,536,139) | (165,340,640) | ||||||||||||||
Janus Orion Fund | 2,622,941,831 | 328,773,864 | (442,380,341) | (113,606,477) | ||||||||||||||
Janus Research Fund | 2,920,261,731 | 137,948,671 | (602,774,676) | (464,826,005) | ||||||||||||||
Janus Triton Fund | 186,179,848 | 14,394,543 | (24,312,623) | (9,918,080) | ||||||||||||||
Janus Twenty Fund | 6,681,845,576 | 1,669,025,773 | (641,249,141) | 1,027,776,632 | ||||||||||||||
Janus Venture Fund | 927,646,715 | 130,484,235 | (281,224,405) | (150,740,170) | ||||||||||||||
Specialty Growth | ||||||||||||||||||
Janus Global Life Sciences Fund | 659,186,366 | 41,345,486 | (129,930,208) | (88,584,722) | ||||||||||||||
Janus Global Technology Fund | 568,967,312 | 64,139,949 | (51,715,270) | 12,424,679 | ||||||||||||||
Information on the tax components of securities sold short as of April 30, 2009 is as follows:
Federal Tax | ||||||||||||||||||
Proceeds from | Unrealized | Unrealized | Net Tax Appreciation/ | |||||||||||||||
Fund | Securities Sold Short | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Growth | ||||||||||||||||||
Janus Orion Fund | $ | (41,974,845) | $ | – | $ | (2,617,365) | $ | (2,617,365) | ||||||||||
Janus Triton Fund | (1,384,102) | – | (269,038) | (269,038) | ||||||||||||||
Janus Venture Fund | (11,654,587) | 283,683 | (1,291,609) | (1,007,926) | ||||||||||||||
Specialty Growth | ||||||||||||||||||
Janus Global Life Sciences Fund | (3,578,918) | 594,579 | – | 594,579 | ||||||||||||||
Janus Global Technology Fund | (5,211,800) | 245,379 | (1,836,144) | (1,590,765) | ||||||||||||||
Net capital loss carryovers as of October 31, 2008 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2008
Accumulated | ||||||||||||||||||||||
Fund | October 31, 2009 | October 31, 2010 | October 31, 2011 | October 31, 2016 | Capital Losses | |||||||||||||||||
Growth | ||||||||||||||||||||||
Janus Fund(1) | $ | (678,219,336) | $ | (2,692,706,418) | $ | (569,521,625) | $ | – | $ | (3,940,447,379) | ||||||||||||
Janus Enterprise Fund(1) | (2,387,573,344) | (1,180,687,781) | (35,756,979) | – | (3,604,018,104) | |||||||||||||||||
Janus Orion Fund(1) | (466,109,767) | (584,074,251) | – | – | (1,050,184,018) | |||||||||||||||||
Janus Research Fund | (1,556,504,638) | (2,677,021,633) | (222,598,721) | (40,293,996) | (4,496,418,988) | |||||||||||||||||
Janus Triton Fund | – | – | – | (5,740,739) | (5,740,739) | |||||||||||||||||
Janus Twenty Fund | (126,048,003) | (117,584,500) | (643,606,306) | – | (887,238,809) | |||||||||||||||||
Janus Venture Fund(1) | (25,161,575) | (12,580,788) | – | (4,691,065) | (42,433,428) | |||||||||||||||||
Specialty Growth | ||||||||||||||||||||||
Janus Global Life Sciences Fund | (209,544,393) | (251,753,591) | (103,237,607) | – | (564,535,591) | |||||||||||||||||
Janus Global Technology Fund | (1,396,606,045) | (857,178,929) | (83,082,507) | – | (2,336,867,481) | |||||||||||||||||
(1) | Capital loss carryovers subject to annual limitations. |
During the year ended October 31, 2008, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
108 Janus Growth Funds April 30, 2009
Capital Loss | |||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||
Growth | |||||||||||||||||
Janus Fund | $ | 931,316,894 | |||||||||||||||
Janus Enterprise Fund | 344,661,844 | ||||||||||||||||
Janus Orion Fund | 660,699,446 | ||||||||||||||||
Janus Twenty Fund | 513,939,646 | ||||||||||||||||
Specialty Growth | |||||||||||||||||
Janus Global Life Sciences Fund | 91,818,591 | ||||||||||||||||
Janus Global Technology Fund | 76,919,749 | ||||||||||||||||
4. | Capital Share Transactions |
For the six-month period ended April 30, 2009 (unaudited) | Janus Enterprise | Janus Orion | Janus Research | Janus Triton | ||||||||||||||||||||||||||||||||||||||||
and the fiscal year ended October 31, 2008 | Janus Fund | Fund | Fund | Fund | Fund | |||||||||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Transactions in Fund Shares: | ||||||||||||||||||||||||||||||||||||||||||||
Shares sold | 34,077 | 51,312 | 4,290 | 12,080 | 21,113 | 126,802 | 6,458 | 30,440 | 6,231 | 8,878 | ||||||||||||||||||||||||||||||||||
Reinvested dividends and distributions | 3,484 | 1,905 | – | – | 3,576 | 1,261 | 404 | 132 | 7 | 1,166 | ||||||||||||||||||||||||||||||||||
Shares repurchased | (50,343) | (70,606) | (6,212) | (10,547) | (49,658) | (132,761) | (17,512) | (44,621) | (2,319) | (5,095) | ||||||||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (12,782) | (17,389) | (1,922) | 1,533 | (24,969) | (4,698) | (10,650) | (14,049) | 3,919 | 4,949 | ||||||||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 369,951 | 387,340 | 39,134 | 37,601 | 377,672 | 382,370 | 141,962 | 156,011 | 13,816 | 8,867 | ||||||||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 357,169 | 369,951 | 37,212 | 39,134 | 352,703 | 377,672 | 131,312 | 141,962 | 17,735 | 13,816 |
Janus Global | ||||||||||||||||||||||||||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Janus Venture | Life Sciences | Janus Global | |||||||||||||||||||||||||||||||||
and the fiscal year ended October 31, 2008 | Janus Twenty Fund | Fund | Fund | Technology Fund | ||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||
Transactions in Fund Shares: | ||||||||||||||||||||||||||||||||||||
Shares sold | 5,358 | 14,515 | 392 | 638 | 1,237 | 5,529 | 2,684 | 5,922 | ||||||||||||||||||||||||||||
Reinvested dividends and distributions | 34 | 339 | – | 5,473 | 59 | – | – | 239 | ||||||||||||||||||||||||||||
Shares repurchased | (10,143) | (20,082) | (1,482) | (2,898) | (2,940) | (5,868) | (3,920) | (11,039) | ||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (4,751) | (5,228) | (1,090) | 3,213 | (1,644) | (339) | (1,236) | (4,878) | ||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 165,712 | 170,940 | 25,519 | 22,306 | 36,725 | 37,064 | 57,403 | 62,281 | ||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 160,961 | 165,712 | 24,429 | 25,519 | 35,081 | 36,725 | 56,167 | 57,403 |
5. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2009, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Growth | ||||||||||||||
Janus Fund | $ | 2,708,095,872 | $ | 2,663,349,549 | $– | $– | ||||||||
Janus Enterprise Fund | 267,858,504 | 340,006,152 | – | – | ||||||||||
Janus Orion Fund | 1,850,192,206 | 1,951,426,279 | – | – | ||||||||||
Janus Research Fund | 859,700,380 | 1,034,546,995 | – | – | ||||||||||
Janus Triton Fund | 56,398,347 | 44,039,782 | – | – | ||||||||||
Janus Twenty Fund | 1,837,109,588 | 1,556,051,416 | – | – | ||||||||||
Janus Venture Fund | 112,438,515 | 138,668,893 | – | – | ||||||||||
Specialty Growth | ||||||||||||||
Janus Global Life Sciences Fund | 225,978,471 | 237,259,494 | – | – | ||||||||||
Janus Global Technology Fund | 327,414,445 | 341,150,343 | – | – | ||||||||||
Janus Growth Funds April 30, 2009 109
Notes to Financial Statements (unaudited) (continued)
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court, four of which still remain: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC), Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly named Perkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On December 30, 2008, the Court granted partial summary judgment in Janus Capital’s favor with respect to Plaintiffs’ damage demand as it relates to what was categorized as “approved” market timing based on the Court’s finding that there was no evidence that investors suffered damages that exceed the $50 million they are entitled to receive under the regulatory settlement. The Court did not grant summary judgment on the remaining causes of action and requested the parties to submit additional briefing with respect to what was categorized as “unapproved” market timing. Having completed the supplemental briefing, the parties are awaiting a ruling from the Court. On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the Court with prejudice. The plaintiff appealed that dismissal to the United States Court of Appeals for the Fourth Circuit, which reversed the order of dismissal and remanded the case back to the Court for further proceedings. Finally, a Motion to Dismiss the Wiggins suit (action (iv) above) was granted and the matter was dismissed in May 2007. Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. In May 2009, the Fourth Circuit reversed the order of dismissal and remanded the case back to the Court for further proceedings.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). In September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings as well as a Motion to Discharge Order to Show Cause. This action is pending.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements (Edward Keely v. Janus Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege some or all of the following claims in addition to other allegations: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims. On
110 Janus Growth Funds April 30, 2009
May 8, 2009, after a four-day trial in the Keely matter, the jury found in favor of Plaintiff. The Court entered judgment in Keely’s favor for approximately $4.8 million in damages plus pre- and post- judgment interest, attorneys’ fees, and damage enhancement under the Colorado Wage Act. Janus Holdings is evaluating all of its options, including the possibility of an appeal. Trial in the Malley matter has not yet been set.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
7. | Subsequent Event |
The Board of Trustees of Janus Adviser Series (“JAD”), a registered investment company advised by Janus Capital, has approved an Agreement and Plan of Reorganization (the “Plan”) pursuant to which certain JAD Funds will merge with and into, and be acquired by, corresponding similarly managed funds of the Janus Investment Fund Trust. Under the Plan, INTECH Risk-Managed Core Fund, Janus Balanced Fund, Janus Contrarian Fund, Janus Enterprise Fund, Janus Flexible Bond Fund, Janus Fund, Janus Growth and Income Fund, Janus High-Yield Fund, Janus Orion Fund, Janus Overseas Fund, Janus Research Core Fund, Janus Triton Fund, Janus Worldwide Fund, Perkins Mid Cap Value Fund, and Perkins Small Cap Value Fund will acquire assets and liabilities from similarly managed JAD Funds. The merger is a part of several significant enhancements Janus Capital has recently undertaken to reorganize and simplify its mutual fund offerings by creating one combined mutual fund platform. The closing date of the merger is expected to be on or about July 6, 2009. For more information regarding these changes, please refer to the March 17, 2009 Supplement to the Prospectus.
Janus Growth Funds April 30, 2009 111
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is 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) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent 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.
At a meeting held on December 9, 2008, 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, 2009 through February 1, 2010, subject to earlier termination as provided for in each agreement, except that with respect to Janus Worldwide Fund, the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or proposed to take to improve long-term Fund performance. At a meeting held on March 12, 2009, the Trustees again considered the investment advisory agreement for Janus Worldwide Fund, and after consideration of information previously provided to them, as well as updated information regarding the steps taken or planned to improve the Fund’s long-term performance, the Trustees approved the continuation of the investment advisory agreement for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve long-term Fund performance.
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.
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 and strategy 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 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, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including
112 Janus Growth Funds April 30, 2009
monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
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 quality of those services had been consistent with or superior to quality norms in the industry and 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 continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of their peers for certain periods, the Trustees also concluded that Janus Capital had taken or was taking appropriate steps to address those instances of under-performance. With respect to Janus Worldwide Fund, at the December 9, 2008 meeting the Trustees considered the continuing underperformance of the Fund, and requested that Janus Capital consider additional steps to improve long-term Fund performance. At the March 12, 2009 meeting, the Trustees requested that Janus Capital promptly report to the Trustees regarding the completion of steps that Janus Capital planned to take in an effort to improve the Fund’s long-term performance.
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 Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after applicable contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
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. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only 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 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 administrative 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 that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by the Trustees’ independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information 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. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation 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
Janus Growth Funds April 30, 2009 113
Additional Information (unaudited) (continued)
similar strategies and the fees Janus Capital and the subadvisers charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was 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 by Janus Capital.
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 that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group identified by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the 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 several Funds that have caused or will cause 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, 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 economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates 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 their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s 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 pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital 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 receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, each of whom is an Independent Trustee, concluded that the proposed continuation of the investment advisory agreement and, if applicable, the subadvisory agreement for each Fund for another year was in the best interest of the respective Funds and their shareholders, except for Janus Worldwide Fund. With respect to that Fund, at their December 9, 2008 meeting the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or propose to take to improve long-term Fund performance. At their March 12, 2009 meeting the Trustees approved the continuation of the investment advisory agreement for that Fund for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve the Fund’s long-term performance. The Trustees also noted that they had previously approved revised and/or new investment advisory and subadvisory agreements for each Fund subadvised by Perkins Investment Management LLC, and that such amended or new agreements were not effective unless approved by those Funds’ shareholders.
114 Janus Growth Funds April 30, 2009
Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. 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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2008. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each 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.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated. Each Fund’s Schedule of Investments relies upon the industry group and country classifications published by Bloomberg L.P.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
Janus Growth Funds April 30, 2009 115
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ 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 Funds’ net assets. Because Funds 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 Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, 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 increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds 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.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ 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 Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
116 Janus Growth Funds April 30, 2009
expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t 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 a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus Growth Funds April 30, 2009 117
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/09)
C-0609-046 | 111-24-103 06-09 |
2009 Semiannual Report
Janus | Core, Risk-Managed and Value Funds |
Janus Balanced Fund
Janus Contrarian Fund
Janus Research Core Fund
Janus Growth and Income Fund
Risk-Managed
INTECH Risk-Managed Core Fund
Value
Perkins Mid Cap Value Fund
Perkins Small Cap Value Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199janus.gif)
Table of Contents
Janus Core, Risk-Managed and Value Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 4 | |
Management Commentary and Schedules of Investments | ||
Janus Balanced Fund | 5 | |
Janus Contrarian Fund | 17 | |
Janus Research Core Fund | 26 | |
Janus Growth and Income Fund | 34 | |
INTECH Risk-Managed Core Fund | 42 | |
Perkins Mid Cap Value Fund | 52 | |
Perkins Small Cap Value Fund | 63 | |
Statements of Assets and Liabilities | 74 | |
Statements of Operations | 76 | |
Statements of Changes in Net Assets | 78 | |
Financial Highlights | 81 | |
Notes to Schedules of Investments | 86 | |
Notes to Financial Statements | 90 | |
Additional Information | 107 | |
Explanations of Charts, Tables and Financial Statements | 110 | |
Shareholder Meeting | 114 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders (unaudited)
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. During the past six months we have seen some of the most challenging market and economic conditions in a generation. Throughout these turbulent times, we have maintained our disciplined, long-term investment approach and research-driven philosophy.
As a result, our long-term results generally remained strong relative to our peers. For the one-year period ended April 30, 2009, 50% of Janus retail funds ranked within Lipper’s top two quartiles. Looking longer-term, 85% of our funds achieved first- or second-quartile Lipper rankings for the three-year period and 86% ranked in Lipper’s top two quartiles for the five-year period ended April 30, 2009. (Lipper rankings are based on total returns. See complete rankings on page 3.)
Major Market Themes
Despite a relatively strong finish, most markets were modestly lower as the most recent six-month period (ended April 30, 2009) came to a close. Consequences from the credit crisis and recession concerns dictated market performance for much of the period. U.S. markets reached 12-year lows and most global markets declined to 5-year lows in March, before rallying late in the period.
The U.S. economy was still in the throes of a recession at period end. Declining asset values in U.S. residential real estate continued to weigh on financial institutions and their ability to extend credit to consumers. Compounding the headwinds for the consumer was a labor market that continued to struggle with more than 5.7 million jobs lost since January 2008. However, late in the period, some signs emerged that the rate of decline in the U.S. economy could be slowing. Retail sales improved through April (though they remained at low absolute levels) and mortgage applications were on the rise in March and April. A slowing in the rate of decline in U.S. manufacturing and consumer confidence indicators provided some additional support to the equity markets.
Improving credit markets, better-than expected earnings reports from some large banks and easing of accounting rules for banks’ troubled assets, also helped to fuel the late period rally, suggesting to the market that the ailing banking industry could be on the mend. Financials remained the worst performing global sector during the six-month period, despite leading the rally off of the March lows. Materials and information technology outperformed, posting modest gains while growth stocks significantly outperformed value stocks. Stocks of mid-sized companies were the strongest performers in the period while large-cap stocks topped small-caps. Within fixed income, the flight-to-quality that was strongly evident in the second half of 2008 finally eased beginning in January. Driven by the performance of the lower quality debt, high-yield corporate spreads relative to Treasuries narrowed. Long-term government bond yields rebounded from historic lows reached in December.
Outlook
At the end of the period, we were encouraged by the slowing in the rate of decline in the U.S. and global economies and the continued progress toward normalization in the credit markets. Though we were pleased to see stocks on the rise, we believe it may be some time before credit markets return to normal and the economy and equity markets fully recover.
We think the moves to date by central banks and governments worldwide will help the global economy recover. However, their actions will likely take time to work and could, in the longer term, fuel inflation. That said, we are not overly concerned about inflation rising over the near term, nor do we believe economic growth will necessarily return to the rapid pace of recent years. Looking forward, the economy will likely be characterized by de-leveraging across consumers and businesses, and a higher personal savings rate.
Given that we have not seen a significant differentiation of fundamentals expressed in stock prices yet, we feel the opportunities for bottom-up, research-driven security selection are tremendous. Our unconstrained approach to research fosters an entrepreneurial culture that encourages our investment team to “go anywhere” to find the most compelling investment ideas around the globe. And we believe we have the right team in place to take advantage of this period in history.
We sincerely appreciate your continued investment in Janus funds. We recognize the confidence that you have placed in us
Janus Core, Risk-Managed and Value Funds April 30, 2009 1
Continued
and we continue in our quest to deliver strong, consistent fund performance to you, our investors.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
The opinions are those of the authors as of April 30, 2009 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Past performance is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Rankings discussed do not indicate positive fund performance. Most funds have experienced negative or poor short-term performance.
2 Janus Core, Risk-Managed and Value Funds April 30, 2009
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/09 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date)Ï | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 52 | 435/844 | 40 | 284/724 | 39 | 233/610 | 60 | 184/310 | 15 | 3/20 | 47 | 380/808 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 52 | 286/550 | 10 | 43/476 | 8 | 30/393 | 77 | 142/184 | 32 | 14/43 | 25 | 130/528 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 96 | 438/457 | 22 | 77/349 | 4 | 10/290 | N/A | N/A | 25 | 43/174 | 86 | 381/443 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 80 | 672/844 | 19 | 132/724 | 12 | 72/610 | 44 | 134/310 | 4 | 3/87 | 17 | 118/710 | |||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 3 | 15/587 | 1 | 5/501 | N/A | N/A | N/A | N/A | 1 | 1/443 | 1 | 4/508 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 80 | 668/844 | 1 | 1/724 | 1 | 2/610 | 21 | 63/310 | 5 | 2/40 | 35 | 283/824 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 48 | 279/587 | 36 | 176/501 | 34 | 136/408 | 65 | 132/204 | 10 | 1/10 | 27 | 77/286 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Global Healthcare/Biotechnology Funds | 75 | 39/51 | 45 | 21/46 | 54 | 24/44 | 19 | 3/15 | 15 | 2/13 | 29 | 15/51 | |||||||||||||
Janus Global Technology Fund (12/98) | Global Science & Technology Funds | 18 | 14/81 | 16 | 12/76 | 28 | 19/69 | 29 | 6/20 | 25 | 5/19 | 25 | 19/76 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 3 | 12/524 | 2 | 4/385 | 1 | 2/290 | 11 | 15/148 | 4 | 1/27 | 1 | 2/346 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 98 | 736/756 | 41 | 247/612 | 5 | 21/460 | N/A | N/A | 18 | 38/213 | 18 | 38/213 | |||||||||||||
Janus Research Core Fund(1)(2) (6/96) | Large-Cap Core Funds | 88 | 802/914 | 83 | 646/783 | 21 | 136/650 | 25 | 90/360 | 4 | 8/212 | 82 | 722/884 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 57 | 514/914 | 73 | 567/783 | 26 | 169/650 | 30 | 105/360 | 8 | 6/81 | 48 | 417/884 | |||||||||||||
INTECH Risk-Managed Core Fund(3) (2/03) | Multi-Cap Core Funds | 55 | 415/756 | 58 | 354/612 | 37 | 167/460 | N/A | N/A | 42 | 157/377 | 42 | 157/377 | |||||||||||||
Perkins Mid Cap Value Fund - Investor Shares(1)(4)(5) (8/98) | Mid-Cap Value Funds | 9 | 27/320 | 4 | 10/256 | 4 | 6/192 | 3 | 2/67 | 4 | 2/56 | 4 | 2/56 | |||||||||||||
Perkins Small Cap Value Fund - Investor Shares(4)(6) (10/87) | Small-Cap Core Funds | 1 | 7/763 | 2 | 7/614 | 8 | 39/496 | 14 | 32/231 | 6 | 7/125 | 6 | 7/125 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 5 | 25/583 | 4 | 16/482 | 5 | 20/402 | 21 | 44/209 | 10 | 2/20 | 6 | 32/535 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 11 | 50/457 | 15 | 55/387 | 14 | 46/334 | 9 | 18/203 | 6 | 5/92 | 16 | 51/325 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 1 | 1/260 | 2 | 4/214 | 3 | 5/179 | 8 | 7/90 | 16 | 4/24 | 5 | 12/254 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 8 | 40/506 | 21 | 79/380 | 56 | 165/297 | N/A | N/A | 11 | 21/206 | 43 | 145/342 | |||||||||||||
Janus Global Research Fund(1) (2/05) | Global Funds | 56 | 280/506 | 10 | 35/380 | N/A | N/A | N/A | N/A | 6 | 18/321 | 6 | 18/321 | |||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 46 | 541/1,197 | 2 | 12/894 | 1 | 2/707 | 3 | 10/369 | 2 | 2/107 | 1 | 2/647 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 68 | 344/506 | 57 | 216/380 | 91 | 271/297 | 91 | 140/153 | 39 | 7/17 | 62 | 371/599 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 75 | 504/677 | 14 | 75/539 | N/A | N/A | N/A | N/A | 8 | 38/533 | 8 | 38/533 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 32 | 167/524 | 6 | 23/385 | N/A | N/A | N/A | N/A | 5 | 19/380 | 5 | 19/380 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 32 | 133/428 | 10 | 33/335 | N/A | N/A | N/A | N/A | 5 | 13/317 | 5 | 13/317 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Formerly named Janus Fundamental Equity Fund. | |
(3) | Formerly named INTECH Risk-Managed Stock Fund. | |
(4) | Rating is for the Investor Share class only; other classes may have different performance characteristics. | |
(5) | Formerly named Janus Mid Cap Value Fund. | |
(6) | Formerly named Janus Small Cap Value Fund. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc., a wholly-owned subsidiary of Reuters, is a nationally recognized organization that ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
Janus Core, Risk-Managed and Value Funds April 30, 2009 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs (1) transaction costs, including redemption fees, where applicable (and any related exchange fees), and (2) ongoing costs, including management fees, administrative services fees (where applicable) and other Fund expenses. The 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-month period from November 1, 2008 to April 30, 2009.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, 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 first line 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 second line of the table in each example 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.
Janus Capital Management LLC (“Janus Capital”) has agreed to waive the transfer agency fees payable to certain limits for the Institutional Shares of Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund until at least March 1, 2010. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is 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.
4 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Balanced Fund (unaudited) | Ticker: JABAX |
Fund Snapshot
The Fund combines the growth potential of stocks with the balance of bonds.
![(MARC PINTO PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ppintoma.gif)
Marc Pinto
co-portfolio manager
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
co-portfolio manager
Performance Overview
Janus Balanced Fund returned 5.88% for the six-month period ended April 30, 2009, compared with a -0.90% return by the Balanced Index, an internally-calculated secondary benchmark. The Balanced Index is composed of a 55% weighting in the S&P 500® Index, the Fund’s primary benchmark, and a 45% weighting in the Barclays Capital U.S. Government/Credit Bond Index, the Fund’s other secondary benchmark, which returned -8.53% and 7.96%, respectively.
Economic Overview
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve (Fed) announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected economic reports added fuel to the rally. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunications were the best relative performers.
In fixed income, the flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and credit markets gained momentum through March and April. Overall, fixed income investors experienced solid gains during the six-month period ending April 30, 2009. The Fed helped fuel the shift to riskier securities by lowering the federal funds rate in December from 1% to a range of zero to 0.25%, a historic move. The low absolute yields in Treasuries and wide spreads to Treasuries in the high yield market appeared to prompt a move into corporate bonds in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, high yield bonds were the best performing fixed income segment. In March, the Fed announcement on buying government debt prompted a large one-day drop in the 10-year Treasury note yield. By period end, the 10-year Treasury’s yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Lowering Equity Exposure Aided Relative Performance
The Fund’s performance during the period reflected both our conservative investment philosophy and our dynamic asset allocation strategy, as our equity and fixed-income teams worked together to determine what we believe to be the optimal balance between stocks and bonds. Our equity exposure, which was 42.5% at the beginning of the period, had risen to 45.4% as of period end. Our underweight relative to the Balanced Index (55% equity) helped significantly until the equity markets started to rally in mid-March. Overall, though, the equity weighting was a key contributor. In addition, both the fixed income and equity portions of the Fund outperformed their respective benchmarks during the period.
Mortgages and Credits Bolstered Fixed Income Performance
Performance on the fixed-income side of the portfolio benefited from non-index exposure to mortgage-backed securities (MBS) and our credit holdings. In MBS, our holdings in agency adjustable rate mortgages (ARM) generated strong price gains. In credits, our overweight in BBB-rated credits and modest exposure in non-index high yield bonds (3.89% at period end) contributed to performance, as lower-rated credits outperformed the higher credit levels during the period.
Janus Core, Risk-Managed and Value Funds April 30, 2009 5
Janus Balanced Fund (unaudited)
Among individual credit contributors was Virginia Electric & Power Co., which outperformed as investors were likely drawn toward what we consider to be its well-financed, cash generating assets. Time Warner Cable, which was spun off from its parent Time Warner during the period, also contributed to performance. As the second largest cable provider in the U.S., the company has been successful in gaining market share for voice, video and data services from incumbent telecommunication services companies in most cities where it operates. We also like the utility nature of its cash flows.
Financials Boosted Equity Returns
Our underweight and holdings in financials contributed the most to the equity portion’s relative outperformance during the period. Within financials, investment bank Goldman Sachs rebounded significantly off depressed levels, as investors likely viewed it as among the survivors of the financial crisis. We believe Goldman Sachs is poised to capture market share in the U.S., as major competitors have either merged into banks or gone bankrupt. We view its balance sheet at period end as sound and feel that its assets were appropriately marked or valued. In addition, we believe the company’s trading and underwriting businesses should continue to be profitable and improve. We added to our position during the period. Staying in financials, investment bank/brokerage firm Morgan Stanley rebounded similarly as Goldman Sachs during the period. The stock benefited as investors likely began to see the company as a survivor as well. We believe Morgan Stanley will gain market share and that its balance sheet at period end was sound; we added to our position.
Agency Debt, Underweight in Credits Weighed on Fixed Income
Our underweight in credits and our yield-curve positioning in agency debt were the largest detractors from relative performance. Among individual credits that detracted from performance were our bonds in Bank of America. We believe the bank will emerge stronger from the present dislocation in the financials sector, but the holding continued to be driven by negative sentiment regarding U.S. Government guarantees. The government has indicated, in our view, that it will stand behind the Bank of America, which gives us confidence the bank could survive and eventually prosper.
Consumer Discretionary Equity Holdings Detracted
Our holdings and overweight in consumer discretionary were the main detractors during the period. Our lack of exposure to the telecommunication services sector as well as our selections and overweight in energy also weighed on comparable performance. Within the consumer discretionary sector, casino operator MGM Mirage fell significantly. The company was negatively impacted by its leveraged balance sheet in a time of tight credit and by declining fundamentals in the gaming industry, as consumers have reduced their spending. In particular, investors have worried about the company’s ability to meet several large upcoming debt maturities. We decided to exit our position due to weaker conditions in Las Vegas than we anticipated and since its balance sheet proved to be a bigger problem than we foresaw.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build. In our opinion, there has not been a significant fundamental difference between what we view as low and high quality companies. As a result, we think there were still many individual opportunities in the market at period end, which offer favorable risk/reward profiles in our view.
In the Fund, we may continue to increase our equity allocation as fixed income spreads relative to Treasuries tighten. In the fixed income portion of the Fund, we were emphasizing companies we think have quality business models, have historically generated steady cash-flows, and have management teams that were focused on debt reduction. For the equity portion, we continue to look for companies we feel have been unnecessarily beaten up and that we think offer attractive value and good growth prospects in a tough economic environment.
Thank you for investing in Janus Balanced Fund.
6 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Janus Balanced Fund At A Glance
5 Top Performers – Equity Holdings
Contribution | ||||
Anheuser-Busch InBev N.V. | 1.63% | |||
Goldman Sachs Group, Inc. | 0.93% | |||
Morgan Stanley | 0.92% | |||
Credit Suisse Group A.G. | 0.72% | |||
Corning, Inc. | 0.67% |
5 Bottom Performers – Equity Holdings
Contribution | ||||
MGM Mirage | -0.92% | |||
ConocoPhillips | -0.73% | |||
Roche Holdings, Inc. | -0.64% | |||
Nestle S.A | -0.61% | |||
Philip Morris International, Inc. | -0.53% |
5 Top Performers – Sectors*
Fund Weighting | ||||||||||||
Fund Contribution | (Average % of Equity) | S&P 500® Index Weighting | ||||||||||
Financials | 2.61% | 5.63% | 11.74% | |||||||||
Information Technology | 2.19% | 17.31% | 16.60% | |||||||||
Materials | 0.21% | 3.97% | 3.11% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.82% | |||||||||
Utilities | 0.00% | 0.00% | 4.27% |
5 Bottom Performers – Sectors*
Fund Weighting | ||||||||||||
Fund Contribution | (Average % of Equity) | S&P 500® Index Weighting | ||||||||||
Health Care | -1.38% | 20.03% | 15.02% | |||||||||
Energy | -1.11% | 10.79% | 13.58% | |||||||||
Industrials | -0.63% | 10.21% | 10.51% | |||||||||
Consumer Discretionary | -0.45% | 7.89% | 8.42% | |||||||||
Consumer Staples | -0.21% | 24.18% | 12.94% |
* | 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. |
Janus Core, Risk-Managed and Value Funds April 30, 2009 7
Janus Balanced Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Anheuser-Busch InBev N.V. Brewery | 2.1% | |||
Nestle S.A. Food – Miscellaneous/Diversified | 1.7% | |||
Roche Holding A.G. Medical – Drugs | 1.6% | |||
Reckitt Benckiser Group PLC Soap and Cleaning Preparations | 1.6% | |||
EnCana Corp. (U.S. Shares) Oil Companies – Exploration and Production | 1.6% | |||
8.6% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p06.gif)
Emerging markets comprised 0.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t06.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c06.gif)
8 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m06.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Balanced Fund | 5.88% | –13.11% | 4.53% | 3.29% | 9.35% | 0.79% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 6.60% | ||||||||
Barclays Capital U.S. Government/Credit Bond Index | 7.96% | 2.58% | 4.43% | 5.63% | 6.23% | ||||||||
Balanced Index | –0.90% | –19.58% | 0.75% | 1.46% | 6.75% | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 12/524 | 2/290 | 15/148 | 1/27 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Core, Risk-Managed and Value Funds April 30, 2009 9
Janus Balanced Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with non-investment grade debt securities, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio managers.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,058.80 | $ | 4.29 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.63 | $ | 4.21 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.84%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
10 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 44.8% | ||||||||||||
Aerospace and Defense – 1.1% | ||||||||||||
1,326,325 | BAE Systems PLC** | $ | 6,974,648 | |||||||||
164,965 | Boeing Co. | 6,606,848 | ||||||||||
707,575 | Empresa Brasileira de Aeronautica S.A. (ADR) | 11,476,866 | ||||||||||
94,940 | Northrop Grumman Corp. | 4,590,349 | ||||||||||
29,648,711 | ||||||||||||
Agricultural Chemicals – 1.3% | ||||||||||||
84,125 | Monsanto Co. | 7,141,371 | ||||||||||
645,530 | Syngenta A.G. (ADR)** | 27,531,855 | ||||||||||
34,673,226 | ||||||||||||
Applications Software – 0.7% | ||||||||||||
356,680 | Citrix Systems, Inc.* | 10,176,080 | ||||||||||
410,180 | Microsoft Corp. | 8,310,247 | ||||||||||
18,486,327 | ||||||||||||
Athletic Footwear – 0.7% | ||||||||||||
345,325 | NIKE, Inc. – Class B | 18,119,203 | ||||||||||
Brewery – 2.1% | ||||||||||||
1,836,033 | Anheuser-Busch InBev N.V.** | 56,030,752 | ||||||||||
1,331,248 | Anheuser-Busch InBev N.V. – VVPR Strips*,** | 3,522 | ||||||||||
56,034,274 | ||||||||||||
Cable Television – 0.3% | ||||||||||||
330,279 | DIRECTV Group, Inc.* | 8,167,800 | ||||||||||
Casino Hotels – 1.0% | ||||||||||||
1,221,231 | Crown, Ltd. | 6,097,918 | ||||||||||
494,250 | Wynn Resorts, Ltd.* | 19,389,427 | ||||||||||
25,487,345 | ||||||||||||
Commercial Services – Finance – 0.2% | ||||||||||||
259,150 | Western Union Co. | 4,340,763 | ||||||||||
Computers – 2.7% | ||||||||||||
270,488 | Apple, Inc.* | 34,035,504 | ||||||||||
165,200 | International Business Machines Corp. | 17,050,292 | ||||||||||
317,795 | Research In Motion, Ltd. (U.S. Shares)* | 22,086,753 | ||||||||||
73,172,549 | ||||||||||||
Cosmetics and Toiletries – 0.7% | ||||||||||||
302,545 | Colgate-Palmolive Co. | 17,850,155 | ||||||||||
Diversified Operations – 1.2% | ||||||||||||
2,197,580 | China Merchants Holdings International Co., Ltd. | 5,192,142 | ||||||||||
427,559 | Danaher Corp. | 24,986,548 | ||||||||||
4,063,815 | Melco International Development, Ltd. | 1,995,066 | ||||||||||
32,173,756 | ||||||||||||
E-Commerce/Services – 0.4% | ||||||||||||
561,200 | eBay, Inc.* | 9,242,964 | ||||||||||
222,170 | Liberty Media Corp. – Interactive – Class A* | 1,177,501 | ||||||||||
10,420,465 | ||||||||||||
Electric Products – Miscellaneous – 0.3% | ||||||||||||
254,905 | Emerson Electric Co. | 8,676,966 | ||||||||||
Electronic Components – Semiconductors – 0.4% | ||||||||||||
130,525 | Broadcom Corp. – Class A* | 3,026,875 | ||||||||||
275,075 | Microchip Technology, Inc. | 6,326,725 | ||||||||||
9,353,600 | ||||||||||||
Electronic Connectors – 0.6% | ||||||||||||
438,025 | Amphenol Corp. – Class A | 14,822,766 | ||||||||||
Enterprise Software/Services – 1.3% | ||||||||||||
1,792,120 | Oracle Corp. | 34,659,601 | ||||||||||
Fiduciary Banks – 0.1% | ||||||||||||
67,967 | Northern Trust Corp. | 3,694,686 | ||||||||||
Finance – Investment Bankers/Brokers – 3.5% | ||||||||||||
273,720 | Charles Schwab Corp. | 5,058,346 | ||||||||||
702,175 | Credit Suisse Group A.G. (ADR)** | 26,879,259 | ||||||||||
220,075 | Goldman Sachs Group, Inc. | 28,279,638 | ||||||||||
1,433,435 | Morgan Stanley | 33,886,402 | ||||||||||
94,103,645 | ||||||||||||
Finance – Other Services – 0.5% | ||||||||||||
559,195 | NYSE Euronext | 12,956,548 | ||||||||||
Food – Miscellaneous/Diversified – 1.7% | ||||||||||||
1,352,194 | Nestle S.A.** | 43,991,099 | ||||||||||
Hotels and Motels – 0.9% | ||||||||||||
1,087,960 | Starwood Hotels & Resorts Worldwide Inc. | 22,694,846 | ||||||||||
Industrial Gases – 0.4% | ||||||||||||
154,990 | Praxair, Inc. | 11,563,804 | ||||||||||
Machinery – General Industrial – 0.1% | ||||||||||||
8,117,070 | Shanghai Electric Group Co., Ltd. | 2,901,878 | ||||||||||
Medical – Biomedical and Genetic – 1.5% | ||||||||||||
223,740 | Celgene Corp.* | 9,558,173 | ||||||||||
661,900 | Gilead Sciences, Inc.* | 30,315,020 | ||||||||||
39,873,193 | ||||||||||||
Medical – Drugs – 3.7% | ||||||||||||
66,555 | Abbott Laboratories | 2,785,327 | ||||||||||
1,498,740 | Bristol-Myers Squibb Co. | 28,775,807 | ||||||||||
351,190 | Merck & Co., Inc. | 8,512,846 | ||||||||||
49,420 | Roche Holding A.G. (ADR)** | 1,563,155 | ||||||||||
340,543 | Roche Holding A.G.** | 43,044,251 | ||||||||||
353,840 | Wyeth | 15,002,816 | ||||||||||
99,684,202 | ||||||||||||
Medical – HMO – 1.2% | ||||||||||||
1,297,450 | UnitedHealth Group, Inc. | 30,516,024 | ||||||||||
Medical Products – 2.1% | ||||||||||||
578,245 | Baxter International, Inc. | 28,044,882 | ||||||||||
495,675 | Covidien, Ltd. | 16,347,362 | ||||||||||
192,800 | Johnson & Johnson | 10,095,008 | ||||||||||
54,487,252 | ||||||||||||
Networking Products – 0.1% | ||||||||||||
189,055 | Cisco Systems, Inc.* | 3,652,543 | ||||||||||
Oil and Gas Drilling – 0.4% | ||||||||||||
141,195 | Transocean, Ltd. (U.S. Shares)*,** | 9,527,839 | ||||||||||
Oil Companies – Exploration and Production – 2.1% | ||||||||||||
930,285 | EnCana Corp. (U.S. Shares) | 42,541,933 | ||||||||||
234,030 | Occidental Petroleum Corp. | 13,173,549 | ||||||||||
55,715,482 | ||||||||||||
Oil Companies – Integrated – 2.0% | ||||||||||||
590,970 | ConocoPhillips | 24,229,770 | ||||||||||
527,885 | Hess Corp. | 28,922,819 | ||||||||||
53,152,589 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 11
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Optical Supplies – 0.2% | ||||||||||||
46,050 | Alcon, Inc. (U.S. Shares)** | $ | 4,237,061 | |||||||||
Power Converters and Power Supply Equipment – 0.2% | ||||||||||||
344,588 | Suntech Power Holdings Co., Ltd. (ADR)* | 5,144,699 | ||||||||||
Retail – Apparel and Shoe – 0.6% | ||||||||||||
2,440,680 | Esprit Holdings, Ltd. | 14,960,998 | ||||||||||
Retail – Consumer Electronics – 0.3% | ||||||||||||
181,915 | Yamada Denki Co., Ltd.** | 8,395,096 | ||||||||||
Retail – Drug Store – 1.3% | ||||||||||||
1,118,932 | CVS Caremark Corp.** | 35,559,659 | ||||||||||
Retail – Jewelry – 0.1% | ||||||||||||
96,135 | Tiffany & Co. | 2,782,147 | ||||||||||
Soap and Cleaning Preparations – 1.6% | ||||||||||||
1,089,795 | Reckitt Benckiser Group PLC** | 42,904,994 | ||||||||||
Telecommunication Equipment – Fiber Optics – 0.7% | ||||||||||||
1,320,680 | Corning, Inc. | 19,308,342 | ||||||||||
Tobacco – 1.8% | ||||||||||||
714,570 | Altria Group, Inc. | 11,668,928 | ||||||||||
962,440 | Philip Morris International, Inc. | 34,840,328 | ||||||||||
46,509,256 | ||||||||||||
Toys – 0.4% | ||||||||||||
40,840 | Nintendo Co., Ltd.** | 10,928,617 | ||||||||||
Transportation – Railroad – 1.4% | ||||||||||||
585,014 | Canadian National Railway Co. (U.S. Shares) | 23,646,266 | ||||||||||
256,535 | Union Pacific Corp. | 12,606,130 | ||||||||||
36,252,396 | ||||||||||||
Wireless Equipment – 0.9% | ||||||||||||
587,120 | QUALCOMM, Inc. | 24,846,918 | ||||||||||
Total Common Stock (cost $1,214,553,648) | 1,186,433,320 | |||||||||||
Corporate Bonds – 26.9% | ||||||||||||
Advertising Services – 0% | ||||||||||||
$ | 1,200,000 | WPP Finance UK, 5.8750%, 6/15/14** | 939,811 | |||||||||
Agricultural Chemicals – 0.5% | ||||||||||||
990,000 | Mosaic Co., 7.6250%, 12/1/16 (144A) | 994,950 | ||||||||||
6,402,000 | Potash Corporation of Saskatchewan, Inc., 5.2500%, 5/15/14 | 6,560,539 | ||||||||||
6,703,000 | Potash Corporation of Saskatchewan, Inc., 6.5000%, 5/15/19 | 6,965,959 | ||||||||||
14,521,448 | ||||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.1% | ||||||||||||
1,298,000 | PACCAR, Inc., 6.3750%, 2/15/12 | 1,339,419 | ||||||||||
1,298,000 | PACCAR, Inc., 6.8750%, 2/15/14 | 1,358,643 | ||||||||||
2,698,062 | ||||||||||||
Beverages – Non-Alcoholic – 0.5% | ||||||||||||
6,441,000 | Dr. Pepper Snapple Group, Inc. 6.1200%, 5/1/13 | 6,436,440 | ||||||||||
2,359,000 | Dr. Pepper Snapple Group, Inc. 6.8200%, 5/1/18 | 2,297,359 | ||||||||||
2,872,000 | Dr. Pepper Snapple Group, Inc. 7.4500%, 5/1/38 | 2,535,080 | ||||||||||
2,589,000 | PepsiCo, Inc., 3.7500%, 3/1/14 | 2,641,619 | ||||||||||
13,910,498 | ||||||||||||
Beverages – Wine and Spirits – 0.2% | ||||||||||||
$ | 4,788,000 | Brown-Forman Corp., 5.0000%, 2/1/14 | 4,921,580 | |||||||||
Brewery – 1.2% | ||||||||||||
9,210,000 | Anheuser-Busch InBev Worldwide, Inc. 7.2000%, 1/15/14 (144A) | 9,601,729 | ||||||||||
12,365,000 | Anheuser-Busch InBev Worldwide, Inc. 7.7500%, 1/15/19 (144A) | 12,945,784 | ||||||||||
10,528,000 | Anheuser-Busch InBev Worldwide, Inc. 8.2000%, 1/15/39 (144A) | 10,549,193 | ||||||||||
33,096,706 | ||||||||||||
Building Products – Cement and Aggregate – 0.2% | ||||||||||||
2,939,000 | CRH America, Inc., 6.9500%, 3/15/12 | 2,637,738 | ||||||||||
2,103,000 | Martin Marietta Materials, Inc., 6.6000% 4/15/18 | 1,701,497 | ||||||||||
4,339,235 | ||||||||||||
Cable Television – 1.9% | ||||||||||||
5,321,000 | Comcast Corp., 6.3000%, 11/15/17 | 5,417,683 | ||||||||||
7,253,000 | Comcast Corp., 5.7000%, 5/15/18 | 7,091,025 | ||||||||||
4,675,000 | Comcast Corp., 6.4000%, 5/15/38 | 4,382,252 | ||||||||||
3,680,000 | COX Communications, Inc., 6.2500% 6/1/18 (144A) | 3,387,701 | ||||||||||
5,810,000 | COX Communications, Inc., 9.3750% 1/15/19 (144A) | 6,540,695 | ||||||||||
3,174,000 | Mediacom Capital Corp., 7.8750% 2/15/11 | 3,142,260 | ||||||||||
5,190,000 | Time Warner Cable, Inc., 6.7500% 7/1/18 | 5,251,502 | ||||||||||
1,320,000 | Time Warner Cable, Inc., 8.7500% 2/14/19 | 1,483,904 | ||||||||||
2,709,000 | Time Warner Cable, Inc., 8.2500% 4/1/19 | 2,993,878 | ||||||||||
8,048,000 | Time Warner Cable, Inc., 7.3000% 7/1/38 | 8,044,933 | ||||||||||
47,735,833 | ||||||||||||
Cellular Telecommunications – 0.9% | ||||||||||||
5,670,000 | Rogers Communications, Inc., 6.3750% 3/1/14 | 5,977,337 | ||||||||||
4,035,000 | Verizon Wireless Capital LLC, 5.2500% 2/1/12 (144A) | 4,178,779 | ||||||||||
4,735,000 | Verizon Wireless Capital LLC, 7.3750% 11/15/13 (144A) | 5,268,322 | ||||||||||
6,727,000 | Verizon Wireless Capital LLC, 5.5500% 2/1/14 (144A) | 7,056,811 | ||||||||||
1,955,000 | Verizon Wireless Capital LLC, 8.5000% 11/15/18 (144A) | 2,341,314 | ||||||||||
24,822,563 | ||||||||||||
Chemicals – Diversified – 0.1% | ||||||||||||
2,795,000 | E.I. du Pont de Nemours and Co. 5.0000% 7/15/13 | 2,891,959 | ||||||||||
Commercial Banks – 1.4% | ||||||||||||
2,594,000 | BB&T Corp., 5.2500%, 11/1/19 | 2,219,100 | ||||||||||
7,070,000 | American Express Bank FSB, 5.5000% 4/16/13 | 6,647,730 | ||||||||||
5,641,000 | BB&T Corp., 5.7000%, 4/30/14 | 5,552,448 | ||||||||||
5,641,000 | BB&T Corp., 6.8500%, 4/30/19 | 5,494,385 | ||||||||||
6,199,000 | Credit Suisse New York, 5.0000% 5/15/13** | 6,121,686 |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Commercial Banks – (continued) | ||||||||||||
$ | 10,072,000 | Credit Suisse New York, 5.5000% 5/1/14** | $ | 10,097,844 | ||||||||
36,133,193 | ||||||||||||
Commercial Services – Finance – 0.2% | ||||||||||||
6,219,000 | Western Union Co., 6.5000%, 2/26/14 | 6,561,163 | ||||||||||
Computers – 0.2% | ||||||||||||
3,111,000 | Hewlett-Packard Co., 4.2500%, 2/24/12 | 3,227,218 | ||||||||||
2,208,000 | Hewlett-Packard Co., 4.7500%, 6/2/14 | 2,307,711 | ||||||||||
5,534,929 | ||||||||||||
Consumer Products – Miscellaneous – 0.2% | ||||||||||||
1,391,000 | Clorox Co., 5.0000%, 3/1/13 | 1,425,935 | ||||||||||
2,988,000 | Clorox Co., 5.9500%, 10/15/17 | 3,023,429 | ||||||||||
4,449,364 | ||||||||||||
Cosmetics and Toiletries – 0.2% | ||||||||||||
1,816,000 | Estee Lauder Companies Inc., 7.7500% 11/1/13 | 1,969,821 | ||||||||||
3,579,000 | Procter & Gamble Co., 4.6000% 1/15/14 | 3,790,111 | ||||||||||
5,759,932 | ||||||||||||
Data Processing and Management – 0.1% | ||||||||||||
2,517,000 | Fiserv, Inc., 6.8000%, 11/20/17 | 2,396,577 | ||||||||||
Diversified Financial Services – 0.5% | ||||||||||||
5,293,000 | American Express Travel Related Services Company Inc., 5.2500% 11/21/11 (144A) | 4,903,663 | ||||||||||
2,997,000 | General Electric Capital Corp., 4.8000% 5/1/13 | 2,931,051 | ||||||||||
5,999,000 | General Electric Capital Corp., 5.6250% 5/1/18 | 5,233,743 | ||||||||||
13,068,457 | ||||||||||||
Diversified Minerals – 0.8% | ||||||||||||
3,107,000 | BHP Billiton Finance U.S.A., Ltd. 5.5000%, 4/1/14 | 3,271,261 | ||||||||||
7,903,000 | Rio Tinto Finance USA, Ltd., 8.9500% 5/1/14 | 8,180,300 | ||||||||||
8,344,000 | Rio Tinto Finance USA, Ltd., 9.0000% 5/1/19 | 8,579,176 | ||||||||||
20,030,737 | ||||||||||||
Diversified Operations – 1.0% | ||||||||||||
2,453,000 | Eaton Corp., 4.9000%, 5/15/13 | 2,427,400 | ||||||||||
1,553,000 | Honeywell International, Inc., 3.8750% 2/15/14 | 1,565,421 | ||||||||||
1,553,000 | Honeywell International, Inc., 5.0000% 2/15/19 | 1,574,492 | ||||||||||
6,784,000 | ITT Corp., 4.9000%, 5/1/14 | 6,876,622 | ||||||||||
6,784,000 | ITT Corp., 6.1250%, 5/1/19 | 6,964,855 | ||||||||||
1,752,000 | Kansas City Southern Railway, 13.0000% 12/15/13 | 1,857,120 | ||||||||||
3,111,000 | Tyco Electronics Group S.A., 6.0000% 10/1/12** | 2,836,050 | ||||||||||
2,133,000 | Tyco Electronics Group S.A., 5.9500% 1/15/14** | 1,765,437 | ||||||||||
2,980,000 | Tyco Electronics Group S.A., 7.1250% 10/1/37** | 1,817,419 | ||||||||||
27,684,816 | ||||||||||||
Electric – Generation – 0.1% | ||||||||||||
$ | 2,845,000 | Allegheny Energy Supply Co. LLC 8.2500%, 4/15/12 (144A) | 2,873,365 | |||||||||
1,232,000 | Edison Mission Energy, 7.0000% 5/15/17 | 930,160 | ||||||||||
3,803,525 | ||||||||||||
Electric – Integrated – 1.2% | ||||||||||||
5,689,000 | CMS Energy Corp., 6.3000%, 2/1/12 | 5,455,074 | ||||||||||
4,813,000 | Duke Energy Corp., 6.3000%, 2/1/14 | 5,075,515 | ||||||||||
2,767,000 | Pacific Gas & Electric Co., 4.2000% 3/1/11 | 2,838,997 | ||||||||||
5,183,000 | Pacific Gas & Electric Co., 8.2500% 10/15/18 | 6,190,524 | ||||||||||
5,772,000 | Virginia Electric and Power Co. 5.1000% 11/30/12 | 5,944,121 | ||||||||||
2,106,000 | Virginia Electric and Power Co. 5.4000% 4/30/18 | 2,147,423 | ||||||||||
6,003,000 | West Penn Power Co., 5.9500% 12/15/17 (144A) | 5,289,904 | ||||||||||
32,941,558 | ||||||||||||
Electronic Components – Semiconductors – 0.2% | ||||||||||||
6,503,000 | National Semiconductor Corp., 6.1500% 6/15/12 | 5,856,927 | ||||||||||
Enterprise Software/Services – 0.2% | ||||||||||||
5,917,000 | BMC Software, Inc., 7.2500%, 6/1/18 | 5,210,214 | ||||||||||
Fiduciary Banks – 0.3% | ||||||||||||
6,673,000 | Northern Trust Corp., 4.6250%, 5/1/14 | 6,751,201 | ||||||||||
Finance – Credit Card – 0.1% | ||||||||||||
3,057,000 | American Express Co., 7.0000%, 3/19/18 | 2,899,439 | ||||||||||
Finance – Investment Bankers/Brokers – 2.8% | ||||||||||||
8,559,000 | Citigroup, Inc., 5.6250%, 8/27/12 | 6,601,754 | ||||||||||
4,951,000 | Citigroup, Inc., 5.5000%, 2/15/17 | 3,413,650 | ||||||||||
3,367,000 | Citigroup, Inc., 6.1250%, 5/15/18 | 2,829,684 | ||||||||||
2,592,000 | Goldman Sachs Group, Inc., 5.4500% 11/1/12 | 2,593,848 | ||||||||||
5,018,000 | Goldman Sachs Group, Inc., 6.0000% 5/1/14 | 4,998,691 | ||||||||||
2,587,000 | Goldman Sachs Group, Inc., 6.2500% 9/1/17 | 2,446,606 | ||||||||||
4,382,000 | Goldman Sachs Group, Inc., 6.1500% 4/1/18 | 4,133,229 | ||||||||||
5,672,000 | Goldman Sachs Group, Inc., 7.5000% 2/15/19 | 5,820,175 | ||||||||||
14,311,000 | JPMorgan Chase & Co., 6.0000% 1/15/18 | 13,913,625 | ||||||||||
9,394,000 | JPMorgan Chase & Co., 6.3000% 4/23/19 | 9,244,100 | ||||||||||
2,368,000 | Lazard Group LLC, 6.8500%, 6/15/17 | 1,901,182 | ||||||||||
2,333,000 | Morgan Stanley, 6.7500%, 4/15/11 | 2,384,744 | ||||||||||
7,558,000 | Morgan Stanley, 4.7500%, 4/1/14 | 6,388,845 | ||||||||||
2,830,000 | Morgan Stanley, 6.0000%, 4/28/15 | 2,673,258 | ||||||||||
2,625,000 | Morgan Stanley, 6.6250%, 4/1/18 | 2,498,105 | ||||||||||
71,841,496 | ||||||||||||
Finance – Other Services – 0.3% | ||||||||||||
7,782,000 | CME Group, Inc., 5.7500%, 2/15/14 | 8,187,217 | ||||||||||
Food – Meat Products – 0.1% | ||||||||||||
3,392,000 | Tyson Foods, Inc., 3.2500%, 10/15/13 | 3,260,560 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 13
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Food – Miscellaneous/Diversified – 0.9% | ||||||||||||
$ | 3,786,000 | Chiquita Brands International, 4.2500% 8/15/16 | $ | 2,229,008 | ||||||||
6,029,000 | Del Monte Corp., 8.6250%, 12/15/12 | 6,149,580 | ||||||||||
3,173,000 | General Mills, Inc., 5.2500%, 8/15/13 | 3,315,906 | ||||||||||
1,774,000 | General Mills, Inc., 5.2000%, 3/17/15 | 1,787,514 | ||||||||||
1,288,000 | Kellogg Co., 4.2500%, 3/6/13 | 1,301,460 | ||||||||||
2,965,000 | Kraft Foods, Inc., 6.7500%, 2/19/14 | 3,230,625 | ||||||||||
5,457,000 | Kraft Foods, Inc., 6.1250%, 2/1/18 | 5,539,302 | ||||||||||
23,553,395 | ||||||||||||
Food – Retail – 1.4% | ||||||||||||
5,880,000 | Delhaize Group, 5.8750%, 2/1/14** | 5,960,544 | ||||||||||
1,782,000 | Kroger Co., 7.5000%, 1/15/14 | 1,985,073 | ||||||||||
9,840,000 | Kroger Co., 6.4000%, 8/15/17 | 10,242,368 | ||||||||||
4,324,000 | Safeway, Inc., 6.2500%, 3/15/14 | 4,595,314 | ||||||||||
8,255,000 | SUPERVALU, Inc., 7.5000%, 11/15/14 | 8,007,350 | ||||||||||
6,135,000 | SUPERVALU, Inc., 8.0000%, 5/1/16 | 5,950,950 | ||||||||||
36,741,599 | ||||||||||||
Hotels and Motels – 0.3% | ||||||||||||
4,896,000 | Marriott International, Inc., 4.6250% 6/15/12 | 4,557,167 | ||||||||||
2,249,000 | Marriott International, Inc., 5.6250% 2/15/13 | 2,106,787 | ||||||||||
1,574,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.8750%, 10/15/14 | 1,515,526 | ||||||||||
8,179,480 | ||||||||||||
Independent Power Producer – 0.3% | ||||||||||||
160,000 | NRG Energy, Inc., 7.3750%, 2/1/16 | 154,000 | ||||||||||
5,783,000 | Reliant Energy, Inc., 7.6250%, 6/15/14 | 5,219,158 | ||||||||||
4,046,000 | Reliant Energy, Inc., 7.8750%, 6/15/17 | 3,611,055 | ||||||||||
8,984,213 | ||||||||||||
Machinery – Construction and Mining – 0.1% | ||||||||||||
1,455,000 | Atlas Copco A.B., 5.6000% 5/22/17 (144A)§ | 1,380,517 | ||||||||||
Medical – Drugs – 0.4% | ||||||||||||
4,486,000 | Pfizer, Inc., 4.4500%, 3/15/12 | 4,713,337 | ||||||||||
5,942,000 | Pfizer, Inc., 5.3500%, 3/15/15 | 6,387,549 | ||||||||||
11,100,886 | ||||||||||||
Medical – HMO – 0.1% | ||||||||||||
2,338,000 | UnitedHealth Group, Inc., 5.8000% 3/15/36 | 1,732,458 | ||||||||||
Medical – Hospitals – 0.6% | ||||||||||||
3,438,000 | CHS/Community Health Systems, Inc. 8.8750%, 7/15/15 | 3,420,810 | ||||||||||
8,936,000 | HCA, Inc., 9.2500%, 11/15/16 | 8,846,640 | ||||||||||
3,396,000 | HCA, Inc., 8.5000%, 4/15/19 (144A) | 3,417,225 | ||||||||||
15,684,675 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.3% | ||||||||||||
3,351,000 | McKesson Corp., 6.5000%, 2/15/14 | 3,534,293 | ||||||||||
2,898,000 | McKesson Corp., 7.5000%, 2/15/19 | 3,122,244 | ||||||||||
6,656,537 | ||||||||||||
Medical Labs and Testing Services – 0.9% | ||||||||||||
$ | 10,510,000 | Roche Holdings, Inc., 4.5000% 3/1/12 (144A) | 11,019,956 | |||||||||
6,305,000 | Roche Holdings, Inc., 6.0000% 3/1/19 (144A) | 6,555,649 | ||||||||||
6,305,000 | Roche Holdings, Inc., 7.0000% 3/1/39 (144A) | 6,849,418 | ||||||||||
24,425,023 | ||||||||||||
Medical Products – 0.2% | ||||||||||||
6,008,000 | Baxter International, Inc., 4.0000% 3/1/14 | 6,223,675 | ||||||||||
Multi-Line Insurance – 0.2% | ||||||||||||
6,519,000 | MetLife, Inc., 7.7170%, 2/15/19 | 6,538,642 | ||||||||||
Office Automation and Equipment – 0.2% | ||||||||||||
908,000 | Xerox Corp., 2.0588%, 12/18/09‡ | 886,224 | ||||||||||
942,000 | Xerox Corp., 5.6500%, 5/15/13 | 847,819 | ||||||||||
3,035,000 | Xerox Corp., 6.3500%, 5/15/18 | 2,458,350 | ||||||||||
4,192,393 | ||||||||||||
Oil – Field Services – 0.1% | ||||||||||||
3,131,000 | Weatherford International, Ltd. 9.6250% 3/1/19** | 3,379,057 | ||||||||||
Oil and Gas Drilling – 0.3% | ||||||||||||
3,380,000 | Diamond Offshore Drilling, Inc. 5.8750%, 5/1/19 | 3,406,675 | ||||||||||
3,956,000 | Nabors Industries, Ltd., 9.2500% 1/15/19 (144A) | 3,733,787 | ||||||||||
7,140,462 | ||||||||||||
Oil Companies – Exploration and Production – 0.4% | ||||||||||||
6,753,000 | Anadarko Petroleum Corp., 5.9500% 9/15/16 | 6,109,763 | ||||||||||
588,000 | EnCana Corp., 6.5000%, 5/15/19 | 603,482 | ||||||||||
463,000 | Forest Oil Corp., 8.0000%, 12/15/11 | 454,898 | ||||||||||
2,986,000 | Forest Oil Corp., 8.5000% 2/15/14 (144A) | 2,896,420 | ||||||||||
10,064,563 | ||||||||||||
Oil Refining and Marketing – 0% | ||||||||||||
525,000 | Frontier Oil Corp., 8.5000%, 9/15/16 | 519,750 | ||||||||||
Paper and Related Products – 0% | ||||||||||||
279,000 | Georgia-Pacific LLC, 8.2500% 5/1/16 (144A) | 279,000 | ||||||||||
Pipelines – 1.1% | ||||||||||||
1,402,000 | El Paso Corp., 12.0000%, 12/12/13 | 1,514,160 | ||||||||||
2,862,000 | El Paso Corp., 8.2500%, 2/15/16 | 2,790,450 | ||||||||||
1,972,000 | El Paso Corp., 7.0000%, 6/15/17 | 1,771,718 | ||||||||||
1,208,000 | Kinder Morgan Energy Partners L.P. 6.0000%, 2/1/17 | 1,139,267 | ||||||||||
1,815,000 | Kinder Morgan Energy Partners L.P. 5.9500%, 2/15/18 | 1,683,491 | ||||||||||
732,000 | Kinder Morgan Energy Partners L.P. 6.5000%, 2/1/37 | 601,213 | ||||||||||
7,407,000 | Kinder Morgan Energy Partners L.P. 6.9500%, 1/15/38 | 6,439,942 | ||||||||||
8,746,000 | Kinder Morgan Finance Co. ULC 5.7000%, 1/5/16 | 7,587,155 | ||||||||||
1,320,000 | Plains All American Pipeline L.P. 6.5000%, 5/1/18 | 1,181,527 | ||||||||||
1,978,000 | Plains All American Pipeline L.P. 8.7500%, 5/1/19 | 2,027,966 |
See Notes to Schedules of Investments and Financial Statements.
14 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Pipelines – (continued) | ||||||||||||
$ | 1,815,000 | TransCanada Pipelines, Ltd., 7.1250% 1/15/19 | $ | 1,990,648 | ||||||||
28,727,537 | ||||||||||||
Reinsurance – 0.7% | ||||||||||||
12,640,000 | Berkshire Hathaway Finance Corp. 4.0000%, 4/15/12 (144A) | 12,846,424 | ||||||||||
5,709,000 | Berkshire Hathaway Finance Corp. 5.0000%, 8/15/13 | 5,913,622 | ||||||||||
18,760,046 | ||||||||||||
REIT – Warehouse/Industrial – 0% | ||||||||||||
876,000 | ProLogis, 5.50%, 4/1/12 | 712,297 | ||||||||||
Retail – Apparel and Shoe – 0.1% | ||||||||||||
4,676,000 | Ltd. Brands, Inc., 7.6000%, 7/15/37 | 3,070,874 | ||||||||||
Retail – Office Supplies – 0.1% | ||||||||||||
3,115,000 | Staples, Inc., 7.7500%, 4/1/11 | 3,262,081 | ||||||||||
Retail – Regional Department Stores – 0.1% | ||||||||||||
3,626,000 | JC Penney Co., Inc., 7.4000%, 4/1/37 | 2,656,360 | ||||||||||
Rubber – Tires – 0.2% | ||||||||||||
6,598,000 | Goodyear Tire & Rubber Co., 6.6775% 12/1/09‡ | 6,507,278 | ||||||||||
Schools – 0.2% | ||||||||||||
1,871,000 | Duke University, 4.2000%, 4/1/14 | 1,909,187 | ||||||||||
1,412,000 | Leland Stanford Junior University 3.6300%, 5/1/14 | 1,420,656 | ||||||||||
1,412,000 | Leland Stanford Junior University 4.2500%, 5/1/16 | 1,406,931 | ||||||||||
1,412,000 | Leland Stanford Junior University 4.7500%, 5/1/19 | 1,409,769 | ||||||||||
6,146,543 | ||||||||||||
Special Purpose Entity – 0.2% | ||||||||||||
2,180,000 | Petroplus Finance, Ltd., 6.7500% 5/1/14 (144A) | 1,798,500 | ||||||||||
4,247,000 | Petroplus Finance, Ltd., 7.0000% 5/1/17 (144A) | 3,418,835 | ||||||||||
5,217,335 | ||||||||||||
Steel – Producers – 0.6% | ||||||||||||
4,051,000 | ArcelorMittal, 5.37500%, 6/1/13** | 3,646,832 | ||||||||||
4,171,000 | ArcelorMittal, 6.1250%, 6/1/18** | 3,361,234 | ||||||||||
6,206,000 | Reliance Steel & Aluminum Co. 6.2000%, 11/15/16 | 4,782,951 | ||||||||||
5,648,000 | Steel Dynamics, Inc. (144A), 8.2500% 4/15/16 | 4,461,920 | ||||||||||
16,252,937 | ||||||||||||
Super-Regional Banks – 0.5% | ||||||||||||
3,420,000 | Bank of America Corp., 5.6500%, 5/1/18 | 2,784,119 | ||||||||||
3,650,000 | National City Corp., 6.8750%, 5/15/19 | 3,118,155 | ||||||||||
2,592,000 | Wachovia Corp., 5.7500%, 2/1/18 | 2,371,760 | �� | |||||||||
4,072,000 | Wells Fargo & Co., 5.6250%, 12/11/17 | 3,796,391 | ||||||||||
12,070,425 | ||||||||||||
Telephone – Integrated – 0.3% | ||||||||||||
1,763,000 | AT&T, Inc., 5.5000%, 2/1/18 | 1,759,932 | ||||||||||
5,313,000 | AT&T, Inc., 5.6000%, 5/15/18 | 5,341,297 | ||||||||||
7,101,229 | ||||||||||||
Transportation – Railroad – 0.3% | ||||||||||||
$ | 3,047,000 | Burlington Northern Santa Fe 5.7500%, 3/15/18 | 3,032,142 | |||||||||
1,910,000 | Canadian National Railways Co. 4.2500% 8/1/09 | 1,909,756 | ||||||||||
2,237,294 | CSX Corp., 8.3750%, 10/15/14 | 2,314,302 | ||||||||||
7,256,200 | ||||||||||||
Transportation – Services – 0.1% | ||||||||||||
1,941,000 | United Parcel Service, Inc., 3.8750% 4/1/14 | 2,000,872 | ||||||||||
Wireless Equipment – 0.2% | ||||||||||||
2,828,000 | Nokia OYJ, 0%, 5/15/19** | 2,801,841 | ||||||||||
1,977,000 | Nokia OYJ, 0%, 5/15/39** | 1,966,996 | ||||||||||
4,768,837 | ||||||||||||
Total Corporate Bonds (cost $703,101,961) | 713,536,176 | |||||||||||
Mortgage Backed Securities – 12.3% | ||||||||||||
Fannie Mae: | ||||||||||||
$ | 1,700,571 | 4.5000%, 2/1/23 | 1,749,367 | |||||||||
921,318 | 4.5000%, 4/1/23 | 947,754 | ||||||||||
1,003,995 | 4.5000%, 4/1/23 | 1,032,803 | ||||||||||
1,653,000 | 4.5000%, 4/1/23 | 1,700,431 | ||||||||||
12,467,999 | 4.5000%, 4/1/23 | 12,823,580 | ||||||||||
626,007 | 4.5000%, 5/1/23 | 643,969 | ||||||||||
734,792 | 4.5000%, 5/1/23 | 755,876 | ||||||||||
775,477 | 4.5000%, 5/1/23 | 797,728 | ||||||||||
3,800,999 | 4.5000%, 5/1/23 | 3,910,064 | ||||||||||
1,821,621 | 4.5000%, 6/1/23 | 1,873,890 | ||||||||||
2,762,000 | 4.5000%, 6/1/23 | 2,841,252 | ||||||||||
1,205,116 | 4.5000%, 9/1/23 | 1,239,695 | ||||||||||
2,336,945 | 4.5000%, 12/1/23 | 2,404,000 | ||||||||||
11,636,822 | 4.0000%, 3/1/24 | 11,807,965 | ||||||||||
1,016,894 | 4.5000%, 3/1/24 | 1,045,970 | ||||||||||
17,971,022 | 4.5000%, 3/1/24 | 18,484,881 | ||||||||||
1,216,348 | 4.5000%, 3/1/24 | 1,251,250 | ||||||||||
11,036,382 | 4.5000%, 3/1/24 | 11,353,057 | ||||||||||
7,940,277 | 4.5000%, 3/1/24 | 8,168,113 | ||||||||||
2,480,480 | 4.5000%, 3/1/24 | 2,551,655 | ||||||||||
9,766,531 | 4.0000%, 4/1/24 | 9,910,168 | ||||||||||
9,615,094 | 4.0000%, 4/1/24 | 9,757,465 | ||||||||||
4,899,375 | 4.0000%, 4/1/24 | 4,971,430 | ||||||||||
7,352,000 | 4.0000%, 5/15/24Ç | 7,448,495 | ||||||||||
7,504,288 | 5.4240%, 1/1/38‡ | 7,783,977 | ||||||||||
34,610,000 | 5.0000%, 4/1/38 | 35,633,487 | ||||||||||
10,046,602 | 4.7920%, 5/1/38‡ | 10,365,779 | ||||||||||
12,468,000 | 4.5000%, 1/1/39 | 12,701,947 | ||||||||||
2,425,615 | 4.5000%, 1/1/39 | 2,470,886 | ||||||||||
17,336,260 | 4.5000%, 1/1/39 | 17,661,554 | ||||||||||
5,569,735 | 4.5000%, 2/1/39 | 5,673,687 | ||||||||||
9,923,827 | 4.5000%, 2/1/39 | 10,109,043 | ||||||||||
31,046,100 | 4.5000%, 3/1/39 | 31,625,538 | ||||||||||
2,463,759 | 4.5000%, 3/1/39 | 2,509,989 | ||||||||||
9,564,077 | 4.0000%, 4/1/39 | 9,543,801 | ||||||||||
53,124,000 | 4.0000%, 5/15/39Ç | 53,148,904 | ||||||||||
5,365,000 | 4.5000%, 5/15/39Ç | 5,458,888 | ||||||||||
324,158,338 | ||||||||||||
Freddie Mac: | ||||||||||||
1,256,112 | 5.7410%, 9/1/37‡ | 1,266,366 | ||||||||||
Total Mortgage Backed Securities (cost $323,956,834) | 325,424,704 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 15
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Preferred Stock – 0.3% | ||||||||||||
Food – Miscellaneous/Diversified – 0.1% | ||||||||||||
16 | H.J. Heinz Finance Co., 8.0000% (144A) | $ | 1,435,000 | |||||||||
Metal – Copper – 0.2% | ||||||||||||
96,900 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.7500% | 6,516,525 | ||||||||||
Total Preferred Stock (cost $6,577,890) | 7,951,525 | |||||||||||
U.S. Government Agencies – 2.2% | ||||||||||||
Fannie Mae: | ||||||||||||
$ | 880,000 | 6.3800%, 6/15/09 | 886,624 | |||||||||
18,932,000 | 2.8800%, 10/12/10 | 19,468,249 | ||||||||||
15,859,000 | 3.6300%, 8/15/11 | 16,640,817 | ||||||||||
36,996,690 | ||||||||||||
Freddie Mac: | ||||||||||||
1,884,000 | 2.8750%, 11/23/10 | 1,934,529 | ||||||||||
18,435,000 | 3.8750%, 6/29/11 | 19,408,847 | ||||||||||
21,343,376 | ||||||||||||
Total U.S. Government Agencies (cost $56,753,411) | 58,339,066 | |||||||||||
U.S. Treasury Notes/Bonds – 12.9% | ||||||||||||
14,784,000 | 4.6300%, 11/15/09 | 15,122,421 | ||||||||||
60,252,000 | 0.8750%, 1/31/11** | 60,301,407 | ||||||||||
4,647,000 | 0.8750%, 2/28/11 | 4,647,558 | ||||||||||
3,200,000 | 0.8750%, 3/31/11 | 3,200,000 | ||||||||||
68,533,000 | 1.3750%, 2/15/12 | 68,720,368 | ||||||||||
4,948,471 | 0.6250%, 4/15/13ÇÇ | 4,861,873 | ||||||||||
60,278,000 | 2.7500%, 10/31/13** | 62,576,098 | ||||||||||
20,164,000 | 1.7500%, 1/31/14 | 19,975,063 | ||||||||||
67,993,000 | 1.8750%, 2/28/14 | 67,647,595 | ||||||||||
849,000 | 1.7500%, 3/31/14 | 839,449 | ||||||||||
1,268,186 | 1.3750%, 7/15/18ÇÇ | 1,236,482 | ||||||||||
22,793,923 | 2.1250%, 1/15/19ÇÇ | 23,791,157 | ||||||||||
6,155,258 | 2.5000%, 1/15/29ÇÇ | 6,264,896 | ||||||||||
1,411,000 | 4.5000%, 5/15/38 | 1,518,369 | ||||||||||
Total U.S. Treasury Notes/Bonds (cost $339,347,909) | 340,702,736 | |||||||||||
Money Market – 3.4% | ||||||||||||
90,849,046 | Janus Cash Liquidity Fund LLC, 0% (cost $90,849,047) | 90,849,047 | ||||||||||
Total Investments (total cost $2,735,140,700) – 102.8% | 2,723,236,574 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (2.8)% | (74,033,393) | |||||||||||
Net Assets – 100% | $ | 2,649,203,181 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 26,128,655 | 0.9% | |||||
Belgium | 61,994,818 | 2.3% | ||||||
Bermuda | 36,525,694 | 1.3% | ||||||
Brazil | 11,476,867 | 0.4% | ||||||
Canada | 119,869,827 | 4.4% | ||||||
Cayman Islands | 5,144,699 | 0.2% | ||||||
China | 2,901,878 | 0.1% | ||||||
Hong Kong | 7,187,208 | 0.3% | ||||||
Japan | 19,323,713 | 0.7% | ||||||
Luxembourg | 13,426,971 | 0.5% | ||||||
Sweden | 1,380,517 | 0.1% | ||||||
Switzerland | 176,373,106 | 6.5% | ||||||
United Kingdom | 50,819,453 | 1.9% | ||||||
United States†† | 2,190,719,048 | 80.4% | ||||||
Total | $ | 2,723,236,574 | 100.0% |
†† | Includes Short-Term Securities (77.1% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/09 | 11,055,000 | $ | 16,348,955 | $ | (88,642) | |||||||
British Pound 6/18/09 | 5,625,000 | 8,318,494 | (90,525) | |||||||||
Euro 5/14/09 | 11,300,000 | 14,948,145 | 295,655 | |||||||||
Euro 6/18/09 | 3,900,000 | 5,158,210 | (105,487) | |||||||||
Euro 6/25/09 | 6,100,000 | 8,067,635 | (122,385) | |||||||||
Japanese Yen 5/14/09 | 165,000,000 | 1,673,668 | 6,063 | |||||||||
Japanese Yen 6/18/09 | 345,000,000 | 3,501,599 | 17,589 | |||||||||
Swiss Franc 6/18/09 | 39,600,000 | 34,732,684 | (693,057) | |||||||||
Total | $ | 92,749,390 | $ | (780,789) |
See Notes to Schedules of Investments and Financial Statements.
16 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Contrarian Fund (unaudited) | Ticker: JSVAX |
Fund Snapshot
This Fund relies on detailed research to find out-of-favor companies believed to have unrecognized value.
![(DAVID DECKER PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pdeckerd.jpg)
David Decker
portfolio manager
Performance Overview
Thank you for your continued investment in Janus Contrarian Fund during this very difficult environment. During the period ended April 30, 2009, the Fund returned a negative 6.30%, modestly outperforming the negative 8.53% return realized by the Fund’s primary benchmark, the S&P 500® Index.
Economic Environment
In my previous communication I outlined what I believed to be some of the primary factors that led to the collapse of the global debt and equity markets. Since that time, markets rebounded sharply, collapsed again (reaching 666 intraday on March 9), and then took off on one of the most powerful rebounds in history – the S&P 500® Index moved 31% from that low through April 30.
Now, the two big questions – which have been asked and answered in different ways by cable news pundits and their prognosticator guests – are, “was that the low?” and “is this sustainable, or simply a bear market rally?” My short answer is I do not know. The complexity of markets is such that trying to explain movements in real time is usually a fruitless activity (though it does boost ratings for cable financial shows). It is generally only in hindsight that one knows when the end occurred, and more often than not, very few predicted it accurately.
That said, I believe there is some reason for optimism. Our research team and I have spoken with a number of companies from a wide range of industries since the Lehman Brothers bankruptcy on September 15, 2008, and it has increasingly become clear to me that following that financial crisis, spending in all areas of the economy literally came to a halt, and remained that way through March of 2009. Not only were consumers not spending, business activity decreased significantly due to a lack of credit available to operate on a daily basis. To a large degree global commerce simply stopped, evidence of which could be seen from collapsing exports out of Asia late last year. While there has been scant evidence that spending is roaring back, I believe that the spending behavior exhibited during that six-month period was likely as unsustainably low as the preceding couple of years was unsustainably high. Furthermore, while credit has not returned to pre-crisis levels, it has improved dramatically. The combination of modestly better spending and a gradually improving credit market (supplemented by a massive global stimulus package) has resulted in an improved appetite for risk, a precondition for any improvement in global equity markets.
When the market hit its March low, I believed the valuation of many individual stocks had become extraordinarily attractive and reflective of expectations for an exceedingly negative global economic environment. While I believe this economic recovery will prove more challenging than most due primarily to the deflationary effects of household and corporate debt reduction, I nonetheless believe it is incorrect and damaging to argue that this downturn is comparable to the Great Depression of the 30’s, as many a pundit has argued in the press. To compare a period that saw almost 1 in 3 people unemployed at its peak to that of today when fewer than 1 in 10 is unemployed (this number is likely to worsen in the coming months, though likely not materially), is quite simply, a stretch. I also do not consider 1973-1974 or 1982 as reasonable comparisons. Price-to-earnings (P/E) multiples are inversely correlated with interest rates and the single digit P/E multiples at the market bottoms in those periods were both environments of rising inflation and high and rising interest rates, an environment that is very different than today (though a significant increase in inflation as a result of the U.S. Government stimulus is a real concern, but not in my view for quite a while). This is not to say that I believe the market is out of the woods by any stretch. It is only to suggest that I disagree with the rationale of the most dire forecasters who argue for some sort of cathartic collapse in the market to a single digit P/E on mid $50 S&P earnings (which would suggest another 50% decline in the U.S. market). I do not know if we have hit the bottom but if we haven’t, I believe we are close. More importantly, irrespective of where we stand, tremendous opportunities are presenting themselves, many of which we capitalized on during the period.
I am often asked what is the most difficult environment for contrarian investing. My answer is when fear outweighs a rational consideration for valuation. Interestingly, however, it is that very environment that then creates the best conditions for contrarian investing. Simply put, fear often drives valuations to very attractive levels, the very levels that a contrarian can capitalize on. Unfortunately, if one owns some of those positions prior to the panic, the downside can be severe, often greater than the market as a whole.
Janus Core, Risk-Managed and Value Funds April 30, 2009 17
Janus Contrarian Fund (unaudited)
Contributors to Relative Performance
The panic that occurred in September 2008 was precipitated by a freezing of the global credit markets. As it was not clear when and if the credit markets would normalize, many investors simply sold companies with upcoming debt maturities, even if the cash flow was more than supportive of the debt. This happened to companies in many industries, and one of the hardest hit was real estate investment trusts (REITs), an area that Janus Contrarian Fund had significant exposure. Having to depend on well functioning debt markets is obviously very difficult when those markets disappear. However, I don’t believe that simply because there is an aversion to risk today there will be an aversion to risk forever. In the financial crisis, many outstanding companies with debt levels that were too high for the crisis that ensued, saw their equity values marked down to levels that simply made no sense to me. It became an environment where valuation was ignored for fear of bankruptcy. To be fair, this fear was not completely irrational. Who could watch Bear Stearns, AIG, Lehman Brothers, and other companies go to zero as quickly as they did without wondering if those companies can go to zero, why can’t any leveraged company? From my perspective, many fine companies’ stocks were declining for reasons not tied to true risk of bankruptcy, but instead because of panic and aversion to risk. When emotion trumps logic, opportunities emerge. Wynn Resorts is an example. Investors began selling Las Vegas casino stocks aggressively in February and March of 2009. While a few of the companies have legitimate balance sheet risks, Wynn is not one of them. With the stock trading at a fraction of our calculated intrinsic value, I bought aggressively. It is not often that one can purchase such a high quality asset at a severely depressed valuation. Wynn was among the top contributors.
Detractors from Relative Performance
In addition to REITs, the Fund suffered large losses in a few of the natural gas exploration and production (E&P) companies held in the Fund, such as Forest Oil. When the economy came to a halt, so too did industrial production, one of the most important end-markets for natural gas. The ensuing decline in natural gas was precipitous, declining from $7.94/mcfe in late August (which was down from an inflated $13.35/mcfe at the end of June 2008) to as low as $3.37 on April 30, 2009. The damage to the stocks of the E&P industry was equally as severe, particularly for highly leveraged E&Ps like Forest Oil. Despite the decline in natural gas, I was a buyer of more Forest Oil, as well as other oil and natural gas companies whose stocks had been marked down to levels that, in our view, reflected a very negative environment for oil and gas for years to come. It is important to remember that a company’s valuation is a function not of next year’s earnings but the next 30+ year’s earnings. In fact, 1 or 2 bad years of earnings have almost no impact on the intrinsic value of a business. When a stock gets marked down by more than half due to a cyclical downturn in earnings, great opportunities are often created. While Forest was an existing position whose performance had a significantly negative impact on the portfolio, the weakness did present the opportunity to buy more.
Portfolio Positioning
In addition to the aforementioned Wynn Resorts, the panic also provided the opportunity to build new positions in a number of companies in a wide range of industries. New positions were established in oil and natural gas companies Ultra Petroleum and Denbury Resources; Apple, Inc., a company that I had sold a few years ago and was able to buy back at a more compelling valuation; and Autoliv, the leading airbag supplier to automobiles. Denbury and Apple were among the Fund’s top contributors during the period. As difficult as the period was, it nonetheless provided the opportunity to buy well managed companies that previously carried less attractive valuations.
Hedging
I continued to implement various hedging strategies using stock index call and put options in an attempt to protect against falling market values. In early March 2009, I sold substantially all of the index put options that were put on in January 2009. In addition, I often sell covered calls in order to generate income and/or scale out of positions held long, and sell put options in order to generate income and buy a position at a lower price. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Conclusion
There are many problems in the global economy, and the U.S. economy in particular. Aggregate personal leverage remains historically high and I expect there will be a period of continued pressure to reduce leverage and fix personal financial statements. I also believe that the impact of the last six months will have a long lasting behavioral impact on spending and perhaps investing as well. The U.S. consumer represented approximately 70% of GDP in this country in recent years, whereas in Europe and Asia it has been closer to 50-55%. The swift and severe collapse in household wealth that resulted from the housing crisis and the stock market crash may rein in
18 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
what many viewed as excessive spending by the American consumer in recent years. While I believe that such a change would be a welcome behavioral shift, it will nonetheless have a very negative impact on U.S. economic growth. However, in my view, such a shift, if executed orderly, would not necessarily create a crisis and cause a depression-like environment. It would simply mean that the economic recovery will prove slow and uneven. In this situation, one would expect that, as a whole, market returns will likely be tempered. However, even in that environment, there will still be excellent return opportunities, as new companies are formed and existing companies adapt. I am frankly excited about the opportunities that are presenting themselves currently as well as many I expect to emerge in the coming years. Rest assured that our outstanding team of analysts and I will continue to look globally to identify and invest in those opportunities.
Thank you again for your continued investment.
Janus Contrarian Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Liberty Media Corp. – Entertainment – Class A | 2.19% | |||
Anheuser-Busch InBev N.V. | 1.03% | |||
Apple, Inc. | 0.87% | |||
Denbury Resources, Inc. | 0.82% | |||
NTPC, Ltd. | 0.72% |
5 Bottom Performers – Holdings
Contribution | ||||
SLM Corp. | -1.61% | |||
St. Joe Co. | -1.49% | |||
Forest Oil Corp. | -1.32% | |||
NRG Energy, Inc. | -1.08% | |||
UAL Corp. | -0.94% |
5 Top Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Consumer Discretionary | 2.31% | 17.09% | 8.42% | |||||||||
Consumer Staples | 1.28% | 5.19% | 12.94% | |||||||||
Information Technology | 1.19% | 2.34% | 16.60% | |||||||||
Utilities | 0.61% | 13.10% | 4.27% | |||||||||
Other** | 0.01% | 0.01% | 0.00% |
5 Bottom Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | -5.12% | 28.68% | 11.74% | |||||||||
Energy | -2.01% | 16.45% | 13.58% | |||||||||
Industrials | -1.80% | 6.64% | 10.51% | |||||||||
Materials | -0.86% | 6.04% | 3.11% | |||||||||
Health Care | -0.73% | 4.49% | 15.02% |
* | 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 Core, Risk-Managed and Value Funds April 30, 2009 19
Janus Contrarian Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
St. Joe Co. Real Estate Operating/Development | 6.7% | |||
Liberty Media Corp. – Entertainment – Class A Multimedia | 6.4% | |||
Plum Creek Timber Company, Inc. Forestry | 5.9% | |||
Anheuser-Busch InBev N.V. Brewery | 5.2% | |||
Kinder Morgan Management LLC Pipelines | 4.6% | |||
28.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p05.gif)
Emerging markets comprised 13.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t05.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c05.gif)
20 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m05.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Contrarian Fund | –6.30% | –45.12% | 1.96% | 2.51% | 1.01% | ||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –3.06% | |||||||
Morgan Stanley Capital International All Country World IndexSM | –3.34% | –39.74% | –0.19% | –2.20% | |||||||
Lipper Quartile | – | 4th | 1st | 1st | |||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 736/756 | 21/460 | 38/213 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
See important disclosures on the next page.
Janus Core, Risk-Managed and Value Funds April 30, 2009 21
Janus Contrarian Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund’s returns and NAV may be subject to volatility.
The Fund held approximately 10.0% of its assets in Indian securities as of April 30, 2009, and the Fund has experienced significant gains due, in part, to its investments in India. While holdings are subject to change without notice, the Fund’s returns and NAV may be affected to a large degree by fluctuations in currency exchange rates or political or economic conditions in India.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 29, 2000 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 937.00 | $ | 4.56 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.08 | $ | 4.76 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.95%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
22 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amount | Value | |||||||||||
Common Stock – 95.2% | ||||||||||||
Aerospace and Defense – 3.9% | ||||||||||||
1,256,980 | Northrop Grumman Corp. | $ | 60,774,983 | |||||||||
4,913,420 | Spirit Aerosystems Holdings, Inc.* | 62,646,105 | ||||||||||
123,421,088 | ||||||||||||
Airlines – 0.7% | ||||||||||||
4,629,760 | UAL Corp.* | 22,778,419 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 1.0% | ||||||||||||
1,250,155 | Autoliv, Inc. | 30,841,324 | ||||||||||
Brewery – 5.2% | ||||||||||||
5,465,914 | Anheuser-Busch InBev N.V.** | 166,804,883 | ||||||||||
4,586,800 | Anheuser-Busch InBev N.V. – VVPR Strips* | 12,136 | ||||||||||
166,817,019 | ||||||||||||
Broadcast Services and Programming – 2.5% | ||||||||||||
2,815,018 | Liberty Global, Inc. – Class A* | 46,419,647 | ||||||||||
2,044,102 | Liberty Global, Inc. – Class C* | 33,441,509 | ||||||||||
79,861,156 | ||||||||||||
Building Products – Cement and Aggregate – 0.7% | ||||||||||||
4,366,422 | Ambuja Cements, Ltd. | 7,121,718 | ||||||||||
2,019,723 | Cemex S.A.B. de C.V. (ADR)* | 15,107,528 | ||||||||||
22,229,246 | ||||||||||||
Casino Hotels – 0.9% | ||||||||||||
734,785 | Wynn Resorts, Ltd.* | 28,825,616 | ||||||||||
Commercial Banks – 3.0% | ||||||||||||
5,032,762 | ICICI Bank, Ltd. | 48,446,527 | ||||||||||
2,352,584 | ICICI Bank, Ltd. (ADR) | 48,533,808 | ||||||||||
96,980,335 | ||||||||||||
Computers – 2.0% | ||||||||||||
506,950 | Apple, Inc.*,** | 63,789,519 | ||||||||||
Containers – Metal and Glass – 3.9% | ||||||||||||
5,118,585 | Owens-Illinois, Inc.*,£ | 124,842,288 | ||||||||||
Electric – Generation – 2.3% | ||||||||||||
19,029,974 | NTPC, Ltd. | 72,437,195 | ||||||||||
Electric – Integrated – 2.2% | ||||||||||||
33,957,500 | Tenaga Nasional Berhad | 69,817,469 | ||||||||||
Electric – Transmission – 2.1% | ||||||||||||
36,831,725 | Power Grid Corp. of India, Ltd. | 68,393,350 | ||||||||||
Energy – Alternate Sources – 1.1% | ||||||||||||
2,580,510 | Covanta Holding Corp.* | 36,410,996 | ||||||||||
Engineering – Research and Development Services – 1.2% | ||||||||||||
2,227,926 | Larsen & Toubro, Ltd. | 39,292,924 | ||||||||||
Finance – Consumer Loans – 0.4% | ||||||||||||
2,684,210 | SLM Corp.* | 12,964,734 | ||||||||||
Financial Guarantee Insurance – 0.5% | ||||||||||||
1,574,680 | Assured Guaranty, Ltd. | 15,211,409 | ||||||||||
Forestry – 5.9% | ||||||||||||
5,477,515 | Plum Creek Timber Co., Inc.** | 189,083,818 | ||||||||||
Independent Power Producer – 0.8% | ||||||||||||
1,472,290 | NRG Energy, Inc.* | 26,471,774 | ||||||||||
Investment Companies – 0.3% | ||||||||||||
8,062,523 | Australian Infrastructure Fund** | 8,828,699 | ||||||||||
Medical – Biomedical and Genetic – 1.0% | ||||||||||||
650,202 | Amgen, Inc.* | 31,515,291 | ||||||||||
Medical – Drugs – 1.7% | ||||||||||||
1,127,510 | Novo Nordisk A/S (ADR) | 53,568,000 | ||||||||||
Metal Processors and Fabricators – 0.5% | ||||||||||||
6,711,673 | Bharat Forge, Ltd. | 16,883,878 | ||||||||||
Multi-Line Insurance – 0.7% | ||||||||||||
482,085 | ACE, Ltd. (U.S. Shares) | 22,330,177 | ||||||||||
Multimedia – 6.4% | ||||||||||||
8,355,574 | Liberty Media Corp. – Entertainment – Class A*,** | 203,458,227 | ||||||||||
Oil Companies – Exploration and Production – 12.6% | ||||||||||||
776,920 | Canadian Natural Resources, Ltd. (U.S. Shares) | 35,823,781 | ||||||||||
8,660,695 | Denbury Resources, Inc.*,** | 140,996,114 | ||||||||||
5,751,140 | Forest Oil Corp.*,£ | 92,018,240 | ||||||||||
23,600 | OGX Petroleo e Gas Participacoes S.A.* | 9,933,205 | ||||||||||
4,748,336 | SandRidge Energy, Inc.* | 38,746,422 | ||||||||||
1,981,795 | Ultra Petroleum Corp. (U.S. Shares)* | 84,820,826 | ||||||||||
402,338,588 | ||||||||||||
Oil Companies – Integrated – 1.5% | ||||||||||||
871,655 | Hess Corp. | 47,757,977 | ||||||||||
Paper and Related Products – 0.1% | ||||||||||||
11,915,828 | Ballarpur Industries, Ltd.£ | 3,767,238 | ||||||||||
Pipelines – 5.7% | ||||||||||||
1,115,156 | Enbridge, Inc. | 34,445,514 | ||||||||||
3,584,689 | Kinder Morgan Management LLC* | 146,398,699 | ||||||||||
180,844,213 | ||||||||||||
Real Estate Management/Services – 3.4% | ||||||||||||
7,783,520 | CB Richard Ellis Group, Inc. – Class A* | 58,376,400 | ||||||||||
3,751,000 | Mitsubishi Estate Co., Ltd. | 48,950,587 | ||||||||||
107,326,987 | ||||||||||||
Real Estate Operating/Development – 8.6% | ||||||||||||
33,001,500 | CapitaLand, Ltd.** | 60,786,301 | ||||||||||
8,649,012 | St. Joe Co.*,**,£ | 215,187,418 | ||||||||||
275,973,719 | ||||||||||||
REIT – Diversified – 2.1% | ||||||||||||
1,366,385 | Vornado Realty Trust | 66,802,563 | ||||||||||
REIT – Mortgage – 0.1% | ||||||||||||
2,057,783 | Gramercy Capital Corp. | 4,444,811 | ||||||||||
REIT – Warehouse/Industrial – 2.3% | ||||||||||||
8,151,587 | ProLogis | 74,260,958 | ||||||||||
Resorts and Theme Parks – 2.6% | ||||||||||||
2,887,055 | Vail Resorts, Inc.*,£ | 84,302,006 | ||||||||||
Retail – Major Department Stores – 0.5% | ||||||||||||
3,593,672 | Pantaloon Retail India, Ltd. | 14,083,484 | ||||||||||
371,411 | Pantaloon Retail India, Ltd. – Class B | 894,347 | ||||||||||
14,977,831 | ||||||||||||
Soap and Cleaning Preparations – 0.7% | ||||||||||||
571,544 | Reckitt Benckiser Group PLC** | 22,501,564 | ||||||||||
Telecommunication Equipment – Fiber Optics – 2.0% | ||||||||||||
4,450,160 | Corning, Inc. | 65,061,339 | ||||||||||
Toys – 0.4% | ||||||||||||
44,600 | Nintendo Co., Ltd. | 11,934,778 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 23
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amount | Value | |||||||||||
Transportation – Marine – 1.7% | ||||||||||||
3,761,905 | Teekay Corp. (U.S. Shares)£ | $ | 54,321,908 | |||||||||
Total Common Stock (cost $3,865,764,474) | 3,043,670,431 | |||||||||||
Corporate Bonds – 1.5% | ||||||||||||
REIT – Diversified – 0.8% | ||||||||||||
$ | 29,844,000 | Vornado Realty Trust, 2.8500%, 4/1/27 | 25,180,875 | |||||||||
REIT – Warehouse/Industrial – 0.7% | ||||||||||||
29,541,000 | ProLogis, 2.2500%, 4/1/37 | 21,084,889 | ||||||||||
Total Corporate Bonds (cost $34,275,872) | 46,265,764 | |||||||||||
Purchased Options – Calls – 0.2% | ||||||||||||
33,689 | Continental Airlines, Inc. expires June 2009 exercise price $1.00 | 3,099,388 | ||||||||||
30,199 | UAL Corp. expires June 2009 exercise price $5.00 | 2,868,905 | ||||||||||
13,125 | UAL Corp. expires June 2009 exercise price $7.50 | 433,125 | ||||||||||
8,750 | UAL Corp. expires June 2009 exercise price $7.50 | 262,500 | ||||||||||
Total Purchased Options – Calls (premiums received $15,239,194) | 6,663,918 | |||||||||||
Purchased Options – Puts – 0.1% | ||||||||||||
39,603 | iShares MSCI Emerging Markets Index Fund (ETF) expires May 2009 exercise price $25.00 | 660,974 | ||||||||||
4,861 | S&P 500®Index expires May 2009 exercise price $775.00 | 1,361,080 | ||||||||||
Total Purchased Options – Puts (premiums received $8,345,249) | 2,022,054 | |||||||||||
Money Market – 3.4% | ||||||||||||
109,897,866 | Janus Cash Liquidity Fund LLC, 0% (cost $109,897,866) | 109,897,866 | ||||||||||
Total Investments (total cost $4,033,522,655) – 100.4% | 3,208,520,033 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.4)% | (11,330,292) | |||||||||||
Net Assets – 100% | $ | 3,197,189,741 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 8,828,699 | 0.3% | |||||
Belgium | 166,817,019 | 5.2% | ||||||
Bermuda | 15,211,409 | 0.5% | ||||||
Brazil | 9,933,205 | 0.3% | ||||||
Canada | 155,090,122 | 4.8% | ||||||
Denmark | 53,568,000 | 1.7% | ||||||
India | 319,854,468 | 10.0% | ||||||
Japan | 60,885,364 | 1.9% | ||||||
Malaysia | 69,817,469 | 2.2% | ||||||
Marshall Islands | 54,321,908 | 1.7% | ||||||
Mexico | 15,107,528 | 0.5% | ||||||
Singapore | 60,786,301 | 1.9% | ||||||
Switzerland | 22,330,177 | 0.7% | ||||||
United Kingdom | 22,501,564 | 0.7% | ||||||
United States†† | 2,173,466,800 | 67.6% | ||||||
Total | $ | 3,208,520,033 | 100.0% |
†† | Includes Short-Term Securities (64.3% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
Australian Dollar 6/25/09 | 10,840,000 | $ | 7,844,997 | $ | (145,345) | |||||||
British Pound 6/18/09 | 13,720,000 | 20,289,731 | (220,801) | |||||||||
Singapore Dollar 5/14/09 | 18,100,000 | 12,232,209 | (266,849) | |||||||||
Singapore Dollar 6/18/09 | 15,500,000 | 10,475,345 | (192,057) | |||||||||
Singapore Dollar 6/25/09 | 42,600,000 | 28,790,586 | (317,505) | |||||||||
Total | $ | 79,632,868 | $ | (1,142,557) |
Schedule of Written Options – Calls | Value | |||
American Express Co. expires May 2009 9,915 contracts exercise price $15.00 | $ | (10,143,045) | ||
Apple, Inc. expires May 2009 1,267 contracts exercise price $120.00 | (909,706) | |||
InBev N.V. expires June 2009 27,329 contracts exercise price EUR 23.00 | (7,021,332) | |||
iShares MSCI Emerging Markets Index expires May 2009 39,603 contracts exercise price $30.00 | (1,721,938) | |||
Total Written Options – Calls | ||||
(Premiums received $8,828,123) | $ | (19,796,021) | ||
Schedule of Written Options – Puts | ||||
Continental Airlines, Inc. expires May 2009 22,259 contracts exercise price $10.00 | $ | (1,558,130) | ||
Forest Oil Corp. expires May 2009 13,353 contracts exercise price $15.00 | (640,944) |
See Notes to Schedules of Investments and Financial Statements.
24 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Value | ||||
Hess Corp. expires May 2009 5,290 contracts exercise price $55.00 | (1,259,020) | |||
Novo Nordisk A/S expires May 2009 6,698 contracts exercise price DKK 240.00 | (168,970) | |||
Novo Nordisk A/S expires May 2009 6,430 contracts exercise price DKK 250.00 | (298,145) | |||
Ultra Petroleum Corp. expires May 2009 6,359 contracts exercise price $38.00 | (228,924) | |||
Ultra Petroleum Corp. expires May 2009 5,564 contracts exercise price $40.00 | (370,062) | |||
Total Written Options – Puts | ||||
(Premiums received $11,509,855) | $ | (4,524,195) | ||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 25
Janus Research Core Fund (unaudited) | Ticker: JAEIX |
Fund Snapshot
This conservative growth Fund relies on the Janus Research Team to drive its fundamental approach to investing in core holdings and opportunistic companies.
Team Based Approach
Led by Jim Goff,
Director of Research
Led by Jim Goff,
Director of Research
Performance Overview
For the six-month period ended April 30, 2009, Janus Research Core Fund returned -4.58%. The Fund outperformed its primary benchmark, the S&P 500® Index, which returned -8.53%, but underperformed its secondary benchmark, the Russell 1000® Growth Index, which returned -1.52%.
Economic Overview
The first quarter ended with a market rally after two difficult months. We think the market also reflected a slightly more rational atmosphere, where investors began to distinguish between high quality, enduring business models and those that will likely struggle in the global recession. Such an environment was a welcome change from the turmoil and intense volatility in the second half of 2008. We believe a long-term fundamental approach should do better when investors distinguish between quality companies. Our focus is on companies that we think have long-term competitive advantages and reasonable growth prospects, but trade at attractive valuations.
We remained disciplined during the market turmoil of the past six months. We did not stray from our core belief that the market ultimately will reward companies with superior business models, quality managements and value-additive returns on invested capital. Our ability to buy these companies at attractive valuations added to our long-term confidence.
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
Investment Process
We employ an unconstrained fundamental bottom-up research approach that we believe provides the best opportunity for generating Fund’s outperformance over the long term. We foster an entrepreneurial culture that encourages our analysts to “go anywhere” to find the most compelling investment ideas and marry that with a disciplined approach to valuation. We strive to remain sector neutral in this approach as well. With this in mind, the Fund’s outperformance during the period relative to the S&P 500® Index was driven by our holdings within industrials, technology and financials. As a group, poor relative performance among our healthcare selections weighed on comparable returns.
Under certain circumstances and market conditions, we may initiate positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Stocks That Aided Relative Performance
New position in the portfolio Tyco Electronics, Ltd. was strong for most of the period, benefiting the most after pre-announcing better-than-expected earnings results and the sale of its struggling wireless systems business, which we think reduces the risk that Tyco could break its covenant on
26 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
a key revolving credit line. While we view these developments as positive over the short term, long term we think it is a leader in the fragmented connector business that has historically generated strong free cash flows and were still attracted to its valuation at period end.
KLA-Tencor, a manufacturer of semiconductor equipment, rebounded off of period lows to finish the six months ended April 30, 2009 on a strong note. The company benefited from overall strength within semiconductor stocks. In particular, KLA itself reported better-than-expected revenues and new orders during its most recent quarterly filing. In general, we saw some positive data on semiconductor companies due to increased demand from wireless companies, generally a large customer of semiconductor companies. While we think the company is well positioned long term, we somewhat share the company’s cautious near-term outlook as it remained unclear how broad based or persistent the industry recovery could be.
Global brewer Anheuser-Busch InBev, a result of Belgium-based InBev’s acquisition of American brewer Anheuser-Busch, was the third largest individual contributor during the period. The stock struggled for much of 2008 amid concerns over the combined company’s ability to service its debt. We were attracted to the company’s pricing power given its lineup of strong brands and believed the company would be able to service its debt. The stock price rebounded off of its November lows and continued to trend higher through April as Anheuser-Busch InBev continued to make good progress in our opinion towards selling off assets and paying down acquisition-related debt.
Investments That Detracted from Relative Performance
Despite rebounding late in the period, Microsoft Corp. finished lower, hurt in January by a disappointing earnings report. The company’s results for its March quarter were relatively in line with overall expectations and provided some fuel for continued strength at period end as investors became more optimistic about the economy. While the software giant was relatively inexpensive at period end given its roughly 10% free cash flow yield, we exited our position in the company due to our view that it is not likely to be a relative outperformer over the long-term. We felt there were better risk/reward opportunities elsewhere.
JPMorgan Chase was impacted by general negative investor sentiment towards the financials sector during much of the period before rebounding in March and April. While we recognize near-term earnings could be pressured from rising consumer and commercial real estate losses and weak capital markets, we believe the company has been reasonably proactive in facing those challenges and building capital and reserves to offset potential credit losses. Conversely, JP Morgan has been growing its earnings power by taking market share and making value accretive acquisitions in our opinion.
Anglo Irish Bank declined during the period amid a slew of negative news that included fraud and nationalization of the institution by the Irish government. While we were aware that the company was exposed to weak real estate sectors in Ireland and the U.K., we felt its tight credit underwriting standards would differentiate it from other Irish and U.K. banks. We wrote down the value of our holdings in Anglo Irish to 0 in the Fund’s NAV. Although the bank’s equity may still have value, we believe it will be difficult for the Irish government to fairly compensate shareholders in a politically-charged environment where Anglo’s management deceived the public.
Outlook
As the half-year ended, the rate of decline in the U.S. and global economies was slowing and we were seeing some improvement in the credit markets. Economic reports in recent months have shown mixed data, an improvement from the stream of negative reports in late 2008. While encouraging, we do not anticipate robust economic growth for several years. With companies and individuals reducing debt levels and with increased government intervention in the economy, we see a muted rather than sharp economic recovery. We believe that a slower growth environment will increase the importance of stock picking over sector allocation in finding companies that may be well suited to gain share and profits in a slow-growth environment. We believe that the Janus bottom-up research driven process will help lead us to these opportunities.
The Fund remained sector-neutral and we expect stock selection to be a key driver of returns going forward. Looking ahead, we will continue to invest with conviction in areas where we feel we can develop an edge through research. Through our valuation discipline and focus on investment risk management, we remain committed to delivering strong long-term results for our clients. (Risk management includes an effort to monitor and manage risk which should not be confused with and does not imply low risk or the ability to control risk.)
Thank you for your investment in Janus Research Core Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2009 27
Janus Research Core Fund (unaudited)
Janus Research Core Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Tyco Electronics, Ltd. | 0.58% | |||
KLA-Tencor Corp. | 0.57% | |||
Anheuser-Busch InBev N.V. | 0.51% | |||
Goldman Sachs Group, Inc. | 0.47% | |||
Petroleo Brasileiro S.A. (ADR) | 0.42% |
5 Bottom Performers – Holdings
Contribution | ||||
Microsoft Corp. | -0.88% | |||
JPMorgan Chase & Co. | -0.68% | |||
Anglo Irish Bank Corporation PLC | -0.66% | |||
Devon Energy Corp. | -0.60% | |||
CapitalSource, Inc. | -0.57% |
3 Top Performers – Sectors*,†
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Technology | 1.84% | 14.73% | 14.75% | |||||||||
Communications | 1.07% | 8.19% | 8.21% | |||||||||
Industrials | 0.46% | 14.76% | 14.33% |
4 Bottom Performers – Sectors*,†
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | -2.92 | 11.76% | 12.02% | |||||||||
Energy | -1.60 | 17.58% | 17.85% | |||||||||
Healthcare | -1.59 | 15.85% | 15.92% | |||||||||
Consumer | -0.83 | 17.13% | 16.93% |
* | 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. | |
† | The sectors listed above reflect those covered by the seven analyst teams who comprise the Janus Research Team. |
28 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
JPMorgan Chase & Co. Finance – Investment Bankers/Brokers | 4.4% | |||
Cisco Systems, Inc. Networking Products | 3.6% | |||
CVS Caremark Corp. Retail – Drug Store | 3.3% | |||
Hess Corp. Oil Companies – Integrated | 3.3% | |||
QUALCOMM, Inc. Wireless Equipment | 3.2% | |||
17.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p03.gif)
Emerging markets comprised 2.9% of total net assets.
Top Country Allocations– Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c03.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2009 29
Janus Research Core Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m03.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Research Core Fund | –4.58% | –38.16% | –1.22% | –0.81% | 6.63% | 0.91% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 3.85% | ||||||||
Russell 1000® Growth Index | –1.52% | –31.57% | –2.39% | –4.40% | 2.37% | ||||||||
Lipper Quartile | – | 4th | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Core Funds | – | 802/914 | 136/650 | 90/360 | 8/212 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited, to exchange traded-funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
30 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
June 30, 1996 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
As of February 27, 2009 Janus Fundamental Equity Fund changed names and is now Janus Research Core Fund.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – June 28, 1996 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 954.20 | $ | 4.80 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.99%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. |
Janus Core, Risk-Managed and Value Funds April 30, 2009 31
Janus Research Core Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 99.8% | ||||||||||||
Advertising Sales – 1.6% | ||||||||||||
438,478 | Lamar Advertising Co. – Class A* | $ | 7,410,278 | |||||||||
Aerospace and Defense – 1.6% | ||||||||||||
157,015 | Northrop Grumman Corp. | 7,591,675 | ||||||||||
Aerospace and Defense – Equipment – 1.9% | ||||||||||||
186,200 | United Technologies Corp. | 9,094,008 | ||||||||||
Agricultural Chemicals – 0.6% | ||||||||||||
31,240 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 2,701,948 | ||||||||||
Athletic Footwear – 1.1% | ||||||||||||
99,875 | NIKE, Inc. – Class B | 5,240,441 | ||||||||||
Beverages – Non-Alcoholic – 1.3% | ||||||||||||
121,160 | PepsiCo, Inc. | 6,028,922 | ||||||||||
Brewery – 2.5% | ||||||||||||
378,556 | Anheuser-Busch InBev N.V.** | 11,552,503 | ||||||||||
183,888 | Anheuser-Busch InBev N.V. – VVPR Strips*,** | 487 | ||||||||||
11,552,990 | ||||||||||||
Building – Residential and Commercial – 1.4% | ||||||||||||
12,885 | NVR, Inc.* | 6,511,692 | ||||||||||
Cable Television – 1.1% | ||||||||||||
697,067 | British Sky Broadcasting Group PLC** | 4,962,784 | ||||||||||
Cellular Telecommunications – 0.6% | ||||||||||||
1,636,944 | Vodafone Group PLC** | 3,005,837 | ||||||||||
Chemicals – Diversified – 0.4% | ||||||||||||
41,193 | Bayer A.G.** | 2,039,952 | ||||||||||
Commercial Banks – 0.7% | ||||||||||||
164,030 | ICICI Bank, Ltd. (ADR) | 3,383,939 | ||||||||||
Computers – 1.5% | ||||||||||||
56,592 | Apple, Inc.* | 7,120,971 | ||||||||||
Consumer Products – Miscellaneous – 2.0% | ||||||||||||
192,410 | Kimberly-Clark Corp. | 9,455,027 | ||||||||||
Containers – Metal and Glass – 0.7% | ||||||||||||
137,005 | Owens-Illinois, Inc.* | 3,341,552 | ||||||||||
Cosmetics and Toiletries – 1.8% | ||||||||||||
142,090 | Colgate-Palmolive Co. | 8,383,310 | ||||||||||
Diversified Minerals – 0.5% | ||||||||||||
150,055 | Cia Vale do Rio Doce (ADR) | 2,477,408 | ||||||||||
Diversified Operations – 3.5% | ||||||||||||
72,420 | Danaher Corp. | 4,232,225 | ||||||||||
372,090 | Illinois Tool Works, Inc. | 12,204,552 | ||||||||||
16,436,777 | ||||||||||||
E-Commerce/Services – 0.5% | ||||||||||||
137,550 | eBay, Inc.* | 2,265,449 | ||||||||||
Electric – Generation – 2.5% | ||||||||||||
1,665,630 | AES Corp.* | 11,776,004 | ||||||||||
Electronic Components – Miscellaneous – 1.2% | ||||||||||||
337,625 | Tyco Electronics, Ltd. | 5,888,180 | ||||||||||
Engineering – Research and Development Services – 0.9% | ||||||||||||
301,142 | ABB, Ltd.** | 4,256,469 | ||||||||||
Enterprise Software/Services – 2.3% | ||||||||||||
571,370 | Oracle Corp. | 11,050,296 | ||||||||||
Finance – Investment Bankers/Brokers – 6.5% | ||||||||||||
61,150 | Goldman Sachs Group, Inc. | 7,857,775 | ||||||||||
630,645 | JPMorgan Chase & Co. | 20,811,285 | ||||||||||
71,965 | Morgan Stanley | 1,701,253 | ||||||||||
30,370,313 | ||||||||||||
Finance – Other Services – 0.7% | ||||||||||||
14,895 | CME Group, Inc. | 3,297,008 | ||||||||||
Independent Power Producer – 2.4% | ||||||||||||
641,510 | NRG Energy, Inc.* | 11,534,350 | ||||||||||
Medical – Biomedical and Genetic – 3.2% | ||||||||||||
68,770 | Celgene Corp.* | 2,937,854 | ||||||||||
72,425 | Genzyme Corp.* | 3,862,425 | ||||||||||
178,075 | Gilead Sciences, Inc.* | 8,155,836 | ||||||||||
14,956,115 | ||||||||||||
Medical – Drugs – 4.9% | ||||||||||||
324,545 | Merck & Co., Inc. | 7,866,971 | ||||||||||
119,235 | Roche Holding A.G.** | 15,071,170 | ||||||||||
22,938,141 | ||||||||||||
Medical Products – 2.8% | ||||||||||||
328,565 | Covidien, Ltd. | 10,836,074 | ||||||||||
73,590 | Hospira, Inc.* | 2,418,903 | ||||||||||
13,254,977 | ||||||||||||
Multimedia – 1.6% | ||||||||||||
845,810 | News Corp. – Class A | 7,713,787 | ||||||||||
Networking Products – 3.6% | ||||||||||||
866,300 | Cisco Systems, Inc.* | 16,736,916 | ||||||||||
Oil – Field Services – 1.2% | ||||||||||||
110,665 | Schlumberger, Ltd. (U.S. Shares) | 5,421,478 | ||||||||||
Oil Companies – Exploration and Production – 4.5% | ||||||||||||
125,940 | Devon Energy Corp. | 6,529,989 | ||||||||||
257,125 | Occidental Petroleum Corp. | 14,473,566 | ||||||||||
21,003,555 | ||||||||||||
Oil Companies – Integrated – 4.9% | ||||||||||||
286,320 | Hess Corp. | 15,687,473 | ||||||||||
224,690 | Petroleo Brasileiro S.A. (ADR) | 7,542,843 | ||||||||||
23,230,316 | ||||||||||||
Oil Field Machinery and Equipment – 0.7% | ||||||||||||
132,605 | Cameron International Corp.* | 3,392,036 | ||||||||||
Property and Casualty Insurance – 2.0% | ||||||||||||
239,745 | Chubb Corp. | 9,338,068 | ||||||||||
Real Estate Management/Services – 1.4% | ||||||||||||
512,000 | Mitsubishi Estate Co., Ltd.** | 6,681,605 | ||||||||||
Real Estate Operating/Development – 0.5% | ||||||||||||
1,234,000 | CapitaLand, Ltd. | 2,272,936 | ||||||||||
Retail – Apparel and Shoe – 1.3% | ||||||||||||
143,756 | Inditex S.A.** | 6,133,617 | ||||||||||
Retail – Discount – 2.6% | ||||||||||||
243,285 | Wal-Mart Stores, Inc. | 12,261,564 | ||||||||||
Retail – Drug Store – 3.3% | ||||||||||||
496,094 | CVS Caremark Corp. | 15,765,867 | ||||||||||
Semiconductor Equipment – 2.6% | ||||||||||||
445,775 | KLA-Tencor Corp. | 12,365,799 | ||||||||||
Soap and Cleaning Preparations – 2.0% | ||||||||||||
236,787 | Reckitt Benckiser Group PLC** | 9,322,253 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
32 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Telecommunication Equipment – Fiber Optics – 1.6% | ||||||||||||
505,205 | Corning, Inc. | $ | 7,386,097 | |||||||||
Telecommunication Services – 0.6% | ||||||||||||
126,660 | Amdocs, Ltd. (U.S. Shares)*,** | 2,650,994 | ||||||||||
Tobacco – 1.3% | ||||||||||||
370,555 | Altria Group, Inc. | 6,051,163 | ||||||||||
Toys – 0.5% | ||||||||||||
8,000 | Nintendo Co., Ltd.** | 2,140,767 | ||||||||||
Transportation – Services – 3.2% | ||||||||||||
288,200 | United Parcel Service, Inc. – Class B | 15,084,388 | ||||||||||
Web Portals/Internet Service Providers – 1.7% | ||||||||||||
14,095 | Google, Inc. – Class A* | 5,581,198 | ||||||||||
169,605 | Yahoo!, Inc.* | 2,423,655 | ||||||||||
8,004,853 | ||||||||||||
Wireless Equipment – 6.0% | ||||||||||||
530,570 | Crown Castle International Corp.* | 13,009,576 | ||||||||||
356,685 | QUALCOMM, Inc. | 15,094,910 | ||||||||||
28,104,486 | ||||||||||||
Total Common Stock (cost $582,885,364) | 469,389,358 | |||||||||||
Money Market – 0% | ||||||||||||
101,503 | Janus Cash Liquidity Fund LLC, 0% (cost $101,503) | 101,503 | ||||||||||
Total Investments (total cost $582,986,867) – 99.8% | 469,490,861 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 799,653 | |||||||||||
Net Assets – 100% | $ | 470,290,514 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Belgium | $ | 11,552,990 | 2.5% | |||||
Bermuda | 16,724,254 | 3.6% | ||||||
Brazil | 10,020,251 | 2.1% | ||||||
Canada | 2,701,948 | 0.6% | ||||||
Germany | 2,039,952 | 0.4% | ||||||
Guernsey | 2,650,994 | 0.6% | ||||||
India | 3,383,939 | 0.7% | ||||||
Japan | 8,822,372 | 1.9% | ||||||
Netherlands Antilles | 5,421,478 | 1.1% | ||||||
Singapore | 2,272,936 | 0.5% | ||||||
Spain | 6,133,617 | 1.3% | ||||||
Switzerland | 19,327,639 | 4.1% | ||||||
United Kingdom | 17,290,875 | 3.7% | ||||||
United States†† | 361,147,616 | 76.9% | ||||||
Total | $ | 469,490,861 | 100.0% |
†† | Includes Short-Term Securities (76.9% excluding Short-Term Securities). |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/09 | 3,300,000 | $ | 4,880,285 | $ | (33,905) | |||||||
British Pound 6/18/09 | 2,230,000 | 3,297,821 | (35,888) | |||||||||
British Pound 6/25/09 | 330,000 | 488,020 | (4,270) | |||||||||
Euro 5/14/09 | 900,000 | 1,190,560 | 27,140 | |||||||||
Euro 6/18/09 | 6,400,000 | 8,464,755 | (173,107) | |||||||||
Japanese Yen 5/14/09 | 145,000,000 | 1,470,799 | (10,872) | |||||||||
Japanese Yen 6/25/09 | 290,000,000 | 2,943,713 | 58,357 | |||||||||
Swiss Franc 6/18/09 | 10,500,000 | 9,209,424 | (183,765) | |||||||||
Total | $ | 31,945,377 | $ | (356,310) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 33
Janus Growth and Income Fund (unaudited) | Ticker: JAGIX |
Fund Snapshot
This growth Fund seeks to create capital appreciation and income through all types of market conditions by leveraging Janus’ bottom-up, fundamental research.
![(MARC PINTO PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ppintoma.gif)
Marc Pinto
portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, Janus Growth and Income Fund returned 2.14%. The Fund’s primary benchmark, the S&P 500® Index, and its secondary benchmark, the Russell 1000® Growth Index, returned -8.53% and -1.52%, respectively.
Economic Overview
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ending April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected (but still weak) economic reports added fuel to the rally. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small caps, but mid-caps performed relatively the best. Growth-oriented indices outpaced value indices. In commodities, natural gas, oil and agricultural commodities posted negative returns, while precious metals generated strong gains led by platinum, silver and gold.
Holdings and Underweight in Financials Top Contributors to Performance
Our underweight and holdings in financials contributed the most to relative performance during the period. Our holdings and overweights in consumer staples and information technology (IT) were significant contributors as well.
Within financials, investment bank Goldman Sachs rebounded significantly off depressed levels, as investors viewed it as among the survivors of the financial crisis. We believe Goldman Sachs is poised to capture market share in the U.S., as major competitors have either merged into banks or gone bankrupt. We view its balance sheet as sound and feel that its assets are appropriately marked or valued. In addition, we believe the company’s trading and underwriting businesses should continue to be profitable and improve. We added to our position during the period. Staying in financials, investment bank/brokerage firm Morgan Stanley rebounded similarly as Goldman Sachs during the period. The stock benefited as investors speculated that the company could be among the survivors as well. We believe Morgan Stanley will gain market share and that its balance sheet was sound at period end; we added to our position.
Within consumer staples, global brewer Anheuser-Busch InBev gained during the period as the market’s fears subsided over the debt the company incurred as a result of InBev’s acquisition of Anheuser-Busch in November. The company announced several asset sales and a successful equity rights offering (in which the Fund fully participated) to help pay down debt. We consider management to be the best operators in the beer industry with a disciplined focus on increasing returns on invested capital. We believe the firm will be able to squeeze more profits out of its business, particularly at Anheuser-Busch, which we consider an under-managed asset.
Another holding that contributed positively to performance was mobile device maker Research In Motion, which gained significantly late in the period following a better-than-expected earnings report highlighted by improving margins and solid subscriber growth. We continue to believe that the long-term total potential market for wireless data subscribers could be substantial. We added to the position in the period.
Consumer Discretionary Holdings Among Detractors from Performance
Our holdings and overweight in consumer discretionary were the main detractors from relative performance during the
34 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
period. Our lack of exposure to the telecommunication services sector as well as our selections and overweight in energy also weighed on comparable performance.
Within the consumer discretionary sector, casino operator MGM Mirage fell significantly. The company was negatively impacted by its leveraged balance sheet in a time of tight credit and by declining fundamentals in the gaming industry, as consumers have reduced their spending. In particular, investors have worried about the company’s ability to meet several large upcoming debt maturities. We decided to exit our position due to weaker conditions in Las Vegas than we anticipated and since its balance sheet proved to be a bigger problem than we foresaw. Staying in consumer discretionary, upscale retailer Nordstrom Inc. also declined significantly early in the period, as weakness in consumer spending severely impacted sales. We did not anticipate the economic downturn would hit the high-end consumer as much as it did; we exited the position.
Integrated energy company ConocoPhillips traded down after the company took a major write-down on assets and suspended share repurchases, although it did maintain its dividend. We trimmed our position, as part of our original thesis was based on the company continuing its share buy-back program.
Among other individual detractors was Switzerland-based pharmaceutical company Roche Holdings, which declined after it gave conservative guidance for the year. The company’s raised bid for the remaining stake in biotechnology leader Genentech it did not own was also accepted during the period. We believe the 100% interest in biotechnology leader Genentech will further strengthen Roche’s drug pipeline.
Portfolio Positioning
During the period, the Fund was most overweight in consumer staples and information technology, while our largest underweights were in industrials and financials. New positions added to the Fund during the period included brokerage firm Charles Schwab Corp., which has continued to be an asset gatherer even in a down market. We continued to avoid banks and insurance companies due to what we think are balance sheet concerns. In healthcare, we took advantage of the sector’s weakness to add Johnson & Johnson to the Fund with its exposure in pharmaceuticals, medical equipment and consumer health products. We also added pharmaceutical company Abbott Laboratories and medical equipment supplier Baxter International. We view valuations in the healthcare sector as attractive with high yields at period end that we believe are sustainable. Within technology, our focus has been on companies with well positioned products that have historically been less subject to discretionary expenditures by client companies. We added Microchip Technology, a semiconductor company that we believe serves diversified niche markets and we view as largely immune from fluctuations in IT spending. Conversely, we trimmed names that we felt were more leveraged to overall IT spending such as Cisco Systems and Microsoft. The Fund used derivatives, such as buying put or selling call options, to both hedge market exposure and express views on stocks. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Outlook
While equity markets rebounded late in the period, the economy continued to be weak as reflected in increasing job losses; however, we feel the economy will reach a bottom this year or early next year. Helping offset the economic conditions has been the U.S. Government’s stimulus efforts. We remain neutral on the market’s short-term outlook and are maintaining a conservative position in the portfolio. With that said, we continue to look for companies we feel have been unnecessarily beaten up in our opinion and that offer what we consider to be attractive value and good growth prospects in a tough economic environment. As always, we remain committed to bottom-up fundamental research and investing with conviction where we believe we have a research edge.
Thank you for your investment in Janus Growth and Income Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2009 35
Janus Growth and Income Fund (unaudited)
Janus Growth and Income Fund At A Glance
5 Top Performers – Equity Holdings
Contribution | ||||
Anheuser-Busch InBev N.V. | 1.75% | |||
Goldman Sachs Group, Inc. | 1.15% | |||
Morgan Stanley Co. | 1.13% | |||
Research In Motion, Ltd. (U.S. Shares) | 0.87% | |||
Corning, Inc. | 0.73% |
5 Bottom Performers – Equity Holdings
Contribution | ||||
MGM Mirage, Inc. | -1.20% | |||
ConocoPhillips | -0.79% | |||
Nordstrom, Inc. | -0.67% | |||
Roche Holding A.G. | -0.52% | |||
Nestle S.A. | -0.46% |
5 Top Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | 3.04% | 7.06% | 11.74% | |||||||||
Information Technology | 2.23% | 23.31% | 16.60% | |||||||||
Consumer Staples | 0.71% | 18.90% | 12.94% | |||||||||
Materials | 0.34% | 4.33% | 3.11% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.82% |
5 Bottom Performers – Sectors*
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Energy | -1.80% | 13.85% | 13.58% | |||||||||
Health Care | -1.27% | 17.91% | 15.02% | |||||||||
Consumer Discretionary | -1.04% | 8.84% | 8.42% | |||||||||
Industrials | -0.58% | 5.80% | 10.51% | |||||||||
Utilities | 0.00% | 0.00% | 4.27% |
* | 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. |
36 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Anheuser-Busch InBev N.V. Brewery | 5.0% | |||
Oracle Corp. Enterprise Software/Services | 4.0% | |||
Apple, Inc. Computers | 3.8% | |||
Hess Corp. Oil Companies – Integrated | 3.6% | |||
EnCana Corp. (U.S. Shares) Oil Companies – Exploration and Production | 3.4% | |||
19.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p07.gif)
Emerging markets comprised 1.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t07.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c07.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2009 37
Janus Growth and Income Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m07.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Growth and Income Fund | 2.14% | –34.87% | –1.59% | –1.05% | 8.98% | 0.88% | |||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | –2.48% | 7.07% | ||||||||
Russell 1000® Growth Index | –1.52% | –31.57% | –2.39% | –4.40% | 5.90% | ||||||||
Lipper Quartile | – | 3rd | 2nd | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Core Funds | – | 514/914 | 169/650 | 105/360 | 6/81 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
38 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 15, 1991 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,021.40 | $ | 4.66 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.18 | $ | 4.66 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.93%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Core, Risk-Managed and Value Funds April 30, 2009 39
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 92.8% | ||||||||||||
Aerospace and Defense – 2.8% | ||||||||||||
954,951 | BAE Systems PLC** | $ | 5,021,731 | |||||||||
1,107,740 | Boeing Co. | 44,364,987 | ||||||||||
2,077,065 | Empraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 33,689,994 | ||||||||||
96,134 | Northrop Grumman Corp. | 4,648,079 | ||||||||||
87,724,791 | ||||||||||||
Agricultural Chemicals – 3.1% | ||||||||||||
210,915 | Monsanto Co. | 17,904,574 | ||||||||||
1,869,825 | Syngenta A.G. (ADR)** | 79,748,037 | ||||||||||
97,652,611 | ||||||||||||
Applications Software – 1.2% | ||||||||||||
868,880 | Citrix Systems, Inc.* | 24,789,147 | ||||||||||
586,290 | Microsoft Corp. | 11,878,235 | ||||||||||
36,667,382 | ||||||||||||
Athletic Footwear – 1.3% | ||||||||||||
794,895 | NIKE, Inc. – Class B | 41,708,141 | ||||||||||
Brewery – 5.0% | ||||||||||||
5,167,364 | Anheuser-Busch InBev N.V.** | 157,693,947 | ||||||||||
3,665,416 | Anheuser-Busch InBev N.V. – VVPR Strips*,** | 9,698 | ||||||||||
157,703,645 | ||||||||||||
Cable Television – 1.1% | ||||||||||||
1,337,085 | DIRECTV Group, Inc.* | 33,066,112 | ||||||||||
Casino Hotels – 1.7% | ||||||||||||
1,555,964 | Crown, Ltd. | 7,769,325 | ||||||||||
1,192,586 | Wynn Resorts, Ltd.* | 46,785,149 | ||||||||||
54,554,474 | ||||||||||||
Commercial Services – Finance – 1.3% | ||||||||||||
2,350,490 | Western Union Co. | 39,370,708 | ||||||||||
Computers – 7.4% | ||||||||||||
957,209 | Apple, Inc.* | 120,445,608 | ||||||||||
355,265 | International Business Machines Corp. | 36,666,901 | ||||||||||
1,079,455 | Research In Motion, Ltd. (U.S. Shares)* | 75,022,122 | ||||||||||
232,134,631 | ||||||||||||
Diversified Operations – 1.8% | ||||||||||||
5,700,000 | China Merchants Holdings International Co., Ltd. | 13,467,182 | ||||||||||
561,275 | Danaher Corp. | 32,800,911 | ||||||||||
18,748,000 | Melco International Development, Ltd. | 9,204,037 | ||||||||||
55,472,130 | ||||||||||||
E-Commerce/Services – 0.9% | ||||||||||||
1,607,315 | eBay, Inc.* | 26,472,478 | ||||||||||
464,365 | Liberty Media Corp. – Interactive – Class A* | 2,461,135 | ||||||||||
28,933,613 | ||||||||||||
Electronic Components – Semiconductors – 0.8% | ||||||||||||
312,520 | Broadcom Corp. – Class A* | 7,247,339 | ||||||||||
705,135 | Microchip Technology, Inc. | 16,218,105 | ||||||||||
23,465,444 | ||||||||||||
Electronic Connectors – 0.8% | ||||||||||||
704,675 | Amphenol Corp. – Class A | 23,846,202 | ||||||||||
Enterprise Software/Services – 4.0% | ||||||||||||
6,539,730 | Oracle Corp. | 126,478,378 | ||||||||||
Fiduciary Banks – 0.3% | ||||||||||||
187,800 | Northern Trust Corp. | 10,208,808 | ||||||||||
Finance – Investment Bankers/Brokers – 8.6% | ||||||||||||
939,560 | Charles Schwab Corp. | 17,363,069 | ||||||||||
1,527,825 | Credit Suisse Group A.G. (ADR)** | 58,485,141 | ||||||||||
704,955 | Goldman Sachs Group, Inc. | 90,586,717 | ||||||||||
4,290,350 | Morgan Stanley Co. | 101,423,873 | ||||||||||
267,858,800 | ||||||||||||
Finance – Other Services – 1.2% | ||||||||||||
1,649,150 | NYSE Euronext | 38,210,806 | ||||||||||
Food – Miscellaneous/Diversified – 2.6% | ||||||||||||
2,499,455 | Nestle S.A.** | 81,315,087 | ||||||||||
Hotels and Motels – 1.3% | ||||||||||||
1,927,610 | Starwood Hotels & Resorts Worldwide, Inc. | 40,209,945 | ||||||||||
Industrial Gases – 0.8% | ||||||||||||
352,255 | Praxair, Inc. | 26,281,746 | ||||||||||
Medical – Biomedical and Genetic – 2.0% | ||||||||||||
465,470 | Celgene Corp.* | 19,884,878 | ||||||||||
952,715 | Gilead Sciences, Inc.* | 43,634,347 | ||||||||||
63,519,225 | ||||||||||||
Medical – Drugs – 6.9% | ||||||||||||
168,280 | Abbott Laboratories | 7,042,518 | ||||||||||
2,255,160 | Bristol-Myers Squibb Co. | 43,299,072 | ||||||||||
1,263,635 | Merck & Co., Inc. | 30,630,512 | ||||||||||
733,542 | Roche Holding A.G.** | 92,718,882 | ||||||||||
1,004,565 | Wyeth | 42,593,556 | ||||||||||
216,284,540 | ||||||||||||
Medical – HMO – 2.2% | ||||||||||||
2,968,535 | UnitedHealth Group, Inc. | 69,819,943 | ||||||||||
Medical Products – 3.2% | ||||||||||||
1,033,425 | Baxter International, Inc. | 50,121,112 | ||||||||||
775,055 | Covidien, Ltd. | 25,561,314 | ||||||||||
470,430 | Johnson & Johnson | 24,631,715 | ||||||||||
100,314,141 | ||||||||||||
Networking Products – 0.2% | ||||||||||||
268,470 | Cisco Systems, Inc.* | 5,186,840 | ||||||||||
Oil and Gas Drilling – 0.7% | ||||||||||||
328,845 | Transocean, Ltd. (U.S. Shares)*,** | 22,190,461 | ||||||||||
Oil Companies – Exploration and Production – 5.6% | ||||||||||||
2,316,429 | EnCana Corp. (U.S. Shares) | 105,930,298 | ||||||||||
706,175 | EOG Resources, Inc. | 44,827,989 | ||||||||||
422,655 | Occidental Petroleum Corp. | 23,791,250 | ||||||||||
174,549,537 | ||||||||||||
Oil Companies – Integrated – 5.7% | ||||||||||||
1,593,965 | ConocoPhillips | 65,352,565 | ||||||||||
2,081,480 | Hess Corp. | 114,044,289 | ||||||||||
179,396,854 | ||||||||||||
Optical Supplies – 1.2% | ||||||||||||
415,110 | Alcon, Inc. (U.S. Shares)** | 38,194,271 | ||||||||||
Power Converters and Power Supply Equipment – 0.6% | ||||||||||||
2,173,860 | JA Solar Holdings Co., Ltd. (ADR)* | 7,630,249 | ||||||||||
1,017,785 | Suntech Power Holdings Co., Ltd. (ADR)* | 15,195,530 | ||||||||||
22,825,779 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
40 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Real Estate Operating/Development – 0.5% | ||||||||||||
5,774,175 | Hang Lung Properties, Ltd. | $ | 16,281,303 | |||||||||
Retail – Apparel and Shoe – 2.1% | ||||||||||||
10,660,740 | Esprit Holdings, Ltd. | 65,348,717 | ||||||||||
Retail – Drug Store – 3.2% | ||||||||||||
3,111,380 | CVS Caremark Corp. | 98,879,656 | ||||||||||
Retail – Jewelry – 0.8% | ||||||||||||
860,535 | Tiffany & Co. | 24,903,883 | ||||||||||
Soap and Cleaning Preparations – 1.8% | ||||||||||||
1,402,646 | Reckitt Benckiser PLC** | 55,221,871 | ||||||||||
Telecommunication Equipment – Fiber Optics – 1.9% | ||||||||||||
4,094,396 | Corning, Inc. | 59,860,070 | ||||||||||
Tobacco – 2.6% | ||||||||||||
1,869,525 | Altria Group, Inc. | 30,529,343 | ||||||||||
1,392,235 | Philip Morris International, Inc. | 50,398,907 | ||||||||||
80,928,250 | ||||||||||||
Toys – 1.2% | ||||||||||||
144,020 | Nintendo Co., Ltd. | 38,539,164 | ||||||||||
Wireless Equipment – 2.3% | ||||||||||||
1,680,810 | QUALCOMM, Inc. | 71,131,879 | ||||||||||
Total Common Stock (cost $3,176,228,124) | 2,906,239,838 | |||||||||||
Corporate Bonds – 1.6% | ||||||||||||
Building – Residential and Commercial – 0.2% | ||||||||||||
$ | 6,290,000 | Meritage Homes Corp. 6.2500%, 3/15/15 | 4,591,700 | |||||||||
Casino Hotels – 0.5% | ||||||||||||
23,526,000 | MGM Mirage, Inc. 8.5000%, 9/15/10 | 16,997,535 | ||||||||||
Power Converters and Power Supply Equipment – 0.9% | ||||||||||||
23,952,000 | JA Solar Holdings Co., Ltd. 4.5000%, 5/15/13 | 14,730,480 | ||||||||||
23,328,000 | Suntech Power Holdings Co., Ltd. 3.0000%, 3/15/13 (144A) | 13,851,000 | ||||||||||
28,581,480 | ||||||||||||
Total Corporate Bonds (cost $65,490,068) | 50,170,715 | |||||||||||
Preferred Stock – 0.4% | ||||||||||||
Metal – Copper – 0.4% | ||||||||||||
196,775 | Freeport-McMoRan Copper & Gold, Inc., convertible, 6.7500% (cost $19,677,500) | 13,233,119 | ||||||||||
U.S. Treasury Notes/Bonds – 4.1% | ||||||||||||
U.S. Treasury Notes/Bonds: | ||||||||||||
$ | 42,370,000 | 3.2500%, 12/31/09 | 43,181,004 | |||||||||
18,547,000 | 2.7500%, 7/31/10 | 19,046,174 | ||||||||||
25,335,000 | 1.5000%, 10/31/10 | 25,623,971 | ||||||||||
18,547,000 | 4.8750%, 7/31/11 | 20,116,243 | ||||||||||
18,547,000 | 3.3750%, 7/31/13 | 19,774,292 | ||||||||||
Total U.S. Treasury Notes/Bonds (cost $124,921,358) | 127,741,684 | |||||||||||
Money Market – 1.5% | ||||||||||||
45,338,084 | Janus Cash Liquidity Fund LLC, 0% (cost $45,338,084) | 45,338,084 | ||||||||||
Total Investments (total cost $3,431,655,134) – 100.4% | 3,142,723,440 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.4)% | (11,950,281) | |||||||||||
Net Assets – 100% | $ | 3,130,773,159 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 7,769,325 | 0.3% | |||||
Belgium | 157,703,645 | 5.0% | ||||||
Bermuda | 90,910,031 | 2.9% | ||||||
Brazil | 33,689,994 | 1.1% | ||||||
Canada | 180,952,421 | 5.8% | ||||||
Cayman Islands | 51,407,259 | 1.6% | ||||||
Hong Kong | 38,952,521 | 1.2% | ||||||
Japan | 38,539,164 | 1.2% | ||||||
Switzerland | 372,651,879 | 11.9% | ||||||
United Kingdom | 60,243,601 | 1.9% | ||||||
United States†† | 2,109,903,600 | 67.1% | ||||||
Total | $ | 3,142,723,440 | 100.0% |
†† | Includes Short-Term Securities (65.7% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/09 | 2,350,000 | $ | 3,475,355 | $ | (18,555) | |||||||
British Pound 6/18/09 | 17,900,000 | 26,471,296 | (288,071) | |||||||||
Euro 5/14/09 | 16,800,000 | 22,223,790 | 383,610 | |||||||||
Euro 6/18/09 | 27,000,000 | 35,710,686 | (730,296) | |||||||||
Euro 6/25/09 | 15,900,000 | 21,028,754 | (319,003) | |||||||||
Swiss Franc 5/14/09 | 31,850,000 | 27,918,189 | 342,680 | |||||||||
Swiss Franc 6/18/09 | 51,300,000 | 44,994,614 | (897,824) | |||||||||
Total | $ | 181,822,684 | $ | (1,527,459) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 41
INTECH Risk-Managed Core Fund (unaudited) | Ticker: JRMSX |
Fund Snapshot
This core Fund embraces the market’s natural volatility in an attempt to deliver index-beating returns with index-like risk.
Managed by INTECH
Performance Overview
For the six-month period ended April 30, 2009, INTECH Risk-Managed Core Fund returned -9.46%. This compares to the -8.53% return posted by the S&P 500® Index, the Fund’s benchmark.
Investment Strategy in This Environment
While INTECH does not employ fundamental analysis in the management of the Fund, fundamentals can have a significant impact on the general direction of the market in which we participate. The Fund’s goal is to produce long-term returns in excess of its benchmark with an equal or lesser amount of risk.
The Fund’s mathematical investment process seeks to build a more efficient portfolio than its benchmark, the S&P 500® Index. With a focus on risk management, investment decisions are governed by a mathematical investment process. The process does not attempt to predict the direction of the market, nor does it have a particular view of any company in the Fund.
Performance Review
As stock prices moved naturally throughout the period, we continued to implement our mathematical process in a disciplined manner in an effort to maintain a more efficient portfolio than the Index, without increasing relative risk. While other factors may influence performance over the short term, we believe that the consistent application of our process will help the Fund perform well over the long term.
In INTECH’s history, which spans more than 21 years, we have experienced twelve-month periods of similar magnitude in terms of both underperformance and outperformance relative to the benchmark. From our perspective, the key is to keep periods of underperformance both short in duration and mild in scope. INTECH aims to achieve excess returns over the long term and we believe the Fund remains well positioned for long-term capital growth.
Investment Strategy and Outlook
INTECH’s mathematical, risk-managed investment process seeks to outperform the S&P 500® Index over the long term, while attempting to manage risk relative to the benchmark. We will continue implementing the process in a disciplined and deliberate manner in an effort to achieve our long-term performance goals. The Fund may underperform during shorter time periods, but has the goal of outperformance over a three- to five-year period. Risk management remains essential to the investment process. We will continue to make marginal improvements to the mathematical process, seeking an efficient portfolio that offers better long-term results than the benchmark, regardless of the market’s direction.
Thank you for your investment in INTECH Risk-Managed Core Fund.
42 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
INTECH Risk-Managed Core Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Exxon Mobil Corp. Oil Companies – Integrated | 5.6% | |||
AT&T, Inc. Telephone – Integrated | 3.1% | |||
General Electric Co. Diversified Operations | 3.0% | |||
Procter & Gamble Co. Cosmetics and Toiletries | 2.4% | |||
Johnson & Johnson Medical Products | 2.3% | |||
16.4% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p02.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c02.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2009 43
INTECH Risk-Managed Core Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m02.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
INTECH Risk-Managed Core Fund | –9.46% | –35.26% | –1.69% | 3.55% | 0.75% | ||||||
S&P 500® Index | –8.53% | –35.31% | –2.70% | 2.59% | |||||||
Lipper Quartile | – | 3rd | 2nd | 2nd | |||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 415/756 | 167/460 | 157/377 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The voluntary waiver of the Fund’s management fee terminated June 25, 2004. Without such waivers, total returns from inception to June 25, 2004 would have been lower.
See important disclosures on the next page.
44 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
The proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC) may not achieve the desired results. Since the portfolio is regularly re-balanced, this may result in a higher portfolio turnover rate, higher expenses and potentially higher net taxable gains or losses compared to a “buy and hold” or index fund strategy.
The Fund’s performance may be affected by the risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risk to the Fund may include those associated with investing in foreign securities, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus of janus.com/info for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests In foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The weighting of securities within the portfolio may differ significantly from the weightings within the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
Effective February 27, 2009, INTECH Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Core Fund.
* | The Fund’s inception date – February 28, 2003 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 906.40 | $ | 4.59 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.98 | $ | 4.86 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.97%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Core, Risk-Managed and Value Funds April 30, 2009 45
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 99.7% | ||||||||||||
Aerospace and Defense – 0.8% | ||||||||||||
3,100 | Boeing Co. | $ | 124,155 | |||||||||
2,300 | General Dynamics Corp. | 118,841 | ||||||||||
18,900 | Lockheed Martin Corp. | 1,484,217 | ||||||||||
1,727,213 | ||||||||||||
Aerospace and Defense – Equipment – 0.1% | ||||||||||||
4,900 | United Technologies Corp. | 239,316 | ||||||||||
Agricultural Chemicals – 0.1% | ||||||||||||
1,700 | Monsanto Co. | 144,313 | ||||||||||
Airlines – 0.4% | ||||||||||||
110,400 | Southwest Airlines Co. | 770,592 | ||||||||||
Apparel Manufacturers – 0.5% | ||||||||||||
1,200 | Coach, Inc. | 29,400 | ||||||||||
7,700 | Polo Ralph Lauren Corp. | 414,568 | ||||||||||
11,300 | VF Corp. | 669,751 | ||||||||||
1,113,719 | ||||||||||||
Appliances – 0% | ||||||||||||
700 | Whirlpool Corp. | 31,612 | ||||||||||
Applications Software – 0.9% | ||||||||||||
1,700 | Citrix Systems, Inc.* | 48,501 | ||||||||||
38,300 | Compuware Corp.* | 286,484 | ||||||||||
25,200 | Intuit, Inc.* | 582,876 | ||||||||||
43,400 | Microsoft Corp. | 879,284 | ||||||||||
1,797,145 | ||||||||||||
Athletic Footwear – 0.1% | ||||||||||||
2,800 | Nike, Inc. – Class B | 146,916 | ||||||||||
Audio and Video Products – 0% | ||||||||||||
2,600 | Harman International Industries, Inc. | 47,294 | ||||||||||
Automotive – Cars and Light Trucks – 0% | ||||||||||||
9,600 | Ford Motor Co.* | 57,408 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0% | ||||||||||||
1,600 | Paccar, Inc. | 56,704 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.1% | ||||||||||||
5,600 | Johnson Controls, Inc. | 106,456 | ||||||||||
Beverages – Non-Alcoholic – 2.1% | ||||||||||||
49,700 | Coca-Cola Co. | 2,139,585 | ||||||||||
6,800 | Dr. Pepper Snapple Group, Inc. | 140,828 | ||||||||||
3,400 | Pepsi Bottling Group, Inc. | 106,318 | ||||||||||
37,700 | PepsiCo, Inc. | 1,875,952 | ||||||||||
4,262,683 | ||||||||||||
Beverages – Wine and Spirits – 0.6% | ||||||||||||
16,675 | Brown-Forman Corp. – Class B | 775,388 | ||||||||||
38,500 | Constellation Brands, Inc. – Class A* | 446,215 | ||||||||||
1,221,603 | ||||||||||||
Building – Residential and Commercial – 0.2% | ||||||||||||
6,000 | Centex Corp. | 65,640 | ||||||||||
15,900 | Lennar Corp. – Class A | 154,866 | ||||||||||
15,500 | Pulte Homes, Inc. | 178,405 | ||||||||||
398,911 | ||||||||||||
Cable Television – 1.7% | ||||||||||||
193,900 | Comcast Corp. – Class A | 2,997,694 | ||||||||||
18,300 | DIRECTV Group, Inc.* | 452,559 | ||||||||||
543 | Time Warner Cable, Inc. – Class A* | 17,501 | ||||||||||
3,467,754 | ||||||||||||
Casino Hotels – 0% | ||||||||||||
1,400 | Wynn Resorts, Ltd.* | 54,922 | ||||||||||
Chemicals – Diversified – 0.8% | ||||||||||||
14,900 | E.I. du Pont de Nemours & Co. | 415,710 | ||||||||||
26,800 | PPG Industries, Inc. | 1,180,540 | ||||||||||
1,596,250 | ||||||||||||
Chemicals – Specialty – 0.1% | ||||||||||||
5,100 | Ecolab, Inc. | 196,605 | ||||||||||
1,200 | International Flavors & Fragrances, Inc. | 37,440 | ||||||||||
300 | Sigma-Aldrich Corp. | 13,152 | ||||||||||
247,197 | ||||||||||||
Coal – 0.5% | ||||||||||||
7,800 | Consol Energy, Inc. | 243,984 | ||||||||||
14,600 | Massey Energy Co. | 232,286 | ||||||||||
17,500 | Peabody Energy Corp. | 461,825 | ||||||||||
938,095 | ||||||||||||
Coatings and Paint Products – 0.3% | ||||||||||||
10,300 | Sherwin-Williams Co. | 583,392 | ||||||||||
Commercial Banks – 0.6% | ||||||||||||
35,700 | BB&T Corp. | 833,238 | ||||||||||
12,136 | First Horizon National Corp. | 139,685 | ||||||||||
5,300 | M&T Bank Corp. | 277,985 | ||||||||||
2,700 | Zions Bancorporation | 29,511 | ||||||||||
1,280,419 | ||||||||||||
Commercial Services – 0% | ||||||||||||
1,900 | Iron Mountain, Inc.* | 54,131 | ||||||||||
Commercial Services – Finance – 1.9% | ||||||||||||
45,900 | Automatic Data Processing, Inc. | 1,615,680 | ||||||||||
74,200 | H&R Block, Inc. | 1,123,388 | ||||||||||
15,700 | Moody’s Corp. | 463,464 | ||||||||||
16,900 | Paychex, Inc. | 456,469 | ||||||||||
11,000 | Western Union Co. | 184,250 | ||||||||||
3,843,251 | ||||||||||||
Computer Aided Design – 0% | ||||||||||||
2,300 | Autodesk, Inc.* | 45,862 | ||||||||||
Computer Services – 0.6% | ||||||||||||
9,600 | Affiliated Computer Services, Inc. – Class A | 464,448 | ||||||||||
4,000 | Cognizant Technology Solutions Corp.* | 99,160 | ||||||||||
19,800 | Computer Sciences Corp.* | 731,808 | ||||||||||
1,295,416 | ||||||||||||
Computers – 4.3% | ||||||||||||
14,500 | Apple, Inc.* | 1,824,535 | ||||||||||
40,000 | Dell, Inc.* | 464,800 | ||||||||||
83,900 | Hewlett-Packard Co. | 3,018,722 | ||||||||||
34,500 | IBM Corp. | 3,560,745 | ||||||||||
6,300 | Sun Microsystems, Inc.* | 57,708 | ||||||||||
8,926,510 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
46 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Computers – Memory Devices – 0.3% | ||||||||||||
11,700 | EMC Corp.* | $ | 146,601 | |||||||||
5,400 | NetApp, Inc.* | 98,820 | ||||||||||
19,500 | SanDisk Corp.* | 306,540 | ||||||||||
551,961 | ||||||||||||
Computers – Peripheral Equipment – 0.1% | ||||||||||||
4,800 | Lexmark International Group, Inc. – Class A* | 94,176 | ||||||||||
Consumer Products – Miscellaneous – 0.6% | ||||||||||||
18,200 | Clorox Co. | 1,020,110 | ||||||||||
5,800 | Kimberly-Clark Corp. | 285,012 | ||||||||||
1,305,122 | ||||||||||||
Containers – Metal and Glass – 0.1% | ||||||||||||
6,400 | Ball Corp. | 241,408 | ||||||||||
Containers – Paper and Plastic – 0.3% | ||||||||||||
20,300 | Bemis Co., Inc. | 488,012 | ||||||||||
4,300 | Pactiv Corp.* | 93,998 | ||||||||||
582,010 | ||||||||||||
Cosmetics and Toiletries – 3.0% | ||||||||||||
300 | Avon Products, Inc. | 6,828 | ||||||||||
14,900 | Colgate-Palmolive Co. | 879,100 | ||||||||||
11,300 | Estee Lauder Cos., Inc. – Class A | 337,870 | ||||||||||
101,587 | Procter & Gamble Co. | 5,022,461 | ||||||||||
6,246,259 | ||||||||||||
Data Processing and Management – 0.3% | ||||||||||||
7,100 | Dun & Bradstreet Corp. | 577,940 | ||||||||||
Dental Supplies and Equipment – 0.1% | ||||||||||||
8,400 | Dentsply International, Inc. | 240,408 | ||||||||||
Dialysis Centers – 0.4% | ||||||||||||
18,900 | DaVita, Inc.* | 876,393 | ||||||||||
Distribution/Wholesale – 1.1% | ||||||||||||
21,900 | Fastenal Co. | 840,084 | ||||||||||
15,300 | Genuine Parts Co. | 519,588 | ||||||||||
10,200 | W.W. Grainger, Inc. | 855,576 | ||||||||||
2,215,248 | ||||||||||||
Diversified Operations – 5.2% | ||||||||||||
13,000 | 3M Co. | 748,800 | ||||||||||
19,800 | Cooper Industries, Ltd. – Class A | 649,242 | ||||||||||
30,600 | Dover Corp. | 941,868 | ||||||||||
489,600 | General Electric Co. | 6,193,440 | ||||||||||
12,500 | Illinois Tool Works, Inc. | 410,000 | ||||||||||
4,053 | Ingersoll-Rand Co. – Class A | 88,234 | ||||||||||
11,700 | ITT Corp. | 479,817 | ||||||||||
33,600 | Leggett & Platt, Inc. | 482,496 | ||||||||||
24,700 | Leucadia National Corp. | 524,381 | ||||||||||
10,518,278 | ||||||||||||
E-Commerce/Products – 0.3% | ||||||||||||
8,000 | Amazon.com, Inc. | 644,160 | ||||||||||
Electric – Integrated – 3.3% | ||||||||||||
10,200 | Ameren Corp. | 234,804 | ||||||||||
36,800 | Consolidated Edison, Inc. | 1,366,384 | ||||||||||
1,600 | Dominion Resources, Inc. | 48,256 | ||||||||||
18,800 | DTE Energy Co. | 555,916 | ||||||||||
4,000 | Duke Energy Corp. | 55,240 | ||||||||||
7,400 | Entergy Corp. | 479,298 | ||||||||||
7,700 | FirstEnergy Corp. | 314,930 | ||||||||||
4,900 | FPL Group, Inc. | 263,571 | ||||||||||
11,100 | Integrys Energy Group, Inc. | 293,151 | ||||||||||
12,500 | Northeast Utilities | 262,750 | ||||||||||
21,300 | PG&E Corp. | 790,656 | ||||||||||
12,100 | Pinnacle West Capital Corp. | 331,298 | ||||||||||
16,400 | PPL Corp. | 490,524 | ||||||||||
15,100 | Progress Energy, Inc. | 515,212 | ||||||||||
900 | Public Service Enterprise Group, Inc. | 26,856 | ||||||||||
5,900 | SCANA Corp. | 178,298 | ||||||||||
7,900 | Southern Co. | 228,152 | ||||||||||
17,000 | TECO Energy, Inc. | 180,030 | ||||||||||
1,700 | Wisconsin Energy Corp. | 67,932 | ||||||||||
3,200 | Xcel Energy, Inc. | 59,008 | ||||||||||
6,742,266 | ||||||||||||
Electric Products – Miscellaneous – 0.1% | ||||||||||||
17,300 | Molex, Inc. | 288,391 | ||||||||||
Electronic Components – Miscellaneous – 0.1% | ||||||||||||
22,100 | Jabil Circuit, Inc. | 179,010 | ||||||||||
Electronic Components – Semiconductors – 2.0% | ||||||||||||
19,900 | Advanced Micro Devices, Inc. | 71,839 | ||||||||||
55,300 | Altera Corp. | 901,943 | ||||||||||
28,700 | Broadcom Corp. – Class A* | 665,553 | ||||||||||
43,400 | Intel Corp. | 684,852 | ||||||||||
9,600 | Microchip Technology, Inc. | 220,800 | ||||||||||
33,300 | Micron Technology, Inc.* | 162,504 | ||||||||||
33,500 | National Semiconductor Corp. | 414,395 | ||||||||||
23,600 | Nvidia Corp.* | 270,928 | ||||||||||
2,600 | QLogic Corp.* | 36,868 | ||||||||||
34,700 | Xilinx, Inc. | 709,268 | ||||||||||
4,138,950 | ||||||||||||
Electronic Connectors – 0.1% | ||||||||||||
2,500 | Amphenol Corp. – Class A | 84,600 | ||||||||||
Electronic Forms – 0.1% | ||||||||||||
10,200 | Adobe Systems, Inc.* | 278,970 | ||||||||||
Electronic Measuring Instruments – 0.1% | ||||||||||||
5,200 | Agilent Technologies, Inc.* | 94,952 | ||||||||||
1,800 | FLIR Systems, Inc.* | 39,924 | ||||||||||
134,876 | ||||||||||||
Engineering – Research and Development Services – 0.3% | ||||||||||||
16,500 | Fluor Corp. | 624,855 | ||||||||||
1,200 | Jacobs Engineering Group, Inc.* | 45,648 | ||||||||||
670,503 | ||||||||||||
Engines – Internal Combustion – 0.4% | ||||||||||||
25,500 | Cummins, Inc. | 867,000 | ||||||||||
Enterprise Software/Services – 1.1% | ||||||||||||
120,142 | Oracle Corp. | 2,323,546 | ||||||||||
Fiduciary Banks – 0.3% | ||||||||||||
3,900 | Bank of New York Mellon Corp. | 99,372 | ||||||||||
6,000 | Northern Trust Corp. | 326,160 | ||||||||||
3,300 | State Street Corp. | 112,629 | ||||||||||
538,161 | ||||||||||||
Filtration and Separations Products – 0% | ||||||||||||
700 | Pall Corp. | 18,487 | ||||||||||
Finance – Consumer Loans – 0.2% | ||||||||||||
64,200 | SLM Corp.* | 310,086 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 47
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Finance – Credit Card – 0.2% | ||||||||||||
2,600 | American Express Co. | $ | 65,572 | |||||||||
51,600 | Discover Financial Services | 419,508 | ||||||||||
485,080 | ||||||||||||
Finance – Investment Bankers/Brokers – 1.2% | ||||||||||||
19,900 | Charles Schwab Corp. | 367,752 | ||||||||||
17,600 | Citigroup, Inc. | 53,680 | ||||||||||
1,600 | Goldman Sachs Group, Inc. | 205,600 | ||||||||||
38,240 | JPMorgan Chase & Co. | 1,261,920 | ||||||||||
25,700 | Morgan Stanley Co. | 607,548 | ||||||||||
2,496,500 | ||||||||||||
Finance – Other Services – 0.2% | ||||||||||||
800 | CME Group, Inc. | 177,080 | ||||||||||
1,000 | IntercontinentalExchange, Inc.* | 87,600 | ||||||||||
5,700 | Nasdaq Stock Market, Inc.* | 109,611 | ||||||||||
5,500 | NYSE Euronext | 127,435 | ||||||||||
501,726 | ||||||||||||
Financial Guarantee Insurance – 0% | ||||||||||||
15,500 | MBIA, Inc.* | 73,315 | ||||||||||
Food – Confectionery – 1.0% | ||||||||||||
31,800 | Hershey Co. | 1,149,252 | ||||||||||
22,100 | J.M. Smucker Co. | 870,740 | ||||||||||
2,019,992 | ||||||||||||
Food – Dairy Products – 0.1% | ||||||||||||
5,400 | Dean Foods Co.* | 111,780 | ||||||||||
Food – Meat Products – 0.1% | ||||||||||||
2,000 | Hormel Foods Corp. | 62,580 | ||||||||||
18,900 | Tyson Foods, Inc. – Class A | 199,206 | ||||||||||
261,786 | ||||||||||||
Food – Miscellaneous/Diversified – 3.9% | ||||||||||||
42,100 | Campbell Soup Co. | 1,082,812 | ||||||||||
32,100 | General Mills, Inc. | 1,627,149 | ||||||||||
55,200 | H.J. Heinz Co. | 1,899,984 | ||||||||||
40,100 | Kellogg Co. | 1,688,611 | ||||||||||
51,600 | Kraft Foods, Inc. – Class A | 1,207,440 | ||||||||||
6,400 | McCormick & Co., Inc. | 188,480 | ||||||||||
34,600 | Sara Lee Corp. | 287,872 | ||||||||||
7,982,348 | ||||||||||||
Food – Retail – 1.2% | ||||||||||||
111,500 | Kroger Co. | 2,410,630 | ||||||||||
Food – Wholesale/Distribution – 0.5% | ||||||||||||
39,700 | Sysco Corp. | 926,201 | ||||||||||
Forestry – 0.1% | ||||||||||||
3,300 | Plum Creek Timber Co., Inc. | 113,916 | ||||||||||
Gas – Distribution – 0.1% | ||||||||||||
8,200 | Nicor, Inc. | 263,548 | ||||||||||
Hazardous Waste Disposal – 0.1% | ||||||||||||
4,800 | Stericycle, Inc.* | 225,984 | ||||||||||
Hotels and Motels – 0% | ||||||||||||
6,000 | Wyndham Worldwide Corp. | 70,080 | ||||||||||
Human Resources – 0% | ||||||||||||
3,400 | Robert Half International, Inc. | 81,668 | ||||||||||
Industrial Gases – 0.1% | ||||||||||||
1,500 | Praxair, Inc. | 111,915 | ||||||||||
Instruments – Scientific – 0.3% | ||||||||||||
3,000 | PerkinElmer, Inc. | 43,710 | ||||||||||
13,100 | Thermo Fisher Scientific, Inc.* | 459,548 | ||||||||||
503,258 | ||||||||||||
Insurance Brokers – 0.5% | ||||||||||||
52,300 | Marsh & McLennan Cos., Inc. | 1,103,007 | ||||||||||
Internet Infrastructure Software – 0% | ||||||||||||
2,700 | Akamai Technologies, Inc.* | 59,454 | ||||||||||
Internet Security – 0.5% | ||||||||||||
2,900 | McAfee, Inc.* | 108,866 | ||||||||||
53,100 | Symantec Corp.* | 915,975 | ||||||||||
1,024,841 | ||||||||||||
Investment Management and Advisory Services – 0.4% | ||||||||||||
2,300 | Ameriprise Financial, Inc. | 60,605 | ||||||||||
2,200 | Federated Investors, Inc. – Class B | 50,336 | ||||||||||
3,400 | Franklin Resources, Inc. | 205,632 | ||||||||||
7,000 | Invesco, Ltd. (U.S. Shares) | 103,040 | ||||||||||
2,200 | Legg Mason, Inc. | 44,154 | ||||||||||
7,700 | T. Rowe Price Group, Inc. | 296,604 | ||||||||||
760,371 | ||||||||||||
Life and Health Insurance – 0.7% | ||||||||||||
2,800 | AFLAC, Inc. | 80,892 | ||||||||||
41,000 | Lincoln National Corp. | 460,840 | ||||||||||
4,800 | Principal Financial Group, Inc. | 78,432 | ||||||||||
15,600 | Prudential Financial, Inc. | 450,528 | ||||||||||
2,000 | Torchmark Corp. | 58,660 | ||||||||||
13,300 | UnumProvident Corp. | 217,322 | ||||||||||
1,346,674 | ||||||||||||
Linen Supply and Related Items – 0.1% | ||||||||||||
10,300 | Cintas Corp. | 264,298 | ||||||||||
Machinery – Construction and Mining – 0.9% | ||||||||||||
52,700 | Caterpillar, Inc. | 1,875,066 | ||||||||||
Machinery – Pumps – 0% | ||||||||||||
1,000 | Flowserve Corp. | 67,900 | ||||||||||
Medical – Biomedical and Genetic – 1.9% | ||||||||||||
41,000 | Amgen, Inc.* | 1,987,270 | ||||||||||
31,600 | Celgene Corp.* | 1,349,952 | ||||||||||
2,200 | Genzyme Corp.* | 117,326 | ||||||||||
11,900 | Gilead Sciences, Inc.* | 545,020 | ||||||||||
3,999,568 | ||||||||||||
Medical – Drugs – 4.6% | ||||||||||||
54,000 | Abbott Laboratories | 2,259,900 | ||||||||||
1,200 | Allergan, Inc. | 55,992 | ||||||||||
84,200 | Bristol-Myers Squibb Co. | 1,616,640 | ||||||||||
8,500 | Cephalon, Inc.* | 557,685 | ||||||||||
2,600 | Eli Lilly & Co. | 85,592 | ||||||||||
41,300 | King Pharmaceuticals, Inc.* | 325,444 | ||||||||||
53,900 | Merck & Co., Inc. | 1,306,536 | ||||||||||
115,300 | Pfizer, Inc. | 1,540,408 | ||||||||||
42,700 | Schering-Plough Corp. | 982,954 | ||||||||||
16,300 | Wyeth | 691,120 | ||||||||||
9,422,271 | ||||||||||||
Medical – Generic Drugs – 0.1% | ||||||||||||
6,400 | Mylan, Inc.* | 84,800 | ||||||||||
1,200 | Watson Pharmaceuticals, Inc.* | 37,128 | ||||||||||
121,928 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
48 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Medical – HMO – 0.4% | ||||||||||||
3,300 | CIGNA Corp. | $ | 65,043 | |||||||||
6,300 | Humana, Inc.* | 181,314 | ||||||||||
4,800 | UnitedHealth Group, Inc. | 112,896 | ||||||||||
9,900 | WellPoint, Inc.* | 423,324 | ||||||||||
782,577 | ||||||||||||
Medical – Wholesale Drug Distributors – 0% | ||||||||||||
2,700 | Cardinal Health, Inc. | 91,233 | ||||||||||
Medical Information Systems – 0.2% | ||||||||||||
36,500 | IMS Health, Inc. | 458,440 | ||||||||||
Medical Instruments – 0.1% | ||||||||||||
12,900 | Boston Scientific Corp.* | 108,489 | ||||||||||
4,300 | Medtronic, Inc. | 137,600 | ||||||||||
246,089 | ||||||||||||
Medical Labs and Testing Services – 0.7% | ||||||||||||
27,700 | Quest Diagnostics, Inc. | 1,421,841 | ||||||||||
Medical Products – 3.9% | ||||||||||||
36,300 | Baxter International, Inc. | 1,760,550 | ||||||||||
30,400 | Covidien, Ltd. | 1,002,592 | ||||||||||
92,700 | Johnson & Johnson | 4,853,772 | ||||||||||
7,300 | Stryker Corp. | 282,583 | ||||||||||
7,600 | Varian Medical Systems, Inc.* | 253,612 | ||||||||||
8,153,109 | ||||||||||||
Metal – Aluminum – 0% | ||||||||||||
2,000 | Alcoa, Inc. | 18,140 | ||||||||||
Metal – Copper – 0.1% | ||||||||||||
3,100 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 132,215 | ||||||||||
Metal Processors and Fabricators – 0% | ||||||||||||
300 | Precision Castparts Corp. | 22,458 | ||||||||||
Motorcycle and Motor Scooter Manufacturing – 0.1% | ||||||||||||
10,800 | Harley-Davidson, Inc. | 239,328 | ||||||||||
Multi-Line Insurance – 1.4% | ||||||||||||
1,900 | Allstate Corp. | 44,327 | ||||||||||
4,800 | Cincinnati Financial Corp. | 114,960 | ||||||||||
42,100 | Hartford Financial Services Group, Inc. | 482,887 | ||||||||||
71,200 | Loews Corp. | 1,772,168 | ||||||||||
12,500 | MetLife, Inc. | 371,875 | ||||||||||
8,700 | XL Capital, Ltd. – Class A | 82,737 | ||||||||||
2,868,954 | ||||||||||||
Multimedia – 0.8% | ||||||||||||
15,100 | McGraw-Hill Cos., Inc. | 455,265 | ||||||||||
2,166 | Time Warner, Inc. | 47,284 | ||||||||||
51,700 | Walt Disney Co. | 1,132,230 | ||||||||||
1,634,779 | ||||||||||||
Networking Products – 1.3% | ||||||||||||
131,700 | Cisco Systems, Inc.* | 2,544,444 | ||||||||||
3,300 | Juniper Networks, Inc.* | 71,445 | ||||||||||
2,615,889 | ||||||||||||
Non-Hazardous Waste Disposal – 1.2% | ||||||||||||
16,725 | Republic Services, Inc. | 351,225 | ||||||||||
76,500 | Waste Management, Inc. | 2,040,255 | ||||||||||
2,391,480 | ||||||||||||
Office Automation and Equipment – 0.1% | ||||||||||||
9,800 | Pitney Bowes, Inc. | 240,492 | ||||||||||
Oil – Field Services – 1.5% | ||||||||||||
17,300 | Baker Hughes, Inc. | 615,534 | ||||||||||
11,800 | BJ Services Co. | 163,902 | ||||||||||
9,700 | Halliburton Co. | 196,134 | ||||||||||
33,800 | Schlumberger, Ltd. (U.S. Shares) | 1,655,862 | ||||||||||
15,700 | Smith International, Inc. | 405,845 | ||||||||||
3,037,277 | ||||||||||||
Oil and Gas Drilling – 0.2% | ||||||||||||
1,100 | Diamond Offshore Drilling, Inc. | 79,651 | ||||||||||
4,600 | ENSCO International, Inc. | 130,088 | ||||||||||
19,300 | Nabors Industries, Ltd.* | 293,553 | ||||||||||
503,292 | ||||||||||||
Oil Companies – Exploration and Production – 1.3% | ||||||||||||
1,900 | Anadarko Petroleum Corp. | 81,814 | ||||||||||
1,900 | Apache Corp. | 138,434 | ||||||||||
1,100 | Cabot Oil & Gas Corp. | 33,209 | ||||||||||
13,600 | Chesapeake Energy Corp. | 268,056 | ||||||||||
11,900 | Denbury Resources, Inc.* | 193,732 | ||||||||||
5,000 | Devon Energy Corp. | 259,250 | ||||||||||
17,800 | Occidental Petroleum Corp. | 1,001,962 | ||||||||||
18,100 | Pioneer Natural Resources Co. | 418,472 | ||||||||||
9,100 | Southwestern Energy Co.* | 326,326 | ||||||||||
2,721,255 | ||||||||||||
Oil Companies – Integrated – 8.6% | ||||||||||||
59,233 | Chevron Corp. | 3,915,301 | ||||||||||
46,100 | ConocoPhillips | 1,890,100 | ||||||||||
173,300 | Exxon Mobil Corp. | 11,553,912 | ||||||||||
1,900 | Hess Corp. | 104,101 | ||||||||||
7,622 | Marathon Oil Corp. | 226,373 | ||||||||||
17,689,787 | ||||||||||||
Oil Field Machinery and Equipment – 0.3% | ||||||||||||
2,100 | Cameron International Corp.* | 53,718 | ||||||||||
18,800 | National Oilwell Varco, Inc.* | 569,264 | ||||||||||
622,982 | ||||||||||||
Oil Refining and Marketing – 0.1% | ||||||||||||
7,300 | Tesoro Corp. | 111,325 | ||||||||||
Pharmacy Services – 0.6% | ||||||||||||
4,200 | Express Scripts, Inc. – Class A* | 268,674 | ||||||||||
23,934 | Medco Health Solutions, Inc.* | 1,042,326 | ||||||||||
1,311,000 | ||||||||||||
Pipelines – 0.3% | ||||||||||||
3,200 | El Paso Corp. | 22,080 | ||||||||||
46,000 | Spectra Energy Corp. | 667,000 | ||||||||||
689,080 | ||||||||||||
Property and Casualty Insurance – 0.4% | ||||||||||||
8,400 | Chubb Corp. | 327,180 | ||||||||||
34,800 | Progressive Corp. | 531,744 | ||||||||||
1,200 | Travelers Cos., Inc. | 49,368 | ||||||||||
908,292 | ||||||||||||
Quarrying – 0.2% | ||||||||||||
9,200 | Vulcan Materials Co. | 437,460 | ||||||||||
Real Estate Management/Services – 0% | ||||||||||||
7,300 | CB Richard Ellis Group, Inc. – Class A* | 54,750 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 49
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
REIT – Apartments – 0.2% | ||||||||||||
967 | Apartment Investment & Management Co. – Class A | $ | 7,059 | |||||||||
1,137 | Avalonbay Communities, Inc. | 64,593 | ||||||||||
17,600 | Equity Residential | 402,864 | ||||||||||
474,516 | ||||||||||||
REIT – Diversified – 0.1% | ||||||||||||
3,635 | Vornado Realty Trust | 177,715 | ||||||||||
REIT – Health Care – 0.2% | ||||||||||||
13,600 | HCP, Inc. | 298,520 | ||||||||||
1,200 | Heath Care REIT, Inc. | 40,884 | ||||||||||
2,300 | Ventas, Inc. | 65,872 | ||||||||||
405,276 | ||||||||||||
REIT – Office Property – 0% | ||||||||||||
1,700 | Boston Properties, Inc. | 84,014 | ||||||||||
REIT – Regional Malls – 0% | ||||||||||||
1,132 | Simon Property Group, Inc. | 58,411 | ||||||||||
REIT – Storage – 0.3% | ||||||||||||
7,900 | Public Storage | 528,194 | ||||||||||
REIT – Warehouse/Industrial – 0.1% | ||||||||||||
30,400 | ProLogis | 276,944 | ||||||||||
Retail – Apparel and Shoe – 0.2% | ||||||||||||
37,200 | Ltd. Brands, Inc. | 424,824 | ||||||||||
Retail – Auto Parts – 0.1% | ||||||||||||
800 | AutoZone, Inc.* | 133,112 | ||||||||||
4,100 | O’Reilly Automotive, Inc.* | 159,285 | ||||||||||
292,397 | ||||||||||||
Retail – Bedding – 0% | ||||||||||||
2,700 | Bed Bath & Beyond, Inc.* | 82,134 | ||||||||||
Retail – Building Products – 0.6% | ||||||||||||
24,400 | Home Depot, Inc. | 642,208 | ||||||||||
23,500 | Lowe’s Cos., Inc. | 505,250 | ||||||||||
1,147,458 | ||||||||||||
Retail – Consumer Electronics – 0.1% | ||||||||||||
15,400 | RadioShack Corp. | 216,832 | ||||||||||
Retail – Discount – 2.0% | ||||||||||||
4,900 | Big Lots, Inc. | 135,436 | ||||||||||
16,800 | Family Dollar Stores, Inc. | 557,592 | ||||||||||
900 | Target Corp. | 37,134 | ||||||||||
68,400 | Wal-Mart Stores, Inc. | 3,447,360 | ||||||||||
4,177,522 | ||||||||||||
Retail – Drug Store – 0.4% | ||||||||||||
14,599 | CVS Caremark Corp. | 463,956 | ||||||||||
9,500 | Walgreen Co. | 298,585 | ||||||||||
762,541 | ||||||||||||
Retail – Jewelry – 0% | ||||||||||||
1,500 | Tiffany & Co. | 43,410 | ||||||||||
Retail – Major Department Stores – 0.3% | ||||||||||||
5,500 | JC Penney Co., Inc. | 168,795 | ||||||||||
3,100 | Sears Holdings Corp.* | 193,657 | ||||||||||
7,900 | TJX Cos., Inc. | 220,963 | ||||||||||
583,415 | ||||||||||||
Retail – Office Supplies – 0.2% | ||||||||||||
20,100 | Staples, Inc. | 414,462 | ||||||||||
Retail – Regional Department Stores – 0.6% | ||||||||||||
26,200 | Kohl’s Corp.* | 1,188,170 | ||||||||||
Retail – Restaurants – 1.3% | ||||||||||||
12,400 | Darden Restaurants, Inc. | 458,428 | ||||||||||
36,800 | McDonald’s Corp. | 1,961,072 | ||||||||||
15,700 | Starbucks Corp.* | 227,022 | ||||||||||
2,646,522 | ||||||||||||
Savings/Loan/Thrifts – 0.4% | ||||||||||||
60,600 | Hudson City Bancorp, Inc. | 761,136 | ||||||||||
8,700 | People’s United Financial, Inc. | 135,894 | ||||||||||
897,030 | ||||||||||||
Schools – 0.1% | ||||||||||||
2,200 | Apollo Group, Inc. – Class A* | 138,490 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.7% | ||||||||||||
25,700 | Analog Devices, Inc. | 546,896 | ||||||||||
37,600 | Linear Technology Corp. | 818,928 | ||||||||||
1,365,824 | ||||||||||||
Semiconductor Equipment – 0% | ||||||||||||
3,100 | Novellus Systems, Inc.* | 55,986 | ||||||||||
Steel – Producers – 0.1% | ||||||||||||
11,300 | AK Steel Holding Corp. | 147,013 | ||||||||||
4,200 | United States Steel Corp. | 111,510 | ||||||||||
258,523 | ||||||||||||
Steel – Specialty – 0% | ||||||||||||
1,500 | Allegheny Technologies, Inc. | 49,095 | ||||||||||
Super-Regional Banks – 2.2% | ||||||||||||
114,453 | Bank of America Corp. | 1,022,065 | ||||||||||
20,800 | Capital One Financial Corp. | 348,192 | ||||||||||
1,800 | Comerica, Inc. | 37,764 | ||||||||||
2,100 | KeyCorp | 12,915 | ||||||||||
16,700 | PNC Financial Services Group, Inc. | 662,990 | ||||||||||
21,200 | U.S. Bancorp | 386,264 | ||||||||||
105,414 | Wells Fargo & Co. | 2,109,334 | ||||||||||
4,579,524 | ||||||||||||
Telecommunication Equipment – 0% | ||||||||||||
11,800 | Tellabs, Inc.* | 61,832 | ||||||||||
Telecommunication Services – 0.4% | ||||||||||||
20,100 | Embarq Corp. | 734,856 | ||||||||||
Telephone – Integrated – 4.4% | ||||||||||||
248,253 | AT&T, Inc. | 6,360,242 | ||||||||||
17,700 | CenturyTel, Inc. | 480,555 | ||||||||||
56,500 | Frontier Communications Corp. | 401,715 | ||||||||||
30,800 | Qwest Communications International, Inc. | 119,812 | ||||||||||
27,200 | Sprint Nextel Corp.* | 118,592 | ||||||||||
48,400 | Verizon Communications, Inc. | 1,468,456 | ||||||||||
12,800 | Windstream Corp. | 106,240 | ||||||||||
9,055,612 | ||||||||||||
Tobacco – 0.4% | ||||||||||||
800 | Lorillard, Inc. | 50,504 | ||||||||||
20,700 | Philip Morris International, Inc. | 749,340 | ||||||||||
2,400 | Reynolds American, Inc. | 91,152 | ||||||||||
890,996 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
50 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Tools – Hand Held – 0.2% | ||||||||||||
4,800 | Black & Decker Corp. | $ | 193,440 | |||||||||
2,300 | Snap-On, Inc. | 78,016 | ||||||||||
2,400 | Stanley Works | 91,272 | ||||||||||
362,728 | ||||||||||||
Toys – 0.2% | ||||||||||||
14,400 | Hasbro, Inc. | 383,904 | ||||||||||
Transportation – Railroad – 3.5% | ||||||||||||
21,900 | Burlington Northern Santa Fe Corp. | 1,477,812 | ||||||||||
58,400 | CSX Corp. | 1,728,056 | ||||||||||
64,900 | Norfolk Southern Corp. | 2,315,632 | ||||||||||
35,600 | Union Pacific Corp. | 1,749,384 | ||||||||||
7,270,884 | ||||||||||||
Transportation – Services – 0.2% | ||||||||||||
7,600 | C.H. Robinson Worldwide, Inc. | 404,016 | ||||||||||
1,300 | FedEx Corp. | 72,748 | ||||||||||
900 | Ryder System, Inc. | 24,921 | ||||||||||
501,685 | ||||||||||||
Web Portals/Internet Service Providers – 0.1% | ||||||||||||
700 | Google, Inc. – Class A* | 277,179 | ||||||||||
Wireless Equipment – 1.0% | ||||||||||||
31,800 | Motorola, Inc. | 175,854 | ||||||||||
43,000 | Qualcomm, Inc. | 1,819,760 | ||||||||||
1,995,614 | ||||||||||||
Total Common Stock (cost $219,899,673) | 206,076,441 | |||||||||||
Money Market – 0.2% | ||||||||||||
469,000 | Janus Cash Liquidity Fund LLC, 0% (cost $469,000) | 469,000 | ||||||||||
Total Investments (total cost $220,368,673) – 99.9% | 206,545,441 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 192,480 | |||||||||||
Net Assets – 100% | $ | 206,737,921 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 2,136,661 | 1.0% | |||||
Cayman Islands | 82,737 | 0.1% | ||||||
Netherlands Antilles | 1,655,862 | 0.8% | ||||||
United States†† | 202,670,181 | 98.1% | ||||||
Total | $ | 206,545,441 | 100.0% |
†† | Includes Short-Term Securities (97.9% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 51
Perkins Mid Cap Value Fund (unaudited) | Ticker: JMCVX |
Fund Snapshot
This Fund seeks to uncover what the portfolio managers believe are fundamentally and financially strong mid-sized companies exhibiting favorable risk-reward characteristics.
Managed by
Perkins Investment
Management LLC
Perkins Investment
Management LLC
Performance Overview
During the six months ended April 30, 2009, Perkins Mid Cap Value Fund’s Investor Shares and Institutional Shares returned 0.96% and 1.12%, respectively, outperforming the Fund’s benchmark, the Russell Midcap® Value Index, which returned -6.14%. The S&P MidCap 400 Index declined 0.18% and the S&P 500® Index was down 8.53% during the same period.
Economic Environment
The stock market has experienced a wild roller coaster ride over the past six months. Continuing fallout from the credit crisis and concerns that the recession may be very deep and prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued through April brought the market back to fair value in our view. The U.S. market’s recovery off 12-year lows reached in early March was very strong, but only partially eased the losses for the six-month period. Market volatility, which spiked to historic levels in November, declined in December yet still remained above long-term normal levels through period end. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunication services were the best relative performers. While large-cap indices outperformed small-caps, but mid-caps exhibited the best relative performance in the most recent six-month period.
Massive fiscal and monetary stimuli have served to slightly narrow historically high credit spreads and moderate the pace of economic decline. We agree with the characterization of the financial system as being out of the emergency room and now in intensive care. We believe the steps taken by U.S. and foreign monetary and governmental authorities have begun to have some positive impact and might be sufficient to stabilize global markets and economies. However we also believe the economic financial system remains fragile and subject to negative surprises. The deleveraging of financial and consumer balance sheets will be a lengthy multiyear process and will inhibit growth for that time span in our view. Fourth quarter Gross Domestic Product (GDP) fell over 6% and we believe first quarter GDP is likely to have had a similar decline when the final numbers are released. The recession reached 18 months in duration through April, making it the longest since the 1930s. Meanwhile, the World Bank forecasts that the global economy will shrink for the first time since World War II. In the U.S., we believe real estate prices are likely to fall further and unemployment, while a lagging indicator, could rise above 10% and pressure personal income over the near term.
Investment Approach, Performance and Positioning
As has been the case throughout this market’s downturn, our standard investment approach emphasizing balance sheet strength, strong free cash flow and stock valuations assuming relatively low expectations has allowed the Fund to hold up relatively well. During the period, the Fund’s outperformance was primarily driven by positive stock selection. Sector allocations and cash reserves were also smaller additives to performance for the period. Our small investment in Russell Midcap® Value Index put options was a detractor after having been more of a significant additive in the prior six month period when the market was in a free fall. The Fund used put options on the index during the period to help minimize downside risk in the portfolio given our view of greater market uncertainty and risk. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Our holdings within financials declined less than the benchmark and, coupled with our underweight to the sector, provided the largest boost to relative results. Materials and industrials also aided comparable returns. Our selections within information technology and an underweight position in consumer discretionary weighed on relative performance.
In terms of sector positioning, we remained overweight healthcare, energy and information technology, while we continued to be underweight in utilities, consumer discretionary and financials. We did increase our investment in what we believe to be quality Real Estate Investment Trusts (REITs) and regional banks as they were the weakest areas of the markets and have substantial long-term appreciation potential in our view. Thus, we are less underweighted in financials than we have been in several years.
52 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Holdings That Contributed to Performance
Construction and engineering company, URS Corp., was the largest contributor during the period. Many stocks within this group outperformed on speculation that the proposed stimulus package would include an infrastructure rebuild component. URS was higher as it recovered from depressed levels and it won several contracts late in 2008, which resulted in a major increase in the company’s order backlog. It also benefited from a better-than-expected earnings release later in the period. We think the fundamentals remain attractive but we reduced our position as its risk/reward relationship became less attractive to us.
In the materials sector, North American gold producer Goldcorp gained due to strength in gold prices. Goldcorp is a low cost producer of gold and benefited from commodity strength as a possible safe haven in this period of financial turmoil. Temple Inland Inc., a paper and corrugated packaging manufacturer, more than doubled in the period from a depressed level as its latest earnings report showed signs of better volume growth. After adding to our position early in the period, we reduced it as its risk/reward became less favorable in our view. Lubrizol Corp., a specialty chemical company, was another contributor after the company provided a better forecast than it previously estimated. This is one of our largest positions as it has very positive free cash flows and because we think it should have positive earnings growth this year and next. In addition, it was trading at 11 times our estimate of the company’s 2009 earnings at period end.
Holdings That Detracted from Performance
Financials remained center stage as the sector struggled for much of the period. Concerns over bank balance sheets, capital needs and government bailouts dominated sentiment for this group. Notable underperformers for the period included commercial bank Synovus Financial Corp. and regional bank SunTrust Bank. These banks have suffered from the real estate problems in the southeast, but we believe the balance sheets will support their franchises. They are among our smaller holdings in the regional bank group as we believe they do have larger loss problems than some of our other investments. Some of that was reflected in their period end stock prices, which were significantly below their tangible book value. We continue to focus on what we believe are the higher quality players in this group that have the liquidity to weather the current financial crisis in our view.
Berkshire Hathaway declined during the period amid overall weakness among insurance companies. We think Berkshire Hathaway is a “best-in-class” insurance and reinsurance operator, which has been able to put some of its large cash position to work in what we believe to be diversified high quality investments at attractive terms.
NCR Corp., a computer hardware company, underperformed due to weaker end markets in the U.K., as well as concerns regarding its pension plan. We continue to like the stock as the company has aggressively cut costs, had a healthy cash position on the balance sheet at period end and continued to generate good free cash flow in our view.
Market Outlook
As we suggested in our annual letter for the period ended in October 2008, the market overshot to the downside while the economy was in freefall and there was great uncertainty about the financial system. In recent months the financial markets have benefited as credit spreads have slightly narrowed toward more normal levels and some economic data have indicated a deceleration in the rate of decline in the U.S. economy. However the health of the economy and the credit system remain fragile and vulnerable to bouts of weakness in our view. While inventory replenishment and government stimulus could provide short term boosts, we do not believe they are sustainable factors. In the meantime, auto industry restructuring, consumer and real estate credit problems and international dislocations could be disruptive. In any case we believe it is unlikely that we will see a strong economic recovery in the next few years. Similarly, we think corporate earnings will not benefit from leverage as they have in the past and, in our opinion, corporate earnings will likely remain well below recent record levels for several years. Additionally the long-term impact of a substantial increase in the government’s influence on the economy and business creates greater uncertainty in our minds. Finally, investor confidence in financial institutions and their appetite for risk probably have suffered long-term damage. Therefore, we believe returns from stocks and valuations will likely continue to be considerably below the levels of the 1980’s and 1990’s.
We have enjoyed the market’s rally off of the lows, which has been the strongest since 1975. However that rally has taken stocks to fairly valued levels in our opinion and we suspect that the market’s roller coaster ride is not over. We believe the market continues to be in somewhat uncharted economic and financial territory and could be subject to disappointment. Volatility, which has subsided, is likely to remain historically high. Thus we expect to maintain above average cash levels. In the Fund, we are always sensitive to downside risk as managing downturns is essential to enhancing the compounding benefit to long-term investment returns. This is especially the case in the current situation in which we
Janus Core, Risk-Managed and Value Funds April 30, 2009 53
Perkins Mid Cap Value Fund (unaudited)
believe that long-term appreciation potential might be less than in the past. Additionally our higher cash levels could give us the opportunity to take advantage of unusually attractive opportunities as we did near the market bottom of March 2009.
Not surprisingly, quality has held up better in this environment. While it is possible that lower quality stocks will lead interim rallies, we believe that financially stronger companies will be longer term beneficiaries of a winnowing process in a difficult economy. In this environment we believe our traditional emphasis on strong balance sheets, positive free cash flow and below normal valuations should be especially important. To some degree, we think that was reflected in the positive return that our portfolio generated in the recent turbulent six-month period. Our investment philosophy served us relatively well in this period as it has in varying markets over the past 29 years, when compared to the Fund’s benchmark.
Thank you for your investment in Perkins Mid Cap Value Fund.
54 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Perkins Mid Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
URS Corp. | 0.71% | |||
Goldcorp, Inc. (U.S. Shares) | 0.49% | |||
Temple-Inland, Inc. | 0.41% | |||
Lubrizol Corp. | 0.39% | |||
Host Hotels & Resorts, Inc. | 0.38% |
5 Bottom Performers – Holdings
Contribution | ||||
NCR Corp. | -0.67% | |||
Synovus Financial Corp. | -0.63% | |||
SunTrust Banks, Inc. | -0.54% | |||
Kansas City Southern | -0.52% | |||
Berkshire Hathaway, Inc. – Class B | -0.48% |
5 Top Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Materials | 1.65% | 7.31% | 6.32% | |||||||||
Consumer Discretionary | 0.98% | 7.98% | 12.94% | |||||||||
Industrials | 0.96% | 12.63% | 7.25% | |||||||||
Information Technology | 0.24% | 9.94% | 6.77% | |||||||||
Telecommunication Services | 0.22% | 1.11% | 1.83% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | -2.56% | 23.16% | 29.25% | |||||||||
Energy | -0.28% | 11.48% | 5.46% | |||||||||
Consumer Staples | -0.25% | 7.86% | 9.12% | |||||||||
Utilities | -0.09% | 4.88% | 15.82% | |||||||||
Health Care | -0.02% | 13.65% | 5.24% |
* | 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. |
Janus Core, Risk-Managed and Value Funds April 30, 2009 55
Perkins Mid Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Lubrizol Corp. Chemicals – Specialty | 1.8% | |||
Berkshire Hathaway, Inc. – Class B Reinsurance | 1.5% | |||
Invesco, Ltd. Investment Management and Advisory Services | 1.4% | |||
Tyco International, Ltd. (U.S. Shares) Diversified Operations | 1.4% | |||
Laboratory Corporation of America Holdings Medical Labs and Testing Services | 1.3% | |||
7.4% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p01.gif)
Emerging markets comprised 0.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c01.gif)
56 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m01.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Perkins Mid Cap Value Fund | |||||||||||||||
Investor Shares | 0.96% | –25.12% | 3.26% | 9.69% | 11.23% | 1.07% | 1.07% | ||||||||
Institutional Shares(1) | 1.12% | –24.96% | 3.43% | 9.84% | 11.37% | 1.04% | 0.84% | ||||||||
Russell Midcap® Value Index | –6.14% | –36.76% | 0.06% | 3.79% | 4.65% | ||||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Mid-Cap Value Funds | – | 27/320 | 6/192 | 2/67 | 2/56 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Services LLC has agreed to voluntarily waive all or a portion of the transfer agency fees applicable to the Fund’s Institutional Shares until at least March 1, 2010. Total returns shown include fee waivers, if any, and without such waivers, the total returns would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers, where applicable and agreed to by Janus Capital, are included under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
See important disclosures on the next page.
Janus Core, Risk-Managed and Value Funds April 30, 2009 57
Perkins Mid Cap Value Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Berger Mid Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Perkins Mid Cap Value Fund – Investor Shares are those of Berger Mid Cap Value Fund – Investor Shares. The returns shown prior to April 21, 2003 for Perkins Mid Cap Value Fund – Institutional Shares are those of Berger Mid Cap Value Fund – Institutional Shares for the period May 17, 2002 to April 17, 2003 and Berger Mid Cap Value Fund – Investor Shares for periods prior to May 17, 2002.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Lipper ranking is for the Investor share class only; other classes may have different performance characteristics.
August 13, 1998 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
Effective February 27, 2009, Janus Mid Cap Value Fund changed its name to Perkins Mid Cap Value Fund.
* | The Fund’s inception date – August 12, 1998 |
(1) Closed to new investors.
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Investor Shares | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,009.00 | $ | 5.73 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.09 | $ | 5.76 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Institutional Shares | (11/1/08) | (4/30/09) | (11/1/08-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,011.20 | $ | 4.54 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.15% for Investor Shares and 0.91% for Institutional Shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital for Institutional Shares. |
58 Janus Core, Risk-Managed and Value Funds April 30, 2009
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Common Stock – 88.1% | ||||||||||||
Aerospace and Defense – 0.7% | ||||||||||||
1,050,000 | Rockwell Collins, Inc. | $ | 40,267,500 | |||||||||
Apparel Manufacturers – 0.4% | ||||||||||||
400,000 | VF Corp. | 23,708,000 | ||||||||||
Athletic Footwear – 0.3% | ||||||||||||
350,000 | NIKE, Inc. – Class B | 18,364,500 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.8% | ||||||||||||
700,000 | BorgWarner, Inc | 20,265,000 | ||||||||||
1,650,000 | Johnson Controls, Inc. | 31,366,500 | ||||||||||
51,631,500 | ||||||||||||
Beverages – Non-Alcoholic – 0.5% | ||||||||||||
600,000 | PepsiCo, Inc. | 29,856,000 | ||||||||||
Beverages – Wine and Spirits – 0.5% | ||||||||||||
700,000 | Brown-Forman Corp. – Class B | 32,550,000 | ||||||||||
Brewery – 0.9% | ||||||||||||
1,500,000 | Molson Coors Brewing Co. – Class B | 57,375,000 | ||||||||||
Building – Residential and Commercial – 1.1% | ||||||||||||
1,500,000 | Centex Corp. | 16,410,000 | ||||||||||
1,500,000 | KB Home | 27,105,000 | ||||||||||
2,200,000 | Pulte Homes, Inc. | 25,322,000 | ||||||||||
68,837,000 | ||||||||||||
Building Products – Cement and Aggregate – 0.3% | ||||||||||||
650,000 | Texas Industries, Inc. | 20,787,000 | ||||||||||
Cable Television – 0.3% | ||||||||||||
1,100,000 | Comcast Corp. – Class A | 17,006,000 | ||||||||||
Chemicals – Specialty – 1.8% | ||||||||||||
2,600,000 | Lubrizol Corp. | 112,372,000 | ||||||||||
Coal – 0.5% | ||||||||||||
2,200,000 | Arch Coal, Inc. | 30,734,000 | ||||||||||
Commercial Banks – 1.6% | ||||||||||||
2,100,000 | BB&T Corp. | 49,014,000 | ||||||||||
1,150,000 | City National Corp. | 42,090,000 | ||||||||||
1,900,000 | Synovus Financial Corp. | 6,137,000 | ||||||||||
97,241,000 | ||||||||||||
Commercial Services – Finance – 0.4% | ||||||||||||
800,000 | Global Payments, Inc. | 25,648,000 | ||||||||||
Computer Aided Design – 0.4% | ||||||||||||
1,250,000 | Autodesk, Inc.* | 24,925,000 | ||||||||||
Computer Services – 0.6% | ||||||||||||
1,506,500 | Perot Systems Corp. – Class A* | 21,181,390 | ||||||||||
1,050,000 | SRA International, Inc.* | 16,159,500 | ||||||||||
37,340,890 | ||||||||||||
Computers – 0.7% | ||||||||||||
1,250,000 | Hewlett-Packard Co. | 44,975,000 | ||||||||||
Computers – Integrated Systems – 1.5% | ||||||||||||
1,500,000 | Diebold, Inc. | 39,645,000 | ||||||||||
4,900,000 | NCR Corp.* | 49,735,000 | ||||||||||
89,380,000 | ||||||||||||
Computers – Memory Devices – 0.6% | ||||||||||||
2,799,504 | EMC Corp.* | 35,077,785 | ||||||||||
Consumer Products – Miscellaneous – 0.7% | ||||||||||||
885,000 | Kimberly-Clark Corp. | 43,488,900 | ||||||||||
Containers – Metal and Glass – 0.5% | ||||||||||||
850,000 | Ball Corp. | 32,062,000 | ||||||||||
Containers – Paper and Plastic – 0.5% | ||||||||||||
2,600,000 | Temple-Inland, Inc. | 31,044,000 | ||||||||||
Cosmetics and Toiletries – 0.7% | ||||||||||||
900,000 | Procter & Gamble Co. | 44,496,000 | ||||||||||
Data Processing and Management – 0.3% | ||||||||||||
430,000 | Fiserv, Inc.* | 16,047,600 | ||||||||||
Distribution/Wholesale – 0.8% | ||||||||||||
1,600,000 | Tech Data Corp.* | 46,064,000 | ||||||||||
Diversified Operations – 1.4% | ||||||||||||
3,554,967 | Tyco International, Ltd. (U.S. Shares) | 84,466,016 | ||||||||||
E-Commerce/Services – 0.2% | ||||||||||||
800,000 | eBay, Inc.* | 13,176,000 | ||||||||||
Electric – Integrated – 3.5% | ||||||||||||
1,200,000 | DPL, Inc. | 26,916,000 | ||||||||||
800,000 | Entergy Corp. | 51,816,000 | ||||||||||
1,000,000 | FirstEnergy Corp. | 40,900,000 | ||||||||||
300,000 | FPL Group, Inc. | 16,137,000 | ||||||||||
1,560,000 | PPL Corp. | 46,659,600 | ||||||||||
1,100,000 | Public Service Enterprise Group, Inc. | 32,824,000 | ||||||||||
215,252,600 | ||||||||||||
Electric Products – Miscellaneous – 0.8% | ||||||||||||
1,400,000 | Emerson Electric Co. | 47,656,000 | ||||||||||
Electronic Components – Miscellaneous – 0.5% | ||||||||||||
5,000,000 | Vishay Intertechnology, Inc.* | 29,350,000 | ||||||||||
Electronic Components – Semiconductors – 0.3% | ||||||||||||
1,700,000 | Intersil Corp. – Class A | 19,720,000 | ||||||||||
Electronic Connectors – 0.8% | ||||||||||||
1,600,000 | Thomas & Betts Corp.*,£ | 49,792,000 | ||||||||||
Electronic Forms – 0.2% | ||||||||||||
400,000 | Adobe Systems, Inc.* | 10,940,000 | ||||||||||
Electronic Measuring Instruments – 0.4% | ||||||||||||
1,401,200 | Agilent Technologies, Inc.* | 25,585,912 | ||||||||||
Engineering – Research and Development Services – 1.7% | ||||||||||||
600,000 | Jacobs Engineering Group, Inc.* | 22,824,000 | ||||||||||
2,000,000 | McDermott International, Inc. (U.S. Shares)* | 32,280,000 | ||||||||||
1,150,000 | URS Corp.* | 50,669,000 | ||||||||||
105,773,000 | ||||||||||||
Entertainment Software – 0.4% | ||||||||||||
1,200,000 | Electronic Arts, Inc.* | 24,420,000 | ||||||||||
Fiduciary Banks – 0.3% | ||||||||||||
300,000 | Northern Trust Corp. | 16,308,000 | ||||||||||
Finance – Investment Bankers/Brokers – 0.5% | ||||||||||||
1,887,312 | Raymond James Financial, Inc. | 29,611,925 | ||||||||||
Food – Miscellaneous/Diversified – 2.8% | ||||||||||||
1,000,000 | General Mills, Inc. | 50,690,000 | ||||||||||
1,400,000 | Kellogg Co. | 58,954,000 | ||||||||||
1,150,000 | Kraft Foods, Inc. – Class A | 26,910,000 | ||||||||||
1,850,000 | Unilever PLC (ADR) | 36,001,000 | ||||||||||
172,555,000 | ||||||||||||
Food – Retail – 0.7% | ||||||||||||
2,100,000 | Kroger Co. | 45,402,000 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 59
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Forestry – 0.7% | ||||||||||||
1,162,697 | Weyerhaeuser Co. | $ | 40,996,696 | |||||||||
Gold Mining – 1.1% | ||||||||||||
2,500,000 | Goldcorp, Inc. (U.S. Shares)** | 68,800,000 | ||||||||||
Hotels and Motels – 0.6% | ||||||||||||
700,000 | Marriott International, Inc. – Class A | 16,492,000 | ||||||||||
897,900 | Starwood Hotels & Resorts Worldwide Inc. | 18,730,194 | ||||||||||
35,222,194 | ||||||||||||
Human Resources – 0.6% | ||||||||||||
550,000 | Manpower, Inc. | 23,699,500 | ||||||||||
550,000 | Robert Half International, Inc. | 13,211,000 | ||||||||||
36,910,500 | ||||||||||||
Industrial Gases – 0.6% | ||||||||||||
550,000 | Air Products & Chemicals, Inc. | 36,245,000 | ||||||||||
Instruments – Scientific – 2.5% | ||||||||||||
2,900,000 | PerkinElmer, Inc. | 42,253,000 | ||||||||||
2,000,000 | Thermo Fisher Scientific, Inc.* | 70,160,000 | ||||||||||
1,150,000 | Varian, Inc.* | 37,973,000 | ||||||||||
150,386,000 | ||||||||||||
Insurance Brokers – 1.4% | ||||||||||||
1,500,000 | Arthur J. Gallagher & Co. | 33,720,000 | ||||||||||
2,800,000 | Brown & Brown, Inc. | 54,488,000 | ||||||||||
88,208,000 | ||||||||||||
Internet Security – 0.4% | ||||||||||||
1,400,000 | Symantec Corp.* | 24,150,000 | ||||||||||
Investment Management and Advisory Services – 2.7% | ||||||||||||
2,600,100 | AllianceBernstein Holding L.P. | 45,553,752 | ||||||||||
550,000 | Franklin Resources, Inc. | 33,264,000 | ||||||||||
5,799,988 | Invesco, Ltd. | 85,375,823 | ||||||||||
164,193,575 | ||||||||||||
Life and Health Insurance – 1.2% | ||||||||||||
1,150,000 | AFLAC, Inc. | 33,223,500 | ||||||||||
1,550,000 | Lincoln National Corp. | 17,422,000 | ||||||||||
2,599,580 | Protective Life Corp. | 22,278,401 | ||||||||||
72,923,901 | ||||||||||||
Machinery – Farm – 1.0% | ||||||||||||
1,500,000 | Deere & Co. | 61,890,000 | ||||||||||
Medical – Biomedical and Genetic – 1.1% | ||||||||||||
1,200,000 | Charles River Laboratories International Inc.* | 33,180,000 | ||||||||||
836,970 | Life Technologies Corp.* | 31,218,981 | ||||||||||
64,398,981 | ||||||||||||
Medical – Drugs – 0.8% | ||||||||||||
1,200,000 | Endo Pharmaceuticals Holdings, Inc.* | 19,848,000 | ||||||||||
1,250,000 | Forest Laboratories, Inc.* | 27,112,500 | ||||||||||
46,960,500 | ||||||||||||
Medical – HMO – 0.4% | ||||||||||||
1,603,600 | Health Net, Inc.* | 23,155,984 | ||||||||||
Medical – Wholesale Drug Distributors – 1.0% | ||||||||||||
1,800,000 | Cardinal Health, Inc. | 60,822,000 | ||||||||||
Medical Instruments – 0.4% | ||||||||||||
650,000 | St. Jude Medical, Inc.* | 21,788,000 | ||||||||||
Medical Labs and Testing Services – 2.0% | ||||||||||||
1,100,000 | Covance, Inc.* | 43,208,000 | ||||||||||
1,250,000 | Laboratory Corporation of America Holdings* | 80,187,500 | ||||||||||
123,395,500 | ||||||||||||
Medical Products – 2.5% | ||||||||||||
1,600,000 | Covidien, Ltd. | 52,768,000 | ||||||||||
500,000 | Henry Schein, Inc.* | 20,520,000 | ||||||||||
1,150,000 | Hospira, Inc.* | 37,800,500 | ||||||||||
964,359 | Zimmer Holdings, Inc.* | 42,422,152 | ||||||||||
153,510,652 | ||||||||||||
Metal – Copper – 0.6% | ||||||||||||
900,000 | Freeport-McMoRan Copper & Gold Inc. – Class B | 38,385,000 | ||||||||||
Metal Processors and Fabricators – 0.5% | ||||||||||||
901,571 | Kaydon Corp.£ | 28,814,209 | ||||||||||
Multi-Line Insurance – 2.2% | ||||||||||||
3,000,000 | Allstate Corp. | 69,990,000 | ||||||||||
6,500,000 | Old Republic International Corp. | 60,905,000 | ||||||||||
130,895,000 | ||||||||||||
Multimedia – 1.1% | ||||||||||||
1,100,000 | McGraw-Hill Cos., Inc. | 33,165,000 | ||||||||||
1,600,000 | Viacom, Inc. – Class B* | 30,784,000 | ||||||||||
63,949,000 | ||||||||||||
Networking Products – 0.5% | ||||||||||||
1,689,315 | Polycom, Inc.* | 31,488,832 | ||||||||||
Non-Hazardous Waste Disposal – 0.5% | ||||||||||||
1,500,000 | Republic Services, Inc. | 31,500,000 | ||||||||||
Oil – Field Services – 0.5% | ||||||||||||
650,000 | Schlumberger, Ltd. (U.S. Shares) | 31,843,500 | ||||||||||
Oil and Gas Drilling – 0.7% | ||||||||||||
650,696 | Transocean, Ltd. (U.S. Shares)* | 43,908,966 | ||||||||||
Oil Companies – Exploration and Production – 5.6% | ||||||||||||
1,150,000 | Anadarko Petroleum Corp. | 49,519,000 | ||||||||||
299,800 | Bill Barrett Corp.* | 7,788,804 | ||||||||||
400,000 | Cabot Oil & Gas Corp. | 12,076,000 | ||||||||||
1,100,000 | Devon Energy Corp. | 57,035,001 | ||||||||||
300,000 | EnCana Corp. (U.S. Shares) | 13,719,000 | ||||||||||
1,400,000 | EQT Corp. | 47,082,000 | ||||||||||
3,450,028 | Forest Oil Corp.* | 55,200,448 | ||||||||||
800,000 | Noble Energy, Inc. | 45,400,000 | ||||||||||
1,450,000 | SandRidge Energy, Inc.* | 11,832,000 | ||||||||||
1,200,000 | St. Mary Land & Exploration Co. | 21,444,000 | ||||||||||
500,000 | Ultra Petroleum Corp. (U.S. Shares)* | 21,400,000 | ||||||||||
342,496,253 | ||||||||||||
Oil Companies – Integrated – 0.9% | ||||||||||||
950,000 | Hess Corp. | 52,050,500 | ||||||||||
Paper and Related Products – 1.2% | ||||||||||||
1,391,900 | Potlatch Corp. | 40,935,779 | ||||||||||
900,000 | Rayonier, Inc. | 34,758,000 | ||||||||||
75,693,779 | ||||||||||||
Pipelines – 1.9% | ||||||||||||
750,000 | Kinder Morgan Energy Partners L.P. | 35,820,000 | ||||||||||
1,850,000 | Plains All American Pipeline L.P. | 78,329,000 | ||||||||||
114,149,000 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
60 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Property and Casualty Insurance – 0.9% | ||||||||||||
1,601,200 | Mercury General Corp. | $ | 54,088,536 | |||||||||
Reinsurance – 2.5% | ||||||||||||
30,500 | Berkshire Hathaway, Inc. – Class B* | 93,482,500 | ||||||||||
778,200 | Everest Re Group, Ltd. | 58,084,848 | ||||||||||
151,567,348 | ||||||||||||
REIT – Apartments – 1.0% | ||||||||||||
600,000 | Avalonbay Communities, Inc. | 34,086,000 | ||||||||||
1,200,000 | Equity Residential | 27,468,000 | ||||||||||
61,554,000 | ||||||||||||
REIT – Health Care – 0.4% | ||||||||||||
850,000 | Ventas, Inc. | 24,344,000 | ||||||||||
REIT – Hotels – 0.4% | ||||||||||||
3,300,000 | Host Hotels & Resorts, Inc. | 25,377,000 | ||||||||||
REIT – Mortgage – 0.6% | ||||||||||||
2,050,000 | Redwood Trust, Inc. | 33,353,500 | ||||||||||
REIT – Office Property – 0.7% | ||||||||||||
400,000 | Boston Properties, Inc. | 19,768,000 | ||||||||||
500,000 | Mack-Cali Realty Corp. | 13,430,000 | ||||||||||
500,000 | SL Green Realty Corp. | 8,830,000 | ||||||||||
42,028,000 | ||||||||||||
REIT – Storage – 0.6% | ||||||||||||
550,000 | Public Storage | 36,773,000 | ||||||||||
REIT – Warehouse/Industrial – 0.5% | ||||||||||||
1,600,000 | AMB Property Corp. | 30,544,000 | ||||||||||
Retail – Apparel and Shoe – 0.5% | ||||||||||||
1,400,000 | American Eagle Outfitters, Inc. | 20,748,000 | ||||||||||
500,000 | Men’s Wearhouse, Inc. | 9,320,000 | ||||||||||
30,068,000 | ||||||||||||
Retail – Automobile – 0.3% | ||||||||||||
600,000 | Copart, Inc.* | 18,834,000 | ||||||||||
Retail – Drug Store – 1.4% | ||||||||||||
1,650,000 | CVS Caremark Corp. | 52,437,000 | ||||||||||
1,100,000 | Walgreen Co. | 34,573,000 | ||||||||||
87,010,000 | ||||||||||||
Savings/Loan/Thrifts – 1.8% | ||||||||||||
1,854,374 | NewAlliance Bancshares, Inc. | 23,939,968 | ||||||||||
3,300,000 | People’s United Financial, Inc.** | 51,546,000 | ||||||||||
2,500,000 | Washington Federal, Inc. | 32,450,000 | ||||||||||
107,935,968 | ||||||||||||
Schools – 0.6% | ||||||||||||
600,000 | Apollo Group, Inc. – Class A* | 37,770,000 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.5% | ||||||||||||
1,400,000 | Analog Devices, Inc. | 29,792,000 | ||||||||||
Semiconductor Equipment – 0.8% | ||||||||||||
4,000,000 | Applied Materials, Inc. | 48,840,000 | ||||||||||
Super-Regional Banks – 1.6% | ||||||||||||
950,000 | PNC Financial Services Group, Inc. | 37,715,000 | ||||||||||
1,800,000 | SunTrust Banks, Inc. | 25,992,000 | ||||||||||
1,700,000 | U.S. Bancorp | 30,974,000 | ||||||||||
94,681,000 | ||||||||||||
Telephone – Integrated – 0.6% | ||||||||||||
1,250,000 | CenturyTel, Inc. | 33,937,500 | ||||||||||
Tools – Hand Held – 0.5% | ||||||||||||
190,900 | Snap-On, Inc. | 6,475,328 | ||||||||||
550,000 | Stanley Works | 20,916,500 | ||||||||||
27,391,828 | ||||||||||||
Toys – 0.4% | ||||||||||||
1,700,000 | Mattel, Inc. | 25,432,000 | ||||||||||
Transportation – Railroad – 1.3% | ||||||||||||
2,450,000 | Kansas City Southern* | 37,362,500 | ||||||||||
800,000 | Union Pacific Corp. | 39,312,000 | ||||||||||
76,674,500 | ||||||||||||
Wireless Equipment – 0.7% | ||||||||||||
3,000,000 | Nokia OYJ (ADR) | 42,420,000 | ||||||||||
X-Ray Equipment – 0.4% | ||||||||||||
1,800,000 | Hologic, Inc.* | 26,748,000 | ||||||||||
Total Common Stock (cost $6,048,814,899) | 5,367,582,830 | |||||||||||
Purchased Options – Puts – 0.8% | ||||||||||||
39,809 | iShares Russell Mid-Cap Value Index expires May 2009 exercise price $27.82 | 4,816,889 | ||||||||||
24,704 | iShares Russell Mid-Cap Value Index expires June 2009 exercise price $30.00** | 7,584,128 | ||||||||||
32,116 | iShares Russell Mid-Cap Value Index expires July 2009 exercise price $13.56** | 96,348 | ||||||||||
32,116 | iShares Russell Mid-Cap Value Index expires July 2009 exercise price $22.60** | 1,991,192 | ||||||||||
6,348 | iShares Russell Mid-Cap Value Index expires August 2009 exercise price $27.82** | 1,733,004 | ||||||||||
7,934 | Mid-Cap SPDR Trust Series 1 expires August 2009 exercise price $91.30** | 4,458,908 | ||||||||||
980 | Russell Mid-Cap Value Index expires May 2009 exercise price $613.83 | 1,203,058 | ||||||||||
1,378 | Russell Mid-Cap Value Index expires July 2009 exercise price $318.93** | 51,964 | ||||||||||
1,378 | Russell Mid-Cap Value Index expires July 2009 exercise price $531.55** | 1,887,681 | ||||||||||
2,644 | Russell Mid-Cap Value Index expires July 2009 exercise price $577.50** | 6,800,421 | ||||||||||
1,500 | Russell Mid-Cap Value Index expires August 2009 exercise price $505.89** | 2,646,690 | ||||||||||
1,388 | Russell Mid-Cap Value Index expires August 2009 exercise price $542.75** | 3,675,632 | ||||||||||
358 | S&P Mid-Cap 400® Index expires May 2009 exercise price $541.80 | 613,970 | ||||||||||
1,725 | S&P Mid-Cap 400® Index expires June 2009 exercise price $272.66** | 26,168 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 61
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Purchased Options – Puts – (continued) | ||||||||||||
1,725 | S&P Mid-Cap 400® Index expires June 2009 exercise price $454.44** | $ | 989,201 | |||||||||
478 | S&P Mid-Cap 400® Index expires June 2009 exercise price $550.35 | 1,269,845 | ||||||||||
1,794 | S&P Mid-Cap 400® Index expires July 2009 exercise price $509.60** | 3,804,608 | ||||||||||
1,685 | S&P Mid-Cap 400® Index expires August 2009 exercise price $279.14** | 154,312 | ||||||||||
1,685 | S&P Mid-Cap 400® Index expires August 2009 exercise price $465.24** | 2,805,795 | ||||||||||
Total Purchased Options – Puts (premiums paid $148,960,023) | 46,609,814 | |||||||||||
Repurchase Agreements – 10.9% | ||||||||||||
$ | 500,000,000 | Calyon, New York, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $500,003,472 collateralized by $476,180,200 in U.S. Treasuries 0% – 7.5000%, 6/15/09 – 1/15/29 with a value of $510,000,031 | 500,000,000 | |||||||||
166,925,000 | ING Financial Markets LLC, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $166,926,159 collateralized by $117,034,641 in Corporate Bonds 7.8750% – 9.1250%, 5/15/18 – 8/15/21 with a value of $170,266,148 | 166,925,000 | ||||||||||
Total Repurchase Agreements (cost $666,925,000) | 666,925,000 | |||||||||||
Total Investments (total cost $6,864,699,922) – 99.8% | 6,081,117,644 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 13,870,013 | |||||||||||
Net Assets – 100% | $ | 6,094,987,657 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 196,228,671 | 3.2% | |||||
Canada | 103,919,000 | 1.7% | ||||||
Finland | 42,420,000 | 0.7% | ||||||
Netherlands | 31,843,500 | 0.5% | ||||||
Panama | 32,280,000 | 0.6% | ||||||
Switzerland | 128,374,982 | 2.1% | ||||||
United Kingdom | 36,001,000 | 0.6% | ||||||
United States†† | 5,510,050,491 | 90.6% | ||||||
Total | $ | 6,081,117,644 | 100.0% |
†† | Includes Short-Term Securities (79.6% excluding Short-Term Securities) |
Schedule of Written Options – Puts | Value | |||
iShares Russell Mid-Cap Value Index expires June 2009 12,352 contracts exercise price $27.85 | $ | (1,161,088) | ||
iShares Russell Mid-Cap Value Index expires July 2009 64,232 contracts exercise price $18.08 | (1,091,944) | |||
iShares Russell Mid-Cap Value Index expires August 2009 3,174 contracts exercise price $23.32 | (365,010) | |||
Mid-Cap SPDR Trust Series 1 expires August 2009 3,967 contracts exercise price $80.34 | (1,158,364) | |||
Russell Mid-Cap Value Index expires July 2009 2,756 contracts exercise price $425.24 | (842,730) | |||
Russell Mid-Cap Value Index expires July 2009 1,322 contracts exercise price $484.00 | (1,032,601) | |||
Russell Mid-Cap Value Index expires August 2009 750 contracts exercise price $423.98 | (512,062) | |||
Russell Mid-Cap Value Index expires August 2009 694 contracts exercise price $465.21 | (728,464) | |||
S&P Mid-Cap 400® Index expires June 2009 3,450 contracts exercise price $363.55 | (334,167) | |||
S&P Mid-Cap 400® Index expires July 2009 713 contracts exercise price $457.60 | (685,207) | |||
S&P Mid-Cap 400® Index expires August 2009 3,370 contracts exercise price $372.19 | (1,561,591) | |||
Total Written Options – Puts | ||||
(Premiums received $46,264,827) | $ | (9,473,228) | ||
See Notes to Schedules of Investments and Financial Statements.
62 Janus Core, Risk-Managed and Value Funds April 30, 2009
Perkins Small Cap Value Fund (unaudited) | Ticker: JSCVX |
Fund Snapshot
This Fund searches for small and what the portfolio managers consider to be out-of-favor companies misunderstood by the broader investment community.
Managed by
Perkins Investment
Management LLC
Perkins Investment
Management LLC
Performance Overview
During the six months ended April 30, 2009, Perkins Small Cap Value Fund’s Investor Shares and Institutional Shares returned 0.79% and 0.90%, respectively, versus a 12.60% decline for the Fund’s benchmark, the Russell 2000® Value Index and an 8.40% decline for the broader Russell 2000® Index.
Economic Environment
The stock market has experienced a wild roller coaster ride over the past six months. Continuing fallout from the credit crisis and concerns the recession may be very deep and prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued through April brought the market back to fair value in our view. The U.S. market’s recovery off 12-year lows reached in early March was very strong, but only partially eased the losses for the six-month period. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted but still above normal level through period end. Although the financials sector was the best performing group since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunication services were the best relative performers. Large-cap indices outperformed small-caps, but mid-caps performed relatively the best.
Massive fiscal and monetary stimulus have served to narrow historically high credit spreads and moderate the pace of economic decline. We agree with the characterization of the financial system as being out of the emergency room and now in intensive care. We believe the steps taken by U.S. and foreign monetary and governmental authorities have begun to have some positive impact and might be sufficient to stabilize global markets and economies. However, we also believe the economic financial system remains fragile and subject to negative surprises. The deleveraging of financial and consumer balance sheets will be a lengthy multiyear process and will inhibit growth for that time span in our view. Fourth quarter Gross Domestic Product (GDP) fell over 6% and we believe first quarter GDP is likely to have had a similar decline when the final numbers are released. The recession reached 18 months in duration through April, making it the longest since the 1930s. Meanwhile, the World Bank forecasts that the global economy will shrink for the first time since World War II. In the U.S., we believe real estate prices are likely to fall further and unemployment, while a lagging indicator, could rise above 10% and pressure personal income over the near term.
Portfolio Manager Added
In March, we were joined by a third co-portfolio manager, Justin Tugman. Justin joined Perkins in 2004 as an equity research analyst focusing on the energy and utilities sectors, which will continue to be his primary responsibility for the foreseeable future. During his tenure, he has worked closely with us and proven himself to be a significant asset to our investment team.
Investment Approach
As has been the case throughout this market’s downturn, our standard investment approach emphasizing balance sheet strength, strong free cash flow and stock valuations assuming relatively low expectations has allowed the Fund to hold up relatively well. During the period, the Fund’s outperformance was primarily driven by positive stock selection. As testament to our investment process, our financial and energy holdings, the two weakest sectors in the period, were among the Fund’s top relative performers. Our overweight position in information technology also provided a boost to comparable returns. On a negative note, individual detractors included select financial, consumer discretionary and healthcare companies.
In terms of sector positioning, the relative exposures remained as they have for some time. We remained overweight healthcare, technology and energy. Underweight sectors included financials and utilities. We reduced our exposure in the consumer discretionary sector on strength as the risk/reward profiles deteriorated while the fundamentals remained, in large part, unchanged in our view. On the margin, we added to positions in technology, energy and select regional banks.
Holdings That Contributed to Performance
Construction and engineering companies, URS Corp. and Sterling Construction, were two of the Fund’s larger contributors during the period. We added to both early in the period near their 52-week lows feeling that our downside, with Sterling in particular, was relatively limited. Many stocks within this group outperformed on speculation that the proposed U.S. Government stimulus package would include an infrastructure rebuild component. URS was higher as it won
Janus Core, Risk-Managed and Value Funds April 30, 2009 63
Perkins Small Cap Value Fund (unaudited)
several contracts late in 2008, which resulted in a major increase in the company’s backlog. Sterling, on the other hand, has had fewer wins as their peers aggressively bid for early contracts. While we think the fundamentals are attractive for both, their valuations and risk/rewards are currently less so, and so we reduced our positions.
Chico’s, a women’s clothing retailer, can be viewed as a relatively extreme example of what occurred in the consumer discretionary sector. Six months ago, the sector had underperformed all others, and we were able to add to select positions at prices approaching net cash on companies’ balance sheets. In Chico’s case, the stock bounced over 300% off of those lows. While we’ve been underweight the sector for the last couple of years, our opportunistic buys took us to an overweight position during the period. It was short lived, however, as we sold into the strength and ended the period once again relatively underexposed as prices and valuations at period end did not adequately discount enough of the risk of a disappointing 2010 in our view.
Tech Data Corp., a technology distributor, benefited from the strength in the technology sector overall late in the period. The company had traded at a price significantly below its book value in late 2008 through mid-March. As the overall market moved toward new lows in the period, we felt as though cash rich technology companies that remained free cash flow positive provided relatively less downside risk than other areas and continued to add to our exposure. Investor speculation that corporate spending cuts in technology may have reached a bottom provided a boost for many technology companies late in the period. If that ends up being the case, Tech Data should continue to be supported in our view. However, with the stock trading closer to its book value at period end, we felt a smaller position was more prudent. We pared back other technology holdings on strength as well, but remained overweight.
Holdings That Detracted From Performance
Financials remained center stage as the sector struggled for much of the period. Concerns over bank balance sheets, capital needs and government bailouts dominated sentiment for this group. A notable underperformer for the period was commercial bank Synovus Financial Corp. We continued to focus on what we believe are the higher quality players in this group that we think have the liquidity to weather the current financial crisis. While we would deem Synovus as lesser quality relative to the rest of our bank holdings, the firm had the benefit of a large capital cushion entering the downturn. While much of that cushion has been used, with the current valuation where it is, the market seems to doubt the bank’s survival. We disagree, and maintained a relatively small position at period end.
Cedar Fair, which owns and operates amusement and water parks in the U.S. and Canada, declined amid concerns over slowing consumer spending trends, although it rebounded off of its period lows. We reduced our position during the period as our downside price target was lowered due to the potential for it to lower its distribution, which occurred late in the period, as the company conserved capital to better manage its debt levels. We think the stock price at the end of April better reflects the risk of further dividend reductions, so we maintained a small position at period end.
Hill-Rom Holdings, a hospital products provider, struggled during the period due to lower hospital budgets. In retrospect, we should have identified earlier, the highly discretionary nature of their products and reduced our position early in the period. That being said, the company is historically a low-cost producer, has maintained market share and we think spending will eventually return. We added to our position on weakness because, in our view, most of the near-term bad news was being priced in the stock at period end and its longer term risk/reward was more favorable to us.
Market Outlook
As we suggested in our annual letter for the period ended in October 2008, the market overshot to the downside while the economy was in freefall and there was great uncertainty about the financial system. In recent months the financial markets have benefited as credit spreads have narrowed toward more normal levels and some economic data have indicated a deceleration in the rate of decline in the U.S. economy. However the health of the economy and the credit system remain fragile and vulnerable to bouts of weakness in our view. While inventory replenishment and government stimulus could provide short term boosts, we do not believe they are sustainable factors. In the meantime, auto industry restructuring, consumer and real estate credit problems and international dislocations could be disruptive. In any case we believe it is unlikely that we will see a strong economic recovery in the next few years. Similarly, we think corporate earnings will not benefit from leverage as they have in the past and, in our opinion, corporate earnings will likely remain well below recent record levels for several years. Additionally the long-term impact of a substantial increase in the U.S. Government’s influence on the economy and business creates greater uncertainty in our minds. Finally, investor confidence in financial institutions and appetite for risk probably have suffered long term damage. Therefore, we believe returns from stocks and valuations will likely
64 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
continue to be considerably below the levels of the 1980’s and 1990’s.
We have enjoyed the market’s rally off of the lows, which has been the strongest since 1975. However that rally has taken stocks to fairly valued levels in our opinion, and we suspect that the market’s roller coaster ride is not over. We believe the market continues to be in somewhat uncharted economic and financial territory and could be subject to disappointment. Volatility, which has subsided, is likely to remain historically high. Thus we expect to maintain above average cash levels. In the Fund, we are sensitive to downside risk as managing downturns is essential to enhancing the compounding benefit to long-term investment returns. This is especially the case in the current situation in which we believe that long-term appreciation potential might be less than in the past. Additionally our higher cash levels could give us the opportunity to take advantage of unusually attractive opportunities as we did near the market bottom of March 2009.
Not surprisingly, quality has held up better in this environment. While it is possible that lower quality stocks will lead interim rallies, we believe that financially stronger companies will be longer term beneficiaries of a winnowing process in a difficult economy. In this environment we believe our traditional emphasis on strong balance sheets, positive free cash flow and below normal valuations should be especially important. To some degree, we think that was reflected in the positive return that our portfolio generated in the recent turbulent six-month period. Our investment philosophy served us relatively well in this period, as it has in varying markets over the past 29 years, when compared to the Fund’s benchmark.
Thank you for your investment in Perkins Small Cap Value Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2009 65
Perkins Small Cap Value Fund (unaudited)
Perkins Small Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Temple-Inland, Inc. | 0.58% | |||
URS Corp. | 0.57% | |||
Tech Data Corp. | 0.52% | |||
Chico’s FAS, Inc. | 0.49% | |||
Sterling Construction Co., Inc. | 0.39% |
5 Bottom Performers – Holdings
Contribution | ||||
Synovus Financial Corp. | -1.31% | |||
Cedar Fair L.P. | -1.06% | |||
Hill-Rom Holdings, Inc. | -0.78% | |||
Wilmington Trust Corp. | -0.73% | |||
Kansas City Southern | -0.66% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Information Technology | 1.13% | 17.88% | 11.76% | |||||||||
Materials | 0.87% | 4.69% | 4.55% | |||||||||
Industrials | 0.69% | 13.02% | 14.28% | |||||||||
Consumer Discretionary | 0.60% | 9.20% | 10.01% | |||||||||
Telecommunication Services | 0.18% | 0.72% | 0.95% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Financials | -1.65% | 28.91% | 37.27% | |||||||||
Health Care | -1.56% | 14.01% | 5.44% | |||||||||
Energy | -0.21% | 10.01% | 2.74% | |||||||||
Consumer Staples | -0.10% | 1.55% | 4.98% | |||||||||
Utilities | 0.00% | 0.00% | 8.02% |
* | 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. |
66 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Old Republic International Corp. Multi-Line Insurance | 2.5% | |||
Lubrizol Corp. Chemicals – Specialty | 2.1% | |||
Washington Federal, Inc. Savings/Loan/Thrifts | 1.8% | |||
NewAlliance Bancshares, Inc. Savings/Loan/Thrifts | 1.7% | |||
Tech Data Corp. Distribution/Wholesale | 1.6% | |||
9.7% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19p04.gif)
Top County Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19c04.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2009 67
Perkins Small Cap Value Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif19m04.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Operating Expenses | Operating Expenses | ||||||||
Perkins Small Cap Value Fund | |||||||||||||
Investor Shares | 0.79% | –16.95% | 2.85% | 8.20% | 1.03% | 1.03% | |||||||
Institutional Shares(1) | 0.90% | –16.72% | 3.08% | 8.47% | 1.02% | 0.82% | |||||||
Russell 2000® Value Index | –12.60% | –31.37% | –1.42% | 5.50% | |||||||||
Lipper Quartile | – | 1st | 1st | 1st | |||||||||
Lipper Ranking – based on total return for Small-Cap Core Funds | – | 7/763 | 39/496 | 7/125 | |||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Services LLC has agreed to voluntarily waive all or a portion of the transfer agency fees applicable to the Fund’s Institutional Shares until at least March 1, 2010. Returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers, where applicable and agreed to by Janus Capital, are included under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
68 Janus Core, Risk-Managed and Value Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Berger Small Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Perkins Small Cap Value Fund – Investor Shares are those of Berger Small Cap Value Fund – Investor Shares for the period February 14, 1997 to April 17, 2003 and Berger Small Cap Value Fund – Institutional Shares (then known as The Omni Investment Fund) for periods prior to February 14, 1997. The returns shown for Perkins Small Cap Value Fund – Institutional Shares are those of Berger Small Cap Value Fund – Institutional Shares for the periods prior to April 21, 2003.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Lipper ranking is for the Investor share class only; other classes may have different performance characteristics.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
Effective December 31, 2008, Janus Small Cap Value Fund changed its name to Perkins Small Cap Value Fund.
(1) Perkins Small Cap Value Fund – Institutional Shares is closed to new investors.
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Investor Shares | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,007.90 | $ | 5.73 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.09 | $ | 5.76 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Institutional Shares | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,009.00 | $ | 4.33 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.48 | $ | 4.36 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.15% for Investor Shares and 0.87% for Institutional Shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital for Institutional Shares. |
Janus Core, Risk-Managed and Value Funds April 30, 2009 69
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 85.0% | ||||||||||||
Apparel Manufacturers – 0.7% | ||||||||||||
490,000 | Volcom, Inc.* | $ | 6,610,100 | |||||||||
Applications Software – 1.0% | ||||||||||||
440,000 | Progress Software Corp.* | 9,323,600 | ||||||||||
Building – Heavy Construction – 0.5% | ||||||||||||
224,872 | Sterling Construction Co., Inc.* | 4,220,847 | ||||||||||
Building – Mobile Home and Manufactured Homes – 0.4% | ||||||||||||
400,000 | Winnebago Industries | 3,524,000 | ||||||||||
Chemicals – Specialty – 2.1% | ||||||||||||
450,000 | Lubrizol Corp. | 19,449,000 | ||||||||||
Circuit Boards – 0.9% | ||||||||||||
1,075,000 | TTM Technologies, Inc.* | 7,976,500 | ||||||||||
Commercial Banks – 3.9% | ||||||||||||
120,000 | Bank of Hawaii Corp. | 4,216,800 | ||||||||||
215,000 | City National Corp. | 7,869,000 | ||||||||||
1,200,000 | F.N.B. Corp. | 9,024,000 | ||||||||||
670,000 | Glacier Bancorp, Inc. | 10,264,400 | ||||||||||
1,700,000 | Synovus Financial Corp. | 5,491,000 | ||||||||||
36,865,200 | ||||||||||||
Commercial Services – 0.6% | ||||||||||||
841,300 | ICT Group, Inc.*,£ | 5,956,404 | ||||||||||
Commercial Services – Finance – 0.7% | ||||||||||||
210,000 | Global Payments, Inc. | 6,732,600 | ||||||||||
Computer Services – 0.7% | ||||||||||||
450,000 | SRA International, Inc.* | 6,925,500 | ||||||||||
Computers – Integrated Systems – 2.3% | ||||||||||||
450,000 | Diebold, Inc. | 11,893,500 | ||||||||||
920,000 | NCR Corp.* | 9,338,000 | ||||||||||
21,231,500 | ||||||||||||
Consulting Services – 2.3% | ||||||||||||
250,000 | Advisory Board Co.* | 4,660,000 | ||||||||||
325,000 | CRA International, Inc.* | 7,585,500 | ||||||||||
85,000 | MAXIMUS, Inc. | 3,428,050 | ||||||||||
400,000 | Navigant Consulting, Inc.* | 5,884,000 | ||||||||||
21,557,550 | ||||||||||||
Containers – Paper and Plastic – 1.6% | ||||||||||||
350,000 | Sonoco Products Co. | 8,543,500 | ||||||||||
570,000 | Temple-Inland, Inc. | 6,805,800 | ||||||||||
15,349,300 | ||||||||||||
Data Processing and Management – 0.4% | ||||||||||||
220,000 | Fair Isaac Corp. | 3,700,400 | ||||||||||
Decision Support Software – 0.8% | ||||||||||||
1,000,000 | Wind River Systems, Inc.* | 7,330,000 | ||||||||||
Direct Marketing – 1.1% | ||||||||||||
1,200,000 | Harte-Hanks, Inc. | 9,912,000 | ||||||||||
Distribution/Wholesale – 2.2% | ||||||||||||
250,000 | Fossil, Inc.* | 5,040,000 | ||||||||||
525,000 | Tech Data Corp.* | 15,114,750 | ||||||||||
20,154,750 | ||||||||||||
Electric Products – Miscellaneous – 0.8% | ||||||||||||
450,000 | Littelfuse, Inc.* | 7,375,500 | ||||||||||
Electronic Components – Miscellaneous – 0.6% | ||||||||||||
900,000 | Vishay Intertechnology, Inc.* | 5,283,000 | ||||||||||
Electronic Components – Semiconductors – 1.3% | ||||||||||||
575,000 | Intersil Corp. – Class A | 6,670,000 | ||||||||||
425,000 | Microsemi Corp.* | 5,703,500 | ||||||||||
12,373,500 | ||||||||||||
Electronic Connectors – 0.6% | ||||||||||||
180,000 | Thomas & Betts Corp.* | 5,601,600 | ||||||||||
Engineering – Research and Development Services – 0.6% | ||||||||||||
125,000 | URS Corp.* | 5,507,500 | ||||||||||
Enterprise Software/Services – 1.0% | ||||||||||||
1,050,000 | Omnicell, Inc.* | 9,240,000 | ||||||||||
Filtration and Separations Products – 0.5% | ||||||||||||
150,000 | Donaldson Co., Inc. | 4,948,500 | ||||||||||
Food – Retail – 0.3% | ||||||||||||
250,000 | Winn-Dixie Stores, Inc.* | 2,865,000 | ||||||||||
Footwear and Related Apparel – 1.0% | ||||||||||||
230,000 | Skechers U.S.A., Inc. – Class A* | 2,691,000 | ||||||||||
330,000 | Wolverine World Wide, Inc. | 6,873,900 | ||||||||||
9,564,900 | ||||||||||||
Hospital Beds and Equipment – 1.5% | ||||||||||||
1,075,000 | Hill-Rom Holdings, Inc. | 13,953,500 | ||||||||||
Human Resources – 1.0% | ||||||||||||
550,000 | MPS Group, Inc.* | 4,422,000 | ||||||||||
200,000 | Robert Half International, Inc. | 4,804,000 | ||||||||||
9,226,000 | ||||||||||||
Industrial Automation and Robotics – 0.8% | ||||||||||||
510,000 | Cognex Corp. | 7,175,700 | ||||||||||
Instruments – Scientific – 2.6% | ||||||||||||
850,000 | PerkinElmer, Inc. | 12,384,500 | ||||||||||
370,000 | Varian, Inc.* | 12,217,400 | ||||||||||
24,601,900 | ||||||||||||
Insurance Brokers – 1.4% | ||||||||||||
675,000 | Brown & Brown, Inc. | 13,135,500 | ||||||||||
Investment Management and Advisory Services – 0.9% | ||||||||||||
500,000 | AllianceBernstein Holding L.P. | 8,760,000 | ||||||||||
Lasers – Systems and Components – 0.7% | ||||||||||||
730,000 | Electro Scientific Industries, Inc.* | 6,278,000 | ||||||||||
Life and Health Insurance – 0.7% | ||||||||||||
750,000 | Protective Life Corp. | 6,427,500 | ||||||||||
Machinery – General Industrial – 1.3% | ||||||||||||
700,000 | Albany International Corp. – Class A | 6,496,000 | ||||||||||
160,000 | Wabtec Corp. | 6,102,400 | ||||||||||
12,598,400 | ||||||||||||
Machinery – Pumps – 0.8% | ||||||||||||
300,000 | Graco, Inc. | 7,077,000 | ||||||||||
Medical – Biomedical and Genetic – 0.6% | ||||||||||||
200,000 | Charles River Laboratories International, Inc.* | 5,530,000 | ||||||||||
Medical – Generic Drugs – 1.1% | ||||||||||||
390,000 | Perrigo Co. | 10,108,800 | ||||||||||
Medical Imaging Systems – 0.6% | ||||||||||||
550,000 | Vital Images, Inc.* | 5,571,500 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
70 Janus Core, Risk-Managed and Value Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Medical Information Systems – 0.4% | ||||||||||||
65,000 | Cerner Corp.* | $ | 3,497,000 | |||||||||
Medical Instruments – 0.6% | ||||||||||||
467,997 | Angiodynamics, Inc.* | 5,929,522 | ||||||||||
Medical Labs and Testing Services – 0.9% | ||||||||||||
225,000 | Covance, Inc.* | 8,838,000 | ||||||||||
Medical Laser Systems – 0.7% | ||||||||||||
1,080,000 | LCA-Vision, Inc.£ | 6,210,000 | ||||||||||
Medical Products – 1.4% | ||||||||||||
590,000 | PSS World Medical, Inc.* | 8,566,800 | ||||||||||
150,000 | West Pharmaceutical Services, Inc. | 4,897,500 | ||||||||||
13,464,300 | ||||||||||||
Medical Sterilization Products – 0.8% | ||||||||||||
300,000 | STERIS Corp. | 7,230,000 | ||||||||||
Metal Processors and Fabricators – 1.3% | ||||||||||||
390,000 | Kaydon Corp. | 12,464,400 | ||||||||||
Multi-Line Insurance – 2.5% | ||||||||||||
2,500,000 | Old Republic International Corp. | 23,425,000 | ||||||||||
Networking Products – 0.7% | ||||||||||||
365,200 | Polycom, Inc.* | 6,807,328 | ||||||||||
Office Furnishings – Original – 0.4% | ||||||||||||
220,000 | HNI Corp. | 3,410,000 | ||||||||||
Oil – Field Services – 1.0% | ||||||||||||
305,000 | CARBO Ceramics, Inc. | 9,366,550 | ||||||||||
Oil Companies – Exploration and Production – 2.6% | ||||||||||||
81,500 | Bill Barrett Corp.* | 2,117,370 | ||||||||||
270,000 | Cabot Oil & Gas Corp. | 8,151,300 | ||||||||||
650,000 | Forest Oil Corp.* | 10,400,000 | ||||||||||
225,000 | St. Mary Land & Exploration Co. | 4,020,750 | ||||||||||
24,689,420 | ||||||||||||
Oil Field Machinery and Equipment – 0.7% | ||||||||||||
200,000 | Lufkin Industries, Inc. | 6,980,000 | ||||||||||
Paper and Related Products – 3.4% | ||||||||||||
715,000 | Glatfelter | 6,349,200 | ||||||||||
400,000 | Potlatch Corp. | 11,764,000 | ||||||||||
355,000 | Rayonier, Inc. | 13,710,100 | ||||||||||
31,823,300 | ||||||||||||
Pipelines – 2.8% | ||||||||||||
220,000 | Magellan Midstream Partners L.P. | 7,348,000 | ||||||||||
825,000 | Western Gas Partners L.P. | 12,531,750 | ||||||||||
375,000 | Williams Partners L.P. | 6,431,250 | ||||||||||
26,311,000 | ||||||||||||
Property and Casualty Insurance – 2.1% | ||||||||||||
250,000 | Infinity Property & Casualty Corp. | 8,810,000 | ||||||||||
140,000 | Navigators* | 6,353,200 | ||||||||||
100,000 | RLI Corp. | 4,803,000 | ||||||||||
19,966,200 | ||||||||||||
Radio – 0.2% | ||||||||||||
1,000,000 | Entercom Communications Corp. | 1,660,000 | ||||||||||
Reinsurance – 1.1% | ||||||||||||
400,000 | IPC Holdings, Ltd.£ | 10,416,000 | ||||||||||
REIT – Apartments – 1.1% | ||||||||||||
235,000 | BRE Properties, Inc. – Class A | 5,773,950 | ||||||||||
125,000 | Mid-America Apartment Communities, Inc. | 4,623,750 | ||||||||||
10,397,700 | ||||||||||||
REIT – Hotels – 0.8% | ||||||||||||
1,225,000 | DiamondRock Hospitality Co. | 7,950,250 | ||||||||||
REIT – Mortgage – 0.9% | ||||||||||||
500,000 | Redwood Trust, Inc. | 8,135,000 | ||||||||||
REIT – Office Property – 1.3% | ||||||||||||
220,000 | Mack-Cali Realty Corp. | 5,909,200 | ||||||||||
450,000 | Parkway Properties, Inc. | 6,241,500 | ||||||||||
12,150,700 | ||||||||||||
Resorts and Theme Parks – 0.4% | ||||||||||||
350,000 | Cedar Fair L.P. | 3,986,500 | ||||||||||
Retail – Apparel and Shoe – 1.0% | ||||||||||||
225,000 | American Eagle Outfitters, Inc. | 3,334,500 | ||||||||||
350,000 | Chico’s FAS, Inc.* | 2,674,000 | ||||||||||
170,000 | Men’s Wearhouse, Inc. | 3,168,800 | ||||||||||
9,177,300 | ||||||||||||
Retail – Convenience Stores – 0.9% | ||||||||||||
310,000 | Casey’s General Stores, Inc. | 8,249,100 | ||||||||||
Retail – Leisure Products – 0.3% | ||||||||||||
670,000 | MarineMax, Inc.* | 3,048,500 | ||||||||||
Retail – Propane Distribution – 0.9% | ||||||||||||
375,000 | Inergy L.P. | 8,662,500 | ||||||||||
Savings/Loan/Thrifts – 5.4% | ||||||||||||
647,918 | Dime Community Bancshares | 5,403,636 | ||||||||||
925,685 | First Niagara Financial Group, Inc. | 12,533,775 | ||||||||||
1,250,000 | NewAlliance Bancshares, Inc. | 16,137,500 | ||||||||||
1,300,000 | Washington Federal, Inc. | 16,874,000 | ||||||||||
50,948,911 | ||||||||||||
Semiconductor Components/Integrated Circuits – 0.3% | ||||||||||||
250,000 | Emulex Corp.* | 2,617,500 | ||||||||||
Semiconductor Equipment – 0.7% | ||||||||||||
600,000 | Verigy, Ltd.* | 6,600,000 | ||||||||||
Telecommunication Services – 0.7% | ||||||||||||
600,000 | Premiere Global Services, Inc.* | 6,324,000 | ||||||||||
Tools – Hand Held – 1.3% | ||||||||||||
110,000 | Snap-On, Inc. | 3,731,200 | ||||||||||
220,000 | Stanley Works | 8,366,600 | ||||||||||
12,097,800 | ||||||||||||
Transactional Software – 0.8% | ||||||||||||
975,000 | Bottomline Tehcnologies, Inc.* | 7,653,750 | ||||||||||
Transportation – Marine – 0.7% | ||||||||||||
225,000 | Kirby Corp.* | 6,943,500 | ||||||||||
Transportation – Railroad – 1.0% | ||||||||||||
600,000 | Kansas City Southern* | 9,150,000 | ||||||||||
Total Common Stock (cost $901,464,413) | 796,603,582 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 71
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Repurchase Agreement – 13.2% | ||||||||||||
$ | 123,197,000 | ING Financial Markets LLC, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $123,197,856 collateralized by $86,376,017 in Corporate Bonds 7.8750% – 9.1250%, 5/15/18 – 8/15/21 with a value of $125,662,894 (cost $123,197,000) | $ | 123,197,000 | ||||||||
Total Investments (total cost $1,024,661,413) – 98.2% | 919,800,582 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.8% | 16,999,304 | |||||||||||
Net Assets – 100% | $ | 936,799,886 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 10,416,000 | 1.1% | |||||
United States†† | 909,384,582 | 98.9% | ||||||
Total | $ | 919,800,582 | 100.0% |
†† | Includes Short-Term Securities (85.5% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
72 Janus Core, Risk-Managed and Value Funds April 30, 2009
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Janus Core, Risk-Managed and Value Funds April 30, 2009 73
Statements of Assets and Liabilities
As of April 30, 2009 (unaudited) | Janus Balanced | Janus Contrarian | ||||||||
(all numbers in thousands except net asset value per share) | Fund | Fund | ||||||||
Assets: | ||||||||||
Investments at cost | $ | 2,735,141 | $ | 4,033,523 | ||||||
Unaffiliated investments at value | $ | 2,632,388 | $ | 3,098,622 | ||||||
Affiliated money market investments | 90,849 | 109,898 | ||||||||
Repurchase agreements | – | – | ||||||||
Cash | 782 | – | ||||||||
Cash denominated in foreign currency(5) | 1,227 | 11,180 | ||||||||
Restricted cash (Note 1) | – | 19,180 | ||||||||
Receivables: | ||||||||||
Investments sold | 82,870 | 6,650 | ||||||||
Fund shares sold | 3,050 | 2,576 | ||||||||
Dividends | 4,710 | 2,852 | ||||||||
Interest | 14,045 | 126 | ||||||||
Non-interested Trustees’ deferred compensation | 64 | 77 | ||||||||
Other assets | 69 | 33 | ||||||||
Forward currency contracts | 319 | – | ||||||||
Total Assets | 2,830,373 | 3,251,194 | ||||||||
Liabilities: | ||||||||||
Payables: | ||||||||||
Options written, at value(6) | – | 24,320 | ||||||||
Due to Custodian | – | 407 | ||||||||
Investments purchased | 176,008 | 22,433 | ||||||||
Fund shares repurchased | 1,774 | 2,781 | ||||||||
Dividends and distributions | 27 | 14 | ||||||||
Advisory fees | 1,167 | 1,234 | ||||||||
Transfer agent fees and expenses | 763 | 1,127 | ||||||||
Administrative services fees | – | – | ||||||||
Non-interested Trustees’ fees and expenses | – | 32 | ||||||||
Non-interested Trustees’ deferred compensation fees | 64 | 77 | ||||||||
Accrued expenses and other payables | 267 | 436 | ||||||||
Forward currency contracts | 1,100 | 1,143 | ||||||||
Total Liabilities | 181,170 | 54,004 | ||||||||
Net Assets | $ | 2,649,203 | $ | 3,197,190 | ||||||
Net Assets Consist of: | ||||||||||
Capital (par value and paid-in surplus)* | $ | 2,758,216 | $ | 5,071,885 | ||||||
Undistributed net investment income/(loss)* | 21,460 | 8,849 | ||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (117,807) | (1,053,339) | ||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (12,666) | (830,205) | ||||||||
Total Net Assets | $ | 2,649,203 | $ | 3,197,190 | ||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 128,811 | 327,861 | ||||||||
Net Asset Value Per Share | $ | 20.57 | $ | 9.75 | ||||||
Net Assets – Investor Shares | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | ||||||||||
Net Asset Value Per Share | ||||||||||
Net Assets – Institutional Shares | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | ||||||||||
Net Asset Value Per Share |
* | See Note 3 in Notes to Financial Statements. |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. | |
(5) | Includes cost of $1,231,823, $11,166,050 and $2,192,941 for Janus Balanced Fund, Janus Contrarian Fund and Janus Growth and Income Fund, respectively. | |
(6) | Includes premiums of $20,337,978 and $46,264,827 on written options for Janus Contrarian Fund and Perkins Mid Cap Value Fund. |
See Notes to Financial Statements.
74 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Growth | ||||||||||||||||||||
Janus Research | and | INTECH Risk-Managed | Perkins Mid Cap | Perkins Small Cap | ||||||||||||||||
Core Fund(1) | Income Fund | Core Fund(2) | Value Fund(3) | Value Fund(4) | ||||||||||||||||
$ | 582,987 | $ | 3,431,655 | $ | 220,369 | $ | 6,864,700 | $ | 1,024,661 | |||||||||||
$ | 469,389 | $ | 3,097,385 | $ | 206,076 | $ | 5,414,193 | $ | 796,604 | |||||||||||
102 | 45,338 | 469 | – | – | ||||||||||||||||
– | – | – | 666,925 | 123,197 | ||||||||||||||||
– | 108 | 1 | 3,736 | 558 | ||||||||||||||||
– | 2,193 | – | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
1,017 | – | 6,377 | 107,274 | 12,772 | ||||||||||||||||
100 | 764 | 63 | 13,687 | 8,146 | ||||||||||||||||
999 | 9,732 | 381 | 6,588 | 733 | ||||||||||||||||
– | 1,861 | – | 5 | 1 | ||||||||||||||||
11 | 76 | 5 | 147 | 22 | ||||||||||||||||
– | 48 | – | 379 | 133 | ||||||||||||||||
86 | 726 | – | – | – | ||||||||||||||||
471,704 | 3,158,231 | 213,372 | 6,212,934 | 942,166 | ||||||||||||||||
– | – | – | 9,473 | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | 21,068 | 6,169 | 97,487 | 3,806 | ||||||||||||||||
403 | 737 | 122 | 4,810 | 559 | ||||||||||||||||
1 | – | 2 | – | – | ||||||||||||||||
226 | 1,541 | 58 | 4,160 | 474 | ||||||||||||||||
187 | 1,454 | 92 | 952 | 126 | ||||||||||||||||
N/A | N/A | 8 | 236 | 142 | ||||||||||||||||
6 | 12 | 5 | – | 3 | ||||||||||||||||
11 | 76 | 5 | 147 | 22 | ||||||||||||||||
137 | 317 | 173 | 681 | 234 | ||||||||||||||||
442 | 2,253 | – | – | – | ||||||||||||||||
1,413 | 27,458 | 6,634 | 117,946 | 5,366 | ||||||||||||||||
$ | 470,291 | $ | 3,130,773 | $ | 206,738 | $ | 6,094,988 | $ | 936,800 | |||||||||||
$ | 715,066 | $ | 4,493,309 | $ | 317,748 | $ | 7,587,423 | $ | 1,146,494 | |||||||||||
2,653 | 12,267 | 2,140 | 22,514 | 8,178 | ||||||||||||||||
(133,571) | (1,084,196) | (99,325) | (768,102) | (113,003) | ||||||||||||||||
(113,857) | (290,607) | (13,825) | (746,847) | (104,869) | ||||||||||||||||
$ | 470,291 | $ | 3,130,773 | $ | 206,738 | $ | 6,094,988 | $ | 936,800 | |||||||||||
32,381 | 140,684 | 22,749 | ||||||||||||||||||
$ | 14.52 | $ | 22.25 | $ | 9.09 | |||||||||||||||
$ | 5,813,578 | $ | 358,028 | |||||||||||||||||
369,667 | 22,343 | |||||||||||||||||||
$ | 15.73 | $ | 16.02 | |||||||||||||||||
$ | 281,410 | $ | 578,772 | |||||||||||||||||
17,778 | 35,647 | |||||||||||||||||||
$ | 15.83 | $ | 16.24 |
Janus Core, Risk-Managed and Value Funds April 30, 2009 75
Statements of Operations
For the six-month period ended April 30, 2009 (unaudited) | Janus Balanced | Janus Contrarian | ||||||||
(all numbers in thousands) | Fund | Fund | ||||||||
Investment Income: | ||||||||||
Interest | $ | 31,571 | $ | 1,018 | ||||||
Securities lending income | 3 | 5 | ||||||||
Dividends | 14,566 | 25,742 | ||||||||
Dividends from affiliates | 133 | 496 | ||||||||
Foreign tax withheld | (985) | (1,257) | ||||||||
Total Investment Income | 45,288 | 26,004 | ||||||||
Expenses: | ||||||||||
Advisory fees | 6,554 | 8,832 | ||||||||
Transfer agent fees and expenses | 2,894 | 4,028 | ||||||||
Registration fees | 129 | 33 | ||||||||
Custodian fees | 63 | 400 | ||||||||
Audit fees | 17 | 20 | ||||||||
Postage fees | 194 | 291 | ||||||||
Non-interested Trustees’ fees and expenses | 8 | 36 | ||||||||
Short Sale Dividend Expense | – | 668 | ||||||||
Stock Loan Fees | – | 214 | ||||||||
Printing expenses | 18 | 18 | ||||||||
Administrative services fees | N/A | N/A | ||||||||
Other expenses | 104 | 115 | ||||||||
Non-recurring costs (Note 2) | – | – | ||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | ||||||||
Total Expenses | 9,981 | 14,655 | ||||||||
Expense and Fee Offset | (1) | (20) | ||||||||
Net Expenses | 9,980 | 14,635 | ||||||||
Less: Excess Expense Reimbursement | – | – | ||||||||
Net Expenses after Expense Reimbursement | 9,980 | 14,635 | ||||||||
Net Investment Income/(Loss) | 35,308 | 11,369 | ||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (65,820) | (877,977) | ||||||||
Net realized gain/(loss) from short sales | – | (5,566) | ||||||||
Net realized gain/(loss) from options contracts | – | (205,322) | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 171,180 | 770,191 | ||||||||
Net Gain/(Loss) on Investments | 105,360 | (318,674) | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 140,668 | $ | (307,305) |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
See Notes to Financial Statements.
76 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Growth | ||||||||||||||||||||
Janus Research | and | INTECH Risk-Managed | Perkins Mid Cap | Perkins Small Cap | ||||||||||||||||
Core Fund(1) | Income Fund | Core Fund(2) | Value Fund(3) | Value Fund(4) | ||||||||||||||||
$ | – | $ | 4,881 | $ | – | $ | 521 | $ | 71 | |||||||||||
– | – | 1 | – | 1 | ||||||||||||||||
5,286 | 37,646 | 3,256 | 63,383 | 12,369 | ||||||||||||||||
11 | 569 | 1 | – | 1 | ||||||||||||||||
(111) | (1,868) | – | (380) | – | ||||||||||||||||
5,186 | 41,228 | 3,258 | 63,524 | 12,442 | ||||||||||||||||
1,375 | 8,974 | 378 | 21,731 | 3,077 | ||||||||||||||||
626 | 4,110 | 288 | 6,526 | 1,109 | ||||||||||||||||
21 | 19 | 6 | 335 | 74 | ||||||||||||||||
14 | 32 | 36 | 17 | 5 | ||||||||||||||||
15 | 19 | 23 | 27 | 55 | ||||||||||||||||
94 | 244 | 85 | 228 | 183 | ||||||||||||||||
7 | 13 | 5 | 16 | 6 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
58 | 12 | 61 | 69 | 65 | ||||||||||||||||
N/A | N/A | 52 | 1,319 | 214 | ||||||||||||||||
54 | 116 | 64 | 172 | 69 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
2,264 | 13,539 | 998 | 30,440 | 4,857 | ||||||||||||||||
(1) | (3) | – | (3) | – | ||||||||||||||||
2,263 | 13,536 | 998 | 30,437 | 4,857 | ||||||||||||||||
– | – | – | (347) | (614) | ||||||||||||||||
2,263 | 13,536 | 998 | 30,090 | 4,243 | ||||||||||||||||
2,923 | 27,692 | 2,260 | 33,434 | 8,199 | ||||||||||||||||
(128,100) | (543,304) | (67,940) | (808,954) | (114,803) | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | (59,830) | – | 169,160 | – | ||||||||||||||||
93,951 | 613,607 | 41,082 | 660,274 | 91,404 | ||||||||||||||||
(34,149) | 10,473 | (26,858) | 20,480 | (23,399) | ||||||||||||||||
$ | (31,226) | $ | 38,165 | $ | (24,598) | $ | 53,914 | $ | (15,200) |
Janus Core, Risk-Managed and Value Funds April 30, 2009 77
Statements of Changes in Net Assets
For the six-month period ended April 30, 2009 (unaudited) | Janus Balanced | |||||||||
and for the fiscal year ended October 31, 2008 | Fund | |||||||||
(all numbers in thousands) | 2009 | 2008 | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 35,308 | $ | 66,189 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | (65,820) | 64,562 | ||||||||
Net realized gain/(loss) from short sales | – | – | ||||||||
Net realized gain/(loss) from options contracts | – | – | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 171,180 | (703,988) | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 140,668 | (573,237) | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | (23,635) | (65,151) | ||||||||
Net realized gain/(loss) from investment transactions* | (106,482) | (87,037) | ||||||||
Net (Decrease) from Dividends and Distributions | (130,117) | (152,188) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | 420,266 | 774,337 | ||||||||
Redemption fees | N/A | N/A | ||||||||
Reinvested dividends and distributions | 127,825 | 150,171 | ||||||||
Shares repurchased | (270,976) | (624,001) | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | 277,115 | 300,507 | ||||||||
Net Increase/(Decrease) in Net Assets | 287,666 | (424,918) | ||||||||
Net Assets: | ||||||||||
Beginning of period | 2,361,537 | 2,786,455 | ||||||||
End of period | $ | 2,649,203 | $ | 2,361,537 | ||||||
Undistributed net investment income/(loss)* | $ | 21,460 | $ | 9,787 |
* | See Note 3 in Notes to Financial Statements. |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. |
See Notes to Financial Statements.
78 Janus Core, Risk-Managed and Value Funds April 30, 2009
Janus Growth | ||||||||||||||||||||||||||||||||
Janus Contrarian | Janus Research | and | INTECH Risk-Managed | |||||||||||||||||||||||||||||
Fund | Core Fund(1) | Income Fund | Core Fund(2) | |||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||
$ | 11,369 | $ | 30,941 | $ | 2,923 | $ | 9,175 | $ | 27,692 | $ | 64,095 | $ | 2,260 | $ | 6,001 | |||||||||||||||||
(877,977) | (13,228) | (128,100) | 17,348 | (543,304) | (398,967) | (67,940) | (30,199) | |||||||||||||||||||||||||
(5,566) | (63,489) | – | – | – | – | – | – | |||||||||||||||||||||||||
(205,322) | 329,236 | – | (215) | (59,830) | (14,682) | – | – | |||||||||||||||||||||||||
– | – | – | (1,608) | – | (10,357) | – | – | |||||||||||||||||||||||||
770,191 | (3,980,426) | 93,951 | (461,418) | 613,607 | (2,483,319) | 41,082 | (125,528) | |||||||||||||||||||||||||
(307,305) | (3,696,966) | (31,226) | (436,718) | 38,165 | (2,843,230) | (24,598) | (149,726) | |||||||||||||||||||||||||
(20,494) | (31,225) | (5,446) | (8,162) | (15,367) | (79,263) | (3,962) | (6,952) | |||||||||||||||||||||||||
(127,433) | (352,470) | (18,689) | (81,266) | – | (673,823) | – | (40,538) | |||||||||||||||||||||||||
(147,927) | (383,695) | (24,135) | (89,428) | (15,367) | (753,086) | (3,962) | (47,490) | |||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
156,865 | 2,111,914 | 16,024 | 83,724 | 117,133 | 400,332 | 14,450 | 31,080 | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | N/A | 8 | 25 | |||||||||||||||||||||||||
143,558 | 375,039 | 23,704 | 87,706 | 15,036 | 738,481 | 3,902 | 46,886 | |||||||||||||||||||||||||
(575,986) | (2,930,515) | (70,526) | (231,761) | (369,895) | (1,304,690) | (29,997) | (146,677) | |||||||||||||||||||||||||
(275,563) | (443,562) | (30,798) | (60,331) | (237,726) | (165,877) | (11,637) | (68,686) | |||||||||||||||||||||||||
(730,795) | (4,524,223) | (86,159) | (586,477) | (214,928) | (3,762,193) | (40,197) | (265,902) | |||||||||||||||||||||||||
3,927,985 | 8,452,208 | 556,450 | 1,142,927 | 3,345,701 | 7,107,894 | 246,935 | 512,837 | |||||||||||||||||||||||||
$ | 3,197,190 | $ | 3,927,985 | $ | 470,291 | $ | 556,450 | $ | 3,130,773 | $ | 3,345,701 | $ | 206,738 | $ | 246,935 | |||||||||||||||||
$ | 8,849 | $ | 17,974 | $ | 2,653 | $ | 5,176 | $ | 12,267 | $ | (58) | $ | 2,140 | $ | 3,842 |
Janus Core, Risk-Managed and Value Funds April 30, 2009 79
Statements of Changes in Net Assets
For the six-month period ended April 30, 2009 (unaudited) | Perkins Mid Cap | Perkins Small Cap | ||||||||||||||||
and for the fiscal year ended October 31, 2008 | Value Fund(1) | Value Fund(2) | ||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 33,434 | $ | 101,537 | $ | 8,199 | $ | 20,484 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (808,954) | 60,332 | (114,803) | 87,851 | ||||||||||||||
Net realized gain/(loss) from options contracts | 169,160 | 33,680 | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 660,274 | (2,359,809) | 91,404 | (454,143) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 53,914 | (2,164,260) | (15,200) | (345,808) | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | ||||||||||||||||||
Investor Shares | (58,252) | (88,491) | (8,453) | (9,322) | ||||||||||||||
Institutional Shares | (4,224) | (13,054) | (10,706) | (9,089) | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Investor Shares | (246,288) | (603,956) | (44,332) | (116,273) | ||||||||||||||
Institutional Shares | (13,958) | (90,114) | (47,807) | (107,401) | ||||||||||||||
Net Decrease from Dividends and Distributions | (322,722) | (795,615) | (111,298) | (242,085) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Investor Shares | 1,553,341 | 3,160,467 | 42,584 | 78,812 | ||||||||||||||
Institutional Shares | 50,466 | 114,516 | 89,643 | 184,019 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Investor Shares | 294,535 | 658,587 | 51,304 | 119,344 | ||||||||||||||
Institutional Shares | 17,348 | 100,575 | 57,453 | 114,053 | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Investor Shares | (961,014) | (1,864,948) | (170,251) | (220,530) | ||||||||||||||
Institutional Shares | (126,613) | (451,091) | (74,234) | (206,652) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 828,063 | 1,718,106 | (3,501) | 69,046 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 559,255 | (1,241,769) | (129,999) | (518,847) | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 5,535,733 | 6,777,502 | 1,066,799 | 1,585,646 | ||||||||||||||
End of period | $ | 6,094,988 | $ | 5,535,733 | $ | 936,800 | $ | 1,066,799 | ||||||||||
Undistributed net investment income/(loss)* | $ | 22,514 | $ | 51,556 | $ | 8,178 | $ | 19,138 |
* | See Note 3 in Notes to Financial Statements. |
(1) | Formerly named Janus Mid Cap Value Fund. | |
(2) | Formerly named Janus Small Cap Value Fund. |
See Notes to Financial Statements.
80 Janus Core, Risk-Managed and Value Funds April 30, 2009
Financial Highlights
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Balanced Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $20.58 | $27.00 | $24.07 | $21.62 | $20.33 | $19.34 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .29 | .59 | .59 | .43 | .42 | .38 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .83 | (5.58) | 2.91 | 2.45 | 1.28 | .99 | ||||||||||||||||||||
Total from Investment Operations | 1.12 | (4.99) | 3.50 | 2.88 | 1.70 | 1.37 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.20) | (.59) | (.57) | (.43) | (.41) | (.38) | ||||||||||||||||||||
Distributions (from capital gains)* | (.93) | (.84) | – | – | – | – | ||||||||||||||||||||
Total Distributions | (1.13) | (1.43) | (.57) | (.43) | (.41) | (.38) | ||||||||||||||||||||
Net Asset Value, End of Period | $20.57 | $20.58 | $27.00 | $24.07 | $21.62 | $20.33 | ||||||||||||||||||||
Total Return** | 5.88% | (19.34)% | 14.73% | 13.41% | 8.43% | 7.11% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,649,203 | $2,361,537 | $2,786,455 | $2,478,237 | $2,507,307 | $2,849,423 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,404,678 | $2,733,572 | $2,593,935 | $2,499,295 | $2,720,829 | $3,234,587 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.84% | 0.79% | 0.79% | 0.82% | 0.80% | 0.87% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.84% | 0.79% | 0.79% | 0.81% | 0.79% | 0.87% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.96% | 2.42% | 2.34% | 1.85% | 1.93% | 1.82% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 228% | 109% | 60% | 50% | 47% | 45% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Contrarian Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.90 | $21.19 | $17.44 | $14.20 | $11.74 | $9.97 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .07 | .06 | .21 | .05 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.76) | (9.40) | 5.71 | 3.25 | 2.44 | 1.76 | ||||||||||||||||||||
Total from Investment Operations | (.72) | (9.33) | 5.77 | 3.46 | 2.49 | 1.77 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.08) | (.21) | (.04) | (.03) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (.37) | (.88) | (1.81) | (.18) | – | – | ||||||||||||||||||||
Total Distributions | (.43) | (.96) | (2.02) | (.22) | (.03) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $9.75 | $10.90 | $21.19 | $17.44 | $14.20 | 11.74 | ||||||||||||||||||||
Total Return** | (6.30)% | (46.02)% | 36.17% | 24.60% | 21.19% | 17.75% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,197,190 | $3,927,985 | $8,452,208 | $4,002,929 | $2,906,324 | 2,383,959 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,110,880 | $7,251,667 | $6,378,807 | $3,511,568 | $2,716,329 | 2,497,342 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.95% | 1.01% | 0.97% | 0.95% | 0.93% | 0.98% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.95% | 1.00% | 0.96% | 0.94% | 0.93% | 0.98% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.74% | 0.43% | 0.38% | 1.41% | 0.45% | 0.07% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 79% | 52% | 28% | 39% | 42% | 30% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 81
Financial Highlights (continued)
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Research Core Fund(1) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.02 | $30.28 | $25.43 | $22.15 | $18.78 | $17.04 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .09 | .25 | .14 | .11 | .11 | .05 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.88) | (12.10) | 4.85 | 3.24 | 3.34 | 1.75 | ||||||||||||||||||||
Total from Investment Operations | (.79) | (11.85) | 4.99 | 3.35 | 3.45 | 1.80 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.16) | (.22) | (.11) | (.07) | (.08) | (.06) | ||||||||||||||||||||
Distributions (from capital gains)* | (.55) | (2.19) | (.03) | – | – | – | ||||||||||||||||||||
Total Distributions | (.71) | (2.41) | (.14) | (.07) | (.08) | (.06) | ||||||||||||||||||||
Net Asset Value, End of Period | $14.52 | $16.02 | $30.28 | $25.43 | $22.15 | $18.78 | ||||||||||||||||||||
Total Return** | (4.58)% | (42.21)% | 19.71% | 15.15% | 18.44% | 10.61% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $470,291 | $556,450 | $1,142,927 | $1,018,315 | $720,889 | $613,269 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $462,425 | $889,958 | $1,067,882 | $955,696 | $652,913 | $653,639 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.99% | 0.91% | 0.87% | 0.92% | 0.90% | 0.97% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.99% | 0.90% | 0.87% | 0.91% | 0.89% | 0.97% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.27% | 1.03% | 0.48% | 0.49% | 0.50% | 0.24% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 60% | 157% | 33% | 46% | 74% | 58% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Growth and Income Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.90 | $44.20 | $37.36 | $33.97 | $29.29 | $27.12 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .19 | .38 | .63 | .61 | .24 | .07 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .27 | (17.92) | 6.86 | 3.30 | 4.66 | 2.17 | ||||||||||||||||||||
Total from Investment Operations | .46 | (17.54) | 7.49 | 3.91 | 4.90 | 2.24 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.11) | (.49) | (.65) | (.52) | (.22) | (.07) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (4.27) | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.11) | (4.76) | (.65) | (.52) | (.22) | (.07) | ||||||||||||||||||||
Net Asset Value, End of Period | $22.25 | $21.90 | $44.20 | $37.36 | $33.97 | $29.29 | ||||||||||||||||||||
Total Return** | 2.14% | (43.79)% | 20.22% | 11.56% | 16.79% | 8.28% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,130,773 | $3,345,701 | $7,107,894 | $6,780,817 | $5,734,941 | $5,177,210 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,937,329 | $5,463,501 | $6,738,311 | $6,677,364 | $5,454,668 | $5,568,170 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.93% | 0.87% | 0.87% | 0.89% | 0.88% | 0.92% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.93% | 0.86% | 0.86% | 0.88% | 0.87% | 0.92% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.90% | 1.17% | 1.98% | 1.90% | 0.68% | 0.24% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 55% | 76% | 54% | 50% | 38% | 41% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
82 Janus Core, Risk-Managed and Value Funds April 30, 2009
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | INTECH Risk-Managed Core Fund(1) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.21 | $17.38 | $16.46 | $15.28 | $13.98 | $12.44 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .10 | .24 | .20 | .12 | .12 | .08 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.05) | (5.75) | 1.71 | 1.96 | 1.89 | 1.75 | ||||||||||||||||||||
Total from Investment Operations | (.95) | (5.51) | 1.91 | 2.08 | 2.01 | 1.83 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.17) | (.24) | (.12) | (.13) | (.08) | (.03) | ||||||||||||||||||||
Dividends (from capital gains)* | – | (1.42) | (.87) | (.77) | (.63) | (.26) | ||||||||||||||||||||
Redemption Fees | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Total Distributions and Other | (.17) | (1.66) | (.99) | (.90) | (.71) | (.29) | ||||||||||||||||||||
Net Asset Value, End of Period | $9.09 | $10.21 | $17.38 | $16.46 | $15.28 | $13.98 | ||||||||||||||||||||
Total Return** | (9.36)% | (34.82)% | 12.11% | 14.10% | 14.79% | 15.06% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $206,738 | $246,935 | $512,837 | $498,582 | $379,214 | $181,903 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $208,469 | $386,247 | $543,933 | $433,127 | $308,431 | $129,518 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.97% | 0.75% | 0.77% | 0.91% | 0.89% | 0.69%(5) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.97% | 0.75% | 0.77% | 0.90% | 0.88% | 0.69% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.19% | 1.55% | 1.08% | 0.81% | 0.92% | 0.72% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 117% | 74% | 109% | 108% | 81% | 71% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Formerly named INTECH Risk-Managed Stock Fund. | |
(2) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(5) | The ratio was 1.07% before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 83
Financial Highlights – Investor Shares
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Perkins Mid Cap Value Fund(1) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.63 | $26.56 | $24.87 | $23.24 | $22.22 | $18.94 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .09 | .29 | .32 | .37 | .14 | .10 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.01) | (7.09) | 3.30 | 3.33 | 2.89 | 3.28 | ||||||||||||||||||||
Total from Investment Operations | .08 | (6.80) | 3.62 | 3.70 | 3.03 | 3.38 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.19) | (.40) | (.31) | (.24) | (.08) | (.10) | ||||||||||||||||||||
Distributions (from capital gains)* | (.79) | (2.73) | (1.62) | (1.83) | (1.93) | – | ||||||||||||||||||||
Total Distributions | (.98) | (3.13) | (1.93) | (2.07) | (2.01) | (.10) | ||||||||||||||||||||
Net Asset Value, End of Period | $15.73 | $16.63 | $26.56 | $24.87 | $23.24 | $22.22 | ||||||||||||||||||||
Total Return** | 0.90% | (28.59)% | 15.38% | 16.88% | 14.26% | 17.92% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,813,578 | $5,170,228 | $5,892,209 | $5,181,449 | $4,188,183 | $2,978,875 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,047,137 | $6,009,064 | $5,710,028 | $4,806,698 | $3,797,215 | $2,244,533 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.15% | 1.07% | 0.86% | 0.93% | 0.93% | 0.94% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 1.15% | 1.06% | 0.85% | 0.93% | 0.92% | 0.94% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.25% | 1.47% | 1.49% | 1.69% | 0.67% | 0.56% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 104% | 103% | 95% | 95% | 86% | 91% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Perkins Small Cap Value Fund(4) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.98 | $27.90 | $30.29 | $31.16 | $32.98 | $28.63 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .13 | .32 | .32 | .39 | .29 | .31 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.16) | (5.83) | 2.57 | 3.49 | �� | 3.16 | 4.16 | |||||||||||||||||||
Total from Investment Operations | (.03) | (5.51) | 2.89 | 3.88 | 3.45 | 4.47 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.31) | (.33) | (.45) | (.30) | (.31) | (.12) | ||||||||||||||||||||
Distributions (from capital gains)* | (1.62) | (4.08) | (4.83) | (4.45) | (4.96) | – | ||||||||||||||||||||
Total Distributions | (1.93) | (4.41) | (5.28) | (4.75) | (5.27) | (.12) | ||||||||||||||||||||
Net Asset Value, End of Period | $16.02 | $17.98 | $27.90 | $30.29 | $31.16 | $32.98 | ||||||||||||||||||||
Total Return** | 0.79% | (22.57)% | 10.77% | 13.71% | 11.34% | 15.65% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $358,028 | $503,335 | $813,857 | $1,153,144 | $1,338,093 | $1,480,885 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $383,918 | $662,033 | $974,404 | $1,259,565 | $1,440,206 | $1,630,099 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.15% | 1.03% | 1.01% | 1.01% | 1.00% | 1.02% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 1.15% | 1.03% | 1.00% | 1.00% | 0.99% | 1.02% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.74% | 1.44% | 1.13% | 1.26% | 0.84% | 0.91% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 70% | 112% | 59% | 62% | 44% | 50% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Formerly named Janus Mid Cap Value Fund. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | Formerly named Janus Small Cap Value Fund. |
See Notes to Financial Statements.
84 Janus Core, Risk-Managed and Value Funds April 30, 2009
Financial Highlights – Institutional Shares
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Perkins Mid Cap Value Fund(1) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.75 | $26.69 | $24.99 | $23.34 | $22.31 | $19.02 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .20 | .49 | .39 | .39 | .15 | .14 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.09) | (7.31) | 3.28 | 3.37 | 2.92 | 3.29 | ||||||||||||||||||||
Total from Investment Operations | .11 | (6.82) | 3.67 | 3.76 | 3.07 | 3.43 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.24) | (.39) | (.35) | (.28) | (.11) | (.14) | ||||||||||||||||||||
Distributions (from capital gains)* | (.79) | (2.73) | (1.62) | (1.83) | (1.93) | – | ||||||||||||||||||||
Total Distributions | (1.03) | (3.12) | (1.97) | (2.11) | (2.04) | (.14) | ||||||||||||||||||||
Net Asset Value, End of Period | $15.83 | $16.75 | $26.69 | $24.99 | $23.34 | $22.31 | ||||||||||||||||||||
Total Return** | 1.12% | (28.49)% | 15.49% | 17.08% | 14.40% | 18.14% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $281,410 | $365,505 | $885,293 | $1,068,045 | $734,926 | $464,450 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $272,215 | $759,342 | $1,043,566 | $921,447 | $597,747 | $395,466 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.91%(4) | 0.84%(4) | 0.77%(4) | 0.78%(4) | 0.77%(4) | 0.77%(4) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.91% | 0.84% | 0.77% | 0.77% | 0.77% | 0.77% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.52% | 1.76% | 1.60% | 1.79% | 0.82% | 0.74% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 104% | 103% | 95% | 95% | 86% | 91% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Perkins Small Cap Value Fund(5) | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.24 | $28.20 | $30.54 | $31.38 | $33.19 | $28.82 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .14 | .33 | .38 | .54 | .37 | .39 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (.16) | (5.86) | 2.61 | 3.43 | 3.17 | 4.18 | ||||||||||||||||||||
Total from Investment Operations | (.02) | (5.53) | 2.99 | 3.97 | 3.54 | 4.57 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.36) | (.35) | (.50) | (.36) | (.39) | (.20) | ||||||||||||||||||||
Distributions (from capital gains)* | (1.62) | (4.08) | (4.83) | (4.45) | (4.96) | – | ||||||||||||||||||||
Total Distributions | (1.98) | (4.43) | (5.33) | (4.81) | (5.35) | (.20) | ||||||||||||||||||||
Net Asset Value, End of Period | $16.24 | $18.24 | $28.20 | $30.54 | $31.38 | $33.19 | ||||||||||||||||||||
Total Return** | 0.90% | (22.39)% | 11.06% | 13.93% | 11.57% | 15.91% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $578,772 | $563,464 | $771,789 | $923,755 | $1,185,733 | $1,400,160 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $477,922 | $664,935 | $831,092 | $1,092,751 | $1,323,226 | $1,486,714 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.87%(6) | 0.82%(6) | 0.80%(6) | 0.80%(6) | 0.79%(6) | 0.81%(6) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.87% | 0.81% | 0.79% | 0.79% | 0.79% | 0.81% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.06% | 1.65% | 1.34% | 1.51% | 1.05% | 1.12% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 70% | 112% | 59% | 62% | 44% | 50% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Formerly named Janus Mid Cap Value Fund. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | The ratio was 1.17% in 2009, 1.04% in 2008, 0.81% in 2007, 0.89% in 2006, 0.88% in 2005, and 0.90% in 2004, before waiver of certain fees incurred by the Fund. | |
(5) | Formerly named Janus Small Cap Value Fund. | |
(6) | The ratio was 1.12% in 2009, 1.02% in 2008, 0.97% in 2007, 0.97% in 2006, 0.96% in 2005, and 0.99% in 2004, before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2009 85
Notes to Schedules of Investments (unaudited)
Balanced Index | An internally-calculated, hypothetical combination of unmanaged indices that combines total returns from the S&P 500® Index (55%) and Barclays Capital U.S. Government/Credit Bond Index (45%). | |
Barclays Capital U.S. Government/Credit Bond Index | Is composed of all bonds that are investment grade with at least one year until maturity. | |
Lipper Large-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500® Index. | |
Lipper Mid-Cap Value Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Mid-cap value funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. | |
Lipper Mixed-Asset Target Allocation Moderate Funds | Funds that, by portfolio practice, maintain a mix of between 40%-60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. | |
Lipper Multi-Cap Core Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating more than 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) above 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. | |
Lipper Small-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | |
Morgan Stanley Capital International All Country World IndexSM | Is an unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Value Index | Measures the performance of those Russell 2000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
Russell 2000® Index | Measures the performance of the 2,000 smallest companies in the Russell 3000® Index. | |
Russell Midcap® Value Index | Measures the performance of those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values. |
86 Janus Core, Risk-Managed and Value Funds April 30, 2009
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. | |
S&P MidCap 400 Index | An unmanaged group of 400 domestic stocks chosen for their market size, liquidity and industry group representation. | |
VVPR Strips | The VVPR strip is a coupon which, if presented along with the dividend coupon of the ordinary share, allows the benefit of a reduced withholding tax on the dividends paid by the company. This strip is quoted separately from the ordinary share and is freely negotiable. | |
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. | |
ADR | American Depositary Receipt | |
ETF | Exchange-Traded Fund | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
SPDR | Standard & Poor’s Depositary Receipt | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
‡ | Rate is subject to change. Rate shown reflects current rate. | |
Ç | Security is traded on a “to-be-announced” basis. | |
ÇÇ | Security is a U.S. Treasury Inflation-Protected Security (TIPS). |
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2009)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Balanced Fund | ||||||||||||
Atlas Copco A.B., 5.6000%, 5/22/17 (144A) | 5/15/07 | $ | 1,454,345 | $ | 1,380,517 | 0.1% | ||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2009. The issuer incurs all registration costs.
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the six-month period ended April 30, 2009. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Contrarian FundÏ | |||||||||||||||||||||
Ballarpur Industries, Ltd. | – | $ | – | 19,030,231 | $ | 5,694,842 | $ | 501,329 | $ | 433,158 | $ | 3,767,238 | |||||||||
Forest Oil Corp.*(1) | 3,209,355 | 13,509,775 | 1,586,260 | 7,344,586 | (5,388,247) | – | 92,018,240 | ||||||||||||||
Owens-Illinois, Inc.* | – | – | 3,698,295 | 68,452,926 | (12,486,020) | – | 124,842,288 | ||||||||||||||
St. Joe Co.* | – | – | 289,860 | 13,065,419 | (7,169,584) | – | 215,187,418 | ||||||||||||||
Teekay Corp. (U.S. Shares) | 3,761,905 | 65,069,252 | – | – | – | 1,189,702 | 54,321,908 | ||||||||||||||
Vail Resorts, Inc.* | – | – | 96,760 | 5,094,697 | (3,449,593) | – | 84,302,006 | ||||||||||||||
$ | 78,579,027 | $ | 99,652,470 | $ | (27,992,115) | $ | 1,622,860 | $ | 574,439,098 | ||||||||||||
Janus Core, Risk-Managed and Value Funds April 30, 2009 87
Notes to Schedules of Investments (unaudited) (continued)
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Perkins Mid Cap Value Fund(2) | |||||||||||||||||||||
Kaydon Corp. | 674,100 | $ | 17,290,453 | 1,148,429 | $ | 47,188,431 | $ | (12,984,143) | $ | 472,362 | $ | 28,814,209 | |||||||||
Thomas & Betts Corp. | 200,000 | 3,588,983 | 1,400,000 | 54,253,996 | $ | (17,351,911) | – | 49,792,000 | |||||||||||||
$ | 20,879,436 | $ | 101,442,427 | $ | (30,336,054) | $ | 472,362 | $ | 78,606,209 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Perkins Small Cap Value Fund(3) | |||||||||||||||||||||
ICT Group, Inc. | 73,100 | $ | 264,324 | 71,800 | $ | 615,685 | $ | (173,146) | $ | – | $ | 5,956,404 | |||||||||
IPC Holdings, Ltd. | 240,000 | 6,196,475 | – | – | – | 112,200 | 10,416,000 | ||||||||||||||
LCA-Vision, Inc. | – | – | – | – | – | – | 6,210,000 | ||||||||||||||
$ | 6,460,799 | $ | 615,685 | $ | (173,146) | $ | 112,200 | $ | 22,582,404 | ||||||||||||
(1) | During the period, exercised options resulted in a net increase of 614,600 shares. | |
(2) | Formerly named Janus Mid Cap Value Fund. | |
(3) | Formerly named Janus Small Cap Value Fund. |
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 April 30, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of April 30, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Core | |||||||||||
Janus Balanced Fund | $ | 870,416,504 | $ | 1,852,820,070 | $ | – | |||||
Janus Contrarian Fund | 2,221,125,298 | 978,708,763 | – | ||||||||
Janus Research Core Fund(1) | 388,544,787 | 80,946,074 | – | ||||||||
Janus Growth and Income Fund | 2,168,899,944 | 973,823,496 | – | ||||||||
Risk-Managed | |||||||||||
INTECH Risk-Managed Core Fund(2) | 206,076,441 | 469,000 | ��� | ||||||||
Value | |||||||||||
Perkins Mid Cap Value Fund(3) | 5,289,161,830 | 745,346,000 | – | ||||||||
Perkins Small Cap Value Fund(4) | 796,603,582 | 123,197,000 | – | ||||||||
Investments in Purchased Options: | |||||||||||
Core | |||||||||||
Janus Contrarian Fund | 3,131,405 | 5,554,567 | – | ||||||||
Value | |||||||||||
Perkins Mid Cap Value Fund(3) | – | 46,609,814 | – | ||||||||
Other Financial Instruments(a): | |||||||||||
Core | |||||||||||
Janus Balanced Fund | – | (780,789) | – | ||||||||
Janus Contrarian Fund | (909,706) | (24,553,067) | – | ||||||||
Janus Research Core Fund(1) | – | (356,310) | – | ||||||||
Janus Growth and Income Fund | – | (1,527,459) | – | ||||||||
Value | |||||||||||
Perkins Mid Cap Value Fund(3) | – | (9,473,228) | – | ||||||||
(a) | Other Financial Instruments include futures, forward currency, written option, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date,which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. | |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
88 Janus Core, Risk-Managed and Value Funds April 30, 2009
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2009 are noted below.
Fund | Aggregate Value | ||||
Core | |||||
Janus Balanced Fund | $ | 422,394,729 | |||
Janus Contrarian Fund | 639,039,954 | ||||
Janus Research Core Fund(1) | 67,818,439 | ||||
Janus Growth and Income Fund | 590,599,125 | ||||
Value | |||||
Perkins Mid Cap Value Fund(2) | 64,493,641 | ||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named Janus Mid Cap Value Fund. |
Repurchase agreements held by a Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or subcustodian. The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
Janus Core, Risk-Managed and Value Funds April 30, 2009 89
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Balanced Fund, Janus Contrarian Fund, Janus Research Core Fund (formerly named Janus Fundamental Equity Fund), Janus Growth and Income Fund, INTECH Risk-Managed Core Fund (formerly named INTECH Risk-Managed Stock Fund), Perkins Mid Cap Value Fund (formerly named Janus Mid Cap Value Fund) and Perkins Small Cap Value Fund (formerly named Janus Small Cap Value Fund) (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part 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. The Trust offers twenty-eight funds, which include multiple series of shares, with differing investment objectives and policies. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified, as defined in the 1940 Act, with the exception of Janus Contrarian Fund, which is classified as non-diversified. The Funds are no-load investments.
Effective March 13, 2009, Perkins Small Cap Value Fund – Investor Shares reopened to new investors.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Short positions shall be valued in accordance with the same methodologies, except that in the event that a last sale price is not available, the latest ask price shall be used instead of a bid price. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. 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; and (iii) a non-significant event such as a market closing early or not opening, or a security trading halt. The Funds may use a systematic fair valuation model provided by an independent pricing service to value foreign equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the Funds’ Trustees.
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 Trust 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
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each fund in the Trust. Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund currently offer two classes of shares. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which may be based upon relative net assets of each class. Expenses 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
90 Janus Core, Risk-Managed and Value Funds April 30, 2009
attributable to a specific class of shares are charged against the operations of such class.
Securities Lending
Under procedures adopted by the Trustees, the Funds may seek to earn additional income by lending securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in non-affiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedules of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statements of Operations (if applicable).
The Securities Lending Program was suspended and effective November 19, 2008, the Funds no longer had any securities on loan. Management continues to review the program and may resume securities lending.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds and certain pooled investment vehicles, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Funds, except INTECH Risk-Managed Core Fund, may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate.
The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Operations (if applicable).
Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts. Such collateral is in the possession of the Funds’ custodian.
On September 15, 2008, Lehman Brothers Holding, Inc. (Lehman) filed for Chapter 11 bankruptcy in U.S. Federal Court. A number of Lehman subsidiaries have subsequently filed bankruptcy or similar insolvency proceedings in the U.S. and other jurisdictions. Lehman’s bankruptcy caused the Funds to write-off Lehman foreign exchange currency gains and losses and the associated receivables and payables. The written-off gains and losses are included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Changes in Net Assets.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds 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
Janus Core, Risk-Managed and Value Funds April 30, 2009 91
Notes to Financial Statements (unaudited) (continued)
the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statements of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statements of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Funds, except INTECH Risk-Managed Core Fund, may utilize swap agreements as a means to gain exposure to certain common stocks and/or to “hedge” or protect their portfolios from adverse movements in securities prices or interest rates. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Swap agreements entail the risk that a party will default on its payment obligation to a Fund. If the other party to a swap defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If a 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 contracts are reported as an asset or liability on the Statements of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statements of Operations (if applicable).
Various types of swaps such as credit default (funded and unfunded), equity, interest rate, and total return swaps are described below.
Credit default swaps are a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments.
Funded or unfunded credit default swaps are based on an index of credit default swaps (“CDXs”) or other similarly structured products. CDXs are designed to track segments of the credit default swap market and provide investors with exposure to specific reference baskets of issuers of bonds or loans. These instruments have the potential to allow an investor to obtain the same investment exposure as an investor who invests in an individual credit default swap, but with the potential added benefit of diversification. The CDX reference baskets are normally priced daily and rebalanced every six months in conjunction with leading market makers in the credit industry. The liquidity of the market for CDXs is normally subject to liquidity in the secured loan and credit derivatives markets. A Fund investing in CDXs is normally only permitted to take long positions in these instruments.
Equity swaps involve the exchange by two parties of future cash flow (e.g., one cash flow based on a referenced interest rate and the other based on the performance of stock or a stock index).
Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments).
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.
Options Contracts
The Funds may purchase or write covered and uncovered put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds may utilize American-style and European-style options. An American-style option is an option contract that can be exercised at any time between the time of purchase and the option’s expiration date. A European-style option is an option contract that can only be exercised on the option’s expiration date. The Funds, except INTECH Risk-Managed Core Fund, may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option,
92 Janus Core, Risk-Managed and Value Funds April 30, 2009
or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedules of Investments (if applicable). Options written are reported as a liability on the Statements of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statements of Operations (if applicable).
The Funds recognized realized gains/(losses) from written options contracts during the six-month period ended April 30, 2009 as indicated in the table below:
Fund | Gains/(Losses) | ||||
Core | |||||
Janus Contrarian Fund | $ | (315,082,677) | |||
Janus Research Core Fund(1) | 1,140,857 | ||||
Value | |||||
Perkins Mid Cap Value Fund(2) | (128,431,660) | ||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named Janus Mid Cap Value Fund. |
The risk in writing call options is that the Funds give 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 Funds 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 Funds pay a premium whether or not the options are exercised. 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 Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2009 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Contrarian Fund | ||||||||
Options outstanding at October 31, 2008 | 66,132 | $ | 27,837,180 | |||||
Options written | 380,969 | 203,446,216 | ||||||
Options closed | (154,495) | (176,537,383) | ||||||
Options expired | (204,039) | (42,935,840) | ||||||
Options exercised | (10,453) | (2,982,050) | ||||||
Options outstanding at April 30, 2009 | 78,114 | $ | 8,828,123 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Contrarian Fund | ||||||||
Options outstanding at October 31, 2008 | 52,806 | $ | 59,356,290 | |||||
Options written | 200,856 | 66,217,872 | ||||||
Options closed | (80,180) | (98,119,718) | ||||||
Options expired | (59,378) | (6,974,678) | ||||||
Options exercised | (48,151) | (8,969,911) | ||||||
Options outstanding at April 30, 2009 | 65,953 | $ | 11,509,855 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Research Core Fund(1) | ||||||||
Options outstanding at October 31, 2008 | – | $ | – | |||||
Options written | 230 | 24,610 | ||||||
Options closed | – | – | ||||||
Options expired | – | – | ||||||
Options exercised | (230) | (24,610) | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
(1) | Formerly named Janus Fundamental Equity Fund. |
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Perkins Mid Cap Value Fund(1) | ||||||||
Options outstanding at October 31, 2008 | 45,817 | $ | 28,210,279 | |||||
Options written | 137,636 | 57,200,770 | ||||||
Options closed | (46,822) | (25,766,848) | ||||||
Options expired | (678) | (1,911,282) | ||||||
Options exercised | (39,173) | (11,468,092) | ||||||
Options outstanding at April 30, 2009 | 96,780 | $ | 46,264,827 | |||||
(1) | Formerly named Janus Mid Cap Value Fund. |
Securities Traded on a To-Be-Announced Basis
The Funds may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the Funds commit to purchasing or selling securities for which specific information is not yet known at the time of the trade, particularly the face amount and maturity date in Government National Motrgage Association (“Ginnie Mae”), Federal National Mortgage Association (“Fannie Mae”) and/or Federal Home Loan Mortgage Corporation (“Freddie Mac”) transactions.
Janus Core, Risk-Managed and Value Funds April 30, 2009 93
Notes to Financial Statements (unaudited) (continued)
Securities purchased on a TBA basis are not settled until they are delivered to the Funds, normally 15 to 45 days later. Beginning on the date the Funds enter into a TBA transaction, cash, U.S. Government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
Mortgage- and Asset-Backed Securities
The Funds, except INTECH Risk-Managed Core Fund, may purchase fixed or variable rate mortgage-backed securities issued by Ginnie Mae, Fannie Mae, Freddie Mac, or other governmental or government-related entities. Fannie Maes and Freddie Macs are not backed by the full faith and credit of the U.S. Government. The Funds may purchase other mortgage- and asset-backed securities through single- and multi-seller conduits, collateralized debt obligations, structured investment vehicles, and other similar securities. Asset-backed securities may be backed by automobile loans, equipment leases, credit card receivables, or other collateral. In the event the underlying securities fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact a Fund’s yield and your return. In addition, mortgage-backed securities may be supported by some form of government or private guarantee and/or insurance. However, there is no assurance that the guarantors or insurers will meet their obligations.
Unlike traditional debt instruments, payments on these securities include both interest and a partial payment of principal. Prepayment risk, which results from prepayments of the principal of underlying loans, may shorten the effective maturities of these securities and may result in a Fund having to reinvest proceeds at a lower interest rate.
In addition to prepayment risk, investments in mortgage-backed securities, including those comprised of subprime mortgages, and investments in other asset-backed securities comprised of under-performing assets may be subject to a higher degree of credit risk, valuation risk, and liquidity risk. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
Mortgage- and asset- backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing a Fund’s sensitivity to interest changes and causing its price to decline.
Floating Rate Loans
Janus Balanced Fund may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates, which adjust periodically, and are tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
Janus Balanced Fund may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment from another holder of, or participation interest in, loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which a Fund invests are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
94 Janus Core, Risk-Managed and Value Funds April 30, 2009
The Fund may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the Fund may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The Fund utilizes an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements and the related rate range during the six-month period ended April 30, 2009 is indicated in the table below:
Average Monthly | ||||||||
Fund | Value | Rates | ||||||
Core | ||||||||
Janus Balanced Fund | $ | 1,365,324 | 0% | |||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of a Fund’s net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls. The Funds may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which a Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that a Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The Funds are also required to pay the lender of the security any dividends or interest that accrues on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, a Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Funds pay stock loan fees on assets borrowed from the security broker.
A Fund may also enter into short positions through derivative instruments such as option contracts, futures contracts and swap agreements which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
Foreign Currency Translations
The Funds do 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.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all
Janus Core, Risk-Managed and Value Funds April 30, 2009 95
Notes to Financial Statements (unaudited) (continued)
of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Exchange-Traded Notes
The Funds may invest directly in exchange-traded notes (“ETN”), which are senior, unsecured, unsubordinated debt securities whose returns are linked to a particular index and provide exposure to the total returns of various market indices, including indices linked to stocks, bonds, commodities and currencies. This type of debt security differs from other types of bonds and notes. ETN returns are based upon the performance of a market index minus applicable fees; no period coupon payments are distributed and no principal protections exist. ETNs do not pay cash distributions. Instead, the value of dividends, interest, and investment gains are captured in the Funds’ total return. The Funds will invest in these securities when desiring exposure to debt securities or commodities. When evaluating ETNs for investment, Janus Capital will consider the potential risks involved, expected tax efficiency, rate of return, and credit risk. When the Funds invest in ETNs, they will bear their proportionate share of any fees and expenses borne by the ETN. There may be restrictions on the Funds’ right to redeem their investment in an ETN, which are meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
Equity-Linked Structured Notes
The Funds, except INTECH Risk-Managed Core Fund, may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Additional Investment Risk
The Funds may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer. INTECH Risk-Managed Core Fund does not intend to invest in high-yield/high-risk bonds.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to a 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 a Fund. A Fund may be unable to recover its investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded in a Fund’s Statement of Assets and Liabilities.
A 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 a Fund’s cash balances are invested in one or more money market funds, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A 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 a Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the
96 Janus Core, Risk-Managed and Value Funds April 30, 2009
inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Restricted Cash
As of April 30, 2009, Janus Contrarian Fund had restricted cash in the amount of $19,180,000. The restricted cash represents collateral received in relation to options contracts, swap agreements, futures contracts and short sales invested in by the Fund at April 30, 2009. The restricted cash is held at the Fund’s custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
Dividend Distributions
Dividends of net investment income for Janus Balanced Fund and Janus Growth and Income Fund are generally declared and distributed quarterly, and realized capital gains (if any) are distributed annually. The remaining Funds generally declare and distribute dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The 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 REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Funds’ tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2006-2008 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2009, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examinations in progress and are 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.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standard Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 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. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Various inputs are used in determining the value of the Funds’ investments defined pursuant to SFAS No. 157. These inputs are summarized into three broad levels:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing a security and are developed based on market data obtained from sources independent of the reporting entity. These may include quoted prices for similar
Janus Core, Risk-Managed and Value Funds April 30, 2009 97
Notes to Financial Statements (unaudited) (continued)
securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the security and would be based on the best information available in the circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of April 30, 2009 to value each Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if required) in the Notes to Schedules of Investments.
In April 2009, FASB issued FASB staff position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds’ financial statement disclosures.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
In September 2008, FASB issued a FASB Staff Position No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45” (the “Position”), which was effective for fiscal years ending after November 15, 2008. The Position amends FASB Statement No. 133 (“FAS 133”), Accounting for Derivative Instruments and Hedging Activities, and also amends FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The amendments to FAS 133 include required disclosure for (i) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. Management has evaluated the impact of SFAS No. 133-1 and FIN 45-4 and there is no impact on the Funds’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based on average daily net assets and calculated at the annual rate shown in the table below for each Fund.
Average Daily Net | Management | |||||||
Fund | Assets of Fund | Fee (%) | ||||||
Core | ||||||||
Janus Balanced Fund | All Asset Levels | 0.55% | ||||||
Janus Contrarian Fund | All Asset Levels | 0.64% | ||||||
Janus Research Core Fund(1) | All Asset Levels | 0.60% | ||||||
Janus Growth and Income Fund | All Asset Levels | 0.62% | ||||||
Risk-Managed | ||||||||
INTECH Risk-Managed Core Fund(2) | All Asset Levels | 0.50% | ||||||
Value | ||||||||
Perkins Mid Cap Value Fund(3) | All Asset Levels | 0.64% | ||||||
Perkins Small Cap Value Fund(4) | All Asset Levels | 0.72% | ||||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
For Janus Contrarian Fund, INTECH Risk-Managed Core Fund, Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund, the investment advisory fee is determined by calculating a base fee rate and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base
98 Janus Core, Risk-Managed and Value Funds April 30, 2009
fee rate depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||
Core | |||||
Janus Contrarian Fund | S&P 500® Index | ||||
Risk-Managed | |||||
INTECH Risk-Managed Core Fund(1) | S&P 500® Index | ||||
Value | |||||
Perkins Mid Cap Value Fund(2) | Russell Midcap® Value Index | ||||
Perkins Small Cap Value Fund(3) | Russell 2000® Value Index | ||||
(1) | Formerly named INTECH Risk-Managed Stock Fund. | |
(2) | Formerly named Janus Mid Cap Value Fund. | |
(3) | Formerly named Janus Small Cap Value Fund. |
At the “Special Meeting” of the shareholders of Perkins Small Cap Value Fund held on November 25, 2008, shareholders of the Fund approved an amended investment advisory agreement between Janus Investment Trust, on behalf of the Fund, and Janus Capital, changing the Fund’s investment advisory fee structure from an annual fixed rate of 0.72% of average daily net assets to an annual rate of 0.72% that adjusts up or down based upon the performance of the Fund’s Investor Shares relative to the Fund’s benchmark index, the Russell 2000® Value Index.
Only the base fee rate applied until January 2007 for INTECH Risk-Managed Core Fund, February 2007 for Janus Contrarian Fund and Perkins Mid Cap Value Fund and will apply until January 2010 for Perkins Small Cap Value Fund, at which time the calculation of the performance adjustment applies as follows:
(Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment)
The investment advisory fee paid to Janus Capital by each of the Funds listed above consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no performance adjustment will be made until the Fund’s performance-based fee structure has been in effect for at least 12 months. When the Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period is equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any applicable Performance Adjustment began January 2007 for INTECH Risk-Managed Core Fund and February 2007 for Janus Contrarian Fund and Perkins Mid Cap Value Fund and will begin January 2010 for Perkins Small Cap Value Fund.
No Performance Adjustment is applied unless the difference between the Fund’s investment performance and the cumulative investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee Rate and the Performance Adjustment, net assets are averaged over different periods (average daily net assets during the previous month for the Base Fee Rate, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses, whereas the Fund’s benchmark index does not have any fees or expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund’s benchmark index. The Base Fee Rate is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The investment performance of Perkins Mid Cap Value Fund’s and Perkins Small Cap Value Fund’s Investor Shares (“Investor Shares”) for the performance measurement period is used to calculate the Performance Adjustment for these Funds’. After Janus Capital determines whether each Fund’s performance was above or below its benchmark index by comparing the investment performance of the Fund’s Investor Shares against the investment record of the benchmark index, Janus Capital applies the same Performance Adjustment (positive or negative) across each other class of shares of the Fund.
It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it depends on the performance of each Fund relative to the record of the Fund’s benchmark index and future changes to the size of each Fund.
The Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as Advisory fees on the Statements of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment.
Janus Core, Risk-Managed and Value Funds April 30, 2009 99
Notes to Financial Statements (unaudited) (continued)
During the six-month period ended April 30, 2009, the following Funds recorded the Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Core | |||||
Janus Contrarian Fund | $ | (1,038,961) | |||
Risk-Managed | |||||
INTECH Risk-Managed Core Fund(1) | (139,162) | ||||
Value | |||||
Perkins Mid Cap Value Fund(2) | 4,849,003 | ||||
(1) | Formerly named INTECH Risk-Managed Stock Fund. | |
(2) | Formerly named Janus Mid Cap Value Fund. |
INTECH Investment Management LLC (“INTECH”) (formerly Enhanced Investment Technologies, LLC) serves as subadviser to INTECH Risk-Managed Core Fund. Janus Capital owns approximately 92% of INTECH.
The subadvisory fee rate paid by Janus Capital to INTECH is equal to 50% of the investment advisory fee paid by INTECH Risk-Managed Core Fund to Janus Capital (net of any performance fee adjustment, if applicable, and reimbursements of expenses incurred or fees waived by Janus Capital).
On December 31, 2008, Janus Capital acquired an additional 50% ownership interest in Perkins Investment Management LLC (“Perkins”)(formerly named Perkins, Wolf, McDonnell and Company, LLC), increasing its interest from 30% to 80%. Perkins has been in the investment management business since 1984 and serves as investment adviser or subadviser to other Janus registered investment companies and other accounts. The same level of services is expected to be provided under the subadvisory arrangement as is currently provided. Janus Capital owns approximately 78% of Perkins.
Perkins serves as subadviser to Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund. Effective January 1, 2009, Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fees paid by the Funds to Janus Capital (net of any performance fee adjustments, if applicable, and reimbursements of expenses incurred or fees waived by Janus Capital). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Funds’ performance relative to their respective benchmark indices over the performance measurement period.
Janus Services LLC (“Janus Services”) receives an administrative services fee at an annual rate of up to 0.05% of the average daily net assets of INTECH Risk-Managed Core Fund, Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund for providing or procuring recordkeeping, subaccounting and other administrative services to the investors.
Until at least March 1, 2010, Janus Services has agreed to voluntarily waive the transfer agency fee payable so that the total operating expenses (excluding any items that are not normally considered operating expenses) of the Institutional Shares of Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund do not exceed 0.77% and 0.79%, respectively. If applicable, amounts waived to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Each Fund pays Janus Services, a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted averaged annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.12% of net assets on the proportion of assets sold directly and 0.25% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for each of the Funds (excluding Perkins Mid Cap Value Fund – Institutional Shares and Perkins Small Cap Value Fund – Institutional Shares) for transfer agent services.
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 Funds. 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 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 Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2009 on the Statements of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a 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 Statements of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statements 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. No deferred fees were distributed to any Trustee under the Deferred Plan during the six-month period ended April 30, 2009.
For the six-month period ended April 30, 2009, Janus Capital assumed $4,842 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection
100 Janus Core, Risk-Managed and Value Funds April 30, 2009
with the regulatory and civil litigation matters discussed in Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the Statements of Operations.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer and compliance staff of the Trust. Total compensation of $63,757 was paid by the Trust during the six-month period ended April 30, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
A 2.00% redemption fee may be imposed on shares of INTECH Risk-Managed Core Fund held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund’s asset levels and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in-Capital.
Total redemption fees received by the Funds for the six-month period ended April 30, 2009 are indicated in the table below:
Redemption | |||||
Fund | Fee | ||||
Risk-Managed | |||||
INTECH Risk-Managed Core Fund(1) | $ | 7,882 | |||
(1) | Formerly named INTECH Risk-Manged Stock Fund. |
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statements of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statements of Assets and Liabilities (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Assets and Liabilities (if applicable). The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Pursuant to the terms and conditions of an SEC exemptive order and the provisions of the 1940 Act, the Funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Funds may be used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Funds are 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.
During the six-month period ended April 30, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Janus Core, Risk-Managed and Value Funds April 30, 2009 101
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/09 | |||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 719,212,704 | $ | (628,363,657) | $ | 71,717 | $ | 90,849,047 | ||||||
Janus Contrarian Fund | 544,456,117 | (434,558,251) | 38,924 | 109,897,866 | ||||||||||
Janus Research Core Fund(1) | 44,998,684 | (44,897,181) | 2,529 | 101,503 | ||||||||||
Janus Growth and Income Fund | 242,158,568 | (196,820,484) | 29,798 | 45,338,084 | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Core Fund(2) | 6,486,077 | (6,017,077) | 400 | 469,000 | ||||||||||
$ | 1,557,312,150 | $ | (1,310,656,650) | $ | 143,368 | $ | 246,655,500 | |||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 56,401 | $ | (17,841,729) | $ | 5,433 | $ | – | ||||||
Janus Growth and Income Fund | 368,822 | (112,654,264) | 179,957 | – | ||||||||||
$ | 425,223 | $ | (130,495,993) | $ | 185,390 | $ | – | |||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 25,703,877 | $ | (127,275,877) | $ | 55,925 | $ | – | ||||||
Janus Contrarian Fund | 67,794,611 | (95,855,611) | 23,326 | – | ||||||||||
Janus Research Core Fund(1) | 8,533,708 | (12,312,708) | 8,706 | – | ||||||||||
Janus Growth and Income Fund | 116,008,138 | (178,733,252) | 359,217 | – | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Core Fund(2) | 946,000 | (946,000) | 172 | – | ||||||||||
$ | 218,986,334 | $ | (415,123,448) | $ | 447,346 | $ | – | |||||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. |
3. | 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 Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals and passive foreign investment companies.
102 Janus Core, Risk-Managed and Value Funds April 30, 2009
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 2,736,887,923 | $ | 178,543,282 | $ | (192,194,631) | $ | (13,651,349) | ||||||
Janus Contrarian Fund | 4,104,118,235 | 295,624,450 | (1,191,222,652) | (895,598,202) | ||||||||||
Janus Research Core Fund(1) | 586,010,395 | 26,572,650 | (143,092,184) | (116,519,534) | ||||||||||
Janus Growth and Income Fund | 3,440,536,361 | 290,879,525 | (588,692,446) | (297,812,921) | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Core Fund(2) | 227,420,114 | 10,083,568 | (30,958,241) | (20,874,673) | ||||||||||
Value | ||||||||||||||
Perkins Mid Cap Value Fund(3) | 7,061,853,800 | 344,012,150 | (1,324,748,306) | (980,736,156) | ||||||||||
Perkins Small Cap Value Fund(4) | 1,025,047,771 | 73,454,126 | (178,701,315) | (105,247,189) | ||||||||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
Net capital loss carryovers as of October 31, 2008 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2008
October | October | October | October | October | October | Accumulated | |||||||||||||||||
Fund | 31, 2009 | 31, 2010 | 31, 2011 | 31, 2012 | 31, 2013 | 31, 2016 | Capital Losses | ||||||||||||||||
Core | |||||||||||||||||||||||
Janus Balanced Fund(1) | $ | (2,173,495) | $ | (2,173,497) | $ | – | $ | – | $ | – | $ | – | $ | (4,346,992) | |||||||||
Janus Contrarian Fund(1) | (25,915,071) | – | (39,096,971) | (38,648,243) | (22,132,836) | – | (125,793,121) | ||||||||||||||||
Janus Growth and Income Fund(1) | (16,656,645) | (8,328,322) | – | – | – | (443,465,071) | (468,450,038) | ||||||||||||||||
Risk-Managed | |||||||||||||||||||||||
INTECH Risk-Managed Core Fund(2) | – | – | – | – | – | (24,849,489) | (24,849,489) | ||||||||||||||||
(1) | Capital loss carryovers subject to annual limitations. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. |
During the year ended October 31, 2008, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Capital Loss | |||||||||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||||||||
Core | |||||||||||||||||||||||
Janus Balanced Fund | $ | 2,173,497 | |||||||||||||||||||||
Janus Contrarian Fund | 25,915,071 | ||||||||||||||||||||||
Janus Core, Risk-Managed and Value Funds April 30, 2009 103
Notes to Financial Statements (unaudited) (continued)
4. | Capital Share Transactions |
For the six-month period | ||||||||||||||||||||||||||||||||||||||||||||
ended April 30, 2009 | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | INTECH Risk- | |||||||||||||||||||||||||||||||||||||||||||
and the fiscal year ended | Janus Growth | Managed Core | ||||||||||||||||||||||||||||||||||||||||||
October 31, 2008 | Janus Balanced Fund | Janus Contrarian Fund | Janus Research Core Fund(1) | and Income Fund | Fund(2) | |||||||||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Transactions in Fund Shares: | ||||||||||||||||||||||||||||||||||||||||||||
Shares sold | 21,209 | 31,503 | 17,481 | 117,238 | 1,178 | 3,500 | 5,812 | 12,153 | 1,626 | 2,290 | ||||||||||||||||||||||||||||||||||
Reinvested dividends and distributions | 6,656 | 6,053 | 15,986 | 19,442 | 1,752 | 3,361 | 754 | 20,695 | 425 | 3,083 | ||||||||||||||||||||||||||||||||||
Shares repurchased | (13,795) | (26,010) | (66,073) | (175,169) | (5,285) | (9,876) | (18,659) | (40,872) | (3,482) | (10,703) | ||||||||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 14,070 | 11,546 | (32,606) | (34,489) | (2,355) | (3,015) | (12,093) | (8,024) | (1,431) | (5,330) | ||||||||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 114,741 | 103,195 | 360,467 | 398,956 | 34,736 | 37,751 | 152,777 | 160,801 | 24,180 | 29,510 | ||||||||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 128,811 | 114,741 | 327,861 | 360,467 | 32,381 | 34,736 | 140,684 | 152,777 | 22,749 | 24,180 |
For the six-month period | ||||||||||||||||||||
ended April 30, 2009 (unaudited) | Perkins Mid Cap | Perkins Small Cap | ||||||||||||||||||
and the fiscal year ended October 31, 2008 | Value Fund(3) | Value Fund(4) | ||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Transactions in Fund Shares – Investor Shares: | ||||||||||||||||||||
Shares sold | 105,762 | 148,804 | 2,873 | 3,686 | ||||||||||||||||
Reinvested dividends and distributions | 20,201 | 29,599 | 3,492 | 5,452 | ||||||||||||||||
Shares repurchased | (67,278) | (89,231) | (12,009) | (10,318) | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 58,685 | 89,172 | (5,644) | (1,180) | ||||||||||||||||
Shares Outstanding, Beginning of Period | 310,982 | 221,810 | 27,987 | 29,167 | ||||||||||||||||
Shares Outstanding, End of Period | 369,667 | 310,982 | 22,343 | 27,987 | ||||||||||||||||
Transactions in Fund Shares – Institutional Shares: | ||||||||||||||||||||
Shares sold | 3,427 | 5,204 | 5,871 | 8,389 | ||||||||||||||||
Reinvested dividends and distributions | 1,183 | 4,494 | 3,864 | 5,149 | ||||||||||||||||
Shares repurchased | (8,647) | (21,053) | (4,984) | (10,014) | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (4,037) | (11,355) | 4,751 | 3,524 | ||||||||||||||||
Shares Outstanding, Beginning of Period | 21,815 | 33,170 | 30,896 | 27,372 | ||||||||||||||||
Shares Outstanding, End of Period | 17,778 | 21,815 | 35,647 | 30,896 |
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
5. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2009, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 1,924,315,596 | $ | 1,613,404,103 | $ | 972,706,677 | $ | 1,077,357,333 | ||||||
Janus Contrarian Fund | 1,213,402,609 | 1,573,408,915 | – | – | ||||||||||
Janus Research Core Fund(1) | 140,614,043 | 183,397,934 | – | – | ||||||||||
Janus Growth and Income Fund | 778,189,614 | 789,853,053 | – | – | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Core Fund(2) | 123,291,048 | 136,926,366 | – | – | ||||||||||
Value | ||||||||||||||
Perkins Mid Cap Value Fund(3) | 2,787,003,555 | 2,439,553,435 | – | – | ||||||||||
Perkins Small Cap Value Fund(4) | 282,878,692 | 437,327,027 | – | – | ||||||||||
(1) | Formerly named Janus Fundamental Equity Fund. | |
(2) | Formerly named INTECH Risk-Managed Stock Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. | |
(4) | Formerly named Janus Small Cap Value Fund. |
104 Janus Core, Risk-Managed and Value Funds April 30, 2009
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court, four of which still remain: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC), Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly named Perkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On December 30, 2008, the Court granted partial summary judgment in Janus Capital’s favor with respect to Plaintiffs’ damage demand as it relates to what was categorized as “approved” market timing based on the Court’s finding that there was no evidence that investors suffered damages that exceed the $50 million they are entitled to receive under the regulatory settlement. The Court did not grant summary judgment on the remaining causes of action and requested the parties to submit additional briefing with respect to what was categorized as “unapproved” market timing. Having completed the supplemental briefing, the parties are awaiting a ruling from the Court. On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the Court with prejudice. The plaintiff appealed that dismissal to the United States Court of Appeals for the Fourth Circuit, which reversed the order of dismissal and remanded the case back to the Court for further proceedings. Finally, a Motion to Dismiss the Wiggins suit (action (iv) above) was granted and the matter was dismissed in May 2007. Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. In May 2009, the Fourth Circuit reversed the order of dismissal and remanded the case back to the Court for further proceedings.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). In September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings as well as a Motion to Discharge Order to Show Cause. This action is pending.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements (Edward Keely v. Janus Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege some or all of the following claims in addition to other allegations: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims. On
Janus Core, Risk-Managed and Value Funds April 30, 2009 105
Notes to Financial Statements (unaudited) (continued)
May 8, 2009, after a four-day trial in the Keely matter, the jury found in favor of Plaintiff. The Court entered judgment in Keely’s favor for approximately $4.8 million in damages plus pre- and post- judgment interest, attorneys’ fees, and damage enhancement under the Colorado Wage Act. Janus Holdings is evaluating all of its options, including the possibility of an appeal. Trial in the Malley matter has not yet been set.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
7. | Subsequent Event |
The Board of Trustees of Janus Adviser Series (“JAD”), a registered investment company advised by Janus Capital, has approved an Agreement and Plan of Reorganization (the “Plan”) pursuant to which certain JAD Funds will merge with and into, and be acquired by, corresponding similarly managed funds of the Janus Investment Fund Trust. Under the Plan, INTECH Risk-Managed Core Fund, Janus Balanced Fund, Janus Contrarian Fund, Janus Enterprise Fund, Janus Flexible Bond Fund, Janus Fund, Janus Growth and Income Fund, Janus High-Yield Fund, Janus Orion Fund, Janus Overseas Fund, Janus Research Core Fund, Janus Triton Fund, Janus Worldwide Fund, Perkins Mid Cap Value Fund, and Perkins Small Cap Value Fund will acquire assets and liabilities from similarly managed JAD Funds. The merger is a part of several significant enhancements Janus Capital has recently undertaken to reorganize and simplify its mutual fund offerings by creating one combined mutual fund platform. The closing date of the merger is expected to be on or about July 6, 2009. For more information regarding these changes, please refer to the March 17, 2009 Supplement to the Prospectus.
106 Janus Core, Risk-Managed and Value Funds April 30, 2009
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is 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) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent 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.
At a meeting held on December 9, 2008, 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, 2009 through February 1, 2010, subject to earlier termination as provided for in each agreement, except that with respect to Janus Worldwide Fund, the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or proposed to take to improve long-term Fund performance. At a meeting held on March 12, 2009, the Trustees again considered the investment advisory agreement for Janus Worldwide Fund, and after consideration of information previously provided to them, as well as updated information regarding the steps taken or planned to improve the Fund’s long-term performance, the Trustees approved the continuation of the investment advisory agreement for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve long-term Fund performance.
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.
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 and strategy 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 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, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including
Janus Core, Risk-Managed and Value Funds April 30, 2009 107
Additional Information (unaudited) (continued)
monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
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 quality of those services had been consistent with or superior to quality norms in the industry and 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 continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of their peers for certain periods, the Trustees also concluded that Janus Capital had taken or was taking appropriate steps to address those instances of under-performance. With respect to Janus Worldwide Fund, at the December 9, 2008 meeting the Trustees considered the continuing underperformance of the Fund, and requested that Janus Capital consider additional steps to improve long-term Fund performance. At the March 12, 2009 meeting, the Trustees requested that Janus Capital promptly report to the Trustees regarding the completion of steps that Janus Capital planned to take in an effort to improve the Fund’s long-term performance.
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 Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after applicable contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
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. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only 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 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 administrative 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 that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by the Trustees’ independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information 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. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation 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
108 Janus Core, Risk-Managed and Value Funds April 30, 2009
similar strategies and the fees Janus Capital and the subadvisers charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was 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 by Janus Capital.
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 that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group identified by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the 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 several Funds that have caused or will cause 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, 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 economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates 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 their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s 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 pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital 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 receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, each of whom is an Independent Trustee, concluded that the proposed continuation of the investment advisory agreement and, if applicable, the subadvisory agreement for each Fund for another year was in the best interest of the respective Funds and their shareholders, except for Janus Worldwide Fund. With respect to that Fund, at their December 9, 2008 meeting the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or propose to take to improve long-term Fund performance. At their March 12, 2009 meeting the Trustees approved the continuation of the investment advisory agreement for that Fund for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve the Fund’s long-term performance. The Trustees also noted that they had previously approved revised and/or new investment advisory and subadvisory agreements for each Fund subadvised by Perkins Investment Management LLC, and that such amended or new agreements were not effective unless approved by those Funds’ shareholders.
Janus Core, Risk-Managed and Value Funds April 30, 2009 109
Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. 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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2008. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each 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.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated. Each Fund’s Schedule of Investments relies upon the industry group and country classifications published by Bloomberg L.P.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
110 Janus Core, Risk-Managed and Value Funds April 30, 2009
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ 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 Funds’ net assets. Because Funds 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 Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, 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 increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds 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.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ 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 Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
Janus Core, Risk-Managed and Value Funds April 30, 2009 111
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t 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 a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
112 Janus Core, Risk-Managed and Value Funds April 30, 2009
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Janus Core, Risk-Managed and Value Funds April 30, 2009 113
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of Janus Small Cap Value Fund and Janus Mid Cap Value Fund was held October 30, 2008 and adjourned and reconvened on November 25, 2008 and December 16, 2008, respectively. At the meeting, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
To approve a new subadvisory agreement between Janus Capital Management LLC and Perkins, Wolf, McDonnell and Company, LLC, with respect to Janus Mid Cap Value Fund, so that Perkins, Wolf, McDonnell and Company, LLC can continue to serve as Janus Mid Cap Value Fund’s subadviser.
Number of Votes | |||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||
Janus Mid Cap Value Fund | 7,461,933,731 | 3,193,308,226 | 132,040,290 | 163,240,661 | 619,409,843 | ||||||||||||||||||||||||
Proposal 2
To approve a new subadvisory agreement between Janus Capital Management LLC and Perkins, Wolf, McDonnell and Company, LLC, with respect to Janus Small Cap Value Fund, so that Perkins, Wolf, McDonnell and Company, LLC can continue to serve as Janus Small Cap Value Fund’s subadviser.
Number of Votes | |||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||
Janus Small Cap Value Fund | 1,303,681,550 | 651,361,230 | 7,648,627 | 11,071,797 | - | ||||||||||||||||||||||||
Proposal 3
To approve an amended and restated investment advisory agreement between Janus Capital Management LLC and Janus Investment Fund, on behalf of Janus Mid Cap Value Fund, to reallocate the obligation to compensate any subadviser engaged by Janus Capital.
Number of Votes | |||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||
Janus Mid Cap Value Fund | 7,461,933,731 | 3,100,642,860 | 184,505,111 | 203,441,228 | 619,409,821 | ||||||||||||||||||||||||
Proposal 4
To approve an amended and restated investment advisory agreement between Janus Capital Management LLC and Janus Investment Fund, on behalf of Janus Small Cap Value Fund, to reallocate the obligation to compensate any subadviser engaged by Janus Capital, and to change the investment advisory fee rate from a fixed rate to a rate that adjusts up or down based upon Janus Small Cap Value Fund’s performance relative to its benchmark index, the Russell 2000® Value Index.
Number of Votes | |||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||
Janus Small Cap Value Fund | 1,303,681,550 | 644,675,135 | 11,890,368 | 13,516,108 | 44 | ||||||||||||||||||||||||
114 Janus Core, Risk-Managed and Value Funds April 30, 2009
Percentage of Total Outstanding Votes | Percentage Voted | ||||||||||||||||||||||||||||||||||||
Affirmative | Against | Abstain | Broker Non-Vote | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||||||||
42.79% | 1.77% | 2.19% | 8.30% | 77.74% | 3.21% | 3.97% | 15.08% | ||||||||||||||||||||||||||||||
Percentage of Total Outstanding Votes | Percentage Voted | ||||||||||||||||||||||||||||||||||||
Affirmative | Against | Abstain | Broker Non-Vote | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||||||||
49.96% | 0.59% | 0.85% | 0.00% | 97.21% | 1.14% | 1.65% | 0.00% | ||||||||||||||||||||||||||||||
Percentage of Total Outstanding Votes | Percentage Voted | ||||||||||||||||||||||||||||||||||||
Affirmative | Against | Abstain | Broker Non-Vote | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||||||||
41.55% | 2.47% | 2.73% | 8.30% | 75.48% | 4.49% | 4.95% | 15.08% | ||||||||||||||||||||||||||||||
Percentage of Total Outstanding Votes | Percentage Voted | ||||||||||||||||||||||||||||||||||||
Affirmative | Against | Abstain | Broker Non-Vote | Affirmative | Against | Abstain | Broker Non-Vote | ||||||||||||||||||||||||||||||
49.45% | 0.91% | 1.04% | 0.00% | 96.21% | 1.77% | 2.02% | 0.00% | ||||||||||||||||||||||||||||||
Janus Core, Risk-Managed and Value Funds April 30, 2009 115
Notes
116 Janus Core, Risk-Managed and Value Funds April 30, 2009
Notes
Janus Core, Risk-Managed and Value Funds April 30, 2009 117
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
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Funds distributed by Janus Distributors LLC (6/09)
C-0609-046 | 111-24-104 06-09 |
2009 Semiannual Report
Janus International & Global Funds
Janus Global Research Fund
Janus Overseas Fund
Janus Worldwide Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199janus.gif)
Table of Contents
Janus International & Global Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 4 | |
Management Commentary and Schedules of Investments | ||
Janus Global Opportunities Fund | 5 | |
Janus Global Research Fund | 12 | |
Janus Overseas Fund | 21 | |
Janus Worldwide Fund | 28 | |
Statements of Assets and Liabilities | 36 | |
Statements of Operations | 37 | |
Statements of Changes in Net Assets | 38 | |
Financial Highlights | 40 | |
Notes to Schedules of Investments | 42 | |
Notes to Financial Statements | 45 | |
Additional Information | 57 | |
Explanations of Charts, Tables and Financial Statements | 60 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders (unaudited)
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment
Officer
Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
Co-Chief Investment
Officer
Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. During the past six months we have seen some of the most challenging market and economic conditions in a generation. Throughout these turbulent times, we have maintained our disciplined, long-term investment approach and research-driven philosophy.
As a result, our long-term results generally remained strong relative to our peers. For the one-year period ended April 30, 2009, 50% of Janus retail funds ranked within Lipper’s top two quartiles. Looking longer-term, 85% of our funds achieved first- or second-quartile Lipper rankings for the three-year period and 86% ranked in Lipper’s top two quartiles for the five-year period ended April 30, 2009. (Lipper rankings are based on total returns. See complete rankings on page 3.)
Major Market Themes
Despite a relatively strong finish, most markets were modestly lower as the most recent six-month period (ended April 30, 2009) came to a close. Consequences from the credit crisis and recession concerns dictated market performance for much of the period. U.S. markets reached 12-year lows and most global markets declined to 5-year lows in March, before rallying late in the period.
The U.S. economy was still in the throes of a recession at period end. Declining asset values in U.S. residential real estate continued to weigh on financial institutions and their ability to extend credit to consumers. Compounding the headwinds for the consumer was a labor market that continued to struggle with more than 5.7 million jobs lost since January 2008. However, late in the period, some signs emerged that the rate of decline in the U.S. economy could be slowing. Retail sales improved through April (though they remained at low absolute levels) and mortgage applications were on the rise in March and April. A slowing in the rate of decline in U.S. manufacturing and consumer confidence indicators provided some additional support to the equity markets.
Improving credit markets, better-than expected earnings reports from some large banks and easing of accounting rules for banks’ troubled assets, also helped to fuel the late period rally, suggesting to the market that the ailing banking industry could be on the mend. Financials remained the worst performing global sector during the six-month period, despite leading the rally off of the March lows. Materials and information technology outperformed, posting modest gains while growth stocks significantly outperformed value stocks. Stocks of mid-sized companies were the strongest performers in the period while large-cap stocks topped small-caps. Within fixed income, the flight-to-quality that was strongly evident in the second half of 2008 finally eased beginning in January. Driven by the performance of the lower quality debt, high-yield corporate spreads relative to Treasuries narrowed. Long-term government bond yields rebounded from historic lows reached in December.
Outlook
At the end of the period, we were encouraged by the slowing in the rate of decline in the U.S. and global economies and the continued progress toward normalization in the credit markets. Though we were pleased to see stocks on the rise, we believe it may be some time before credit markets return to normal and the economy and equity markets fully recover.
We think the moves to date by central banks and governments worldwide will help the global economy recover. However, their actions will likely take time to work and could, in the longer term, fuel inflation. That said, we are not overly concerned about inflation rising over the near term, nor do we believe economic growth will necessarily return to the rapid pace of recent years. Looking forward, the economy will likely be characterized by de-leveraging across consumers and businesses, and a higher personal savings rate.
Given that we have not seen a significant differentiation of fundamentals expressed in stock prices yet, we feel the opportunities for bottom-up, research-driven security selection are tremendous. Our unconstrained approach to research fosters an entrepreneurial culture that encourages our investment team to “go anywhere” to find the most compelling investment ideas around the globe. And we believe we have the right team in place to take advantage of this period in history.
We sincerely appreciate your continued investment in Janus funds. We recognize the confidence that you have placed in us
Janus International & Global Funds April 30, 2009 1
Continued
and we continue in our quest to deliver strong, consistent fund performance to you, our investors.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
The opinions are those of the authors as of April 30, 2009 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Past performance is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Rankings discussed do not indicate positive fund performance. Most funds have experienced negative or poor short-term performance.
2 Janus International & Global Funds April 30, 2009
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/09 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 52 | 435/844 | 40 | 284/724 | 39 | 233/610 | 60 | 184/310 | 15 | 3/20 | 47 | 380/808 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 52 | 286/550 | 10 | 43/476 | 8 | 30/393 | 77 | 142/184 | 32 | 14/43 | 25 | 130/528 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 96 | 438/457 | 22 | 77/349 | 4 | 10/290 | N/A | N/A | 25 | 43/174 | 86 | 381/443 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 80 | 672/844 | 19 | 132/724 | 12 | 72/610 | 44 | 134/310 | 4 | 3/87 | 17 | 118/710 | |||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 3 | 15/587 | 1 | 5/501 | N/A | N/A | N/A | N/A | 1 | 1/443 | 1 | 4/508 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 80 | 668/844 | 1 | 1/724 | 1 | 2/610 | 21 | 63/310 | 5 | 2/40 | 35 | 283/824 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 48 | 279/587 | 36 | 176/501 | 34 | 136/408 | 65 | 132/204 | 10 | 1/10 | 27 | 77/286 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Global Healthcare/Biotechnology Funds | 75 | 39/51 | 45 | 21/46 | 54 | 24/44 | 19 | 3/15 | 15 | 2/13 | 29 | 15/51 | |||||||||||||
Janus Global Technology Fund (12/98) | Global Science & Technology Funds | 18 | 14/81 | 16 | 12/76 | 28 | 19/69 | 29 | 6/20 | 25 | 5/19 | 25 | 19/76 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 3 | 12/524 | 2 | 4/385 | 1 | 2/290 | 11 | 15/148 | 4 | 1/27 | 1 | 2/346 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 98 | 736/756 | 41 | 247/612 | 5 | 21/460 | N/A | N/A | 18 | 38/213 | 18 | 38/213 | |||||||||||||
Janus Research Core Fund(1)(2) (6/96) | Large-Cap Core Funds | 88 | 802/914 | 83 | 646/783 | 21 | 136/650 | 25 | 90/360 | 4 | 8/212 | 82 | 722/884 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 57 | 514/914 | 73 | 567/783 | 26 | 169/650 | 30 | 105/360 | 8 | 6/81 | 48 | 417/884 | |||||||||||||
INTECH Risk-Managed Core Fund(3) (2/03) | Multi-Cap Core Funds | 55 | 415/756 | 58 | 354/612 | 37 | 167/460 | N/A | N/A | 42 | 157/377 | 42 | 157/377 | |||||||||||||
Perkins Mid Cap Value Fund - Investor Shares(1)(4)(5) (8/98) | Mid-Cap Value Funds | 9 | 27/320 | 4 | 10/256 | 4 | 6/192 | 3 | 2/67 | 4 | 2/56 | 4 | 2/56 | |||||||||||||
Perkins Small Cap Value Fund - Investor Shares(4)(6) (10/87) | Small-Cap Core Funds | 1 | 7/763 | 2 | 7/614 | 8 | 39/496 | 14 | 32/231 | 6 | 7/125 | 6 | 7/125 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 5 | 25/583 | 4 | 16/482 | 5 | 20/402 | 21 | 44/209 | 10 | 2/20 | 6 | 32/535 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 11 | 50/457 | 15 | 55/387 | 14 | 46/334 | 9 | 18/203 | 6 | 5/92 | 16 | 51/325 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 1 | 1/260 | 2 | 4/214 | 3 | 5/179 | 8 | 7/90 | 16 | 4/24 | 5 | 12/254 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 8 | 40/506 | 21 | 79/380 | 56 | 165/297 | N/A | N/A | 11 | 21/206 | 43 | 145/342 | |||||||||||||
Janus Global Research Fund(1) (2/05) | Global Funds | 56 | 280/506 | 10 | 35/380 | N/A | N/A | N/A | N/A | 6 | 18/321 | 6 | 18/321 | |||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 46 | 541/1,197 | 2 | 12/894 | 1 | 2/707 | 3 | 10/369 | 2 | 2/107 | 1 | 2/647 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 68 | 344/506 | 57 | 216/380 | 91 | 271/297 | 91 | 140/153 | 39 | 7/17 | 62 | 371/599 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 75 | 504/677 | 14 | 75/539 | N/A | N/A | N/A | N/A | 8 | 38/533 | 8 | 38/533 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 32 | 167/524 | 6 | 23/385 | N/A | N/A | N/A | N/A | 5 | 19/380 | 5 | 19/380 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 32 | 133/428 | 10 | 33/335 | N/A | N/A | N/A | N/A | 5 | 13/317 | 5 | 13/317 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Formerly named Janus Fundamental Equity Fund. | |
(3) | Formerly named INTECH Risk-Managed Stock Fund. | |
(4) | Rating is for the Investor Share class only; other classes may have different performance characteristics. | |
(5) | Formerly named Janus Mid Cap Value Fund. | |
(6) | Formerly named Janus Small Cap Value Fund. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc., a wholly-owned subsidiary of Reuters, is a nationally recognized organization that ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
Janus International & Global Funds April 30, 2009 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs (1) transaction costs, including redemption fees, where applicable, (and any related exchange fees), and (2) ongoing costs, including management fees and other Fund expenses. The 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-month period from November 1, 2008 to April 30, 2009.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, 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 first line 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 second line of the table in each example 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.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive Janus Global Research Fund’s total operating expenses, excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least March 1, 2010. Expenses in the example reflect the application of this waiver. Had the waiver not been in effect, your expenses would have been higher. More information regarding the waiver is available in the Funds’ prospectus.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees. These fees are fully described in the prospectus. Therefore, the second line of each table is 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.
4 Janus International & Global Funds April 30, 2009
Janus Global Opportunities Fund (unaudited) | Ticker: JGVAX |
Fund Snapshot
We are patient investors, focused on the relationship between a company’s inherent value and its stock price. We carefully evaluate investment opportunities around the world, looking to build a diversified portfolio of what we consider to be the most attractive risk/reward situations. We believe our edge comes from combining fundamental security analysis with thoughtful investing behavior and a heavy dose of risk aversion.
![(GREGORY KOLB PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pkolbgre.jpg)
Gregory Kolb
portfolio manager
Performance Overview
Janus Global Opportunities Fund returned 4.35% over the six months ended April 30, 2009. The Fund outperformed the benchmark Morgan Stanley Capital International (MSCI) World IndexSM, which returned -5.44% during the period.
Kolb Assumes Sole Portfolio Manager Role
Gregory Kolb, who has been the co-portfolio manager of the Fund since May of 2005, assumed sole portfolio management responsibilities of the Fund on April 1, 2009. He succeeded Jason Yee, who left the firm. Kolb, who joined the Janus investment team as an equity research analyst in August of 2001, plans to continue to manage the Fund in a similar style and work closely with the analyst team.
Economic Environment
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. Global markets bounced off of the roughly six-year lows reached in early March, though only partially eased the losses as most indices finished the period over 3% lower. Market volatility, which spiked dramatically in October, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector as well as the real economy. The rally received a further boost later in the month when the U.S. Federal Reserve (Fed) announced it would help the beleaguered U.S. housing market by buying up to $1.15 trillion in Treasuries, mortgage-backed securities and U.S. agency debt. Then, in early April, G20 leaders agreed to provide over $1 trillion in emergency aid for global economies. Both actions appeared to lift global markets through period end. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed by healthcare and then utilities. Materials and information technology were the best relative performers. In local currency terms, emerging markets, which posted strong returns during the period, outperformed developed markets. U.S. stocks trailed much of the developed world for the period while China and Brazil led emerging markets higher. In commodities, natural gas, oil and agricultural commodities suffered negatives returns, while precious metals generated strong returns. The Dollar Index finished the period roughly flat overall and relative to the Japanese yen, while the U.S. currency lagged the euro however was stronger relative to the British pound.
Contributors to Performance
New technology holding Tyco Electronics, Ltd. was the largest individual contributor. The stock rose late in the period, reflecting the announcement of better-than-expected earnings results and the balance sheet enhancing sale of its struggling wireless systems business, as well as renewed optimism in the stock market regarding the global economic outlook. While we view the quarterly report and segment divestiture positively, our focus remains on the longer-term outlook for the company as a leader in the connector business. Tyco has a strong history of financial performance and we were still attracted to its valuation at period end.
Staying in technology, new holding eBay, Inc. also rebounded late in the period on better-than-expected earnings and renewed optimism regarding the economic outlook. While the market seems to be pessimistic regarding the fundamental outlook for the company, we think that the core Internet auction and listing business will continue to generate substantial cash flows, while other businesses owned by the company, notably PayPal, are of considerable value as well.
In consumer staples, German retailer Metro A.G. rebounded in April after the stock was lower much of the six-month period primarily due to the company’s exposure in Eastern Europe countries, which was the cause of considerable concern in the market during the period. While we recognize the economic problems facing this region, we feel Metro’s exposure is manageable and that the region offers a good growth opportunity for the company in the long run. More broadly across Metro’s wide geographic footprint, we believe the company’s stores, which offer items ranging from electronics
Janus International & Global Funds April 30, 2009 5
Janus Global Opportunities Fund (unaudited)
to food, sell basic products in a highly competitive fashion that we believe will allow the company to endure the downturn.
Detractors from Performance
Among individual detractors, JPMorgan Chase was the largest, as the U.S. bank was negatively impacted by ongoing turmoil in its industry. We remain confident in management and the company’s ability to emerge from the financial crisis in a stronger competitive position than it had entering the downturn.
Pasona Group, a Japan-based temporary staffing company, continued to be impacted by the downturn in the Japanese economy. We think this company is in the top-tier among temporary staffers in Japan and should benefit as the labor market in Japan becomes more flexible and open to using temporary personnel. We continued to own the company, which we believe traded at an attractive valuation at period end.
Covidien, Ltd., a global healthcare products company, sold down in reaction to both the global economic malaise and the Obama healthcare proposal. We believe the company’s management, after having been spun-off from former parent Tyco International in June 2007, is restructuring the company in a way that should enhance value for shareholders over the long term.
Looking Ahead
Conflicting forces are making any investment outlook murky at best in our view. On one side, we have been experiencing a massive demand shock, which is deflationary in nature and driven by job losses and deleveraging across businesses and consumers. On the other, governments seem to be doing everything they can to not let deflation take root by using typical and atypical monetary and fiscal policy tools, which over time could be inflationary. Therefore, we think the macroeconomic outlook continues to be challenging.
The market dislocation has resulted in broad-based selling, which we believe has enabled us to find better risk/reward opportunities across more sectors than on which we have traditionally focused. By taking advantage of the environment, we have been seeking to improve the diversification of the portfolio without impacting the expected return potential of the overall portfolio.
Thank you for your continued support of Janus Global Opportunities Fund.
6 Janus International & Global Funds April 30, 2009
(unaudited)
Janus Global Opportunities Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Tyco Electronics, Ltd. | 1.76% | |||
eBay, Inc. | 1.31% | |||
Metro A.G. | 1.20% | |||
Tiffany & Co. | 1.14% | |||
Tenma Corp. | 0.95% |
5 Bottom Performers – Holdings
Contribution | ||||
JPMorgan Chase & Co. | -1.63% | |||
Pasona Group, Inc. | -1.39% | |||
Covidien, Ltd. | -0.94% | |||
Berkshire Hathaway, Inc. – Class B | -0.79% | |||
Dell, Inc. | -0.52% |
5 Top Performers – Sectors*
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (Average % of Equity) | World IndexSM Weighting | ||||||||||
Consumer Discretionary | 3.72% | 31.07% | 9.14% | |||||||||
Information Technology | 3.55% | 15.33% | 11.01% | |||||||||
Consumer Staples | 1.20% | 4.32% | 11.15% | |||||||||
Materials | 0.95% | 0.91% | 6.05% | |||||||||
Energy | 0.00% | 0.00% | 12.05% |
5 Bottom Performers – Sectors*
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (Average % of Equity) | World IndexSM Weighting | ||||||||||
Financials | -2.81% | 25.74% | 17.42% | |||||||||
Health Care | -0.91% | 10.40% | 11.91% | |||||||||
Industrials | -0.26% | 10.42% | 10.58% | |||||||||
Telecommunication Services | -0.04% | 1.82% | 5.17% | |||||||||
Utilities | 0.00% | 0.00% | 5.55% |
* | 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. |
Janus International & Global Funds April 30, 2009 7
Janus Global Opportunities Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
News Corp. – Class A Multimedia | 6.2% | |||
Willis Group Holdings, Ltd. Insurance Brokers | 5.8% | |||
UnitedHealth Group, Inc. Medical – HMO | 5.8% | |||
Dell, Inc. Computers | 5.7% | |||
eBay, Inc. E-Commerce/Services | 4.8% | |||
28.3% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21p02.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21c02.gif)
8 Janus International & Global Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21m02.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Global Opportunities Fund | 4.35% | –29.88% | –1.47% | 2.51% | 1.25% | ||||||
Morgan Stanley Capital International World IndexSM | –5.44% | –39.33% | –1.02% | –0.69% | |||||||
Lipper Quartile | – | 1st | 3rd | 1st | |||||||
Lipper Ranking – based on total return for Global Funds | – | 40/506 | 165/297 | 21/206 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus International & Global Funds April 30, 2009 9
Janus Global Opportunities Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with nondiversification, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
June 30, 2001 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – June 29, 2001 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,044.70 | $ | 7.10 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.85 | $ | 7.00 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.40%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
10 Janus International & Global Funds April 30, 2009
Janus Global Opportunities Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 91.1% | ||||||||||||
Applications Software – 3.2% | ||||||||||||
132,035 | Microsoft Corp. | $ | 2,675,029 | |||||||||
Broadcast Services and Programming – 3.2% | ||||||||||||
162,383 | Liberty Global, Inc. – Class A* | 2,677,696 | ||||||||||
Building – Residential and Commercial – 3.2% | ||||||||||||
95,770 | KB Home | 1,730,564 | ||||||||||
81,640 | Pulte Homes, Inc. | 939,676 | ||||||||||
2,670,240 | ||||||||||||
Cable Television – 3.0% | ||||||||||||
348,688 | British Sky Broadcasting Group PLC | 2,482,492 | ||||||||||
Cellular Telecommunications – 1.6% | ||||||||||||
704,164 | Vodafone Group PLC | 1,293,021 | ||||||||||
Computers – 5.7% | ||||||||||||
409,770 | Dell, Inc.* | 4,761,527 | ||||||||||
Diversified Operations – 2.0% | ||||||||||||
50,230 | Illinois Tool Works, Inc. | 1,647,544 | ||||||||||
E-Commerce/Services – 4.8% | ||||||||||||
239,280 | eBay, Inc.* | 3,940,942 | ||||||||||
Electric Products – Miscellaneous – 0.2% | ||||||||||||
8,900 | Icom, Inc. | 180,718 | ||||||||||
Electronic Components – Miscellaneous – 7.9% | ||||||||||||
155,725 | Koninklijke Philips Electronics N.V. | 2,807,390 | ||||||||||
214,000 | Tyco Electronics, Ltd. | 3,732,161 | ||||||||||
6,539,551 | ||||||||||||
Electronic Connectors – 2.3% | ||||||||||||
18,400 | Hirose Electric Co., Ltd. | 1,914,237 | ||||||||||
Electronic Parts Distributors – 0.3% | ||||||||||||
32,000 | Kuroda Electric Co., Ltd. | 217,989 | ||||||||||
Finance – Investment Bankers/Brokers – 3.0% | ||||||||||||
76,105 | JPMorgan Chase & Co. | 2,511,465 | ||||||||||
Food – Catering – 4.4% | ||||||||||||
381,229 | Nissin Healthcare Food Service Co., Ltd. | 3,603,867 | ||||||||||
Food – Retail – 3.3% | ||||||||||||
65,010 | Metro A.G. | 2,763,253 | ||||||||||
Human Resources – 2.6% | ||||||||||||
4,809 | Pasona Group, Inc. | 2,185,899 | ||||||||||
Insurance Brokers – 5.8% | ||||||||||||
174,925 | Willis Group Holdings, Ltd. | 4,812,187 | ||||||||||
Medical – HMO – 5.8% | ||||||||||||
203,270 | UnitedHealth Group, Inc. | 4,780,910 | ||||||||||
Medical Instruments – 0.2% | ||||||||||||
1,260 | Medikit Co., Ltd. | 189,433 | ||||||||||
Medical Products – 4.2% | ||||||||||||
67,868 | Covidien, Ltd. | 2,238,286 | ||||||||||
23,510 | Johnson & Johnson | 1,230,984 | ||||||||||
3,469,270 | ||||||||||||
Metal Products – Fasteners – 0% | ||||||||||||
600 | Kitagawa Industries Co., Ltd. | 6,450 | ||||||||||
Miscellaneous Manufacturers – 0.2% | ||||||||||||
30,200 | Mirai Industry Co., Ltd. | 200,585 | ||||||||||
Multimedia – 6.2% | ||||||||||||
560,530 | News Corp. – Class A | 5,112,034 | ||||||||||
Property and Casualty Insurance – 4.0% | ||||||||||||
616,000 | Nipponkoa Insurance Co., Ltd. | 3,345,858 | ||||||||||
Reinsurance – 2.9% | ||||||||||||
783 | Berkshire Hathaway, Inc. – Class B* | 2,399,895 | ||||||||||
Retail – Apparel and Shoe – 3.2% | ||||||||||||
433,600 | Esprit Holdings, Ltd. | 2,657,902 | ||||||||||
Retail – Jewelry – 2.1% | ||||||||||||
59,875 | Tiffany & Co. | 1,732,783 | ||||||||||
Savings/Loan/Thrifts – 2.6% | ||||||||||||
165,135 | NewAlliance Bancshares, Inc. | 2,131,893 | ||||||||||
Transportation – Marine – 2.9% | ||||||||||||
456,964 | Horizon Lines, Inc. – Class A | 2,431,048 | ||||||||||
Wire and Cable Products – 0.3% | ||||||||||||
31,200 | HI-LEX Corp. | 208,312 | ||||||||||
Total Common Stock (cost $88,568,576) | 75,544,030 | |||||||||||
Money Market – 7.8% | ||||||||||||
6,441,110 | Janus Cash Liquidity Fund LLC, 0% (cost $6,441,110) | 6,441,110 | ||||||||||
Total Investments (total cost $95,009,686) – 98.9% | 81,985,140 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.1% | 943,626 | |||||||||||
Net Assets – 100% | $ | 82,928,766 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 13,440,536 | 16.4% | |||||
Germany | 2,763,253 | 3.4% | ||||||
Japan | 12,053,349 | 14.7% | ||||||
Netherlands | 2,807,390 | 3.4% | ||||||
United Kingdom | 3,775,513 | 4.6% | ||||||
United States†† | 47,145,099 | 57.5% | ||||||
Total | $ | 81,985,140 | 100.0% |
†† | Includes Short-Term Securities (49.6% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2009 11
Janus Global Research Fund (unaudited) | Ticker: JARFX |
Fund Snapshot
This Fund pulls together the best ideas from Janus’ research analysts into a single package.
Team-Based Approach
Led by Jim Goff,
Director of Research
Led by Jim Goff,
Director of Research
Performance Overview
For the six-month period ended April 30, 2009, Janus Global Research Fund returned 4.52%, outperforming its primary benchmark, the Morgan Stanley Capital International (MSCI) World Growth Index, which returned -4.13% and its secondary benchmark, the Russell 1000® Index, which returned -7.39%.
Economic Overview
The first quarter ended with a market rally after two difficult months. We think the market also reflected a slightly more rational atmosphere, where investors began to distinguish between high quality, enduring business models and those that will likely struggle in the global recession. Such an environment was a welcome change from the turmoil and intense volatility in the second half of 2008. We believe a long-term fundamental approach should do better when investors distinguish between quality companies. Our focus is on companies that we think have long-term competitive advantages and reasonable growth prospects, but trade at attractive valuations.
We remained disciplined during the market turmoil of the past six months. We did not stray from our core belief that the market ultimately will reward companies with superior business models, quality managements and value-additive returns on invested capital. Our ability to buy these companies at attractive valuations added to our long-term confidence.
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. Global markets bounced off of the roughly five-year lows reached in early March, though only partially erased the losses as most indices finished the period over 3% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. The rally received a further boost later in the month when the U.S. Federal Reserve (Fed) announced it would help the beleaguered U.S. housing market by buying up to $1.15 trillion in Treasuries, mortgage-backed securities and U.S. agency debt. Then, in early April, G20 leaders agreed to provide over $1 trillion in emergency aid for global economies. Both actions appeared to lift global markets through period end. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed by utilities and, then healthcare. Materials and information technology were the best relative performers. In local currency terms, emerging markets, which posted strong returns during the period, outperformed developed markets. U.S. stocks trailed much of the developed world for the period while Asia and Latin America led emerging markets higher thanks to strong returns in China and Brazil. In commodities, natural gas, oil and agricultural commodities suffered negatives returns, while precious metals generated strong returns. The Dollar Index finished the period lower overall, as the U.S. currency lagged the euro, although it was stronger relative to the Japanese yen and British pound.
Under certain circumstances and market conditions, we may initiate positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Contributors to Fund Performance
Our holdings in the consumer, energy and technology sectors contributed the most to relative performance. Among individual contributors was Petroleo Brasileiro (Petrobras), a Brazilian oil and gas development and production company. The company’s shares rebounded, as oil prices rose late in the period. We continue to like this deepwater production company because we believe it had some of the largest and most attractive oil reserves in the world at period end.
Keppel Corp., the world’s largest manufacturer of offshore rigs, rose late in the period following a solid earnings report that suggested to us the company was weathering the current global slowdown relatively well. We think the market was pricing in an overly bearish outlook and that the share price at period end gave little credit for Keppel’s offshore oil rig business and its property holdings in Singapore.
CommScope, Inc., a company involved in providing infrastructure solutions for communication and wireless networks, rebounded late in the period to be among the top contributors. The company had been a relative underperformer given its leverage profile and concerns over
12 Janus International & Global Funds April 30, 2009
(unaudited)
its debt obligations. A better-than-expected quarterly earnings report allayed some of those concerns. We continue to believe CommScope is an extremely well-run component provider in wireless and cable and that the business remains fundamentally healthy with historically high free cash flows.
Detractors from Fund Performance
Celgene, a biotechnology company, was negatively impacted similar to other healthcare companies following the announcement of the U.S. Administration’s budget and what the proposals could mean for specific companies. Celgene dropped further later in the period after saying it expects 2009 profits to be at the lower end of its previous forecast. We think Celgene will continue to benefit from its cancer fighting drug Revlimid, which is still early in its global launch cycle. We added to our position.
In financials, middle market lender CapitalSource continued to be under pressure, which has largely been the case for the company’s stock since the credit crisis began. We decided to exit our position, as we felt that while the company’s capital position was strong, its liquidity position had become more difficult to analyze.
Another detractor was biotechnology holding Genzyme Corp., which reported lower-than-expected revenues and earnings in its latest quarter. We believe the stock was trading at an attractive valuation relative to its growth prospects at period end and that the company has defensible franchises that have lower-than-average reimbursement/political risk. We added to our position.
Outlook
As the half-year ended, the rate of decline in the U.S. and global economies was slowing and we were seeing some improvement in the credit markets. Economic reports in recent months have shown mixed data, an improvement from the stream of negative reports in late 2008. While encouraging, we do not anticipate robust economic growth for several years. With companies and individuals reducing debt levels and with increased government intervention in the economy, we see a muted rather than sharp economic recovery. We believe that a slower growth environment will increase the importance of stock picking over sector allocation in finding companies that may be well suited to gain share and profits in a slow-growth environment. We believe that the Janus bottom-up research driven process will help lead us to these opportunities.
Thank you for your investment in Janus Global Research Fund.
Janus International & Global Funds April 30, 2009 13
Janus Global Research Fund (unaudited)
Janus Global Research Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Petroleo Brasileiro S.A. (ADR) | 0.59% | |||
Keppel Corp., Ltd. | 0.57% | |||
CommScope, Inc. | 0.55% | |||
Marvell Technology Group, Ltd. | 0.43% | |||
Corning, Inc. | 0.33% |
5 Bottom Performers – Holdings
Contribution | ||||
Celgene Corp. | -0.48% | |||
CapitalSource, Inc. | -0.38% | |||
Genzyme Corp. | -0.38% | |||
Covidien, Ltd. | -0.32% | |||
Microsemi Corp. | -0.30% |
4 Top Performers – Sectors*,†
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International World | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Technology | 2.75% | 18.60% | 16.48% | |||||||||
Industrials | 1.50% | 18.31% | 19.14% | |||||||||
Energy | 1.28% | 12.27% | 12.33% | |||||||||
Consumer | 0.97% | 20.26% | 20.81% |
3 Bottom Performers – Sectors*,†
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International World | |||||||||||
Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
Healthcare | -1.26% | 15.98% | 16.24% | |||||||||
Financials | -0.19% | 8.07% | 8.46% | |||||||||
Communications | 0.84% | 6.52% | 6.54% |
* | 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. | |
† | The sectors listed above reflect those covered by the seven analyst teams who comprise the Janus Research Team. |
14 Janus International & Global Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Petroleo Brasileiro S.A. (ADR) Oil Companies – Integrated | 2.0% | |||
Keppel Corp., Ltd. Diversified Operations | 1.8% | |||
Owens-Illinois, Inc. Containers – Metal and Glass | 1.6% | |||
Hess Corp. Oil Companies – Integrated | 1.5% | |||
Apple, Inc. Computers | 1.5% | |||
8.4% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21p01.gif)
Emerging markets comprised 4.3% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21c01.gif)
Janus International & Global Funds April 30, 2009 15
Janus Global Research Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21m01.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Global Research Fund | 4.52% | –39.66% | 1.19% | 1.15% | 1.15% | ||||||
Morgan Stanley Capital International World Growth Index | –4.13% | –38.70% | –3.71% | ||||||||
Russell 1000® Index | –7.39% | –35.30% | –5.31% | ||||||||
Lipper Quartile | – | 3rd | 1st | ||||||||
Lipper Ranking – based on total return for Global Funds | – | 280/506 | 18/321 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. The expense waiver shown reflects the application of such limit. Total returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
16 Janus International & Global Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs) which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than those held by the underlying Fund assets. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
Effective January 1, 2007, Janus Global Research Fund compares its performance to the MSCI World Growth Index, and such benchmark index is used to calculate the Fund’s performance-based adjustment to the investment advisory fee for periods after January 1, 2007.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 25, 2005 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,045.20 | $ | 6.34 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.60 | $ | 6.26 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.25%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus International & Global Funds April 30, 2009 17
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Common Stock – 98.9% | ||||||||||||
Advertising Sales – 0.3% | ||||||||||||
31,260 | Lamar Advertising Co. – Class A* | $ | 528,294 | |||||||||
Aerospace and Defense – 1.4% | ||||||||||||
415,917 | BAE Systems PLC | 2,187,152 | ||||||||||
Aerospace and Defense – Equipment – 1.2% | ||||||||||||
39,360 | United Technologies Corp. | 1,922,342 | ||||||||||
Agricultural Chemicals – 1.2% | ||||||||||||
21,124 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1,827,015 | ||||||||||
Agricultural Operations – 0.2% | ||||||||||||
626,000 | Chaoda Modern Agriculture Holdings, Ltd. | 356,653 | ||||||||||
Airlines – 1.2% | ||||||||||||
65,860 | Ryanair Holdings PLC (ADR)* | 1,801,271 | ||||||||||
Apparel Manufacturers – 0.6% | ||||||||||||
14,750 | VF Corp. | 874,233 | ||||||||||
Applications Software – 0.7% | ||||||||||||
38,025 | Citrix Systems, Inc.* | 1,084,853 | ||||||||||
Athletic Footwear – 0.8% | ||||||||||||
34,645 | Adidas A.G. | 1,306,350 | ||||||||||
Automotive – Cars and Light Trucks – 0.6% | ||||||||||||
29,053 | Bayerische Motoren Werke A.G. | 1,000,593 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.7% | ||||||||||||
44,980 | Autoliv, Inc. | 1,109,657 | ||||||||||
Batteries and Battery Systems – 0.4% | ||||||||||||
11,205 | Energizer Holdings, Inc.* | 642,047 | ||||||||||
Beverages – Non-Alcoholic – 0.6% | ||||||||||||
19,245 | PepsiCo, Inc. | 957,631 | ||||||||||
Brewery – 0.8% | ||||||||||||
43,011 | Anheuser-Busch InBev N.V. | 1,312,579 | ||||||||||
21,000 | Anheuser-Busch InBev N.V. – VVPR Strips* | 56 | ||||||||||
1,312,635 | ||||||||||||
Building – Residential and Commercial – 1.3% | ||||||||||||
3,971 | NVR, Inc.* | 2,006,824 | ||||||||||
Building Products – Cement and Aggregate – 1.1% | ||||||||||||
65,997 | CRH PLC | 1,716,085 | ||||||||||
Cable Television – 1.0% | ||||||||||||
209,798 | British Sky Broadcasting Group PLC | 1,493,662 | ||||||||||
Casino Hotels – 1.1% | ||||||||||||
342,876 | Crown, Ltd. | 1,712,067 | ||||||||||
Cellular Telecommunications – 0.9% | ||||||||||||
757,564 | Vodafone Group PLC | 1,391,076 | ||||||||||
Chemicals – Diversified – 1.1% | ||||||||||||
34,769 | Bayer A.G. | 1,721,824 | ||||||||||
Chemicals – Specialty – 1.0% | ||||||||||||
2,280,000 | Huabao International Holdings, Ltd. | 1,614,715 | ||||||||||
Commercial Banks – 0.7% | ||||||||||||
56,618 | Barclays PLC | 230,298 | ||||||||||
82,279 | ICICI Bank, Ltd. | 792,037 | ||||||||||
1,022,335 | ||||||||||||
Commercial Services – Finance – 0.5% | ||||||||||||
48,905 | Western Union Co. | 819,159 | ||||||||||
Computers – 2.4% | ||||||||||||
18,951 | Apple, Inc.* | 2,384,604 | ||||||||||
19,080 | Research In Motion, Ltd. (U.S. Shares)* | 1,326,060 | ||||||||||
3,710,664 | ||||||||||||
Computers – Peripheral Equipment – 0.7% | ||||||||||||
82,849 | Logitech International S.A.* | 1,102,306 | ||||||||||
Consulting Services – 1.1% | ||||||||||||
42,076 | Bereau Veritas S.A. | 1,714,079 | ||||||||||
Consumer Products – Miscellaneous – 0.8% | ||||||||||||
24,540 | Kimberly-Clark Corp. | 1,205,896 | ||||||||||
Containers – Metal and Glass – 1.6% | ||||||||||||
103,540 | Owens-Illinois, Inc.* | 2,525,341 | ||||||||||
Cosmetics and Toiletries – 0.8% | ||||||||||||
20,415 | Colgate-Palmolive Co. | 1,204,485 | ||||||||||
Decision Support Software – 0.6% | ||||||||||||
46,890 | MSCI, Inc.* | 984,221 | ||||||||||
Distribution/Wholesale – 0.4% | ||||||||||||
246,000 | Li & Fung, Ltd. | 692,487 | ||||||||||
Diversified Minerals – 1.1% | ||||||||||||
102,449 | Cia Vale do Rio Doce (ADR) | 1,691,433 | ||||||||||
Diversified Operations – 5.1% | ||||||||||||
748,000 | China Merchants Holdings International Co., Ltd. | 1,767,273 | ||||||||||
25,876 | Danaher Corp. | 1,512,193 | ||||||||||
47,905 | Illinois Tool Works, Inc. | 1,571,284 | ||||||||||
718,300 | Keppel Corp., Ltd. | 2,873,651 | ||||||||||
7,724,401 | ||||||||||||
E-Commerce/Services – 0.5% | ||||||||||||
44,420 | eBay, Inc.* | 731,597 | ||||||||||
Electric – Generation – 0.3% | ||||||||||||
69,978 | AES Corp.* | 494,744 | ||||||||||
Electronic Components – Miscellaneous – 0.6% | ||||||||||||
51,935 | Tyco Electronics, Ltd. | 905,746 | ||||||||||
Electronic Components – Semiconductors – 0.9% | ||||||||||||
817,342 | ARM Holdings PLC | 1,434,474 | ||||||||||
Electronic Connectors – 0.6% | ||||||||||||
27,430 | Amphenol Corp. – Class A | 928,231 | ||||||||||
Electronic Measuring Instruments – 0.8% | ||||||||||||
7,300 | Keyence Corp. | 1,288,463 | ||||||||||
Engineering – Research and Development Services – 0.9% | ||||||||||||
103,412 | ABB, Ltd. | 1,461,669 | ||||||||||
Enterprise Software/Services – 0.7% | ||||||||||||
59,408 | Oracle Corp. | 1,148,951 | ||||||||||
Fiduciary Banks – 0.4% | ||||||||||||
10,703 | Northern Trust Corp. | 581,815 | ||||||||||
Finance – Investment Bankers/Brokers – 1.9% | ||||||||||||
9,785 | Goldman Sachs Group, Inc. | 1,257,373 | ||||||||||
38,716 | JPMorgan Chase & Co. | 1,277,627 | ||||||||||
20,615 | Morgan Stanley | 487,339 | ||||||||||
3,022,339 | ||||||||||||
Finance – Other Services – 1.4% | ||||||||||||
4,025 | CME Group, Inc. | 890,934 | ||||||||||
105,900 | Hong Kong Exchanges & Clearing, Ltd. | 1,217,822 | ||||||||||
2,108,756 |
See Notes to Schedules of Investments and Financial Statements.
18 Janus International & Global Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Food – Catering – 0.6% | ||||||||||||
1,713,000 | FU JI Food & Catering Services Holdings, Ltd. | $ | 906,106 | |||||||||
Food – Miscellaneous/Diversified – 1.3% | ||||||||||||
18,600 | General Mills, Inc. | 942,834 | ||||||||||
34,225 | Nestle S.A. | 1,113,446 | ||||||||||
2,056,280 | ||||||||||||
Food – Retail – 0.8% | ||||||||||||
243,560 | Tesco PLC | 1,208,816 | ||||||||||
Hotels and Motels – 0.7% | ||||||||||||
54,795 | Starwood Hotels & Resorts Worldwide, Inc. | 1,143,024 | ||||||||||
Independent Power Producer – 0.4% | ||||||||||||
32,960 | NRG Energy, Inc.* | 592,621 | ||||||||||
Internet Security – 0.8% | ||||||||||||
74,525 | Symantec Corp.* | 1,285,556 | ||||||||||
Machinery – General Industrial – 0.7% | ||||||||||||
2,849,030 | Shanghai Electric Group Co., Ltd. | 1,018,537 | ||||||||||
Medical – Biomedical and Genetic – 4.4% | ||||||||||||
43,909 | Celgene Corp.* | 1,875,793 | ||||||||||
31,383 | Genzyme Corp.* | 1,673,655 | ||||||||||
36,916 | Gilead Sciences, Inc.* | 1,690,753 | ||||||||||
49,765 | OSI Pharmaceuticals, Inc.* | 1,670,611 | ||||||||||
6,910,812 | ||||||||||||
Medical – Drugs – 4.8% | ||||||||||||
115,452 | GlaxoSmithKline PLC | 1,782,281 | ||||||||||
114,717 | Grifols S.A. | 2,014,180 | ||||||||||
40,645 | Novo Nordisk A/S | 1,928,893 | ||||||||||
13,143 | Roche Holding A.G. | 1,661,260 | ||||||||||
7,386,614 | ||||||||||||
Medical Products – 2.2% | ||||||||||||
52,612 | Covidien, Ltd. | 1,735,144 | ||||||||||
53,148 | Hospira, Inc.* | 1,746,975 | ||||||||||
3,482,119 | ||||||||||||
Multi-Line Insurance – 0.9% | ||||||||||||
30,350 | ACE, Ltd. (U.S. Shares) | 1,405,812 | ||||||||||
Multimedia – 1.5% | ||||||||||||
88,954 | News Corp. – Class A | 734,760 | ||||||||||
230,455 | WPP PLC | 1,575,713 | ||||||||||
2,310,473 | ||||||||||||
Networking Products – 1.1% | ||||||||||||
50,406 | Cisco Systems, Inc.* | 973,844 | ||||||||||
30,795 | Juniper Networks, Inc.* | 666,712 | ||||||||||
1,640,556 | ||||||||||||
Oil – Field Services – 1.5% | ||||||||||||
221,667 | Acergy S.A. | 1,719,199 | ||||||||||
13,259 | Schlumberger, Ltd. (U.S. Shares) | 649,558 | ||||||||||
2,368,757 | ||||||||||||
Oil and Gas Drilling – 1.4% | ||||||||||||
52,575 | Helmerich & Payne, Inc. | 1,620,361 | ||||||||||
8,497 | Transocean, Ltd. (U.S. Shares)* | 573,378 | ||||||||||
2,193,739 | ||||||||||||
Oil Companies – Exploration and Production – 0.5% | ||||||||||||
13,105 | Occidental Petroleum Corp. | 737,680 | ||||||||||
Oil Companies – Integrated – 4.5% | ||||||||||||
43,580 | Hess Corp. | 2,387,748 | ||||||||||
93,629 | Petroleo Brasileiro S.A. (ADR) | 3,143,125 | ||||||||||
58,339 | Suncor Energy, Inc. | 1,468,500 | ||||||||||
6,999,373 | ||||||||||||
Oil Field Machinery and Equipment – 1.5% | ||||||||||||
39,049 | Cameron International Corp.* | 998,873 | ||||||||||
25,370 | National Oilwell Varco, Inc.* | 768,204 | ||||||||||
74,078 | Wellstream Holdings PLC | 563,847 | ||||||||||
2,330,924 | ||||||||||||
Physical Practice Management – 1.2% | ||||||||||||
50,585 | Mednax, Inc.* | 1,816,002 | ||||||||||
Pipelines – 0.2% | ||||||||||||
7,290 | Kinder Morgan Management LLC* | 297,724 | ||||||||||
Power Converters and Power Supply Equipment – 0.3% | ||||||||||||
136,186 | JA Solar Holdings Co., Ltd. (ADR)* | 478,013 | ||||||||||
Property and Casualty Insurance – 0.3% | ||||||||||||
12,325 | Chubb Corp. | 480,059 | ||||||||||
Real Estate Management/Services – 0.6% | ||||||||||||
69,000 | Mitsubishi Estate Co., Ltd. | 900,451 | ||||||||||
Real Estate Operating/Development – 1.0% | ||||||||||||
325,000 | CapitaLand, Ltd. | 598,626 | ||||||||||
340,995 | Hang Lung Properties, Ltd. | 961,495 | ||||||||||
1,560,121 | ||||||||||||
REIT – Warehouse/Industrial – 0.4% | ||||||||||||
71,687 | ProLogis | 653,069 | ||||||||||
Retail – Apparel and Shoe – 2.5% | ||||||||||||
211,100 | Esprit Holdings, Ltd. | 1,294,011 | ||||||||||
32,363 | Inditex S.A. | 1,380,827 | ||||||||||
53,855 | Ltd. Brands, Inc. | 615,024 | ||||||||||
27,350 | Nordstrom, Inc. | 618,931 | ||||||||||
3,908,793 | ||||||||||||
Retail – Consumer Electronics – 0.7% | ||||||||||||
8,865 | Best Buy Co., Inc. | 340,239 | ||||||||||
16,270 | Yamada Denki Co., Ltd. | 750,835 | ||||||||||
1,091,074 | ||||||||||||
Retail – Discount – 1.2% | ||||||||||||
35,855 | Wal-Mart Stores, Inc. | 1,807,092 | ||||||||||
Retail – Drug Store – 1.2% | ||||||||||||
58,552 | CVS Caremark Corp. | 1,860,783 | ||||||||||
Retail – Jewelry – 0.3% | ||||||||||||
17,560 | Tiffany & Co. | 508,186 | ||||||||||
Retail – Regional Department Stores – 0.9% | ||||||||||||
29,635 | Kohl’s Corp.* | 1,343,947 | ||||||||||
Semiconductor Components/Integrated Circuits – 1.6% | ||||||||||||
292,697 | Atmel Corp.* | 1,123,956 | ||||||||||
117,908 | Marvell Technology Group, Ltd.* | 1,294,630 | ||||||||||
2,418,586 | ||||||||||||
Semiconductor Equipment – 1.0% | ||||||||||||
56,645 | KLA-Tencor Corp. | 1,571,332 | ||||||||||
Soap and Cleaning Preparations – 1.0% | ||||||||||||
40,596 | Reckitt Benckiser Group PLC | 1,598,256 |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2009 19
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Telecommunication Equipment – 1.8% | ||||||||||||
95,859 | Arris Group, Inc.* | $ | 1,022,816 | |||||||||
71,898 | CommScope, Inc.* | 1,804,639 | ||||||||||
2,827,455 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 0.6% | ||||||||||||
62,559 | Corning, Inc. | 914,613 | ||||||||||
Telecommunication Services – 1.3% | ||||||||||||
42,364 | Amdocs, Ltd. (U.S. Shares)* | 886,678 | ||||||||||
48,865 | SAVVIS, Inc.* | 556,084 | ||||||||||
58,999 | Time Warner Telecom, Inc. – Class A* | 542,201 | ||||||||||
1,984,963 | ||||||||||||
Tobacco – 0.9% | ||||||||||||
86,580 | Altria Group, Inc. | 1,413,851 | ||||||||||
Toys – 1.3% | ||||||||||||
86,390 | Mattel, Inc. | 1,292,394 | ||||||||||
3,000 | Nintendo Co., Ltd. | 802,788 | ||||||||||
2,095,182 | ||||||||||||
Transportation – Services – 2.2% | ||||||||||||
30,169 | C.H. Robinson Worldwide, Inc. | 1,603,784 | ||||||||||
33,697 | United Parcel Service, Inc. – Class B | 1,763,701 | ||||||||||
3,367,485 | ||||||||||||
Web Portals/Internet Service Providers – 1.1% | ||||||||||||
2,353 | Google, Inc. – Class A* | 931,717 | ||||||||||
54,285 | Yahoo!, Inc.* | 775,733 | ||||||||||
1,707,450 | ||||||||||||
Wireless Equipment – 2.7% | ||||||||||||
59,968 | Crown Castle International Corp.* | 1,470,415 | ||||||||||
43,349 | QUALCOMM, Inc. | 1,834,530 | ||||||||||
102,673 | Telefonaktiebolaget L.M. Ericsson – Class B | 886,202 | ||||||||||
4,191,147 | ||||||||||||
Total Common Stock (cost $183,126,479) | 153,844,004 | |||||||||||
Money Market – 1.0% | ||||||||||||
1,499,000 | Janus Cash Liquidity Fund LLC, 0% (cost $1,499,000) | 1,499,000 | ||||||||||
Total Investments (total cost $184,625,479) – 99.9% | 155,343,004 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 217,108 | |||||||||||
Net Assets – 100% | $ | 155,560,112 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 1,712,067 | 1.1% | |||||
Belgium | 1,312,635 | 0.8% | ||||||
Bermuda | 7,536,733 | 4.9% | ||||||
Brazil | 4,834,559 | 3.1% | ||||||
Canada | 4,621,574 | 3.0% | ||||||
Cayman Islands | 1,740,772 | 1.1% | ||||||
China | 1,018,537 | 0.7% | ||||||
Denmark | 1,928,893 | 1.2% | ||||||
France | 1,714,079 | 1.1% | ||||||
Germany | 4,028,766 | 2.6% | ||||||
Guernsey | 886,678 | 0.6% | ||||||
Hong Kong | 3,946,590 | 2.5% | ||||||
India | 792,037 | 0.5% | ||||||
Ireland | 3,517,356 | 2.3% | ||||||
Japan | 3,742,537 | 2.4% | ||||||
Jersey | 1,575,713 | 1.0% | ||||||
Luxembourg | 1,719,199 | 1.1% | ||||||
Netherlands Antilles | 649,558 | 0.4% | ||||||
Singapore | 3,472,276 | 2.2% | ||||||
Spain | 3,395,008 | 2.2% | ||||||
Sweden | 886,202 | 0.6% | ||||||
Switzerland | 7,317,872 | 4.7% | ||||||
United Kingdom | 11,889,863 | 7.7% | ||||||
United States†† | 81,103,500 | 52.2% | ||||||
Total | $ | 155,343,004 | 100.0% |
†† | Includes Short-Term Securities (51.2% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
20 Janus International & Global Funds April 30, 2009
Janus Overseas Fund (unaudited) | Ticker: JAOSX |
Fund Snapshot
This Fund invests in growth companies around the world.
![(BRENT LYNN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199plynnbre.jpg)
Brent Lynn
portfolio manager
Performance Overview
During the six-month period ended April 30, 2009, Janus Overseas Fund returned 15.68%. Its primary benchmark, the Morgan Stanley Capital International (MSCI) All Country World ex-U.S. IndexSM returned 1.03%, and its secondary benchmark, the Morgan Stanley Capital International (MSCI) EAFE® Index, returned -2.64%.
Economic Update
Fall of 2008 was an extraordinarily difficult time for global stock markets and for the global economy. Frozen credit markets, the Lehman bankruptcy, and falling economic activity created panic and waves of selling in equity markets around the world. Although I had expected a slowdown in U.S. housing and in global economies after a multi-year period of strong growth, I was surprised by the sudden economic collapse and by the implosion in global financial markets. In this period of extreme risk aversion, the Fund fell sharply and underperformed its benchmarks. Since last fall, credit markets and economies have shown signs of stabilization, driven in part by concerted government actions to ease credit conditions and provide fiscal stimulus. Equity markets and the Fund have rebounded from their lows, but there remains considerable uncertainty regarding the outlook for the global economy and for corporate earnings.
Portfolio Positioning
In this very difficult period, I concentrated the Fund in our highest conviction ideas. I believe that many of our top holdings will take advantage of this downturn to improve their competitive position. During the period, the Fund was overweight in consumer discretionary, information technology and energy sectors and underweight in healthcare, materials, telecommunication services and utilities. (The Fund may use derivatives, such as buying put options or selling call options, to both hedge market exposure and express views on stocks. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.)
Contributors to Performance
On a geographic basis, the Fund’s holdings in Hong Kong and Brazil were the largest contributors to performance. On a sector basis, the Fund’s holdings in consumer discretionary and information technology were the largest contributors to performance. Energy holdings were significant contributors as well.
Li & Fung, a Hong Kong based outsourcing and logistics company, was the largest contributor during the period. Although Li & Fung’s U.S. retailer customer base faced a challenging sales environment, Li & Fung was able to grow through market share gains, new outsourcing customers, and acquisitions.
China Overseas Land & Investment, a leading residential housing developer in China, was another significant contributor during the period. Despite a slowing economy in China, China Overseas Land continued to show strong sales, reflecting a broad portfolio of high quality projects.
Reliance Industries, the India-based energy and petrochemicals conglomerate, also contributed to performance. During the period, the company successfully brought on line a large scale refinery and a major offshore gas project.
Detractors from Performance
On a geographic basis, the Fund’s holdings in Ireland and the United Arab Emirates detracted the most from performance. On a sector basis, the Fund’s holdings in industrials and materials were the largest detractors.
Ireland’s Anglo Irish Bank was the largest detractor during the period. After the stock fell sharply in 2007 and 2008, I significantly increased our position in this bank. Although Anglo Irish was clearly exposed to declining real estate sectors in Ireland and the U.K., I believed that the company’s tight credit underwriting standards would differentiate them from other Irish and U.K. banks. I misjudged, however, the devastating and sometimes self-fulfilling impact that financial market pressure can have even on healthy banks. In addition, the company revealed large and previously undisclosed loans made to the chairman. Shortly thereafter, the Irish government nationalized Anglo Irish. We wrote down the value of our holdings in Anglo Irish to zero in the Fund’s NAV. Although the bank’s equity may still have value, I believe it will be difficult for the Irish government to fairly compensate shareholders in a politically-charged environment where Anglo’s management deceived the public.
Mitsubishi Estate Co., Ltd., a Japanese real estate company, was another detractor to performance. Despite having a portfolio of prime Tokyo office properties, concerns about the Japanese economy and real estate sector weighed on the stock.
Janus International & Global Funds April 30, 2009 21
Janus Overseas Fund (unaudited)
Kingdom Hotel Investments, a United Arab Emirates based lodging company, was another detractor during the period. Concerns about the impact of declining oil prices on the Middle East economies and general negative sentiment towards lodging assets globally hit the stock.
Outlook
In this very uncertain environment, I cannot predict when the global economies will recover and return to growth again, but I do believe we are invested in some of the world’s great growth franchises. My conviction comes from the in-depth fundamental research our analyst team does on a daily basis. Janus’ investment team travels millions of miles every year to meet with companies and their competitors, suppliers and customers. These meetings help us better understand our holdings and lay the foundation for high-conviction investments.
Despite incredibly difficult markets and a bleak near-term picture for the global economy, I remain optimistic about the long term. New technologies, urbanization, infrastructure development, trade and the desire of people around the world for a better life will continue to drive long-term economic growth. I have not changed my investment approach. I believe the best way to generate solid long-term returns is to make high conviction, long-term investments in world-class companies with exciting growth prospects that trade at undeservedly low valuations. As manager of the Fund, my sole focus is to deliver strong, long-term performance for you. I will perform this job to the best of my ability.
Thank you for your continued investment in Janus Overseas Fund.
Janus Overseas Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Li & Fung, Ltd. | 3.21% | |||
China Overseas Land & Investment, Ltd. | 2.17% | |||
Reliance Industries, Ltd. | 1.95% | |||
Petroleo Brasileiro S.A. (ADR) | 1.86% | |||
Research In Motion, Ltd. (U.S. Shares) | 1.67% |
5 Bottom Performers – Holdings
Contribution | ||||
Anglo Irish Bank Corp., Ltd. | -1.90% | |||
Mitsubishi Estate Co., Ltd. | -0.78% | |||
Kingdom Hotel Investments (GDR) | -0.76% | |||
Reliance Capital, Ltd. | -0.59% | |||
IG Group Holdings PLC | -0.40% |
5 Top Performers – Sectors*
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International All Country World ex-U.S. | |||||||||||
Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
Consumer Discretionary | 6.41% | 21.67% | 10.16% | |||||||||
Information Technology | 5.18% | 18.91% | 5.27% | |||||||||
Energy | 4.26% | 16.88% | 8.94% | |||||||||
Financials | 0.80% | 25.51% | 21.85% | |||||||||
Consumer Staples | 0.58% | 5.39% | 10.34% |
5 Bottom Performers – Sectors*
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International All Country World ex-U.S. | |||||||||||
Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
Telecommunication Services | -0.02% | 0.82% | 6.82% | |||||||||
Utilities | 0.10% | 0.37% | 7.35% | |||||||||
Health Care | 0.18% | 0.56% | 9.65% | |||||||||
Industrials | 0.26% | 6.44% | 11.43% | |||||||||
Materials | 0.40% | 3.45% | 8.19% |
* | 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. |
22 Janus International & Global Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Li & Fung, Ltd. Distribution/Wholesale | 7.1% | |||
Reliance Industries, Ltd. Oil Refining and Marketing | 6.5% | |||
China Overseas Land & Investment, Ltd. Real Estate Operating/Development | 3.8% | |||
Petroleo Brasileiro S.A. (ADR) Oil Companies – Integrated | 3.8% | |||
Hang Lung Properties, Ltd. Real Estate Operating/Development | 3.6% | |||
24.8% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21p03.gif)
Emerging markets comprised 24.4% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21c03.gif)
Janus International & Global Funds April 30, 2009 23
Janus Overseas Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21m03.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Overseas Fund | 15.68% | –43.09% | 10.69% | 6.94% | 10.58% | 0.90% | |||||||
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | 1.03% | –42.64% | 2.57% | 1.32% | N/A** | ||||||||
Morgan Stanley Capital International EAFE® Index | –2.64% | –42.76% | 0.66% | –0.04% | 2.80% | ||||||||
Lipper Quartile | – | 2nd | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for International Funds | – | 541/1197 | 2/707 | 10/369 | 2/107 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
24 Janus International & Global Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund’s returns and NAV may be subject to volatility.
Janus Overseas Fund held approximately 11.0% and 11.5% respectively, of its assets in Brazilian and Indian securities as of April 30, 2009 and the Fund may have experienced significant gains or losses due, in part, to its investments in Brazil and India. While holdings are subject to change without notice, the Fund’s returns and NAV may be affected to a large degree by fluctuations in currency exchange rates or political or economic conditions in Brazil and India.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 5, 1994 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
Effective December 22, 2008, the Fund changed its primary benchmark from the Morgan Stanley Capital International (“MSCI”) EAFE® Index to the MSCI All Country World ex-U.S. IndexSM. The new primary benchmark provides a more appropriate representation of the Fund’s investments.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 2, 1994 | |
** | Since inception return is not shown for the index because the index’s inception date, December 31, 1998, differs significantly from the Fund’s inception date. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,156.80 | $ | 4.92 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.23 | $ | 4.61 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.92%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus International & Global Funds April 30, 2009 25
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 89.6% | ||||||||||||
Aerospace and Defense – 0.7% | ||||||||||||
2,067,150 | Empresa Brasileira de Aeronautica S.A. (ADR) | $ | 33,529,173 | |||||||||
Agricultural Chemicals – 2.7% | ||||||||||||
1,468,236 | Potash Corporation of Saskatchewan, Inc. | 126,147,687 | ||||||||||
Agricultural Operations – 2.0% | ||||||||||||
138,125,652 | Chaoda Modern Agriculture Holdings, Ltd.£ | 78,694,834 | ||||||||||
19,990,994 | China Green Holdings, Ltd. | 16,037,200 | ||||||||||
94,732,034 | ||||||||||||
Airlines – 2.3% | ||||||||||||
6,038,795 | Continental Airlines, Inc. – Class B* | 63,528,123 | ||||||||||
4,493,639 | Delta Air Lines, Inc.* | 27,725,753 | ||||||||||
3,828,290 | UAL Corp.* | 18,835,187 | ||||||||||
110,089,063 | ||||||||||||
Automotive – Cars and Light Trucks – 0.8% | ||||||||||||
6,347,243 | Ford Motor Co.* | 37,956,513 | ||||||||||
Building – Residential and Commercial – 1.4% | ||||||||||||
4,247,945 | Brascan Residential Properties S.A. | 7,287,855 | ||||||||||
2,327,579 | Gafisa S.A. | 20,211,112 | ||||||||||
4,070,200 | MRV Engenharia e Participacoes S.A.* | 39,569,838 | ||||||||||
67,068,805 | ||||||||||||
Casino Hotels – 2.1% | ||||||||||||
13,220,078 | Crown, Ltd. | 66,011,222 | ||||||||||
7,947,025 | Melco Crown Entertainment, Ltd. (ADR)* | 36,158,964 | ||||||||||
102,170,186 | ||||||||||||
Commercial Banks – 1.5% | ||||||||||||
26,420,589 | Anglo Irish Bank Corp., Ltd.o | 0 | ||||||||||
24,177,167 | Banco de Oro Unibank, Inc. | 15,037,628 | ||||||||||
495,960 | Banco de Oro Unibank, Inc. (GDR) (144A) | 6,167,919 | ||||||||||
765,810 | Julius Baer Holding A.G. | 25,125,144 | ||||||||||
2,834,764 | Punjab National Bank, Ltd. | 27,174,366 | ||||||||||
73,505,057 | ||||||||||||
Computers – 2.5% | ||||||||||||
1,686,333 | Research In Motion, Ltd. (U.S. Shares)* | 117,200,144 | ||||||||||
Computers – Other – 0.1% | ||||||||||||
231,222,597 | Amax Entertainment Holdings, Ltd.£ | 5,378,197 | ||||||||||
Dental Supplies and Equipment – 0.1% | ||||||||||||
474,254 | Osstem Implant Co., Ltd.*,£ | 5,141,200 | ||||||||||
Diagnostic Kits – 0.2% | ||||||||||||
55,035,935 | Trinity, Ltd. – Private Placement*,°° ,§,£ | 10,723,407 | ||||||||||
Distribution/Wholesale – 7.1% | ||||||||||||
118,328,110 | Li & Fung, Ltd. | 333,092,240 | ||||||||||
Diversified Operations – 1.5% | ||||||||||||
4,329,428 | MAX India, Ltd.* | 12,384,271 | ||||||||||
63,254,090 | Melco International Development, Ltd.£ | 31,053,606 | ||||||||||
782,085 | Orascom Development Holding A.G.* | 22,979,659 | ||||||||||
97,159,121 | Polytec Asset Holdings, Ltd. | 5,682,576 | ||||||||||
72,100,112 | ||||||||||||
Electric – Distribution – 0.4% | ||||||||||||
2,780,900 | Equatorial Energia S.A. | 17,340,867 | ||||||||||
Electronic Components – Semiconductors – 3.1% | ||||||||||||
83,754,567 | ARM Holdings PLC£ | 146,993,241 | ||||||||||
Electronic Connectors – 2.4% | ||||||||||||
1,091,400 | Hirose Electric Co., Ltd. | 113,543,405 | ||||||||||
Finance – Investment Bankers/Brokers – 1.9% | ||||||||||||
3,828,535 | Morgan Stanley | 90,506,567 | ||||||||||
Finance – Mortgage Loan Banker – 0.5% | ||||||||||||
687,598 | Housing Development Finance Corp. | 23,823,925 | ||||||||||
Finance – Other Services – 0.7% | ||||||||||||
10,584,799 | IG Group Holdings PLC | 34,270,467 | ||||||||||
Food – Catering – 0.2% | ||||||||||||
20,131,000 | FU JI Food & Catering Services Holdings, Ltd. | 10,648,462 | ||||||||||
Gambling – Non-Hotel – 0.1% | ||||||||||||
1,206,100 | Great Canadian Gaming Corp.* | 3,811,397 | ||||||||||
Hotels and Motels – 1.4% | ||||||||||||
12,220,368 | Kingdom Hotel Investments (GDR)*,£ | 29,328,883 | ||||||||||
25,411,000 | Shangri-La Asia, Ltd. | 37,543,207 | ||||||||||
66,872,090 | ||||||||||||
Insurance Brokers – 0% | ||||||||||||
1,354,044 | Eurodekania, Ltd. – Private Placement*,°° ,§,£ | 2,077,854 | ||||||||||
Investment Companies – 0.8% | ||||||||||||
7,909,060 | SM Investments Corp. | 39,737,308 | ||||||||||
Investment Management and Advisory Services – 0.4% | ||||||||||||
6,897,433 | BlueBay Asset Management PLC | 18,191,686 | ||||||||||
Medical – Drugs – 0.8% | ||||||||||||
318,462 | Roche Holding A.G. | 40,253,238 | ||||||||||
Oil Companies – Exploration and Production – 2.1% | ||||||||||||
2,016,835 | Niko Resources, Ltd. | 102,092,763 | ||||||||||
Oil Companies – Integrated – 5.7% | ||||||||||||
1,675,975 | Hess Corp. | 91,826,670 | ||||||||||
5,338,295 | Petroleo Brasileiro S.A. (ADR) | 179,206,563 | ||||||||||
271,033,233 | ||||||||||||
Oil Field Machinery and Equipment – 0.7% | ||||||||||||
4,485,417 | Wellstream Holdings PLC | 34,140,910 | ||||||||||
Oil Refining and Marketing – 6.5% | ||||||||||||
8,582,310 | Reliance Industries, Ltd. | 309,261,014 | ||||||||||
Power Converters and Power Supply Equipment – 3.0% | ||||||||||||
2,030,480 | SunPower Corp. – Class A* | 55,594,542 | ||||||||||
5,733,957 | Suntech Power Holdings Co., Ltd. (ADR)* | 85,607,978 | ||||||||||
141,202,520 | ||||||||||||
Property and Casualty Insurance – 2.1% | ||||||||||||
9,459,592 | Reliance Capital, Ltd. | 99,291,714 | ||||||||||
Real Estate Management/Services – 3.1% | ||||||||||||
1,181,500 | Daito Trust Construction Co., Ltd. | 48,818,493 | ||||||||||
7,561,000 | Mitsubishi Estate Co., Ltd. | 98,671,124 | ||||||||||
147,489,617 | ||||||||||||
Real Estate Operating/Development – 14.6% | ||||||||||||
137,368,440 | Ayala Land, Inc. | 18,246,862 | ||||||||||
87,410,032 | CapitaLand, Ltd. | 161,002,757 | ||||||||||
102,705,000 | China Overseas Land & Investment, Ltd. | 179,249,647 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus International & Global Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Real Estate Operating/Development – (continued) | ||||||||||||
17,145,775 | Cyrela Brazil Realty S.A. | $ | 106,759,080 | |||||||||
2,973,300 | Cyrela Commercial Properties S.A. Empreendimentos e Participacoes* | 12,514,576 | ||||||||||
60,714,000 | Hang Lung Properties, Ltd. | 171,193,808 | ||||||||||
1,980,255 | PDG Realty S.A. Empreendimentos e Participacoes | 18,662,848 | ||||||||||
1,584,880 | Rodobens Negocios Imobiliarios S.A. | 10,506,410 | ||||||||||
3,477,401 | Rossi Residencial S.A. | 12,011,336 | ||||||||||
690,147,324 | ||||||||||||
Retail – Apparel and Shoe – 3.1% | ||||||||||||
23,753,500 | Esprit Holdings, Ltd. | 145,605,347 | ||||||||||
Retail – Consumer Electronics – 1.9% | ||||||||||||
1,993,930 | Yamada Denki Co., Ltd. | 92,016,790 | ||||||||||
Retail – Major Department Stores – 0.5% | ||||||||||||
9,265,498 | Arcandor A.G.*,** | 21,801,058 | ||||||||||
Semiconductor Equipment – 1.9% | ||||||||||||
4,508,768 | ASML Holdings N.V.** | 91,622,207 | ||||||||||
Sugar – 2.3% | ||||||||||||
5,807,259 | Bajaj Hindusthan, Ltd. | 8,969,232 | ||||||||||
1,009,400 | Bajaj Hindusthan, Ltd. (GDR) (144A) | 1,558,898 | ||||||||||
13,335,458 | Balrampur Chini Mills, Ltd.£ | 18,692,081 | ||||||||||
10,961,459 | Cosan, Ltd. – Class A*,£ | 38,584,336 | ||||||||||
5,048,700 | Cosan S.A. Industria e Comercio* | 31,089,533 | ||||||||||
4,561,730 | Shree Renuka Sugars, Ltd. | 9,010,617 | ||||||||||
107,904,697 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 1.2% | ||||||||||||
4,036,950 | Corning, Inc. | 59,020,209 | ||||||||||
Telecommunication Services – 1.9% | ||||||||||||
2,628,275 | Amdocs, Ltd. (U.S. Shares)* | 55,009,796 | ||||||||||
7,990,806 | Reliance Communications, Ltd. | 35,531,201 | ||||||||||
90,540,997 | ||||||||||||
Transportation – Truck – 0.5% | ||||||||||||
2,284,841 | DSV A/S | 25,804,491 | ||||||||||
Warehousing and Harbor Transport Services – 0.1% | ||||||||||||
12,114,876 | DP World, Ltd. (U.S. Shares) | 3,271,017 | ||||||||||
Wireless Equipment – 0.7% | ||||||||||||
3,971,223 | Telefonaktiebolaget L.M. Ericsson – Class B | 34,276,840 | ||||||||||
Total Common Stock (cost $5,402,649,035) | 4,263,427,073 | |||||||||||
Preferred Stock – 0.8% | ||||||||||||
Investment Companies – 0.8% | ||||||||||||
2,955,900 | Bradespar S.A., 0.5700% (cost $10,890,725) | 36,390,918 | ||||||||||
Money Market – 7.5% | ||||||||||||
356,671,499 | Janus Cash Liquidity Fund LLC, 0% (cost $356,671,499) | 356,671,499 | ||||||||||
Total Investments (total cost $5,770,211,259) – 97.9% | 4,656,489,490 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 2.1% | 100,393,652 | |||||||||||
Net Assets – 100% | $ | 4,756,883,142 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 66,011,223 | 1.4% | |||||
Bermuda | 576,240,527 | 12.4% | ||||||
Brazil | 525,080,109 | 11.3% | ||||||
Canada | 349,251,990 | 7.5% | ||||||
Cayman Islands | 246,121,698 | 5.3% | ||||||
Denmark | 25,804,491 | 0.5% | ||||||
Germany | 21,801,058 | 0.5% | ||||||
Guernsey | 55,009,796 | 1.2% | ||||||
Hong Kong | 392,220,467 | 8.4% | ||||||
India | 545,697,319 | 11.7% | ||||||
Ireland | 0 | 0.0% | ||||||
Japan | 353,049,811 | 7.6% | ||||||
Netherlands | 91,622,207 | 2.0% | ||||||
Philippines | 79,189,717 | 1.7% | ||||||
Singapore | 161,002,757 | 3.5% | ||||||
South Korea | 5,141,200 | 0.1% | ||||||
Sweden | 34,276,840 | 0.7% | ||||||
Switzerland | 88,358,042 | 1.9% | ||||||
United Arab Emirates | 3,271,016 | 0.1% | ||||||
United Kingdom | 235,674,158 | 5.0% | ||||||
United States†† | 801,665,064 | 17.2% | ||||||
Total | $ | 4,656,489,490 | 100.0% |
†† | Includes Short-Term Securities (9.6% excluding Short-Term Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value U.S.$ | Gain/(Loss) | |||||||||
Euro 5/14/09 | 24,000,000 | $ | 31,748,272 | $ | 723,728 | |||||||
Euro 6/18/09 | 16,000,000 | 21,161,888 | (432,768) | |||||||||
Euro 6/25/09 | 20,000,000 | 26,451,262 | (401,262) | |||||||||
Total | $ | 79,361,422 | $ | (110,302) |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2009 27
Janus Worldwide Fund (unaudited) | Ticker: JAWWX |
Fund Snapshot
This global Fund offers geographic diversification in a single portfolio.
![(LAURENT SALTIEL PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psaltiel.jpg)
Laurent Saltiel
portfolio manager
Performance Overview
Janus Worldwide Fund returned -2.64% over the six months ended April 30, 2009, as compared to a -5.44% return for the benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM.
Saltiel Selected as New Portfolio Manager
Laurent Saltiel, who has served as a portfolio manager at Janus since November of 2006 and as an analyst at the firm since September of 2002, was named as portfolio manager of the Janus Worldwide Fund effective April 13, 2009. He succeeded Jason Yee, who left the firm. Joining Laurent in managing the Fund are analysts Julian McManus and Tony Yao, who were appointed as assistant portfolio managers. The Fund will employ a global core growth style that should be well aligned with the fundamental research produced by the seven Janus global sector teams. The strategy seeks to invest in companies with strong and sustainable competitive advantages, high or improving returns on capital and attractive long-term growth prospects. The Fund will focus on investment ideas where our research may deliver superior risk-adjusted performance over the long-term. Mr. Saltiel expects to increase the number of holdings (54 as of December 31, 2008) to a range of 70-100. In addition, many of the Fund’s historically large sector and country differences from the index will likely be minimized in an effort to make stock selection the primary driver of excess returns.
Economic Environment
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. Global markets bounced off of the roughly five-year lows reached in early March, though only partially eased the losses as most indices finished the period over 3% lower. Market volatility, which spiked to historic levels in November, declined in December and continued at a more muted level through period end. Sentiment began to improve in March amid some positive news coming out of the financials sector. The rally received a further boost later in the month when the U.S. Federal Reserve (Fed) announced it would help the beleaguered U.S. housing market by buying up to $1.15 trillion in Treasuries, mortgage-backed securities and U.S. agency debt. Then, in early April, G20 leaders agreed to provide over $1 trillion in emergency aid for global economies. Both actions appeared to lift global markets through period end. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed by utilities and, then healthcare. Materials and information technology were the best relative performers. In local currency terms, emerging markets, which posted strong returns during the period, outperformed developed markets. U.S. stocks trailed much of the developed world for the period while Asia and Latin America led emerging markets higher thanks to strong returns in China and Brazil. In commodities, natural gas, oil and agricultural commodities suffered negatives returns, while precious metals generated strong returns. The Dollar Index finished the period lower overall, as the U.S. currency lagged the euro, although it was stronger relative to the Japanese yen and British pound.
Contributors to Performance
On a country basis, the largest contributors to relative performance were our holdings in the U.S., the U.K., and Hong Kong as well as an overweight in Hong Kong. On a sector basis, our holdings and significant overweights in consumer discretionary and information technology were the largest contributors.
The largest individual contributor was new technology holding Research In Motion, which rose following a better-than-expected earnings report highlighted by improving margins and solid subscriber growth for its mobile devices. Based on its market share gains and growing usage of mobile data services worldwide, Research In Motion represented an attractive growth opportunity at period end in our opinion. Another top contributor was title company First American Financial, which rebounded during the period. We sold the position on the stock’s strength.
Amazon.com, the online retailer, gained after the company reported significant revenue growth in its most recent quarter. We took advantage of the stock’s strength to exit our position. Consumer discretionary holding Li & Fung, a Hong Kong-based apparel outsourcing firm, rose after the announcement of several large contract wins. We believe the company is
28 Janus International & Global Funds April 30, 2009
(unaudited)
gaining market share, growing organically and reducing costs to improve margins. We added to our position.
Detractors from Performance
On a country basis, our holdings in Japan, Switzerland and France were among key detractors. On the sector level, our holdings and underweight in materials were among detractors, as was our overweight to financials.
Among individual detractors, JPMorgan Chase was the largest, as the U.S. bank was negatively impacted by ongoing turmoil in its industry. We remain confident in the management and the company’s ability to emerge from the financial crisis in a stronger competitive position than it had entering the downturn; however, we did trim our position.
Dell, the computer manufacturer, continued to be pressured by the downturn in consumer spending; we decided to exit our position. Berkshire Hathaway also detracted from performance, as its service businesses and investment portfolio have both suffered in the economic downturn and financial fallout. We trimmed our position in Berkshire. Willis Group Holdings, an insurance brokerage firm, also declined as the underlying operating environment for property and casualty insurance and brokers in particular continued to be weak. We elected to exit our position.
Outlook
We remain cautious, as the U.S. and the global economy remain challenged in our view. Emerging countries previously benefited from strong consumption in the U.S., while the U.S. economy benefited from increasing use of debt and loose credit practices. As a result, the rest of the world has been suffering along with the U.S., as evidenced by downturns in housing and reductions in net worth worldwide. While many investors are expecting a second half recovery in 2009, we foresee only a muted improvement with U.S. Gross Domestic Product declining at a smaller rate than the steep declines seen in recent quarters. We think there remains considerable pressure on company margins due to weak consumer spending as individuals have continued to deleverage their personal balance sheets as much as companies have.
The overall portfolio theme has been one of caution amid this global recession. We have been concentrating on companies that we believe have either modest economic sensitivity or are in areas where we see some economic growth potential. We were also seeking to take advantage of what we believe to be attractive valuations. Looking ahead, we are not counting on significant economic growth in developed markets, although we still think we can find attractive investments nevertheless. As for emerging markets, we think Brazil and China still offer economic growth potential, though most likely at slower paces than in recent years. We believe valuations for many companies participating in these economies were undemanding at period end.
Thank you for your continued support of Janus Worldwide Fund.
Janus International & Global Funds April 30, 2009 29
Janus Worldwide Fund (unaudited)
Janus Worldwide Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Research In Motion, Ltd. (U.S. Shares) | 1.03% | |||
First American Financial Corp. | 0.83% | |||
Amazon.com, Inc. | 0.57% | |||
Li & Fung, Ltd. | 0.55% | |||
Marvell Technology Group, Ltd. | 0.46% |
5 Bottom Performers – Holdings
Contribution | ||||
JPMorgan Chase & Co. | -1.04% | |||
Dell, Inc. | -1.03% | |||
Berkshire Hathaway Inc. | -0.95% | |||
Willis Group Holdings, Ltd. | -0.66% | |||
SLM Corp. | -0.64% |
5 Top Performers – Sectors*
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (Average % of Equity) | World IndexSM Weighting | ||||||||||
Information Technology | 1.14% | 25.59% | 11.01% | |||||||||
Consumer Discretionary | 1.14% | 24.12% | 9.14% | |||||||||
Energy | 0.21% | 1.23% | 12.05% | |||||||||
Telecommunication Services | 0.13% | 0.13% | 5.17% | |||||||||
Utilities | 0.00% | 0.00% | 5.55% |
5 Bottom Performers – Sectors*
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (Average % of Equity) | World IndexSM Weighting | ||||||||||
Financials | -2.71% | 24.09% | 17.42% | |||||||||
Health Care | -0.38% | 11.63% | 11.91% | |||||||||
Materials | -0.13% | 4.63% | 6.05% | |||||||||
Consumer Staples | -0.10% | 3.53% | 11.15% | |||||||||
Industrials | -0.01% | 5.05% | 10.58% |
* | 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. |
30 Janus International & Global Funds April 30, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2009
Celgene Corp. Medical – Biomedical and Genetic | 2.9% | |||
Gilead Sciences, Inc. Medical – Biomedical and Genetic | 2.7% | |||
Apple, Inc. Computers | 2.6% | |||
Capita Group PLC Human Resources | 2.6% | |||
Goldman Sachs Group, Inc. Finance – Investment Bankers/Brokers | 2.6% | |||
13.4% |
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21p04.gif)
Emerging markets comprised 6.3% of total net assets.
Top Country Allocations– Long Positions (% of Investment Securities)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21c04.gif)
Janus International & Global Funds April 30, 2009 31
Janus Worldwide Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif21m04.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratio – for the fiscal year ended October 31, 2008 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Worldwide Fund | –2.64% | –40.86% | –4.29% | –3.30% | 6.80% | 0.83% | |||||||
Morgan Stanley Capital International World IndexSM | –5.44% | –39.33% | –1.02% | –1.57% | 4.92% | ||||||||
Lipper Quartile | – | 3rd | 4th | 4th | 2nd | ||||||||
Lipper Ranking – based on total return for Global Funds | – | 344/506 | 271/297 | 140/153 | 7/17 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratio shown was determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
See important disclosures on the next page.
32 Janus International & Global Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets.
This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund’s returns and NAV may be subject to volatility.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See Notes to Schedules of Investments for index definitions.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 15, 1991 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 974.20 | $ | 3.52 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.22 | $ | 3.61 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.72%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. |
Janus International & Global Funds April 30, 2009 33
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 98.7% | ||||||||||||
Aerospace and Defense – Equipment – 0.8% | ||||||||||||
302,660 | United Technologies Corp. | $ | 14,781,914 | |||||||||
Agricultural Chemicals – 6.5% | ||||||||||||
563,910 | Monsanto Co. | 47,870,320 | ||||||||||
677,974 | Mosaic Co. | 27,424,048 | ||||||||||
520,034 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 44,977,741 | ||||||||||
120,272,109 | ||||||||||||
Agricultural Operations – 0.2% | ||||||||||||
6,465,490 | Chaoda Modern Agriculture Holdings Ltd. | 3,683,607 | ||||||||||
Applications Software – 1.5% | ||||||||||||
1,392,210 | Microsoft Corp. | 28,206,175 | ||||||||||
Beverages – Non-Alcoholic – 1.1% | ||||||||||||
426,335 | PepsiCo, Inc. | 21,214,430 | ||||||||||
Brewery – 1.3% | ||||||||||||
804,913 | Anheuser-Busch InBev N.V. | 24,563,764 | ||||||||||
Cable Television – 1.2% | ||||||||||||
32,055 | Jupiter Telecommunications Co., Ltd. | 22,542,798 | ||||||||||
Chemicals – Diversified – 2.0% | ||||||||||||
1,049,925 | Israel Chemicals, Ltd. | 8,808,448 | ||||||||||
470,876 | K+S A.G. | 28,094,099 | ||||||||||
36,902,547 | ||||||||||||
Chemicals – Specialty – 0.7% | ||||||||||||
19,515,000 | Huabao International Holdings, Ltd. | 13,820,683 | ||||||||||
Commercial Banks – 1.8% | ||||||||||||
1,299,240 | ICICI Bank, Ltd. | 12,506,784 | ||||||||||
346,450 | Julius Baer Holding A.G. | 11,366,535 | ||||||||||
622,106 | Standard Chartered PLC | 9,563,935 | ||||||||||
33,437,254 | ||||||||||||
Commercial Services – 2.3% | ||||||||||||
2,268,539 | Aggreko PLC | 19,186,023 | ||||||||||
20,385 | SGS S.A. | 22,707,549 | ||||||||||
41,893,572 | ||||||||||||
Computer Services – 0.3% | ||||||||||||
165,626 | Infosys Technologies, Ltd. | 5,019,282 | ||||||||||
Computers – 5.1% | ||||||||||||
386,355 | Apple, Inc.* | 48,615,049 | ||||||||||
651,817 | Research In Motion, Ltd. (U.S. Shares)* | 45,301,282 | ||||||||||
93,916,331 | ||||||||||||
Consulting Services – 1.8% | ||||||||||||
812,092 | Bereau Veritas S.A. | 33,082,757 | ||||||||||
Cosmetics and Toiletries – 2.6% | ||||||||||||
297,140 | Colgate-Palmolive Co. | 17,531,260 | ||||||||||
634,625 | Procter & Gamble Co. | 31,375,860 | ||||||||||
48,907,120 | ||||||||||||
Distribution/Wholesale – 2.4% | ||||||||||||
15,938,430 | Li & Fung, Ltd. | 44,866,493 | ||||||||||
Diversified Operations – 1.0% | ||||||||||||
3,702,495 | China Merchants Holdings International Co., Ltd. | 8,747,750 | ||||||||||
161,704 | Danaher Corp. | 9,449,981 | ||||||||||
18,197,731 | ||||||||||||
Educational Software – 0.1% | ||||||||||||
19,915 | Educomp Solutions, Ltd. | 992,907 | ||||||||||
Electric – Distribution – 0.1% | ||||||||||||
341,440 | Equatorial Energia S.A. | 2,129,118 | ||||||||||
Electronic Connectors – 0.8% | ||||||||||||
418,320 | Amphenol Corp. – Class A | 14,155,949 | ||||||||||
Enterprise Software/Services – 2.2% | ||||||||||||
434,125 | Autonomy Corp. PLC* | 9,129,656 | ||||||||||
551,580 | Nomura Research Institute, Ltd. | 9,780,522 | ||||||||||
1,142,945 | Oracle Corp. | 22,104,556 | ||||||||||
41,014,734 | ||||||||||||
Finance – Investment Bankers/Brokers – 3.6% | ||||||||||||
374,030 | Goldman Sachs Group, Inc. | 48,062,855 | ||||||||||
546,663 | JPMorgan Chase & Co. | 18,039,879 | ||||||||||
66,102,734 | ||||||||||||
Finance – Mortgage Loan Banker – 1.1% | ||||||||||||
612,360 | Housing Development Finance Corp. | 21,217,076 | ||||||||||
Finance – Other Services – 1.8% | ||||||||||||
2,493,440 | BM&F Bovespa S.A.* | 10,118,406 | ||||||||||
34,600 | CME Group, Inc. | 7,658,710 | ||||||||||
42,950 | Hong Kong Exchanges & Clearing, Ltd. | 493,914 | ||||||||||
4,704,375 | IG Group Holdings PLC | 15,231,383 | ||||||||||
33,502,413 | ||||||||||||
Food – Miscellaneous/Diversified – 0.7% | ||||||||||||
411,704 | Nestle S.A. | 13,394,019 | ||||||||||
Food – Retail – 2.0% | ||||||||||||
7,275,685 | Tesco PLC | 36,110,060 | ||||||||||
Food – Wholesale/Distribution – 0.3% | ||||||||||||
4,446,840 | Olam International, Ltd. | 5,248,050 | ||||||||||
Gold Mining – 2.0% | ||||||||||||
897,730 | Newmont Mining Corp. | 36,124,655 | ||||||||||
Human Resources – 2.6% | ||||||||||||
4,801,563 | Capita Group PLC | 48,337,008 | ||||||||||
Investment Companies – 0.5% | ||||||||||||
2,719,640 | Man Group PLC | 10,024,410 | ||||||||||
Medical – Biomedical and Genetic – 5.9% | ||||||||||||
1,269,805 | Celgene Corp.* | 54,246,070 | ||||||||||
1,094,408 | Gilead Sciences, Inc.* | 50,123,886 | ||||||||||
148,365 | Vertex Pharmaceuticals, Inc.* | 4,572,609 | ||||||||||
108,942,565 | ||||||||||||
Medical – Drugs – 7.4% | ||||||||||||
413,220 | Abbott Laboratories | 17,293,257 | ||||||||||
826,695 | Grifols S.A. | 14,514,963 | ||||||||||
690,909 | Novartis A.G. | 26,102,164 | ||||||||||
806,103 | Novo Nordisk A/S | 38,255,286 | ||||||||||
325,581 | Roche Holding A.G. | 41,153,072 | ||||||||||
137,318,742 | ||||||||||||
Medical – Generic Drugs – 0.4% | ||||||||||||
189,235 | Teva Pharmaceutical S.P. (ADR) | 8,305,524 | ||||||||||
Medical Instruments – 1.1% | ||||||||||||
92,220 | Intuitive Surgical, Inc.* | 13,254,781 | ||||||||||
238,660 | St. Jude Medical, Inc.* | 7,999,883 | ||||||||||
21,254,664 |
See Notes to Schedules of Investments and Financial Statements.
34 Janus International & Global Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Medical Products – 2.2% | ||||||||||||
285,160 | Baxter International, Inc. | $ | 13,830,260 | |||||||||
326,250 | Johnson & Johnson | 17,082,450 | ||||||||||
237,180 | Stryker Corp. | 9,181,238 | ||||||||||
40,093,948 | ||||||||||||
Multi-Line Insurance – 0.5% | ||||||||||||
53,860 | Zurich Financial Services A.G. | 9,950,435 | ||||||||||
Networking Products – 0.5% | ||||||||||||
472,655 | Cisco Systems, Inc.* | 9,131,695 | ||||||||||
Oil – Field Services – 1.6% | ||||||||||||
1,110,730 | Petrofac, Ltd. | 9,354,910 | ||||||||||
430,555 | Schlumberger, Ltd. (U.S. Shares) | 21,092,889 | ||||||||||
30,447,799 | ||||||||||||
Oil Companies – Exploration and Production – 2.0% | ||||||||||||
175,680 | Devon Energy Corp. | 9,109,008 | ||||||||||
311,360 | EOG Resources, Inc. | 19,765,133 | ||||||||||
152,060 | Occidental Petroleum Corp. | 8,559,457 | ||||||||||
37,433,598 | ||||||||||||
Oil Companies – Integrated – 2.4% | ||||||||||||
323,100 | Hess Corp. | 17,702,649 | ||||||||||
500,130 | Petroleo Brasileiro S.A. (ADR) | 16,789,364 | ||||||||||
181,298 | Total S.A. | 9,064,931 | ||||||||||
43,556,944 | ||||||||||||
Oil Field Machinery and Equipment – 0.5% | ||||||||||||
1,263,890 | Wellstream Holdings PLC | 9,620,143 | ||||||||||
Optical Supplies – 1.2% | ||||||||||||
240,785 | Alcon, Inc. (U.S. Shares) | 22,154,628 | ||||||||||
Real Estate Management/Services – 3.0% | ||||||||||||
672,300 | Aeon Mall Co., Ltd. | 8,812,574 | ||||||||||
768,300 | Daito Trust Construction Co., Ltd. | 31,745,448 | ||||||||||
1,094,000 | Mitsubishi Estate Co., Ltd. | 14,276,711 | ||||||||||
54,834,733 | ||||||||||||
Real Estate Operating/Development – 2.2% | ||||||||||||
11,032,500 | CapitaLand, Ltd. | 20,321,042 | ||||||||||
5,433,845 | China Overseas Land & Investment, Ltd. | 9,483,616 | ||||||||||
3,630,605 | Hang Lung Properties, Ltd. | 10,237,130 | ||||||||||
40,041,788 | ||||||||||||
Reinsurance – 2.0% | ||||||||||||
12,090 | Berkshire Hathaway, Inc. – Class B* | 37,055,850 | ||||||||||
Retail – Apparel and Shoe – 5.4% | ||||||||||||
7,536,200 | Esprit Holdings, Ltd. | 46,195,762 | ||||||||||
576,056 | Hennes & Mauritz A.B. – Class B | 25,766,095 | ||||||||||
652,848 | Inditex S.A. | 27,854,973 | ||||||||||
180,000 | Ports Design, Ltd. | 273,177 | ||||||||||
100,090,007 | ||||||||||||
Retail – Consumer Electronics – 0.5% | ||||||||||||
218,580 | Yamada Denki Co., Ltd. | 10,087,129 | ||||||||||
Schools – 0.3% | ||||||||||||
36,000 | Anhanguera Educacional Participacoes S.A.* | 251,990 | ||||||||||
25,500 | Estacio Participacoes S.A.* | 172,077 | ||||||||||
14,773,000 | Raffles Education Corp., Ltd. | 4,302,550 | ||||||||||
4,726,617 | ||||||||||||
Soap and Cleaning Preparations – 1.5% | ||||||||||||
682,951 | Reckitt Benckiser Group PLC | 26,887,634 | ||||||||||
Super-Regional Banks – 0.5% | ||||||||||||
453,530 | Wells Fargo & Co. | 9,075,135 | ||||||||||
Telecommunication Services – 0.5% | ||||||||||||
598,796 | Bharti Tele-Ventures, Ltd. | 9,044,596 | ||||||||||
Tobacco – 3.3% | ||||||||||||
915,345 | British American Tobacco PLC | 22,204,851 | ||||||||||
2,343,860 | ITC, Ltd. | 8,885,060 | ||||||||||
840,875 | Philip Morris International, Inc. | 30,439,675 | ||||||||||
61,529,586 | ||||||||||||
Transportation – Railroad – 0.6% | ||||||||||||
2,000,950 | All America Latina Logistica S.A. (GDR) | 10,371,838 | ||||||||||
Transportation – Services – 1.2% | ||||||||||||
412,700 | United Parcel Service, Inc. – Class B | 21,600,718 | ||||||||||
Transportation – Truck – 0.5% | ||||||||||||
885,281 | DSV A/S | 9,998,169 | ||||||||||
Web Portals/Internet Service Providers – 0.8% | ||||||||||||
36,030 | Google, Inc. – Class A* | 14,266,799 | ||||||||||
Wireless Equipment – 0.3% | ||||||||||||
201,570 | Crown Castle International Corp.* | 4,942,496 | ||||||||||
Total Investments (total cost $1,760,128,013) – 98.7% | 1,826,425,480 | |||||||||||
Cash, Receivables and Other Assets net of Liabilities – 1.3% | 23,420,991 | |||||||||||
Net Assets – 100% | $ | 1,849,846,471 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Belgium | $ | 24,563,764 | 1.3% | |||||
Bermuda | 105,156,115 | 5.8% | ||||||
Brazil | 39,832,794 | 2.2% | ||||||
Canada | 90,279,022 | 4.9% | ||||||
Cayman Islands | 3,683,607 | 0.2% | ||||||
Denmark | 48,253,455 | 2.6% | ||||||
France | 42,147,688 | 2.3% | ||||||
Germany | 28,094,100 | 1.6% | ||||||
Hong Kong | 28,962,409 | 1.6% | ||||||
India | 57,665,704 | 3.2% | ||||||
Israel | 17,113,972 | 0.9% | ||||||
Japan | 97,245,183 | 5.3% | ||||||
Jersey | 9,354,910 | 0.5% | ||||||
Netherlands Antilles | 21,092,889 | 1.2% | ||||||
Singapore | 29,871,642 | 1.6% | ||||||
Spain | 42,369,935 | 2.3% | ||||||
Sweden | 25,766,095 | 1.4% | ||||||
Switzerland | 146,828,401 | 8.1% | ||||||
United Kingdom | 206,295,103 | 11.3% | ||||||
United States | 761,848,692 | 41.7% | ||||||
Total | $ | 1,826,425,480 | 100.0% |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2009 35
Statements of Assets and Liabilities
As of April 30, 2009 (unaudited) | Janus Global | Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||
(all numbers in thousands except net asset value per share) | Opportunities Fund | Research Fund | Fund | Fund | ||||||||||||||
Assets: | ||||||||||||||||||
Investments at cost | $ | 95,010 | $ | 184,625 | $ | 5,770,211 | $ | 1,760,128 | ||||||||||
Unaffiliated investments at value | $ | 75,544 | $ | 153,844 | $ | 4,299,818 | $ | 1,826,425 | ||||||||||
Affiliated money market investments value | 6,441 | 1,499 | 356,671 | – | ||||||||||||||
Cash | 7 | 40 | 940 | – | ||||||||||||||
Cash denominated in foreign currency(1) | – | 201 | 4,505 | 7,844 | ||||||||||||||
Receivables: | ||||||||||||||||||
Investments sold | 2,124 | 3,502 | 91,511 | 57,502 | ||||||||||||||
Fund shares sold | 34 | 119 | 7,830 | 142 | ||||||||||||||
Dividends | 192 | 618 | 14,415 | 4,553 | ||||||||||||||
Non-interested Trustees’ deferred compensation | 2 | 4 | 115 | 45 | ||||||||||||||
Other assets | 1 | 2 | 291 | 144 | ||||||||||||||
Forward currency contracts | – | – | 724 | – | ||||||||||||||
Total Assets | 84,345 | 159,829 | 4,776,820 | 1,896,655 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Payables: | ||||||||||||||||||
Due to Custodian | – | – | – | 5,460 | ||||||||||||||
Investments purchased | 1,203 | 3,533 | 12,570 | 36,979 | ||||||||||||||
Fund shares repurchased | 25 | 139 | 2,042 | 957 | ||||||||||||||
Dividends and distributions | – | 3 | 10 | 1 | ||||||||||||||
Custody fees | – | 53 | – | – | ||||||||||||||
Advisory fees | 41 | 308 | 2,363 | 777 | ||||||||||||||
Transfer agent fees and expenses | 31 | 128 | 730 | 2,268 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 6 | 5 | 31 | 11 | ||||||||||||||
Non-interested Trustees’ deferred compensation fees | 2 | 4 | 115 | 45 | ||||||||||||||
Foreign tax liability | – | – | – | 149 | ||||||||||||||
Accrued expenses and other payables | 108 | 96 | 1,242 | 162 | ||||||||||||||
Forward currency contracts | – | – | 834 | – | ||||||||||||||
Total Liabilities | 1,416 | 4,269 | 19,937 | 46,809 | ||||||||||||||
Net Assets | $ | 82,929 | $ | 155,560 | $ | 4,756,883 | $ | 1,849,846 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||
Capital (par value and paid-in surplus)* | $ | 103,001 | $ | 247,367 | $ | 6,352,827 | $ | 7,608,069 | ||||||||||
Undistributed net investment income/(loss)* | 44 | 441 | 8,130 | 9,598 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (7,088) | (62,955) | (490,456) | (5,834,092) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(2) | (13,028) | (29,293) | (1,113,618) | 66,271 | ||||||||||||||
Total Net Assets | $ | 82,929 | $ | 155,560 | $ | 4,756,883 | $ | 1,849,846 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,118 | 17,004 | 160,257 | 61,391 | ||||||||||||||
Net Asset Value Per Share | $ | 9.10 | $ | 9.15 | $ | 29.68 | $ | 30.13 |
* | See Note 3 in the Notes to the Financial Statements. |
(1) | Includes cost of $201,541, $4,502,384, and $7,838,554 for Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively. | |
(2) | Net of foreign taxes on investments of $148,823 for Janus Worldwide Fund. |
See Notes to Financial Statements.
36 Janus International & Global Funds April 30, 2009
Statements of Operations
For the six-month period ended April 30, 2009 (unaudited) | Janus Global | Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||
(all numbers in thousands) | Opportunities Fund | Research Fund | Fund | Fund | ||||||||||||||
Investment Income: | ||||||||||||||||||
Interest | $ | – | $ | – | $ | 3 | $ | 25 | ||||||||||
Securities lending income | 1 | 3 | – | – | ||||||||||||||
Dividends | 1,111 | 1,557 | 40,801 | 17,035 | ||||||||||||||
Dividends from affiliates | 9 | 4 | 3,088 | 337 | ||||||||||||||
Foreign tax withheld | (29) | (41) | (1,266) | (658) | ||||||||||||||
Total Investment Income | 1,092 | 1,523 | 42,626 | 16,739 | ||||||||||||||
Expenses: | ||||||||||||||||||
Advisory fees | 243 | 537 | 12,377 | 3,291 | ||||||||||||||
Transfer agent fees and expenses | 108 | 258 | 4,172 | 2,727 | ||||||||||||||
Registration fees | 21 | 7 | 52 | 7 | ||||||||||||||
Custodian fees | 8 | 53 | 828 | 108 | ||||||||||||||
Audit fees | 21 | 19 | 29 | 33 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 6 | 7 | 34 | 7 | ||||||||||||||
Printing expenses | 52 | 87 | 19 | 10 | ||||||||||||||
Postage expenses | 28 | 33 | 181 | 159 | ||||||||||||||
Accounting systems expense | 37 | 37 | 37 | 37 | ||||||||||||||
Other expenses | 8 | 35 | 99 | 50 | ||||||||||||||
Non-recurring costs (Note 2) | – | N/A | – | – | ||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | N/A | – | – | ||||||||||||||
Total Expenses | 532 | 1,073 | 17,828 | 6,429 | ||||||||||||||
Expense and Fee Offset | – | – | (3) | (2) | ||||||||||||||
Net Expenses | 532 | 1,073 | 17,825 | 6,427 | ||||||||||||||
Less: Excess Expense Reimbursement | – | (162) | – | – | ||||||||||||||
Net Expenses after Expense Reimbursement | 532 | 911 | 17,825 | 6,427 | ||||||||||||||
Net Investment Income/(Loss) | 560 | 612 | 24,801 | 10,312 | ||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (7,082) | (44,615) | (458,947) | (1,180,113) | ||||||||||||||
Net realized gain/(loss) from swap contracts | – | 103 | – | – | ||||||||||||||
Net realized gain/(loss) from options contracts | – | 29 | – | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(1) | 9,427 | 48,109 | 1,026,400 | 1,106,176 | ||||||||||||||
Net Gain/(Loss) on Investments | 2,345 | 3,626 | 567,453 | (73,937) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,905 | $ | 4,238 | $ | 592,254 | $ | (63,625) |
(1) | Net of foreign taxes on investments of $148,823 for Janus Worldwide Fund. |
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2009 37
Statements of Changes in Net Assets
For the six-month period ended April 30, 2009 (unaudited) | Janus Global | Janus Global | ||||||||||||||||
and for the fiscal year ended October 31, 2008 | Opportunities Fund | Research Fund | ||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 560 | $ | 963 | $ | 612 | $ | 1,098 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (7,082) | 5,864 | (44,615) | (17,471) | ||||||||||||||
Net realized gain/(loss) from swap contracts | – | – | 103 | (309) | ||||||||||||||
Net realized gain/(loss) from options contracts | – | – | 29 | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 9,427 | (78,223) | 48,109 | (133,887) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,905 | (71,396) | 4,238 | (150,569) | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | (28) | (2,799) | (915) | (782) | ||||||||||||||
Net realized gain/(loss) from investment transactions* | (5,568) | (4,999) | – | (12,121) | ||||||||||||||
Net (Decrease) from Dividends and Distributions | (5,596) | (7,798) | (915) | (12,903) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | 3,717 | 18,012 | 15,780 | 165,649 | ||||||||||||||
Redemption fees | 4 | 112 | 43 | 250 | ||||||||||||||
Reinvested dividends and distributions | 5,500 | 7,659 | 903 | 12,720 | ||||||||||||||
Shares repurchased | (9,226) | (49,580) | (31,965) | (131,833) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (5) | (23,797) | (15,239) | 46,786 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | (2,696) | (102,991) | (11,916) | (116,686) | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 85,625 | 188,616 | 167,476 | 284,162 | ||||||||||||||
End of period | $ | 82,929 | $ | 85,625 | $ | 155,560 | $ | 167,476 | ||||||||||
Undistributed Net Investment Income/(Loss)* | $ | 44 | $ | (488) | $ | 441 | $ | 744 |
* | See Note 3 in Notes to Financial Statements |
See Notes to Financial Statements.
38 Janus International & Global Funds April 30, 2009
Janus Overseas | Janus Worldwide | |||||||||||||||
Fund | Fund | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | 24,801 | $ | 73,249 | $ | 10,312 | $ | 28,563 | |||||||||
(458,947) | 146,881 | (1,180,113) | 120,599 | |||||||||||||
– | – | – | – | |||||||||||||
– | 30,174 | – | – | |||||||||||||
1,026,400 | (5,783,595) | 1,106,176 | (2,160,537) | |||||||||||||
592,254 | (5,533,291) | (63,625) | (2,011,375) | |||||||||||||
(1,114) | (163,518) | (26,296) | (21,825) | |||||||||||||
(207,095) | (794,328) | – | – | |||||||||||||
(208,209) | (957,846) | (26,296) | (21,825) | |||||||||||||
353,862 | 1,534,806 | 31,068 | 106,106 | |||||||||||||
306 | 2,696 | 43 | 154 | |||||||||||||
203,268 | 933,537 | 25,716 | 21,345 | |||||||||||||
(529,622) | (3,059,840) | (161,919) | (694,799) | |||||||||||||
27,814 | (588,801) | (105,092) | (567,194) | |||||||||||||
411,859 | (7,079,938) | (195,013) | (2,600,394) | |||||||||||||
4,345,024 | 11,424,962 | 2,044,859 | 4,645,253 | |||||||||||||
$ | 4,756,883 | $ | 4,345,024 | $ | 1,849,846 | $ | 2,044,859 | |||||||||
$ | 8,130 | $ | (15,557) | $ | 9,598 | $ | 25,582 |
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2009 39
Financial Highlights
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Global Opportunities Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.36 | $17.21 | $15.32 | $13.91 | $12.93 | $11.66 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .15 | .07 | .10 | .10 | .03 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .30 | (7.26) | 4.13 | 1.42 | .91 | 1.27 | ||||||||||||||||||||
Total from Investment Operations | .36 | (7.11) | 4.20 | 1.52 | 1.01 | 1.3 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.27) | (.09) | (.11) | (.03) | (.03) | ||||||||||||||||||||
Distributions (from capital gains)* | (.62) | (.48) | (2.22) | – | – | |||||||||||||||||||||
Redemption fees | –(1) | .01 | –(1) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Total Distributions and Other | (.62) | (.74) | (2.31) | (.11) | (.03) | (.03) | ||||||||||||||||||||
Net Asset Value, End of Period | $9.10 | $9.36 | $17.21 | $15.32 | $13.91 | $12.93 | ||||||||||||||||||||
Total Return** | 4.47% | (42.89)% | 30.59% | 10.96% | 7.78% | 11.18% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $82,929 | $85,625 | $188,616 | $145,667 | $177,560 | $207,414 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $76,665 | $136,813 | $162,723 | $161,256 | $218,871 | $175,110 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 1.40%(3) | 1.25%(3) | 1.07%(3) | 1.17%(4) | 1.03%(3) | 1.09%(3) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 1.40% | 1.24% | 1.06% | 1.15% | 1.02% | 1.09% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.47% | 0.70% | 0.43% | 0.57% | 0.62% | 0.24% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 41% | 18% | 14% | 38% | 36% | 37% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Global Research Fund | |||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005(5) | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.81 | $17.11 | $13.16 | $11.11 | $10.00 | |||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .04 | .04 | .10 | (.01) | |||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .35 | (7.58) | 4.72 | 2.22 | 1.12 | |||||||||||||||||||||
Total from Investment Operations | .39 | (7.54) | 4.76 | 2.32 | 1.11 | |||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.05) | (.05) | (.04) | – | |||||||||||||||||||||
Distributions (from capital gains)* | – | (.72) | (.76) | (.23) | – | |||||||||||||||||||||
Redemption fees | –(1) | .01 | –(1) | N/A | N/A | |||||||||||||||||||||
Total Distributions and Other | (.05) | (.76) | (.81) | (.27) | – | |||||||||||||||||||||
Net Asset Value, End of Period | $9.15 | $8.81 | $17.11 | $13.16 | $11.11 | |||||||||||||||||||||
Total Return** | 4.52% | (45.95)% | 38.09% | 21.21% | 11.10% | |||||||||||||||||||||
Net Assets, End of Period (in thousands) | $155,560 | $167,476 | $284,162 | $113,025 | $47,404 | |||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $142,681 | $260,977 | $173,760 | $79,500 | $29,920 | |||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 1.25%(6) | 1.15% | 1.12% | 1.16% | 1.27%(6) | |||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 1.25% | 1.14% | 1.11% | 1.14% | 1.25% | |||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.86% | 0.42% | 0.36% | 0.48% | (0.24)% | |||||||||||||||||||||
Portfolio Turnover Rate*** | 94% | 95% | 72% | 118% | 86% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and increased the ratio by 0.02%. | |
(5) | Period from February 25, 2005 (inception date) through October 31, 2005. | |
(6) | The ratio was 1.48% in 2009 and 1.61% in 2005 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
40 Janus International & Global Funds April 30, 2009
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Overseas Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.12 | $63.02 | $42.45 | $28.42 | $21.62 | $19.50 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .15 | .63 | .36 | .49 | .21 | .18 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | 3.75 | (31.38) | 20.74 | 13.80 | 6.82 | 2.18 | ||||||||||||||||||||
Total from Investment Operations | 3.90 | (30.75) | 21.10 | 14.29 | 7.03 | 2.36 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01) | (.88) | (.55) | (.28) | (.23) | (.24) | ||||||||||||||||||||
Distributions (from capital gains)* | (1.33) | (4.29) | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(1) | .02 | .02 | .02 | –(1) | –(1) | ||||||||||||||||||||
Total Distributions and Other | (1.34) | (5.15) | (.53) | (.26) | (.23) | (.24) | ||||||||||||||||||||
Net Asset Value, End of Period | $29.68 | $27.12 | $63.02 | $42.45 | $28.42 | $21.62 | ||||||||||||||||||||
Total Return** | 15.68% | (52.78)% | 50.24% | 50.71% | 32.74% | 12.24% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,756,883 | $4,345,024 | $11,424,962 | $5,317,122 | $2,554,621 | $2,090,180 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,906,435 | $9,214,669 | $7,916,993 | $3,933,175 | $2,272,200 | $2,496,896 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.92% | 0.90% | 0.89% | 0.92% | 0.90% | 0.93% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.92% | 0.89% | 0.89% | 0.91% | 0.89% | 0.93% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.28% | 0.79% | 0.77% | 1.69% | 0.88% | 0.72% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 35% | 50% | 51% | 61% | 57% | 58% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2009 (unaudited) | Janus Worldwide Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $31.36 | $60.04 | $48.05 | $41.41 | $38.12 | $37.34 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .17 | .43 | .32 | .65 | .46 | .30 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | (.99) | (28.82) | 12.31 | 6.48 | 3.14 | .84 | ||||||||||||||||||||
Total from Investment Operations | (.82) | (28.39) | 12.63 | 7.13 | 3.60 | 1.14 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.41) | (.29) | (.64) | (.49) | (.31) | (.36) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(1) | –(1) | –(1) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Total Distributions and Other | (.41) | (.29) | (.64) | (.49) | (.31) | (.36) | ||||||||||||||||||||
Net Asset Value, End of Period | $30.13 | $31.36 | $60.04 | $48.05 | $41.41 | $38.12 | ||||||||||||||||||||
Total Return** | (2.58)% | (47.49)% | 26.53% | 17.34% | 9.47% | 3.06% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,849,846 | $2,044,859 | $4,645,253 | $4,373,358 | $4,957,669 | $7,074,321 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,787,764 | $3,480,275 | $4,522,584 | $4,601,953 | $5,984,293 | $9,278,240 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.73% | 0.83% | 0.88%(4) | 0.87%(4) | 0.85% | 0.92% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.72% | 0.83% | 0.87% | 0.86% | 0.85% | 0.92% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.16% | 0.82% | 0.53% | 1.31% | 0.90% | 0.61% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 218% | 16% | 27% | 43% | 33% | 120% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | The ratio was 0.89% in 2007 and 0.90% in 2006 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2009 41
Notes to Schedules of Investments (unaudited)
Lipper Global Funds | Funds that invest at least 25% of their portfolios in securities traded outside of the United States and that may own U.S. securities as well. | |
Lipper International Funds | Funds that invest their assets in securities with primary trading markets outside of the United States. | |
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | Is an unmanaged, free float-adjusted, market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International EAFE® Index | Is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World Growth Index | Measures the performance of growth stocks in developed countries throughout the world. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World IndexSM | Is a market capitalization weighted index composed of companies representative of the market structure of developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | |
VVPR Strips | The VVPR strip is a coupon which, if presented along with the dividend coupon of the ordinary share, allows the benefit of a reduced withholding tax on the dividends paid by the company. This strip is quoted separately from the ordinary share and is freely negotiable. | |
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. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
o | On January 23, 2009 Anglo Irish Bank Corporation PLC was acquired by the Republic of Ireland. The Fund’s investment in this issuer, as reflected in the Schedule of Investments, exposes investors to the negative (or positive) performance resulting from this and other events. |
°° ∞ Schedule of Fair Valued Securities (as of April 30, 2009)
Value as a | |||||||
Value | % of Net Assets | ||||||
Janus Overseas Fund | |||||||
Eurodekania, Ltd. – Private Placement | $ | 2,077,854 | 0.0% | ||||
Trinity, Ltd. – Private Placement | 10,723,407 | 0.2% | |||||
$ | 12,801,261 | 0.2% | |||||
Securities are valued at “fair value” pursuant to procedures adopted by the Fund’s trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
42 Janus International & Global Funds April 30, 2009
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2009)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Overseas Fund | ||||||||||||
Eurodekania, Ltd.-Private Placement | 3/8/07 | $ | 17,754,225 | $ | 2,077,854 | 0.0% | ||||||
Trinity, Ltd.-Private Placement | 11/14/07 | 25,332,992 | 10,723,407 | 0.2% | ||||||||
$ | 43,087,217 | $ | 12,801,261 | 0.2% | ||||||||
The Fund had registration rights for certain restricted securities held as of April 30, 2009. The issuer incurs all registration costs.
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the six-month period ended April 30, 2009. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Overseas Fund | |||||||||||||||||||||
Amax Entertainment Holdings, Ltd. | – | $ | – | 12,024,000 | $ | 2,026,481 | $ | (1,709,753) | $ | 447,510 | $ | 5,378,197 | |||||||||
ARM Holdings PLC | – | – | 151,360 | 480,760 | (280,003) | 1,616,765 | 146,993,241 | ||||||||||||||
Balrampur Chini Mills, Ltd. | – | – | – | – | – | 136,021 | 18,692,081 | ||||||||||||||
BrasilAgro – Companhia Brasileira de Propriedades Agricolas | – | – | 3,440,000 | 17,348,780 | (8,665,478) | – | – | ||||||||||||||
Chaoda Modern Agriculture Holdings, Ltd. | 9,331,755 | 2,471,008 | – | – | – | 531,684 | 78,694,834 | ||||||||||||||
Cosan, Ltd. – Class A* | – | – | – | – | – | – | 38,584,336 | ||||||||||||||
Eurodekania, Ltd. – Private Placement* | – | – | – | – | – | – | 2,077,854 | ||||||||||||||
Kingdom Hotel Investments (GDR)* | 2,506,268 | 4,015,037 | – | – | – | – | 29,328,883 | ||||||||||||||
Melco International Development, Ltd. | – | – | 215,000 | 459,690 | (404,400) | – | 31,053,606 | ||||||||||||||
NDS Group PLC (ADR)* | – | – | 965,304 | 46,052,833 | 14,761,319 | – | – | ||||||||||||||
Osstem Implant Co., Ltd. | – | – | 387,619 | 19,630,729 | (15,337,665) | – | 5,141,200 | ||||||||||||||
Trinity, Ltd. – Private Placement* | – | – | – | – | – | – | 10,723,407 | ||||||||||||||
$ | 6,486,045 | $ | 85,999,273 | $ | (11,635,980) | $ | 2,731,980 | $ | 366,667,639 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Worldwide Fund | |||||||||||||||||||||
Ryland Group, Inc. | – | $ | – | 3,255,000 | $ | 116,379,456 | $ | (59,847,881) | $ | 133,705 | $ | – | |||||||||
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 April 30, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of April 30, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Janus Global Opportunities Fund | $ | 51,486,623 | $ | 30,498,517 | $ | – | |||||
Janus Global Research Fund | 90,208,522 | 65,134,482 | – | ||||||||
Janus Overseas Fund | 656,909,157 | 3,986,779,072 | 12,801,261 | ||||||||
Janus Worldwide Fund | 895,809,691 | 930,615,789 | – | ||||||||
Other Financial Instruments(a): | |||||||||||
Janus Overseas Fund | – | (110,302) | – | ||||||||
(a) | Other Financial Instruments include futures, forward currency, written option, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date.Options and swap contracts are reported at their market value at measurement date. |
Janus International & Global Funds April 30, 2009 43
Notes to Schedules of Investments (unaudited) (continued)
Level 3 Valuation Reconciliation of Assets (as of the six-month period ended April 30, 2009)
Change in | |||||||||||||||||||||||
Accrued | Unrealized | Net | Transfers In | ||||||||||||||||||||
Balance as of | Discounts/ | Realized | Appreciation/ | Purchases/ | and/or Out of | Balance as of | |||||||||||||||||
October 31, 2008 | Premiums | Gain/(Loss) | (Depreciation)(a) | (Sales) | Level 3 | April 30, 2009 | |||||||||||||||||
Investments in Securities: | |||||||||||||||||||||||
Janus Overseas Fund | $ | 42,466,662 | $ | – | $ | – | $ | (29,665,401) | $ | – | $ | – | $ | 12,801,261 | |||||||||
(a) | Included in “Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statements of Operations. |
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2009 are noted below.
Fund | Aggregate Value | ||||
Janus Overseas Fund | $ | 113,423,265 | |||
44 Janus International & Global Funds April 30, 2009
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part 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. The Trust offers twenty-eight funds with differing investment objectives and policies. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified, as defined in the 1940 Act, with the exception of Janus Global Opportunities Fund, which is classified as non-diversified. The Funds are no-load investments.
Effective December 22, 2008, Janus Overseas Fund changed its primary benchmark from the MSCI EAFE® Index to the MSCI All Country ex-U.S. IndexSM. The new primary benchmark provides a more appropriate representation of the Fund’s investments. The MSCI EAFE® Index will serve as the Fund’s secondary benchmark.
Effective December 22, 2008, Janus Overseas Fund reopened to new investors.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Short positions shall be valued in accordance with the same methodologies, except that in the event that a last sale price is not available, the latest ask price shall be used instead of a bid price. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. 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; and (iii) a non-significant event such as a market closing early or not opening, or a security trading halt. The Funds may use a systematic fair valuation model provided by an independent pricing service to value foreign equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the Funds’ Trustees.
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 Trust 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.
Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each fund in the Trust.
Securities Lending
Under procedures adopted by the Trustees, the Funds may seek to earn additional income by lending securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. There is the risk of delay in recovering a loaned
Janus International & Global Funds April 30, 2009 45
Notes to Financial Statements (unaudited) (continued)
security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in non-affiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedules of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statements of Operations (if applicable).
The Securities Lending Program was suspended and effective November 19, 2008, the Funds no longer had any securities on loan. Management continues to review the program and may resume securities lending.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds and certain pooled investment vehicles, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate.
The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Operations (if applicable).
Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts. Such collateral is in the possession of the Funds’ custodian.
On September 15, 2008, Lehman Brothers Holding, Inc. (Lehman) filed for Chapter 11 bankruptcy in U.S. Federal Court. A number of Lehman subsidiaries have subsequently filed bankruptcy or similar insolvency proceedings in the U.S. and other jurisdictions. Lehman’s bankruptcy caused the Funds to write-off Lehman foreign exchange currency gains and losses and the associated receivables and payables. The written-off gains and losses are included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Changes in Net Assets.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds 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 are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statements of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statements of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral
46 Janus International & Global Funds April 30, 2009
for market value on futures contracts are noted in the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Funds may utilize swap agreements as a means to gain exposure to certain common stocks and/or to “hedge” or protect their portfolios from adverse movements in securities prices or interest rates. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Swap agreements entail the risk that a party will default on its payment obligation to a Fund. If the other party to a swap defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If a 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 contracts are reported as an asset or liability on the Statements of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statements of Operations (if applicable).
Various types of swaps such as credit default (funded and unfunded), equity, interest rate, and total return swaps are described below.
Credit default swaps are a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments.
Funded or unfunded credit default swaps are based on an index of credit default swaps (“CDXs”) or other similarly structured products. CDXs are designed to track segments of the credit default swap market and provide investors with exposure to specific reference baskets of issuers of bonds or loans. These instruments have the potential to allow an investor to obtain the same investment exposure as an investor who invests in an individual credit default swap, but with the potential added benefit of diversification. The CDX reference baskets are normally priced daily and rebalanced every six months in conjunction with leading market makers in the credit industry. The liquidity of the market for CDXs is normally subject to liquidity in the secured loan and credit derivatives markets. A Fund investing in CDXs is normally only permitted to take long positions in these instruments.
Equity swaps involve the exchange by two parties of future cash flow (e.g., one cash flow based on a referenced interest rate and the other based on the performance of stock or a stock index).
Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments).
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.
Options Contracts
The Funds may purchase or write covered and uncovered put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds may utilize American-style and European-style options. An American-style option is an option contract that can be exercised at any time between the time of purchase and the option’s expiration date. A European-style option is an option contract that can only be exercised on the option’s expiration date. The Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
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.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call)
Janus International & Global Funds April 30, 2009 47
Notes to Financial Statements (unaudited) (continued)
the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedules of Investments (if applicable). Options written are reported as a liability on the Statements of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statements of Operations (if applicable).
The Funds recognized realized gains/(losses) from written options contracts during the six-month period ended April 30, 2009 as indicated in the table below:
Fund | Gains/(Losses) | ||||
Janus Global Research Fund | $ | 29,148 | |||
The risk in writing call options is that the Funds give 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 Funds 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 Funds pay a premium whether or not the options are exercised. 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 Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2009 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Global Research Fund | ||||||||
Options outstanding at October 31, 2008 | – | $ | – | |||||
Options written | 479 | 34,706 | ||||||
Options closed | (402) | (29,148) | ||||||
Options expired | – | – | ||||||
Options exercised | (77) | (5,558) | ||||||
Options outstanding at April 30, 2009 | – | $ | – | |||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of a Fund’s net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls. The Funds may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which a Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that a Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The Funds are also required to pay the lender of the security any dividends or interest that accrues on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, a Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Funds pay stock loan fees on assets borrowed from the security broker.
A Fund may also enter into short positions through derivative instruments such as option contracts, futures contracts and swap agreements which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
Foreign Currency Translations
The Funds do 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
48 Janus International & Global Funds April 30, 2009
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.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Exchange-Traded Notes
The Funds may invest directly in exchange-traded notes (“ETN”), which are senior, unsecured, unsubordinated debt securities whose returns are linked to a particular index and provide exposure to the total returns of various market indices, including indices linked to stocks, bonds, commodities and currencies. This type of debt security differs from other types of bonds and notes. ETN returns are based upon the performance of a market index minus applicable fees; no period coupon payments are distributed and no principal protections exist. ETNs do not pay cash distributions. Instead, the value of dividends, interest, and investment gains are captured in the Funds’ total return. The Funds will invest in these securities when desiring exposure to debt securities or commodities. When evaluating ETNs for investment, Janus Capital will consider the potential risks involved, expected tax efficiency, rate of return, and credit risk. When the Funds invest in ETNs, they will bear their proportionate share of any fees and expenses borne by the ETN. There may be restrictions on the Funds’ right to redeem their investment in an ETN, which are meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to a 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 a Fund. A Fund may be unable to recover its investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded in a Fund’s Statement of Assets and Liabilities.
Janus International & Global Funds April 30, 2009 49
Notes to Financial Statements (unaudited) (continued)
A 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 a Fund’s cash balances are invested in one or more money market funds, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A 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 a Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
The Funds generally declare and distribute dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The 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 REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Funds’ tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2006-2008 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2009, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examinations in progress and are 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.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standard Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 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. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Various inputs are used in determining the value of the Funds’ investments defined pursuant to SFAS No. 157. These inputs are summarized into three broad levels:
Level 1 – Quoted prices in active markets for identical securities.
50 Janus International & Global Funds April 30, 2009
Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing a security and are developed based on market data obtained from sources independent of the reporting entity. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the security and would be based on the best information available in the circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of April 30, 2009 to value each Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if required) in the Notes to Schedules of Investments.
In April 2009, FASB issued FASB staff position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds’ financial statement disclosures.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
In September 2008, FASB issued a FASB Staff Position No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45” (the “Position”), which was effective for fiscal years ending after November 15, 2008. The Position amends FASB Statement No. 133 (“FAS 133”), Accounting for Derivative Instruments and Hedging Activities, and also amends FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The amendments to FAS 133 include required disclosure for (i) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. Management has evaluated the impact of SFAS No. 133-1 and FIN 45-4 and there is no impact on the Funds’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based on average daily net assets and calculated at the annual rate shown in the table below for each Fund.
Fund | Advisory Fee % | ||||
Janus Global Opportunities Fund | 0.64% | ||||
Janus Global Research Fund | 0.64% | ||||
Janus Overseas Fund | 0.64% | ||||
Janus Worldwide Fund | 0.60% | ||||
For Janus Global Research Fund and Janus Worldwide Fund, the investment advisory fee is determined by calculating a base fee rate and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base fee rate depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||
Janus Global Research Fund | MSCI World Growth Index | ||||
Janus Worldwide Fund | MSCI World IndexSM | ||||
Only the base fee rate applied until January 2007 for Janus Global Research Fund and February 2007 for Janus
Janus International & Global Funds April 30, 2009 51
Notes to Financial Statements (unaudited) (continued)
Worldwide Fund, at which time the calculation of the performance adjustment applies as follows:
(Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment)
The investment advisory fee paid to Janus Capital by each of the Funds listed above consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no performance adjustment will be made until the Fund’s performance-based fee structure has been in effect for at least 12 months. When the Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period is equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began January 2007 for Janus Global Research Fund and February 2007 for Janus Worldwide Fund.
No Performance Adjustment is applied unless the difference between the Fund’s investment performance and the cumulative investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. For Janus Global Research Fund, the Performance Adjustment is made in even increments for every 0.50% difference in the investment performance of the Fund compared to the cumulative investment record of the Russell 1000 Index (for periods prior to January 1, 2007) and the MSCI World Growth Index (for periods commencing January 1, 2007). The aggregate of the Fund’s performance versus these two benchmark indices, respectively, are used for purposes of calculating the Performance Adjustment. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee Rate and the Performance Adjustment, net assets are averaged over different periods (average daily net assets during the previous month for the Base Fee Rate, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses, whereas the Fund’s benchmark index does not have any fees or expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund’s benchmark index. The Base Fee Rate is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it depends on the performance of each Fund relative to the record of the Fund’s benchmark index and future changes to the size of each Fund.
The Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as Advisory fees on the Statements of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment.
During the six-month period ended April 30, 2009, the following Funds recorded the Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Janus Global Research Fund | $ | 84,548 | |||
Janus Worldwide Fund | (2,012,576) | ||||
Until at least March 1, 2010, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Global Research Fund by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses) exceed the following annual rate noted below. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Fund | Expense Limit % | ||||
Janus Global Research Fund | 1.25% | ||||
Each Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted averaged annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.12% of net assets on the proportion of assets sold directly and 0.25% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for each of the Funds for transfer agent services.
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 Funds. All deferred fees are
52 Janus International & Global Funds April 30, 2009
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 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 Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2009 on the Statements of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a 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 Statements of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statements 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. No deferred fees were distributed to any Trustee under the Deferred Plan during the six-month period ended April 30, 2009.
For the six-month period ended April 30, 2009, Janus Capital assumed $4,842 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the Statements of Operations.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer and compliance staff of the Trust. Total compensation of $63,757 was paid by the Trust during the six-month period ended April 30, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
A 2.00% redemption fee may be imposed on shares of Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund held for 90 days or less. This fee is paid to the Funds rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Funds’ asset levels and cash flow due to short-term money movements in and out of the Funds. The redemption fee is accounted for as an addition to Paid-in-Capital. Total redemption fees received by the Funds for the six-month period ended April 30, 2009 are indicated in the table below:
Fund | Redemption Fee | ||||
Janus Global Opportunities Fund | $ | 4,416 | |||
Janus Global Research Fund | 42,651 | ||||
Janus Overseas Fund | 306,213 | ||||
Janus Worldwide Fund | 43,023 | ||||
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statements of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statements of Assets and Liabilities (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Assets and Liabilities (if applicable). The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Pursuant to the terms and conditions of an SEC exemptive order and the provisions of the 1940 Act, the Funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Funds may be used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Funds are 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.
During the six-month period ended April 30, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Janus International & Global Funds April 30, 2009 53
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/09 | |||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||
Janus Global Opportunities Fund | $ | 13,733,552 | $ | (7,292,442) | $ | 3,410 | $ | 6,441,110 | ||||||
Janus Global Research Fund | 21,521,223 | (20,022,223) | 1,559 | 1,499,000 | ||||||||||
Janus Overseas Fund | 607,437,348 | (250,765,849) | 109,195 | 356,671,499 | ||||||||||
Janus Worldwide Fund | 395,592,298 | (395,592,298) | 69,107 | – | ||||||||||
$ | 1,038,284,421 | $ | (673,672,812) | $ | 183,271 | $ | 364,611,609 | |||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||
Janus Overseas Fund | $ | 98,173 | $ | (54,314,423) | $ | 37,620 | $ | – | ||||||
$ | 98,173 | $ | (54,314,423) | $ | 37,620 | $ | – | |||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||
Janus Global Opportunities Fund | $ | 218,981 | $ | (4,787,559) | $ | 5,428 | $ | – | ||||||
Janus Global Research Fund | 3,129,397 | (10,275,397) | 2,125 | – | ||||||||||
Janus Overseas Fund | 101,227,786 | (256,790,052) | 209,395 | – | ||||||||||
Janus Worldwide Fund | 2,357,124 | (69,952,124) | 133,998 | – | ||||||||||
$ | 106,933,288 | $ | (341,805,132) | $ | 350,946 | $ | – | |||||||
3. | 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 Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals and passive foreign investment companies.
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Janus Global Opportunities Fund | $ | 95,501,852 | $ | 7,570,767 | $ | (21,087,479) | $ | (13,516,712) | ||||||
Janus Global Research Fund | 192,290,430 | 6,637,787 | (43,585,213) | (36,947,426) | ||||||||||
Janus Overseas Fund | 5,822,086,247 | 629,534,834 | (1,795,131,591) | (1,165,596,757) | ||||||||||
Janus Worldwide Fund | 1,766,898,623 | 116,815,251 | (57,288,394) | 59,526,857 | ||||||||||
Net capital loss carryovers as of October 31, 2008 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2008
Accumulated | |||||||||||||||||
Fund | October 31, 2009 | October 31, 2010 | October 31, 2011 | October 31, 2016 | Capital Losses | ||||||||||||
Janus Global Research Fund | $ | – | $ | – | $ | – | $ | (12,248,917) | $ | (12,248,917) | |||||||
Janus Overseas Fund(1) | – | (921,657) | – | (921,657) | |||||||||||||
Janus Worldwide Fund | (775,333,211) | (3,186,843,718) | (670,957,456) | (4,633,134,385) | |||||||||||||
(1) | Capital loss carryovers subject to annual limitations. |
54 Janus International & Global Funds April 30, 2009
During the year ended October 31, 2008, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Capital Loss | ||||||||||||||
Fund | Carryover Utilized | |||||||||||||
Janus Overseas Fund | $ | 460,827 | ||||||||||||
Janus Worldwide Fund | 107,781,398 | |||||||||||||
4. | Capital Share Transactions |
For the six-month period ended | ||||||||||||||||||||||||||||||||||||
April 30, 2009 (unaudited) | ||||||||||||||||||||||||||||||||||||
and the fiscal year ended October 31, | Janus Global Opportunities Fund | Janus Global Research Fund | Janus Overseas Fund | Janus Worldwide Fund | ||||||||||||||||||||||||||||||||
2008 (all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||||||
Transactions in Fund Shares: | ||||||||||||||||||||||||||||||||||||
Shares sold | 453 | 1,274 | 1,928 | 11,580 | 13,725 | 29,616 | 1,105 | 2,183 | ||||||||||||||||||||||||||||
Reinvested dividends and distributions | 661 | 510 | 113 | 830 | 8,646 | 17,531 | 877 | 392 | ||||||||||||||||||||||||||||
Shares repurchased | (1,146) | (3,593) | (4,038) | (10,015) | (22,317) | (68,222) | (5,804) | (14,737) | ||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (32) | (1,809) | (1,997) | 2,395 | 54 | (21,075) | (3,822) | (12,162) | ||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 9,150 | 10,959 | 19,001 | 16,606 | 160,203 | 181,278 | 65,213 | 77,375 | ||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 9,118 | 9,150 | 17,004 | 19,001 | 160,257 | 160,203 | 61,391 | 65,213 |
5. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2009, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Opportunities Fund | $ | 14,973,474 | $ | 22,718,413 | $ | – | $ | – | ||||||
Janus Global Research Fund | 66,909,214 | 79,242,400 | – | – | ||||||||||
Janus Overseas Fund | 674,511,580 | 993,010,382 | – | – | ||||||||||
Janus Worldwide Fund | 1,837,376,479 | 1,888,469,122 | – | – | ||||||||||
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court, four of which still remain: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al.,
Janus International & Global Funds April 30, 2009 55
Notes to Financial Statements (unaudited) (continued)
U.S. District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC), Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly named Perkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On December 30, 2008, the Court granted partial summary judgment in Janus Capital’s favor with respect to Plaintiffs’ damage demand as it relates to what was categorized as “approved” market timing based on the Court’s finding that there was no evidence that investors suffered damages that exceed the $50 million they are entitled to receive under the regulatory settlement. The Court did not grant summary judgment on the remaining causes of action and requested the parties to submit additional briefing with respect to what was categorized as “unapproved” market timing. Having completed the supplemental briefing, the parties are awaiting a ruling from the Court. On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the Court with prejudice. The plaintiff appealed that dismissal to the United States Court of Appeals for the Fourth Circuit, which reversed the order of dismissal and remanded the case back to the Court for further proceedings. Finally, a Motion to Dismiss the Wiggins suit (action (iv) above) was granted and the matter was dismissed in May 2007. Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. In May 2009, the Fourth Circuit reversed the order of dismissal and remanded the case back to the Court for further proceedings.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). In September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings as well as a Motion to Discharge Order to Show Cause. This action is pending.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements (Edward Keely v. Janus Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege some or all of the following claims in addition to other allegations: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims. On May 8, 2009, after a four-day trial in the Keely matter, the jury found in favor of Plaintiff. The Court entered judgment in Keely’s favor for approximately $4.8 million in damages plus pre- and post- judgment interest, attorneys’ fees, and damage enhancement under the Colorado Wage Act. Janus Holdings is evaluating all of its options, including the possibility of an appeal. Trial in the Malley matter has not yet been set.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
7. | Subsequent Event |
The Board of Trustees of Janus Adviser Series (“JAD”), a registered investment company advised by Janus Capital, has approved an Agreement and Plan of Reorganization (the “Plan”) pursuant to which certain JAD Funds will merge with and into, and be acquired by, corresponding similarly managed funds of the Janus Investment Fund Trust. Under the Plan, INTECH Risk-Managed Core Fund, Janus Balanced Fund, Janus Contrarian Fund, Janus Enterprise Fund, Janus Flexible Bond Fund, Janus Fund, Janus Growth and Income Fund, Janus High-Yield Fund, Janus Orion Fund, Janus Overseas Fund, Janus Research Core Fund, Janus Triton Fund, Janus Worldwide Fund, Perkins Mid Cap Value Fund, and Perkins Small Cap Value Fund will acquire assets and liabilities from similarly managed JAD Funds. The merger is a part of several significant enhancements Janus Capital has recently undertaken to reorganize and simplify its mutual fund offerings by creating one combined mutual fund platform. The closing date of the merger is expected to be on or about July 6, 2009. For more information regarding these changes, please refer to the March 17, 2009 Supplement to the Prospectus.
56 Janus International & Global Funds April 30, 2009
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is 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) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent 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.
At a meeting held on December 9, 2008, 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, 2009 through February 1, 2010, subject to earlier termination as provided for in each agreement, except that with respect to Janus Worldwide Fund, the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or proposed to take to improve long-term Fund performance. At a meeting held on March 12, 2009, the Trustees again considered the investment advisory agreement for Janus Worldwide Fund, and after consideration of information previously provided to them, as well as updated information regarding the steps taken or planned to improve the Fund’s long-term performance, the Trustees approved the continuation of the investment advisory agreement for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve long-term Fund performance.
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.
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 and strategy 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 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, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including
Janus International & Global Funds April 30, 2009 57
Additional Information (unaudited) (continued)
monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
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 quality of those services had been consistent with or superior to quality norms in the industry and 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 continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of their peers for certain periods, the Trustees also concluded that Janus Capital had taken or was taking appropriate steps to address those instances of under-performance. With respect to Janus Worldwide Fund, at the December 9, 2008 meeting the Trustees considered the continuing underperformance of the Fund, and requested that Janus Capital consider additional steps to improve long-term Fund performance. At the March 12, 2009 meeting, the Trustees requested that Janus Capital promptly report to the Trustees regarding the completion of steps that Janus Capital planned to take in an effort to improve the Fund’s long-term performance.
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 Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after applicable contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
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. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only 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 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 administrative 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 that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by the Trustees’ independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information 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. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation 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
58 Janus International & Global Funds April 30, 2009
similar strategies and the fees Janus Capital and the subadvisers charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was 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 by Janus Capital.
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 that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group identified by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the 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 several Funds that have caused or will cause 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, 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 economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates 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 their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s 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 pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital 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 receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, each of whom is an Independent Trustee, concluded that the proposed continuation of the investment advisory agreement and, if applicable, the subadvisory agreement for each Fund for another year was in the best interest of the respective Funds and their shareholders, except for Janus Worldwide Fund. With respect to that Fund, at their December 9, 2008 meeting the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or propose to take to improve long-term Fund performance. At their March 12, 2009 meeting the Trustees approved the continuation of the investment advisory agreement for that Fund for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve the Fund’s long-term performance. The Trustees also noted that they had previously approved revised and/or new investment advisory and subadvisory agreements for each Fund subadvised by Perkins Investment Management LLC, and that such amended or new agreements were not effective unless approved by those Funds’ shareholders.
Janus International & Global Funds April 30, 2009 59
Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. 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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2008. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each 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.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated. Each Fund’s Schedule of Investments relies upon the industry group and country classifications published by Bloomberg L.P.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
60 Janus International & Global Funds April 30, 2009
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ 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 Funds’ net assets. Because Funds 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 Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, 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 increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds 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.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ 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 Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
Janus International & Global Funds April 30, 2009 61
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t 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 a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
62 Janus International & Global Funds April 30, 2009
Notes
Janus International & Global Funds April 30, 2009 63
Notes
64 Janus International & Global Funds April 30, 2009
Notes
Janus International & Global Funds April 30, 2009 65
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/09)
C-0609-046 | 111-24-105 06-09 |
2009 Semiannual Report
Janus Bond & Money Market Funds
Janus Flexible Bond Fund
Janus High-Yield Fund
Janus Short-Term Bond Fund
Money Market
Janus Money Market Fund
Janus Government Money Market Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199janus.gif)
Table of Contents
Janus Bond & Money Market Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 4 | |
Management Commentary and Schedules of Investments | ||
Janus Flexible Bond Fund | 5 | |
Janus High-Yield Fund | 14 | |
Janus Short-Term Bond Fund | 24 | |
Janus Money Market Fund | 34 | |
Janus Government Money Market Fund | 36 | |
Statements of Assets and Liabilities – Bond Funds | 37 | |
Statements of Operations – Bond Funds | 38 | |
Statements of Changes in Net Assets – Bond Funds | 39 | |
Financial Highlights – Bond Funds | 40 | |
Statements of Assets and Liabilities – Money Market Funds | 42 | |
Statements of Operations – Money Market Funds | 43 | |
Statements of Changes in Net Assets – Money Market Funds | 44 | |
Financial Highlights – Money Market Funds | 45 | |
Notes to Schedules of Investments | 46 | |
Notes to Financial Statements | 48 | |
Additional Information | 62 | |
Explanations of Charts, Tables and Financial Statements | 65 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
Investment in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market funds.
Co-Chief Investment Officers’ Letter to the Shareholders (unaudited)
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment
Officer
Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
Co-Chief Investment
Officer
Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. During the past six months we have seen some of the most challenging market and economic conditions in a generation. Throughout these turbulent times, we have maintained our disciplined, long-term investment approach and research-driven philosophy.
As a result, our long-term results generally remained strong relative to our peers. For the one-year period ended April 30, 2009, 50% of Janus retail funds ranked within Lipper’s top two quartiles. Looking longer-term, 85% of our funds achieved first- or second-quartile Lipper rankings for the three-year period and 86% ranked in Lipper’s top two quartiles for the five-year period ended April 30, 2009. (Lipper rankings are based on total returns. See complete rankings on page 3.)
Major Market Themes
Despite a relatively strong finish, most markets were modestly lower as the most recent six-month period (ended April 30, 2009) came to a close. Consequences from the credit crisis and recession concerns dictated market performance for much of the period. U.S. markets reached 12-year lows and most global markets declined to 5-year lows in March, before rallying late in the period.
The U.S. economy was still in the throes of a recession at period end. Declining asset values in U.S. residential real estate continued to weigh on financial institutions and their ability to extend credit to consumers. Compounding the headwinds for the consumer was a labor market that continued to struggle with more than 5.7 million jobs lost since January 2008. However, late in the period, some signs emerged that the rate of decline in the U.S. economy could be slowing. Retail sales improved through April (though they remained at low absolute levels) and mortgage applications were on the rise in March and April. A slowing in the rate of decline in U.S. manufacturing and consumer confidence indicators provided some additional support to the equity markets.
Improving credit markets, better-than expected earnings reports from some large banks and easing of accounting rules for banks’ troubled assets, also helped to fuel the late period rally, suggesting to the market that the ailing banking industry could be on the mend. Financials remained the worst performing global sector during the six-month period, despite leading the rally off of the March lows. Materials and information technology outperformed, posting modest gains while growth stocks significantly outperformed value stocks. Stocks of mid-sized companies were the strongest performers in the period while large-cap stocks topped small-caps. Within fixed income, the flight-to-quality that was strongly evident in the second half of 2008 finally eased beginning in January. Driven by the performance of the lower quality debt, high-yield corporate spreads relative to Treasuries narrowed. Long-term government bond yields rebounded from historic lows reached in December.
Outlook
At the end of the period, we were encouraged by the slowing in the rate of decline in the U.S. and global economies and the continued progress toward normalization in the credit markets. Though we were pleased to see stocks on the rise, we believe it may be some time before credit markets return to normal and the economy and equity markets fully recover.
We think the moves to date by central banks and governments worldwide will help the global economy recover. However, their actions will likely take time to work and could, in the longer term, fuel inflation. That said, we are not overly concerned about inflation rising over the near term, nor do we believe economic growth will necessarily return to the rapid pace of recent years. Looking forward, the economy will likely be characterized by de-leveraging across consumers and businesses, and a higher personal savings rate.
Given that we have not seen a significant differentiation of fundamentals expressed in stock prices yet, we feel the opportunities for bottom-up, research-driven security selection are tremendous. Our unconstrained approach to research fosters an entrepreneurial culture that encourages our investment team to “go anywhere” to find the most compelling investment ideas around the globe. And we believe we have the right team in place to take advantage of this period in history.
We sincerely appreciate your continued investment in Janus funds. We recognize the confidence that you have placed in us
Janus Bond & Money Market Funds April 30, 2009 1
Continued
and we continue in our quest to deliver strong, consistent fund performance to you, our investors.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
The opinions are those of the authors as of April 30, 2009 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Past performance is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Rankings discussed do not indicate positive fund performance. Most funds have experienced negative or poor short-term performance.
2 Janus Bond & Money Market Funds April 30, 2009
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/09 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 52 | 435/844 | 40 | 284/724 | 39 | 233/610 | 60 | 184/310 | 15 | 3/20 | 47 | 380/808 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 52 | 286/550 | 10 | 43/476 | 8 | 30/393 | 77 | 142/184 | 32 | 14/43 | 25 | 130/528 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 96 | 438/457 | 22 | 77/349 | 4 | 10/290 | N/A | N/A | 25 | 43/174 | 86 | 381/443 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 80 | 672/844 | 19 | 132/724 | 12 | 72/610 | 44 | 134/310 | 4 | 3/87 | 17 | 118/710 | |||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 3 | 15/587 | 1 | 5/501 | N/A | N/A | N/A | N/A | 1 | 1/443 | 1 | 4/508 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 80 | 668/844 | 1 | 1/724 | 1 | 2/610 | 21 | 63/310 | 5 | 2/40 | 35 | 283/824 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 48 | 279/587 | 36 | 176/501 | 34 | 136/408 | 65 | 132/204 | 10 | 1/10 | 27 | 77/286 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Global Healthcare/Biotechnology Funds | 75 | 39/51 | 45 | 21/46 | 54 | 24/44 | 19 | 3/15 | 15 | 2/13 | 29 | 15/51 | |||||||||||||
Janus Global Technology Fund (12/98) | Global Science & Technology Funds | 18 | 14/81 | 16 | 12/76 | 28 | 19/69 | 29 | 6/20 | 25 | 5/19 | 25 | 19/76 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 3 | 12/524 | 2 | 4/385 | 1 | 2/290 | 11 | 15/148 | 4 | 1/27 | 1 | 2/346 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 98 | 736/756 | 41 | 247/612 | 5 | 21/460 | N/A | N/A | 18 | 38/213 | 18 | 38/213 | |||||||||||||
Janus Research Core Fund(1)(2) (6/96) | Large-Cap Core Funds | 88 | 802/914 | 83 | 646/783 | 21 | 136/650 | 25 | 90/360 | 4 | 8/212 | 82 | 722/884 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 57 | 514/914 | 73 | 567/783 | 26 | 169/650 | 30 | 105/360 | 8 | 6/81 | 48 | 417/884 | |||||||||||||
INTECH Risk-Managed Core Fund(3) (2/03) | Multi-Cap Core Funds | 55 | 415/756 | 58 | 354/612 | 37 | 167/460 | N/A | N/A | 42 | 157/377 | 42 | 157/377 | |||||||||||||
Perkins Mid Cap Value Fund - Investor Shares(1)(4)(5) (8/98) | Mid-Cap Value Funds | 9 | 27/320 | 4 | 10/256 | 4 | 6/192 | 3 | 2/67 | 4 | 2/56 | 4 | 2/56 | |||||||||||||
Perkins Small Cap Value Fund - Investor Shares(4)(6) (10/87) | Small-Cap Core Funds | 1 | 7/763 | 2 | 7/614 | 8 | 39/496 | 14 | 32/231 | 6 | 7/125 | 6 | 7/125 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 5 | 25/583 | 4 | 16/482 | 5 | 20/402 | 21 | 44/209 | 10 | 2/20 | 6 | 32/535 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 11 | 50/457 | 15 | 55/387 | 14 | 46/334 | 9 | 18/203 | 6 | 5/92 | 16 | 51/325 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 1 | 1/260 | 2 | 4/214 | 3 | 5/179 | 8 | 7/90 | 16 | 4/24 | 5 | 12/254 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 8 | 40/506 | 21 | 79/380 | 56 | 165/297 | N/A | N/A | 11 | 21/206 | 43 | 145/342 | |||||||||||||
Janus Global Research Fund(1) (2/05) | Global Funds | 56 | 280/506 | 10 | 35/380 | N/A | N/A | N/A | N/A | 6 | 18/321 | 6 | 18/321 | |||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 46 | 541/1,197 | 2 | 12/894 | 1 | 2/707 | 3 | 10/369 | 2 | 2/107 | 1 | 2/647 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 68 | 344/506 | 57 | 216/380 | 91 | 271/297 | 91 | 140/153 | 39 | 7/17 | 62 | 371/599 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 75 | 504/677 | 14 | 75/539 | N/A | N/A | N/A | N/A | 8 | 38/533 | 8 | 38/533 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 32 | 167/524 | 6 | 23/385 | N/A | N/A | N/A | N/A | 5 | 19/380 | 5 | 19/380 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 32 | 133/428 | 10 | 33/335 | N/A | N/A | N/A | N/A | 5 | 13/317 | 5 | 13/317 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Formerly named Janus Fundamental Equity Fund. | |
(3) | Formerly named INTECH Risk-Managed Stock Fund. | |
(4) | Rating is for the Investor Share class only; other classes may have different performance characteristics. | |
(5) | Formerly named Janus Mid Cap Value Fund. | |
(6) | Formerly named Janus Small Cap Value Fund. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc., a wholly-owned subsidiary of Reuters, is a nationally recognized organization that ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
Janus Bond & Money Market Funds April 30, 2009 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs (1) transaction costs, including redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The 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-month period from November 1, 2008 to April 30, 2009.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, 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 first line 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 second line of the table in each example 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.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive each Bond Fund’s total operating expenses, excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses including, but not limited to, acquired fund fees and expenses, to certain limits until at least March 1, 2010. Janus Capital has agreed to waive one-half of its advisory fee for each Money Market Fund. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is 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.
4 Janus Bond & Money Market Funds April 30, 2009
Janus Flexible Bond Fund (unaudited) | Ticker: JAFIX |
Fund Snapshot
This bond Fund continually adjusts its allocations among different types of bond investments in an attempt to take advantage of ever-changing market conditions.
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
co-portfolio manager
![(DARRELL WATTERS PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pwatterd.jpg)
Darrell Watters
co-portfolio manager
Performance Overview
During the six-month period ended April 30, 2009, Janus Flexible Bond Fund returned 9.88%, compared to a 7.74% return for the Fund’s benchmark, the Barclays Capital U.S. Aggregate Bond Index.
Economic Update
The flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and credit markets gained momentum through March and April. Overall, fixed income investors experienced solid gains during the six-month period ended April 30, 2009. Investors pushed U.S. Treasuries to record low yields, benefiting long-term government bonds (at least 10 years in maturity) the most. Conversely, short-term Treasuries were among the worst relative performers. The low absolute yields in Treasuries and wide spreads to Treasuries in the high yield market appeared to prompt a move into corporate bonds in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, high yield bonds were the best performing fixed income segment.
In March, the Fed announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities (MBS) and agency debt to help the beleaguered housing market, which prompted the largest one-day drop in the 10-year Treasury note (almost half a percent) since the aftermath of the 1987 market crash. By the end of the period, the 10-year Treasury yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). The downward shift in the Treasury curve was most pronounced in the five and 10-year yields, which led to an overall steepening in the curve. Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Contributors to Performance
Our overweight and security selection within the corporate credit sector was the largest contributor to our relative performance during the period. Our significant overweight in the BBB-rated credits and modest exposure in non-index high yield bonds (6.14% at period end) contributed to performance, as lower-rated credits outperformed the higher credit levels during the period.
Among individual credit contributors was Virginia Electric & Power Co., which outperformed as investors were drawn toward what we consider to be its well-financed, cash generating assets. Time Warner Cable, which was spun off from its parent Time Warner during the period, also contributed to performance. As the second largest cable provider in the U.S., the company has been successful in gaining market share for voice, video and data services from incumbent telecommunications companies in most cities where it operates. We also like the utility nature of its cash flows.
Roche Holdings, a new position in the Fund, boosted returns, as the bonds it issued to help finance its remaining stake in biotechnology leader Genentech performed well. We participated in the Switzerland-based pharmaceutical company’s bond issuance based on our assessment that the company will continue to demonstrate operating earnings growth and will pay down its debt over time.
Our security selection in mortgages also aided our returns and more than offset the drag on relative performance represented by our underweight to the segment. Our lack of exposure to asset-backed securities and commercial mortgage-backed securities also aid performance, as both suffered substantial underperformance early in the period.
Detractors from Performance
Our underweight in the over 10-year maturity range in Treasuries was the largest detractor from performance. Our underweight in mortgage-backed securities also detracted.
Among individual credits that detracted from performance were our bonds in Bank of America. We believe the bank will emerge stronger from the present dislocation in the financials sector, but the holding continued to be driven by negative sentiment regarding U.S. Government guarantees. The government has indicated, in our view, that it will stand behind the Bank of America, which gives us confidence the bank could survive and eventually prosper.
Janus Bond & Money Market Funds April 30, 2009 5
Janus Flexible Bond Fund (unaudited)
Edison Mission Energy, an Irvine, CA-based subsidiary of power producer and distributor Edison International, declined during the period as natural gas prices fell and power demands slowed. We feel demand will return from industrial and consumer users as the summer cooling season begins. In addition, we like the company’s asset base supporting its debt at period end.
National Semiconductor Corp., a semiconductor manufacturer for communication devices and computers was hurt along with the rest of the industry due to this sector’s historical dependence on global industrial demand. At period end, we were comfortable with our short-term debt holding in National Semiconductor given the company’s significant cash balance.
Outlook
There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build.
We have reduced our exposure to Treasuries and agencies in favor of corporate credit and to a lesser extent mortgages. We continue to think there are many opportunities in investment grade credit in which to explore and possibly add to the portfolio. The main obstacles to the success of this strategy, in our view, might be continued lack of liquidity and rising defaults. We believe that our ability to add value with individual credit selection will allow us to overcome these obstacles, but we are being very cautious as to how and when we add risk to the portfolio. In terms of credit selection, our focus is on companies that have considerable assets, historically strong cash-flow generation and whose managements are focused on debt reduction.
Thank you for entrusting your assets to us and your investment in Janus Flexible Bond Fund.
Janus Flexible Bond Fund At A Glance
Fund Profile
April 30, 2009
Weighted Average Maturity | 6.1 Years | |
Average Effective Duration* | 4.8 Years | |
30-day Current Yield** | 3.90% | |
Weighted Average Fixed Income Credit Rating | AA- | |
Number of Bonds/Notes | 223 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
April 30, 2009
AAA | 46.1% | |
AA | 7.8% | |
A | 12.6% | |
BBB | 20.2% | |
BB | 4.5% | |
B | 2.1% | |
Other | 6.7% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18b07.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18p07.gif)
Emerging markets comprised 0.1% of total net assets.
6 Janus Bond & Money Market Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18m07.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Flexible Bond Fund | 9.88% | 5.43% | 4.90% | 5.19% | 7.35% | 0.78% | 0.78% | ||||||||
Barclays Capital U.S. Aggregate Bond Index | 7.74% | 3.84% | 4.78% | 5.71% | 7.33%** | ||||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Intermediate Investment Grade Debt Funds | – | 25/583 | 20/402 | 44/209 | 2/20 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. The expense waiver shown reflects the application of such limit. Total returns and yields shown include fee waivers, if any, and without such waivers total returns and yields would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
Janus Bond & Money Market Funds April 30, 2009 7
Janus Flexible Bond Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with non-investment grade debt securities, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio managers.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
July 9, 1987 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – July 7, 1987 | |
** | The Barclays Capital U.S. Aggregate Bond Index’s since inception returns are calculated from June 30, 1987. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,097.70 | $ | 3.90 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.75%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
8 Janus Bond & Money Market Funds April 30, 2009
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Corporate Bonds – 53.6% | ||||||||||||
Advertising Services – 0.1% | ||||||||||||
$ | 800,000 | WPP Finance UK, 5.8750%, 6/15/14 | $ | 626,541 | ||||||||
Agricultural Chemicals – 1.0% | ||||||||||||
4,500,000 | Potash Corporation of Saskatchewan, Inc., 5.2500%, 5/15/14 | 4,611,438 | ||||||||||
4,700,000 | Potash Corporation of Saskatchewan, Inc., 6.5000%, 5/15/19 | 4,884,381 | ||||||||||
9,495,819 | ||||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.2% | ||||||||||||
900,000 | PACCAR, Inc., 6.3750%, 2/15/12 | 928,719 | ||||||||||
900,000 | PACCAR, Inc., 6.8750%, 2/15/14 | 942,048 | ||||||||||
1,870,767 | ||||||||||||
Beverages – Non-Alcoholic – 0.8% | ||||||||||||
2,498,000 | Dr. Pepper Snapple Group, Inc. 6.1200%, 5/1/13 | 2,496,232 | ||||||||||
1,691,000 | Dr. Pepper Snapple Group, Inc. 6.8200%, 5/1/18 | 1,646,814 | ||||||||||
1,993,000 | Dr. Pepper Snapple Group, Inc. 7.4500%, 5/1/38 | 1,759,197 | ||||||||||
1,800,000 | PepsiCo, Inc., 3.7500%, 3/1/14 | 1,836,583 | ||||||||||
7,738,826 | ||||||||||||
Beverages – Wine and Spirits – 0.4% | ||||||||||||
3,978,000 | Brown-Forman Corp., 5.0000%, 2/1/14 | 4,088,982 | ||||||||||
Brewery – 1.6% | ||||||||||||
4,100,000 | Anheuser-Busch InBev Worldwide, Inc. 7.2000%, 1/15/14 (144A) | 4,274,385 | ||||||||||
4,100,000 | Anheuser-Busch InBev Worldwide, Inc. 7.7500%, 1/15/19 (144A) | 4,292,577 | ||||||||||
6,450,000 | Anheuser-Busch InBev Worldwide, Inc. 8.2000%, 1/15/39 (144A) | 6,462,984 | ||||||||||
15,029,946 | ||||||||||||
Building Products – Cement and Aggregate – 0.4% | ||||||||||||
2,050,000 | CRH America, Inc., 6.9500%, 3/15/12 | 1,839,864 | ||||||||||
1,725,000 | Martin Marietta Materials, Inc. 6.6000%, 4/15/18 | 1,395,665 | ||||||||||
3,235,529 | ||||||||||||
Cable Television – 2.9% | ||||||||||||
1,946,000 | Comcast Corp., 6.3000%, 11/15/17 | 1,981,359 | ||||||||||
2,861,000 | Comcast Corp., 5.7000%, 5/15/18 | 2,797,108 | ||||||||||
3,367,000 | COX Communications, Inc. 4.6250%, 1/15/10 | 3,366,283 | ||||||||||
6,015,000 | COX Communications, Inc. 6.2500%, 6/1/18 (144A) | 5,537,234 | ||||||||||
2,150,000 | COX Communications, Inc. 9.3750%, 1/15/19 (144A) | 2,420,395 | ||||||||||
1,851,000 | Time Warner Cable, Inc. 6.7500%, 7/1/18 | 1,872,934 | ||||||||||
1,050,000 | Time Warner Cable, Inc. 8.7500%, 2/14/19 | 1,180,379 | ||||||||||
2,050,000 | Time Warner Cable, Inc. 8.2500%, 4/1/19 | 2,265,578 | ||||||||||
4,092,000 | Time Warner Cable, Inc. 7.3000%, 7/1/38 | 4,090,441 | ||||||||||
25,511,711 | ||||||||||||
Cellular Telecommunications – 2.0% | ||||||||||||
$ | 3,768,000 | Rogers Communications, Inc. 6.3750%, 3/1/14 | 3,972,241 | |||||||||
2,675,000 | Verizon Wireless Capital LLC 5.2500%, 2/1/12 (144A) | 2,770,318 | ||||||||||
3,900,000 | Verizon Wireless Capital LLC 7.3750%, 11/15/13 (144A) | 4,339,273 | ||||||||||
4,475,000 | Verizon Wireless Capital LLC 5.5500%, 2/1/14 (144A) | 4,694,400 | ||||||||||
2,025,000 | Verizon Wireless Capital LLC 8.5000%, 11/15/18 (144A) | 2,425,146 | ||||||||||
18,201,378 | ||||||||||||
Chemicals – Diversified – 0.2% | ||||||||||||
1,914,000 | E.I. du Pont de Nemours & Co. 5.0000%, 7/15/13 | 1,980,397 | ||||||||||
Commercial Banks – 2.5% | ||||||||||||
4,975,000 | American Express Bank FSB 5.5000%, 4/16/13 | 4,677,858 | ||||||||||
3,900,000 | BB&T Corp., 5.7000%, 4/30/14 | 3,838,778 | ||||||||||
3,900,000 | BB&T Corp., 6.8500%, 4/30/19 | 3,798,635 | ||||||||||
3,933,000 | Credit Suisse New York, 5.0000%, 5/15/13 | 3,883,948 | ||||||||||
6,950,000 | Credit Suisse New York, 5.5000%, 5/1/14 | 6,967,833 | ||||||||||
23,167,052 | ||||||||||||
Commercial Services – 0.3% | ||||||||||||
2,826,000 | Iron Mountain, Inc., 8.6250%, 4/1/13 | 2,836,598 | ||||||||||
Commercial Services – Finance – 0.5% | ||||||||||||
4,300,000 | Western Union Co., 6.5000%, 2/26/14 | 4,536,582 | ||||||||||
Computers – 0.4% | ||||||||||||
2,150,000 | Hewlett-Packard Co., 4.2500%, 2/24/12 | 2,230,317 | ||||||||||
1,615,000 | Hewlett-Packard Co., 4.7500%, 6/2/14 | 1,687,932 | ||||||||||
3,918,249 | ||||||||||||
Consumer Products – Miscellaneous – 0.3% | ||||||||||||
922,000 | Clorox Co., 5.0000%, 3/1/13 | 945,156 | ||||||||||
1,629,000 | Clorox Co., 5.9500%, 10/15/17 | 1,648,315 | ||||||||||
2,593,471 | ||||||||||||
Containers – Metal and Glass – 0.4% | ||||||||||||
2,300,000 | Owens-Brockway Glass Container, Inc. 8.2500%, 5/15/13 | 2,334,500 | ||||||||||
1,575,000 | Owens-Brockway Glass Container, Inc. 6.7500%, 12/1/14 | 1,531,688 | ||||||||||
3,866,188 | ||||||||||||
Cosmetics and Toiletries – 0.5% | ||||||||||||
1,475,000 | Estee Lauder Cos., Inc., 7.7500%, 11/1/13 | 1,599,937 | ||||||||||
2,962,000 | Procter & Gamble Co., 4.6000%, 1/15/14 | 3,136,716 | ||||||||||
4,736,653 | ||||||||||||
Data Processing and Management – 0.2% | ||||||||||||
1,839,000 | Fiserv, Inc., 6.8000%, 11/20/17 | 1,751,015 | ||||||||||
Dialysis Centers – 0.3% | ||||||||||||
2,525,000 | DaVita, Inc., 6.6250%, 3/15/13 | 2,480,813 | ||||||||||
Diversified Financial Services – 0.7% | ||||||||||||
2,225,000 | General Electric Capital Corp. 4.8000%, 5/1/13 | 2,176,039 | ||||||||||
4,450,000 | General Electric Capital Corp. 5.6250%, 5/1/18 | 3,882,340 | ||||||||||
6,058,379 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 9
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Diversified Minerals – 1.6% | ||||||||||||
$ | 2,350,000 | BHP Billiton Finance U.S.A., Ltd. 5.5000%, 4/1/14 | $ | 2,474,240 | ||||||||
5,625,000 | Rio Tinto Finance USA, Ltd. 8.9500%, 5/1/14 | 5,822,370 | ||||||||||
5,950,000 | Rio Tinto Finance USA, Ltd. 9.0000%, 5/1/19 | 6,117,701 | ||||||||||
14,414,311 | ||||||||||||
Diversified Operations – 2.0% | ||||||||||||
1,696,000 | Eaton Corp., 4.9000%, 5/15/13 | 1,678,301 | ||||||||||
4,650,000 | ITT Corp., 4.9000%, 5/1/14 | 4,713,486 | ||||||||||
4,650,000 | ITT Corp., 6.1250%, 5/1/19 | 4,773,964 | ||||||||||
1,425,000 | Kansas City Southern Railway 13.0000%, 12/15/13 | 1,510,500 | ||||||||||
1,272,000 | SPX Corp., 7.6250%, 12/15/14 | 1,256,100 | ||||||||||
2,175,000 | Tyco Electronics Group S.A. 6.0000%, 10/1/12 | 1,982,774 | ||||||||||
1,575,000 | Tyco Electronics Group S.A. 5.9500%, 1/15/14 | 1,303,593 | ||||||||||
2,100,000 | Tyco Electronics Group S.A. 7.1250%, 10/1/37 | 1,280,731 | ||||||||||
18,499,449 | ||||||||||||
Diversified Operations – Commercial Services – 0.2% | ||||||||||||
2,048,000 | ARAMARK Corp., 8.5000%, 2/1/15 | 1,955,840 | ||||||||||
Electric – Generation – 0.8% | ||||||||||||
4,223,000 | Allegheny Energy Supply Co. LLC 8.2500%, 4/15/12 (144A) | 4,265,103 | ||||||||||
4,405,000 | Edison Mission Energy, 7.0000%, 5/15/17 | 3,325,775 | ||||||||||
7,590,878 | ||||||||||||
Electric – Integrated – 3.4% | ||||||||||||
3,999,000 | CMS Energy Corp., 6.3000%, 2/1/12 | 3,834,565 | ||||||||||
4,100,000 | Duke Energy Corp., 6.3000%, 2/1/14 | 4,323,626 | ||||||||||
3,550,000 | Monongahela Power Co. 6.7000%, 6/15/14 | 3,596,871 | ||||||||||
1,652,000 | Pacific Gas & Electric Co. 4.8000%, 3/1/14 | 1,699,056 | ||||||||||
4,250,000 | Pacific Gas & Electric Co. 8.2500%, 10/15/18 | 5,076,157 | ||||||||||
3,902,000 | Southern California Edison Co. 7.6250%, 1/15/10 | 4,020,059 | ||||||||||
3,484,000 | Virginia Electric and Power Co. 5.1000%, 11/30/12 | 3,587,893 | ||||||||||
1,450,000 | Virginia Electric and Power Co. 5.4000%, 4/30/18 | 1,478,520 | ||||||||||
3,448,000 | West Penn Power Co. 5.9500%, 12/15/17 (144A) | 3,038,412 | ||||||||||
30,655,159 | ||||||||||||
Electronic Components – Semiconductors – 0.5% | ||||||||||||
3,600,000 | National Semiconductor Corp. 1.5700%, 6/15/10‡ | 3,185,319 | ||||||||||
1,775,000 | National Semiconductor Corp. 6.1500%, 6/15/12 | 1,598,654 | ||||||||||
4,783,973 | ||||||||||||
Enterprise Software/Services – 0.6% | ||||||||||||
3,886,000 | BMC Software, Inc., 7.2500%, 6/1/18 | 3,421,817 | ||||||||||
2,525,000 | CA, Inc., 6.1250%, 12/1/14 | 2,398,750 | ||||||||||
5,820,567 | ||||||||||||
Fiduciary Banks – 0.5% | ||||||||||||
$ | 4,525,000 | Northern Trust Corp., 4.6250%, 5/1/14 | 4,578,028 | |||||||||
Finance – Credit Card – 0.2% | ||||||||||||
2,300,000 | American Express Co., 7.0000%, 3/19/18 | 2,181,456 | ||||||||||
Finance – Investment Bankers/Brokers – 5.4% | ||||||||||||
5,925,000 | Citigroup, Inc., 5.6250%, 8/27/12 | 4,570,089 | ||||||||||
3,450,000 | Citigroup, Inc., 5.5000%, 2/15/17 | 2,378,730 | ||||||||||
2,325,000 | Citigroup, Inc., 6.1250%, 5/15/18 | 1,953,970 | ||||||||||
2,150,000 | Goldman Sachs Group, Inc. 5.4500%, 11/1/12 | 2,151,533 | ||||||||||
3,500,000 | Goldman Sachs Group, Inc. 6.0000%, 5/1/14 | 3,486,532 | ||||||||||
4,550,000 | Goldman Sachs Group, Inc. 6.1500%, 4/1/18 | 4,291,692 | ||||||||||
3,925,000 | Goldman Sachs Group, Inc. 7.5000%, 2/15/19 | 4,027,537 | ||||||||||
10,438,000 | JPMorgan Chase & Co. 6.0000%, 1/15/18 | 10,148,167 | ||||||||||
5,850,000 | JPMorgan Chase & Co. 6.3000%, 4/23/19 | 5,756,651 | ||||||||||
1,625,000 | Lazard Group LLC, 6.8500%, 6/15/17 | 1,304,654 | ||||||||||
5,275,000 | Morgan Stanley, 4.7500%, 4/1/14 | 4,459,005 | ||||||||||
2,375,000 | Morgan Stanley, 6.0000%, 4/28/15 | 2,243,458 | ||||||||||
2,150,000 | Morgan Stanley, 6.6250%, 4/1/18 | 2,046,067 | ||||||||||
48,818,085 | ||||||||||||
Finance – Other Services – 0.6% | ||||||||||||
5,275,000 | CME Group, Inc., 5.7500%, 2/15/14 | 5,549,675 | ||||||||||
Food – Miscellaneous/Diversified – 1.5% | ||||||||||||
1,875,000 | Dole Food Co., Inc. 13.8750%, 3/15/14 (144A) | 1,973,438 | ||||||||||
4,182,000 | General Mills, Inc., 5.2500%, 8/15/13 | 4,370,350 | ||||||||||
1,436,000 | General Mills, Inc., 5.2000%, 3/17/15 | 1,446,939 | ||||||||||
1,014,000 | Kellogg Co., 4.2500%, 3/6/13 | 1,024,596 | ||||||||||
2,450,000 | Kraft Foods, Inc., 6.7500%, 2/19/14 | 2,669,488 | ||||||||||
2,125,000 | Kraft Foods, Inc., 6.1250%, 2/1/18 | 2,157,049 | ||||||||||
13,641,860 | ||||||||||||
Food – Retail – 2.4% | ||||||||||||
1,000,000 | Delhaize Group, 5.8750%, 2/1/14 | 1,013,698 | ||||||||||
1,475,000 | Kroger Co., 7.5000%, 1/15/14 | 1,643,088 | ||||||||||
4,100,000 | Kroger Co., 6.4000%, 8/15/17 | 4,267,653 | ||||||||||
5,624,000 | Safeway, Inc., 6.2500%, 3/15/14 | 5,976,884 | ||||||||||
5,814,000 | SUPERVALU, Inc., 7.5000%, 11/15/14 | 5,639,580 | ||||||||||
3,375,000 | SUPERVALU, Inc., 8.0000%, 5/1/16 | 3,273,750 | ||||||||||
21,814,653 | ||||||||||||
Gas – Distribution – 0.1% | ||||||||||||
1,025,000 | Southern Star Central Gas Pipeline, Inc. 6.0000%, 6/1/16 (144A) | 912,250 | ||||||||||
Hotels and Motels – 0.6% | ||||||||||||
1,059,135 | Starwood Hotels & Resorts 7.8750%, 5/11/09 | 1,059,135 | ||||||||||
3,425,000 | Marriott International, Inc. 4.6250%, 6/15/12 | 3,187,970 | ||||||||||
1,575,000 | Marriott International, Inc. 5.6250%, 2/15/13 | 1,475,406 | ||||||||||
5,722,511 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Independent Power Producer – 0.3% | ||||||||||||
$ | 256,000 | NRG Energy, Inc., 7.3750%, 2/1/16 | $ | 246,400 | ||||||||
2,583,000 | Reliant Energy, Inc., 7.6250%, 6/15/14 | 2,331,158 | ||||||||||
530,000 | Reliant Energy, Inc., 7.8750%, 6/15/17 | 473,025 | ||||||||||
3,050,583 | ||||||||||||
Medical – Drugs – 0.9% | ||||||||||||
3,400,000 | Pfizer, Inc., 4.4500%, 3/15/12 | 3,572,302 | ||||||||||
4,500,000 | Pfizer, Inc., 5.3500%, 3/15/15 | 4,837,423 | ||||||||||
8,409,725 | ||||||||||||
Medical – HMO – 0.2% | ||||||||||||
1,950,000 | UnitedHealth Group, Inc. 5.8000%, 3/15/36 | 1,444,950 | ||||||||||
Medical – Hospitals – 0.8% | ||||||||||||
2,325,000 | CHS/Community Health Systems, Inc. 8.8750%, 7/15/15 | 2,313,375 | ||||||||||
2,392,000 | HCA, Inc., 9.2500%, 11/15/16 | 2,368,080 | ||||||||||
2,375,000 | HCA, Inc., 8.5000%, 4/15/19 (144A) | 2,389,844 | ||||||||||
7,071,299 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.5% | ||||||||||||
2,200,000 | McKesson Corp., 6.5000%, 2/15/14 | 2,320,336 | ||||||||||
1,900,000 | McKesson Corp., 7.5000%, 2/15/19 | 2,047,020 | ||||||||||
4,367,356 | ||||||||||||
Medical Labs and Testing Services – 1.8% | ||||||||||||
7,200,000 | Roche Holdings, Inc. 4.5000%, 3/1/12 (144A) | 7,549,352 | ||||||||||
4,300,000 | Roche Holdings, Inc. 6.0000%, 3/1/19 (144A) | 4,470,942 | ||||||||||
4,300,000 | Roche Holdings, Inc. 7.0000%, 3/1/39 (144A) | 4,671,292 | ||||||||||
16,691,586 | ||||||||||||
Medical Products – 0.3% | ||||||||||||
3,050,000 | Baxter International, Inc., 4.0000%, 3/1/14 | 3,159,489 | ||||||||||
Metal – Copper – 0.2% | ||||||||||||
1,751,000 | Freeport-McMoRan Copper & Gold, Inc., 8.3750%, 4/1/17 | 1,715,980 | ||||||||||
Multi-Line Insurance – 0.5% | ||||||||||||
4,650,000 | MetLife, Inc., 7.7170%, 2/15/19 | 4,664,010 | ||||||||||
Non-Hazardous Waste Disposal – 0.9% | ||||||||||||
2,528,000 | Allied Waste North America, Inc. 6.5000%, 11/15/10 | 2,578,560 | ||||||||||
3,475,000 | Allied Waste North America, Inc. 7.2500%, 3/15/15 | 3,405,500 | ||||||||||
2,177,000 | Waste Management, Inc., 7.3750%, 8/1/10 | 2,224,313 | ||||||||||
8,208,373 | ||||||||||||
Office Automation and Equipment – 0.2% | ||||||||||||
742,000 | Xerox Corp., 2.0588%, 12/18/09‡ | 724,205 | ||||||||||
687,000 | Xerox Corp., 5.6500%, 5/15/13 | 618,314 | ||||||||||
1,013,000 | Xerox Corp., 6.3500%, 5/15/18 | 820,530 | ||||||||||
2,163,049 | ||||||||||||
Oil – Field Services – 0.3% | ||||||||||||
2,125,000 | Weatherford International, Ltd. 9.6250%, 3/1/19 | 2,293,355 | ||||||||||
Oil and Gas Drilling – 0.6% | ||||||||||||
$ | 2,325,000 | Diamond Offshore Drilling, Inc. 5.8750%, 5/1/19 | 2,343,349 | |||||||||
3,213,000 | Nabors Industries, Ltd. 9.2500%, 1/15/19 (144A) | 3,032,522 | ||||||||||
5,375,871 | ||||||||||||
Oil Companies – Exploration and Production – 1.0% | ||||||||||||
4,325,000 | Anadarko Petroleum Corp. 5.9500%, 9/15/16 | 3,913,034 | ||||||||||
375,000 | EnCana Corp., 6.5000%, 5/15/19 | 384,874 | ||||||||||
1,135,000 | Forest Oil Corp. 8.0000%, 12/15/11 | 1,115,138 | ||||||||||
2,050,000 | Forest Oil Corp. 8.5000%, 2/15/14 (144A) | 1,988,500 | ||||||||||
1,869,000 | Kerr-McGee Corp., 6.8750%, 9/15/11 | 1,907,064 | ||||||||||
9,308,610 | ||||||||||||
Paper and Related Products – 0% | ||||||||||||
200,000 | Georgia-Pacific LLC 8.2500%, 5/1/16 (144A) | 200,000 | ||||||||||
Pipelines – 2.2% | ||||||||||||
1,150,000 | El Paso Corp., 12.0000%, 12/12/13 | 1,242,000 | ||||||||||
575,000 | El Paso Corp., 8.2500%, 2/15/16 | 560,625 | ||||||||||
1,418,000 | El Paso Corp., 7.0000%, 6/15/17 | 1,273,984 | ||||||||||
1,331,000 | Kinder Morgan Energy Partners L.P. 5.9500%, 2/15/18 | 1,234,560 | ||||||||||
5,927,000 | Kinder Morgan Energy Partners L.P. 6.9500%, 1/15/38 | 5,153,171 | ||||||||||
8,190,000 | Kinder Morgan Finance Co. ULC 5.7000%, 1/5/16 | 7,104,824 | ||||||||||
1,009,000 | Plains All American Pipeline L.P. 6.5000%, 5/1/18 | 903,152 | ||||||||||
1,350,000 | Plains All American Pipeline L.P. 8.7500%, 5/1/19 | 1,384,102 | ||||||||||
1,500,000 | TransCanada Pipelines, Ltd. 7.1250%, 1/15/19 | 1,645,164 | ||||||||||
20,501,582 | ||||||||||||
Reinsurance – 1.6% | ||||||||||||
8,975,000 | Berkshire Hathaway Finance Corp. 4.0000%, 4/15/12 (144A) | 9,121,571 | ||||||||||
3,745,000 | Berkshire Hathaway Finance Corp. 5.0000%, 8/15/13 | 3,879,228 | ||||||||||
1,275,000 | Berkshire Hathaway Finance Corp. 4.6250%, 10/15/13 | 1,301,729 | ||||||||||
14,302,528 | ||||||||||||
REIT – Warehouse/Industrial – 0% | ||||||||||||
550,000 | ProLogis, 5.5000%, 4/1/12 | 447,218 | ||||||||||
Retail – Apparel and Shoe – 0.2% | ||||||||||||
3,175,000 | Ltd. Brands, Inc., 7.6000%, 7/15/37 | 2,085,121 | ||||||||||
Retail – Office Supplies – 0.1% | ||||||||||||
900,000 | Staples, Inc., 7.7500%, 4/1/11 | 942,495 | ||||||||||
Schools – 0.5% | ||||||||||||
1,600,000 | Duke University, 4.2000%, 4/1/14 | 1,632,655 | ||||||||||
975,000 | Leland Stanford Junior University 3.6250%, 5/1/14 | 980,977 | ||||||||||
975,000 | Leland Stanford Junior University 4.2500%, 5/1/16 | 971,500 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 11
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Schools – (continued) | ||||||||||||
$ | 975,000 | Leland Stanford Junior University 4.7500%, 5/1/19 | $ | 973,460 | ||||||||
4,558,592 | ||||||||||||
Special Purpose Entity – 0.4% | ||||||||||||
1,742,000 | Petroplus Finance, Ltd. 6.7500%, 5/1/14 (144A) | 1,437,150 | ||||||||||
1,285,000 | Petroplus Finance, Ltd. 7.0000%, 5/1/17 (144A) | 1,034,425 | ||||||||||
1,390,000 | Source Gas LLC 5.9000%, 4/1/17 (144A)§ | 1,011,356 | ||||||||||
3,482,931 | ||||||||||||
Steel – Producers – 1.3% | ||||||||||||
2,850,000 | ArcelorMittal, 5.3750%, 6/1/13 | 2,565,656 | ||||||||||
2,975,000 | ArcelorMittal, 6.1250%, 6/1/18 | 2,397,428 | ||||||||||
4,275,000 | Reliance Steel & Aluminum Co. 6.2000%, 11/15/16 | 3,294,733 | ||||||||||
4,093,000 | Steel Dynamics, Inc. 8.2500%, 4/15/16 (144A) | 3,233,470 | ||||||||||
11,491,287 | ||||||||||||
Super-Regional Banks – 0.9% | ||||||||||||
2,530,000 | Bank of America Corp., 5.6500%, 5/1/18 | 2,059,597 | ||||||||||
2,550,000 | National City Corp., 6.8750%, 5/15/19 | 2,178,437 | ||||||||||
2,150,000 | Wachovia Corp., 5.7500%, 2/1/18 | 1,967,317 | ||||||||||
2,587,000 | Wells Fargo & Co., 5.6250%, 12/11/17 | 2,411,901 | ||||||||||
8,617,252 | ||||||||||||
Telephone – Integrated – 0.7% | ||||||||||||
1,430,000 | AT&T, Inc., 5.5000%, 2/1/18 | 1,427,512 | ||||||||||
1,951,000 | AT&T, Inc., 5.6000%, 5/15/18 | 1,961,391 | ||||||||||
2,566,000 | BellSouth Corp., 4.7500%, 11/15/12 | 2,633,719 | ||||||||||
6,022,622 | ||||||||||||
Transportation – Railroad – 0.4% | ||||||||||||
1,637,000 | Burlington Northern Santa Fe Corp. 5.7500%, 3/15/18 | 1,629,018 | ||||||||||
1,825,970 | CSX Corp., 8.3750%, 10/15/14 | 1,888,820 | ||||||||||
614,000 | Kansas City Southern de Mexico S.A. de C.V., 7.3750%, 6/1/14 | 497,340 | ||||||||||
4,015,178 | ||||||||||||
Transportation – Services – 0.3% | ||||||||||||
1,104,000 | Fedex Corp., 5.5000%, 8/15/09 | 1,111,837 | ||||||||||
1,600,000 | United Parcel Service, Inc., 3.8750%, 4/1/14 | 1,649,354 | ||||||||||
2,761,191 | ||||||||||||
Wireless Equipment – 0.4% | ||||||||||||
1,950,000 | Nokia OYJ, 0%, 5/15/19 | 1,931,963 | ||||||||||
1,350,000 | Nokia OYJ, 0%, 5/15/39 | 1,343,169 | ||||||||||
3,275,132 | ||||||||||||
Total Corporate Bonds (cost $487,949,160) | 491,290,956 | |||||||||||
Mortgage Backed Securities – 24.1% | ||||||||||||
U.S. Government Agencies – 24.1% | ||||||||||||
Fannie Mae: | ||||||||||||
472,655 | 6.5000%, 11/1/17 | 499,242 | ||||||||||
1,309,952 | 5.0000%, 11/1/18 | 1,365,369 | ||||||||||
1,531,649 | 4.5000%, 2/1/23 | 1,575,597 | ||||||||||
829,817 | 4.5000%, 4/1/23 | 853,628 | ||||||||||
904,172 | 4.5000%, 4/1/23 | 930,116 | ||||||||||
$ | 1,200,000 | 4.5000%, 4/1/23 | 1,234,433 | |||||||||
564,077 | 4.5000%, 5/1/23 | 580,262 | ||||||||||
661,980 | 4.5000%, 5/1/23 | 680,975 | ||||||||||
698,546 | 4.5000%, 5/1/23 | 718,590 | ||||||||||
3,250,000 | 4.5000%, 5/1/23 | 3,343,255 | ||||||||||
1,640,514 | 4.5000%, 6/1/23 | 1,687,587 | ||||||||||
1,999,999 | 4.5000%, 6/1/23 | 2,057,387 | ||||||||||
1,085,416 | 4.5000%, 9/1/23 | 1,116,561 | ||||||||||
2,104,554 | 4.5000%, 12/1/23 | 2,164,941 | ||||||||||
10,474,434 | 4.0000%, 3/1/24 | 10,628,481 | ||||||||||
915,889 | 4.5000%, 3/1/24 | 942,078 | ||||||||||
1,115,544 | 4.5000%, 3/1/24 | 1,147,554 | ||||||||||
1,916,101 | 4.5000%, 3/1/24 | 1,971,081 | ||||||||||
7,281,995 | 4.5000%, 3/1/24 | 7,490,943 | ||||||||||
10,121,754 | 4.5000%, 3/1/24 | 10,412,185 | ||||||||||
13,746,927 | 4.5000%, 3/1/24 | 14,140,003 | ||||||||||
4,055,741 | 4.0000%, 4/1/24 | 4,115,389 | ||||||||||
7,959,449 | 4.0000%, 4/1/24 | 8,077,305 | ||||||||||
8,084,810 | 4.0000%, 4/1/24 | 8,203,714 | ||||||||||
6,575,000 | 4.0000%, 5/15/24Ç | 6,661,297 | ||||||||||
7,712,913 | 4.7920%, 5/1/38‡ | 7,957,949 | ||||||||||
5,761,143 | 5.4240%, 1/1/38‡ | 5,975,864 | ||||||||||
1,777,196 | 4.5000%, 1/1/39 | 1,810,365 | ||||||||||
4,775,000 | 4.5000%, 1/1/39Ç | 4,858,563 | ||||||||||
12,947,811 | 4.5000%, 1/1/39 | 13,190,761 | ||||||||||
5,109,121 | 4.5000%, 2/1/39 | 5,204,476 | ||||||||||
9,103,131 | 4.5000%, 2/1/39 | 9,273,030 | ||||||||||
1,846,821 | 4.5000%, 3/1/39 | 1,881,475 | ||||||||||
27,953,270 | 4.5000%, 3/1/39 | 28,474,984 | ||||||||||
8,610,664 | 4.0000%, 4/1/39 | 8,592,409 | ||||||||||
39,925,000 | 4.0000%, 5/1/39Ç | 39,943,716 | ||||||||||
Freddie Mac: | ||||||||||||
956,926 | 5.7410%, 9/1/37‡ | 992,073 | ||||||||||
Total Mortgage Backed Securities (cost $219,720,062) | 220,753,638 | |||||||||||
U.S. Government Agencies – 1.7% | ||||||||||||
Fannie Mae: | ||||||||||||
7,692,000 | 2.8750%, 10/12/10 | 7,909,876 | ||||||||||
3,821,000 | 3.6250%, 8/15/11 | 4,009,368 | ||||||||||
Freddie Mac: | ||||||||||||
3,821,000 | 3.8750%, 6/29/11 | 4,022,848 | ||||||||||
Total U.S. Government Agencies (cost $15,384,749) | 15,942,092 | |||||||||||
U.S. Treasury Notes/Bonds – 20.0% | ||||||||||||
U.S. Treasury Notes/Bonds: | ||||||||||||
35,375,000 | 0.8750%, 1/31/11** | 35,404,007 | ||||||||||
7,360,000 | 0.8750%, 2/28/11 | 7,360,883 | ||||||||||
11,022,000 | 0.8750%, 3/31/11 | 11,022,000 | ||||||||||
7,437,000 | 1.1250%, 1/15/12 | 7,409,111 | ||||||||||
16,000,000 | 4.6250%, 2/29/12** | 17,480,000 | ||||||||||
3,470,000 | 4.7500%, 5/31/12 | 3,820,796 | ||||||||||
4,115,362 | 0.6250%, 4/15/13ÇÇ | 4,043,343 | ||||||||||
12,310,000 | 2.7500%, 10/31/13** | 12,779,319 | ||||||||||
24,095,000 | 1.7500%, 1/31/14 | 23,869,229 | ||||||||||
11,768,000 | 1.8750%, 2/28/14 | 11,708,219 | ||||||||||
2,005,000 | 1.7500%, 3/31/14 | 1,982,444 | ||||||||||
1,052,723 | 1.3750%, 7/15/18ÇÇ | 1,026,405 | ||||||||||
12,771,988 | 2.1250%, 1/15/19ÇÇ | 13,330,763 | ||||||||||
28,284,000 | 2.7500%, 2/15/19 | 27,395,599 |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
U.S. Treasury Notes/Bonds – (continued) | ||||||||||||
$ | 4,273,799 | 2.5000%, 1/15/29ÇÇ | $ | 4,349,924 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $181,243,001) | 182,982,042 | |||||||||||
Money Market – 9.0% | ||||||||||||
82,216,662 | Janus Cash Liquidity Fund LLC, 0% (cost $82,216,662) | 82,216,662 | ||||||||||
Total Investments (total cost $986,513,634) – 108.4% | 993,185,390 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.4)% | (77,252,855) | |||||||||||
Net Assets – 100% | $ | 915,932,535 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 14,414,310 | 1.4% | |||||
Belgium | 1,013,698 | 0.1% | ||||||
Bermuda | 2,471,575 | 0.2% | ||||||
Canada | 22,602,922 | 2.3% | ||||||
Luxembourg | 9,530,181 | 1.0% | ||||||
Mexico | 497,340 | 0.1% | ||||||
Switzerland | 13,145,137 | 1.3% | ||||||
United Kingdom | 626,541 | 0.1% | ||||||
United States†† | 928,883,686 | 93.5% | ||||||
Total | $ | 993,185,390 | 100.0% |
†† | Includes Short-Term Securities (85.2% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 13
Janus High-Yield Fund (unaudited) | Ticker: JAHYX |
Fund Snapshot
This bond Fund strives to provide exposure to the best income and total return opportunities in the high-yield market.
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
co-portfolio manager
![(DARRELL WATTERS PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pwatterd.jpg)
Darrell Watters
co-portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, Janus High-Yield Fund returned 12.44%, compared to a 16.02% return of its benchmark, the Barclays Capital U.S. Corporate High-Yield Bond Index.
Economic Update
The flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and gained momentum in March and April to lead to strong overall gains for high-yield investors during the six-month period ended April 30, 2009. The U.S. Federal Reserve (Fed) helped fuel the shift to riskier securities by lowering the federal funds rate in December from 1% to a range of zero to 0.25%, a historic move. As a result investors pushed U.S. Treasuries to record low yields. The low yields in Treasuries and historic wide spreads in December relative to Treasuries in high yield appeared to prompt a move into high yield bonds in January, as investors speculated the risk of default was more than compensated by relatively inexpensive prices. This bullish trend resumed in March and April (after a brief uptick in spreads in February) and enabled high yield bonds to be the best performing fixed income segment in the period after being among the worst-performing in fixed income during the anxiety-filled fall period. Helping the asset class later in the period were better-than-anticipated economic reports on durable goods orders and new-home sales as well as some banks hinting that they may be profitable in the first quarter. At the same time high yield bonds have received higher investor interest, default rates have more than tripled from 2.25% at year end to 7.5% at period end. Lower credit quality and increasing liquidity characterized the high yield market during the latter portion of the period. Lower rated credits have benefited from the market’s view that any type of financing available to most distressed companies may decrease the likelihood of default.
Detractors from Performance
Our defensive positioning relative to the index was the largest detractor to performance. Specifically, our significant underweight in the BB-rated credits and CCC-rated and lower, which performed the strongest during the late period rally in high yield bonds, weighed on relative performance. Similarly, our 10% non-index exposure in investment grade bonds was a negative, as high yield outperformed investment grade.
In terms of credit sectors, our holdings in the wire-lines communications sector and our lack of exposure in the consumer finance sector weighed on performance the most. Other detractors included our holdings in the retail and healthcare sectors.
On a security level basis, our lack of exposure to index holding ResCap, which was spun out of GMAC and focuses on mortgage financing, was at top detractor, as the credit rebounded during the period. Our underweight in Ford Motor Co. also weighed on performance. Relative to the rest of the auto sector, we still like this name due to the company’s significant cash holdings at period end and because we consider its financing business to be more stable than competitors (i.e., focuses on autos alone.) We also view its product line to be stronger.
Contributors to Performance
On a sector level, our holdings in cable and technology were the largest contributors followed by our holdings in basic industry metals and our holdings and overweight in building materials.
On a security level basis, our lack of exposure to index holding Charter Communications, which filed for bankruptcy during the period, was the largest contributor. Other contributors included our exposure in Visant Corp., a publisher of school yearbooks and marketer of class rings among other school affinity products. The credit rose during the period as the company reported increased sales and earnings for 2008 and the closing of several domestic and international operations during the fourth quarter. We consider Visant to be a good defensive holding with free cash flow generation potential that it could use to pay down debt.
Dole Food Company, a producer of fruits and vegetables, benefited returns during the period after the company announced an asset sale and a refinancing of debt maturing in 2009. In addition, the company continued to produce better-than-expected earnings. We believe the company,
14 Janus Bond & Money Market Funds April 30, 2009
(unaudited)
which admitted to being over-leveraged, remains committed to reducing its debt.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build. In our opinion, there has not been a significant fundamental difference between what we view as low and high quality companies. As a result, we think there were still many individual opportunities in the market at period end, which offer favorable risk/reward profiles in our view.
In the Fund, our focus remains on companies that have considerable assets on their balance sheets, strong cash-flow generation potential in our view and whose managements are focused on debt reduction. We believe our underperformance during the period was largely due to unsustainable market euphoria in higher risk issues. Consequently, we think our conservative posture based on a lower corporate earnings environment for the foreseeable future could help provide meaningful risk-adjusted outperformance versus the benchmark.
Thank you for entrusting your assets to us and for your investment in Janus High-Yield Fund.
Janus Bond & Money Market Funds April 30, 2009 15
Janus High-Yield Fund (unaudited)
Janus High-Yield Fund At A Glance
Fund Profile
April 30, 2009
Weighted Average Maturity | 6.0 Years | |
Average Effective Duration* | 4.0 Years | |
30-day Current Yield** | 14.32% | |
Weighted Average Fixed Income Credit Rating | BB- | |
Number of Bonds/Notes | 209 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
April 30, 2009
A | 1.0% | |
BBB | 9.8% | |
BB | 28.4% | |
B | 42.7% | |
CCC | 9.2% | |
Other | 8.9% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18b02.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18p02.gif)
Emerging markets comprised 0.8% of total net assets.
16 Janus Bond & Money Market Funds April 30, 2009
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18m02.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus High-Yield Fund | 12.44% | –9.38% | 2.61% | 3.93% | 6.22% | 0.91% | 0.91% | ||||||||
Barclays Capital U.S. Corporate High-Yield Bond Index | 16.02% | –13.28% | 2.34% | 3.56% | 4.86% | ||||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for High Current Yield Funds | – | 50/457 | 46/334 | 18/203 | 5/92 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. The expense waiver shown reflects the application of such limit. Total returns and yields shown include fee waivers, if any, and without such waivers, total returns and yields would have been lower.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers, where applicable and agreed to by Janus Capital are included under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
Janus Bond & Money Market Funds April 30, 2009 17
Janus High-Yield Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with non-investment grade debt securities, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Funds may include those associated with investing in foreign securities, emerging markets, initial public offerings and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: liquidity, decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
December 31, 1995 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – December 29, 1995 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,122.90 | $ | 4.74 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.33 | $ | 4.51 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.90%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
18 Janus Bond & Money Market Funds April 30, 2009
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Bank Loans – 1.8% | ||||||||||||
Automotive – Cars and Light Trucks – 0.8% | ||||||||||||
$ | 7,615,000 | Ford Motor Co., 0%, 12/15/13‡ | $ | 4,797,450 | ||||||||
Independent Power Producer – 1.0% | ||||||||||||
6,266,626 | Calpine Corp., 0%, 3/29/14‡ | 5,373,631 | ||||||||||
Total Bank Loans (cost $8,722,592) | 10,171,081 | |||||||||||
Corporate Bonds – 93.2% | ||||||||||||
Advertising Services – 1.4% | ||||||||||||
2,615,000 | Visant Holding Corp., 7.6250%, 10/1/12 | 2,536,550 | ||||||||||
5,710,000 | Visant Holding Corp., 8.7500%, 12/1/13 | 5,253,200 | ||||||||||
7,789,750 | ||||||||||||
Agricultural Chemicals – 0.5% | ||||||||||||
2,924,000 | Mosaic Co., 7.6250%, 12/1/16 (144A) | 2,938,620 | ||||||||||
Airlines – 0.6% | ||||||||||||
3,925,000 | Continental Airlines, Inc. 8.7500%, 12/1/11 | 2,394,250 | ||||||||||
1,825,000 | UAL Corp., 4.5000%, 6/30/21 | 675,250 | ||||||||||
3,069,500 | ||||||||||||
Apparel Manufacturers – 2.2% | ||||||||||||
2,662,000 | Hanesbrands, Inc., 5.6975%, 12/15/14‡,ß | 2,036,430 | ||||||||||
4,206,000 | Levi Strauss & Co., 9.7500%, 1/15/15 | 3,974,670 | ||||||||||
4,530,000 | Levi Strauss & Co., 8.8750%, 4/1/16 | 4,009,050 | ||||||||||
4,100,000 | Quiksilver, Inc., 6.8750%, 4/15/15 | 2,091,000 | ||||||||||
12,111,150 | ||||||||||||
Appliances – 1.0% | ||||||||||||
3,125,000 | Whirlpool Corp., 8.0000%, 5/1/12 | 3,179,344 | ||||||||||
2,188,000 | Whirlpool Corp., 8.6000%, 5/1/14 | 2,241,912 | ||||||||||
5,421,256 | ||||||||||||
Automotive – Cars and Light Trucks – 1.2% | ||||||||||||
8,725,000 | Ford Motor Co., 7.4500%, 7/16/31 | 4,667,875 | ||||||||||
19,650,000 | General Motors Corp., 8.3750%, 7/15/33 | 1,670,250 | ||||||||||
6,338,125 | ||||||||||||
Automotive – Truck Parts and Equipment – Original – 1.1% | ||||||||||||
2,175,000 | Tenneco, Inc., 10.2500%, 7/15/13 | 1,348,500 | ||||||||||
4,675,000 | TRW Automotive, Inc. 7.0000%, 3/15/14 (144A) | 2,594,625 | ||||||||||
4,450,000 | TRW Automotive, Inc. 7.2500%, 3/15/17 (144A) | 2,380,750 | ||||||||||
6,323,875 | ||||||||||||
Beverages – Non-Alcoholic – 0.9% | ||||||||||||
2,221,000 | Dr. Pepper Snapple Group, Inc. 6.1200%, 5/1/13 | 2,219,428 | ||||||||||
1,435,000 | Dr. Pepper Snapple Group, Inc. 6.8200%, 5/1/18 | 1,397,503 | ||||||||||
1,768,000 | Dr. Pepper Snapple Group, Inc. 7.4500%, 5/1/38 | 1,560,592 | ||||||||||
5,177,523 | ||||||||||||
Building – Residential and Commercial – 0.6% | ||||||||||||
4,322,000 | Meritage Homes Corp., 6.2500%, 3/15/15 | 3,155,060 | ||||||||||
Building Products – Cement and Aggregate – 0.8% | ||||||||||||
2,830,000 | CRH America, Inc., 5.6250%, 9/30/11 | 2,549,561 | ||||||||||
2,161,000 | Texas Industries, Inc. 7.2500%, 7/15/13 (144A) | 1,755,813 | ||||||||||
4,305,374 | ||||||||||||
Building Products – Wood – 0.4% | ||||||||||||
$ | 2,175,000 | Masco Corp., 1.6313%, 3/12/10‡ | 2,073,367 | |||||||||
Cable Television – 1.4% | ||||||||||||
3,423,000 | Kabel Deutschland, 10.6250%, 7/1/14 | 3,491,460 | ||||||||||
4,058,000 | Mediacom LLC/Mediacom Capital Corp. 9.5000%, 1/15/13 | 3,976,840 | ||||||||||
7,468,300 | ||||||||||||
Casino Hotels – 1.5% | ||||||||||||
3,632,000 | Boyd Gaming Corp., 7.1250%, 2/1/16 | 2,651,360 | ||||||||||
6,550,000 | Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 6.6250%, 12/1/14 | 5,534,750 | ||||||||||
8,186,110 | ||||||||||||
Cellular Telecommunications – 1.2% | ||||||||||||
875,000 | Metro PCS Wireless, Inc. 9.2500%, 11/1/14 (144A) | 871,719 | ||||||||||
5,720,000 | Metro PCS Wireless, Inc. 9.2500%, 11/1/14 | 5,727,150 | ||||||||||
6,598,869 | ||||||||||||
Chemicals – Diversified – 0.2% | ||||||||||||
1,409,000 | Innophos Holdings, Inc. 9.5000%, 4/15/12 (144A)§ | 986,300 | ||||||||||
Chemicals – Specialty – 1.1% | ||||||||||||
2,804,000 | MacDermid, Inc. 9.5000%, 4/15/17 (144A) | 1,387,980 | ||||||||||
3,595,000 | Nalco Co., 7.7500%, 11/15/11 | 3,630,950 | ||||||||||
1,293,000 | Nalco Co., 8.8750%, 11/15/13 | 1,299,465 | ||||||||||
6,318,395 | ||||||||||||
Coal – 0.2% | ||||||||||||
1,275,000 | Arch Western Finance LLC 6.7500%, 7/1/13 | 1,112,438 | ||||||||||
Commercial Banks – 0.5% | ||||||||||||
2,750,000 | American Express Bank FSB 5.5000%, 4/16/13 | 2,585,751 | ||||||||||
Commercial Services – 0.5% | ||||||||||||
1,300,000 | Iron Mountain, Inc., 8.0000%, 6/15/20 | 1,254,500 | ||||||||||
3,725,000 | Live Nation, Inc., 2.8750%, 7/15/27 | 1,550,531 | ||||||||||
2,805,031 | ||||||||||||
Commercial Services – Finance – 0.6% | ||||||||||||
525,000 | Cardtronics, Inc., 9.2500%, 8/15/13 | 380,625 | ||||||||||
3,888,000 | Cardtronics, Inc., 9.2500%, 8/15/13 | 2,818,800 | ||||||||||
3,199,425 | ||||||||||||
Computer Services – 1.0% | ||||||||||||
2,734,000 | SunGard Data Systems, Inc. 9.1250%, 8/15/13 | 2,610,970 | ||||||||||
1,300,000 | SunGard Data Systems, Inc. 10.6250%, 5/15/15 (144A) | 1,244,750 | ||||||||||
2,176,000 | SunGard Data Systems, Inc. 10.2500%, 8/15/15 | 1,893,120 | ||||||||||
5,748,840 | ||||||||||||
Computers – Memory Devices – 0.5% | ||||||||||||
2,625,000 | Seagate Technology International 10.0000%, 5/1/14 (144A) | 2,585,625 | ||||||||||
Consulting Services – 0.3% | ||||||||||||
1,692,000 | FTI Consulting, Inc., 7.7500%, 10/1/16 | 1,717,380 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 19
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Consumer Products – Miscellaneous – 1.2% | ||||||||||||
$ | 2,544,000 | Amscan Holdings, Inc., 8.7500%, 5/1/14 | $ | 2,035,200 | ||||||||
1,750,000 | Jarden Corp., 8.0000%, 5/1/16 | 1,706,250 | ||||||||||
3,412,000 | Jarden Corp., 7.5000%, 5/1/17 | 3,019,620 | ||||||||||
6,761,070 | ||||||||||||
Containers – Metal and Glass – 0.7% | ||||||||||||
1,733,000 | Greif, Inc, 6.7500%, 2/1/17 | 1,603,025 | ||||||||||
2,370,000 | Owens-Illinois, Inc., 7.8000%, 5/15/18 | 2,304,825 | ||||||||||
3,907,850 | ||||||||||||
Containers – Paper and Plastic – 1.3% | ||||||||||||
1,724,000 | Graham Packaging Co. L.P./GPC Capital Corp. I, 8.5000%, 10/15/12 | 1,482,640 | ||||||||||
2,711,000 | Graham Packaging Co. L.P./GPC Capital Corp. I, 9.8750%, 10/15/14 | 2,192,521 | ||||||||||
3,446,000 | Rock-Tenn Co., 9.2500%, 3/15/16 | 3,506,305 | ||||||||||
7,181,466 | ||||||||||||
Cosmetics and Toiletries – 0.7% | ||||||||||||
2,401,000 | Chattem, Inc., 7.0000%, 3/1/14 | 2,316,965 | ||||||||||
1,700,000 | Chattem, Inc., 1.6250%, 5/1/14 | 1,472,625 | ||||||||||
3,789,590 | ||||||||||||
Cruise Lines – 0.3% | ||||||||||||
1,425,000 | Royal Caribbean Cruises, Ltd. 8.0000%, 5/15/10 | 1,396,500 | ||||||||||
Data Processing and Management – 1.2% | ||||||||||||
13,308,000 | First Data Corp. 11.2500%, 3/31/16 (144A) | 6,787,080 | ||||||||||
Direct Marketing – 0.3% | ||||||||||||
2,588,000 | Affinion Group, Inc., 11.5000%, 10/15/15 | 1,863,360 | ||||||||||
Distribution/Wholesale – 1.4% | ||||||||||||
1,925,000 | Ace Hardware Corp., 9.1250%, 6/1/16 (144A)§ | 1,742,125 | ||||||||||
4,910,000 | KAR Holdings, Inc., 8.7500%, 5/1/14 | 3,240,600 | ||||||||||
1,480,000 | KAR Holdings, Inc., 10.0000%, 5/1/15 | 858,400 | ||||||||||
2,397,000 | Nebraska Book Co., Inc. 8.6250%, 3/15/12 | 1,677,900 | ||||||||||
7,519,025 | ||||||||||||
Diversified Financial Services – 0.6% | ||||||||||||
4,800,000 | GMAC LLC, 8.0000%, 11/1/31 (144A) | 3,360,000 | ||||||||||
Diversified Operations – 1.5% | ||||||||||||
1,300,000 | Kansas City Southern Railway 13.0000%, 12/15/13 | 1,378,000 | ||||||||||
903,000 | Kansas City Southern Railway 8.0000%, 6/1/15 | 781,095 | ||||||||||
1,322,000 | SPX Corp., 7.6250%, 12/15/14 | 1,305,475 | ||||||||||
1,325,000 | Textron, Inc., 4.5000%, 5/1/13 | 1,432,656 | ||||||||||
400,000 | Tyco Electronics Group S.A. 6.0000%, 10/1/12 | 364,648 | ||||||||||
575,000 | Tyco Electronics Group S.A. 5.9500%, 1/15/14 | 475,915 | ||||||||||
1,750,000 | Tyco Electronics Group S.A. 6.5500%, 10/1/17 | 1,346,863 | ||||||||||
1,975,000 | Tyco Electronics Group S.A. 7.1250%, 10/1/37 | 1,204,497 | ||||||||||
8,289,149 | ||||||||||||
Diversified Operations – Commercial Services – 1.4% | ||||||||||||
8,211,000 | ARAMARK Corp., 8.5000%, 2/1/15 | 7,841,505 | ||||||||||
Electric – Generation – 3.3% | ||||||||||||
$ | 1,725,000 | AES Corp., 9.7500%, 4/15/16 (144A) | 1,707,750 | |||||||||
5,559,000 | AES Corp., 8.0000%, 10/15/17 | 5,086,485 | ||||||||||
4,695,000 | Allegheny Energy Supply Co. LLC 8.2500%, 4/15/12 (144A) | 4,741,809 | ||||||||||
4,272,000 | Edison Mission Energy, 7.0000%, 5/15/17 | 3,225,360 | ||||||||||
4,443,000 | Edison Mission Energy, 7.2000%, 5/15/19 | 3,232,283 | ||||||||||
17,993,687 | ||||||||||||
Electric – Integrated – 1.4% | ||||||||||||
4,863,000 | CMS Energy Corp., 2.0813%, 1/15/13‡,ß | 3,855,630 | ||||||||||
2,996,000 | Energy Future Holdings Corp. 10.8750%, 11/1/17 | 2,044,770 | ||||||||||
3,464,000 | Texas Competitive Electric Holdings Co. LLC, 10.2500%, 11/1/15 | 1,965,820 | ||||||||||
7,866,220 | ||||||||||||
Electronic Components – Semiconductors – 1.5% | ||||||||||||
3,000,000 | National Semiconductor Corp. 1.5700%, 6/15/10‡ | 2,654,433 | ||||||||||
3,225,000 | National Semiconductor Corp. 6.1500%, 6/15/12 | 2,904,596 | ||||||||||
3,475,000 | National Semiconductor Corp. 6.6000%, 6/15/17 | 2,724,167 | ||||||||||
8,283,196 | ||||||||||||
Finance – Auto Loans – 1.5% | ||||||||||||
9,162,000 | Ford Motor Credit Co. LLC 9.7500%, 9/15/10 | 8,246,203 | ||||||||||
Finance – Credit Card – 0.2% | ||||||||||||
1,425,000 | American Express Co., 7.0000%, 3/19/18 | 1,351,554 | ||||||||||
Finance – Investment Bankers/Brokers – 0.7% | ||||||||||||
4,150,000 | Citigroup, Inc., 5.5000%, 2/15/17 | 2,861,371 | ||||||||||
1,350,000 | Citigroup, Inc., 6.1250%, 5/15/18 | 1,134,563 | ||||||||||
3,995,934 | ||||||||||||
Food – Meat Products – 1.4% | ||||||||||||
1,300,000 | JBS U.S.A. LLC/JBS U.S.A. Finance, Inc. 11.6250%, 5/1/14 (144A) | 1,235,000 | ||||||||||
3,226,000 | National Beef Packing Co. LLC/NB Finance Corp., 10.5000%, 8/1/11 | 3,217,935 | ||||||||||
1,325,000 | Tyson Foods, Inc., 3.2500%, 10/15/13 | 1,273,656 | ||||||||||
2,400,000 | Tyson Foods, Inc., 7.8500%, 4/1/16 | 2,176,666 | ||||||||||
7,903,257 | ||||||||||||
Food – Miscellaneous/Diversified – 3.2% | ||||||||||||
1,750,000 | Chiquita Brands International 7.5000%, 11/1/14 | 1,452,500 | ||||||||||
2,375,000 | Chiquita Brands International 4.2500%, 8/15/16 | 1,398,281 | ||||||||||
6,045,000 | Del Monte Corp., 6.7500%, 2/15/15 | 5,803,200 | ||||||||||
3,110,000 | Dole Food Co., Inc. 8.7500%, 7/15/13 | 2,674,600 | ||||||||||
5,875,000 | Dole Food Co., Inc. 13.8750%, 3/15/14 (144A) | 6,183,438 | ||||||||||
17,512,019 | ||||||||||||
Food – Retail – 1.7% | ||||||||||||
650,000 | Ingles Markets, Inc., 8.8750%, 5/15/17 | 627,562 | ||||||||||
2,313,000 | Stater Brothers Holdings 7.7500%, 4/15/15 | 2,232,045 | ||||||||||
4,570,000 | SUPERVALU, Inc., 7.5000%, 11/15/14 | 4,432,900 |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Food – Retail – (continued) | ||||||||||||
$ | 1,900,000 | SUPERVALU, Inc., 8.0000%, 5/1/16 | $ | 1,843,000 | ||||||||
9,135,507 | ||||||||||||
Gambling – Non-Hotel – 1.2% | ||||||||||||
1,211,000 | Isle of Capri Casinos, Inc. 7.0000%, 3/1/14 | 920,360 | ||||||||||
4,329,000 | Pinnacle Entertainment, Inc. 8.2500%, 3/15/12 | 4,220,775 | ||||||||||
658,000 | Pinnacle Entertainment, Inc. 8.7500%, 10/1/13 | 634,970 | ||||||||||
797,000 | Pokagon Gaming Authority 10.3750%, 6/15/14 (144A) | 737,225 | ||||||||||
6,513,330 | ||||||||||||
Hotels and Motels – 0.9% | ||||||||||||
3,075,000 | Starwood Hotels & Resorts Worldwide, Inc. 6.2500%, 2/15/13 | 2,829,000 | ||||||||||
1,950,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.8750%, 10/15/14 | 1,877,558 | ||||||||||
4,706,558 | ||||||||||||
Independent Power Producer – 2.4% | ||||||||||||
896,000 | AES China Generating Co., Ltd. 8.2500%, 6/26/10 | 788,975 | ||||||||||
5,952,000 | NRG Energy, Inc., 7.3750%, 2/1/16 | 5,728,799 | ||||||||||
4,129,000 | Reliant Energy, Inc., 7.6250%, 6/15/14 | 3,726,423 | ||||||||||
3,141,000 | Reliant Energy, Inc., 7.8750%, 6/15/17 | 2,803,343 | ||||||||||
13,047,540 | ||||||||||||
Machine Tools and Related Products – 0.2% | ||||||||||||
1,735,000 | Thermadyne Holdings Corp. 9.5000%, 2/1/14‡ | 1,134,256 | ||||||||||
Medical – Hospitals – 4.4% | ||||||||||||
4,800,000 | CHS/Community Health Systems, Inc. 8.8750%, 7/15/15 | 4,776,000 | ||||||||||
2,384,000 | HCA, Inc., 7.8750%, 2/1/11 | 2,336,320 | ||||||||||
12,432,000 | HCA, Inc., 9.2500%, 11/15/16 | 12,307,679 | ||||||||||
1,075,000 | HCA, Inc., 9.8750%, 2/15/17 (144A) | 1,075,000 | ||||||||||
1,325,000 | HCA, Inc., 8.5000%, 4/15/19 (144A) | 1,333,281 | ||||||||||
1,225,000 | Tenet Healthcare Corp., 7.3750%, 2/1/13 | 1,120,875 | ||||||||||
1,611,000 | Tenet Healthcare Corp., 9.2500%, 2/1/15 | 1,490,175 | ||||||||||
24,439,330 | ||||||||||||
Medical – Outpatient and Home Medical Care – 0.1% | ||||||||||||
702,000 | National Mentor Holdings, Inc. 11.2500%, 7/1/14 | 617,760 | ||||||||||
Medical Products – 0.6% | ||||||||||||
3,275,000 | Biomet, Inc., 11.6250%, 10/15/17 | 3,176,750 | ||||||||||
Metal – Copper – 1.4% | ||||||||||||
3,888,000 | Freeport-McMoRan Copper & Gold, Inc. 8.2500%, 4/1/15 | 3,829,680 | ||||||||||
4,022,000 | Freeport-McMoRan Copper & Gold, Inc. 8.3750%, 4/1/17 | 3,941,560 | ||||||||||
7,771,240 | ||||||||||||
Office Automation and Equipment – 0.5% | ||||||||||||
1,485,000 | Xerox Corp., 6.8750%, 8/15/11 | 1,489,424 | ||||||||||
1,525,000 | Xerox Corp., 6.3500%, 5/15/18 | 1,235,250 | ||||||||||
2,724,674 | ||||||||||||
Oil Companies – Exploration and Production – 3.8% | ||||||||||||
$ | 1,529,000 | Cimarex Energy Co., 7.1250%, 5/1/17 | 1,353,165 | |||||||||
2,249,000 | Encore Acquisition Co., 6.2500%, 4/15/14 | 1,900,405 | ||||||||||
2,472,000 | Forest Oil Corp., 8.0000%, 12/15/11 | 2,428,740 | ||||||||||
1,125,000 | Forest Oil Corp., 8.5000%, 2/15/14 (144A) | 1,091,250 | ||||||||||
1,750,000 | Forest Oil Corp., 7.7500%, 5/1/14 | 1,649,375 | ||||||||||
1,025,000 | Forest Oil Corp., 7.2500%, 6/15/19 (144A) | 853,313 | ||||||||||
4,146,000 | Forest Oil Corp., 7.2500%, 6/15/19 | 3,451,544 | ||||||||||
849,000 | Hilcorp Energy I L.P./Hilcorp Finance Co. 9.0000%, 6/1/16 (144A) | 725,895 | ||||||||||
1,715,000 | PetroHawk Energy Corp. 9.1250%, 7/15/13 | 1,680,700 | ||||||||||
1,031,000 | Plains Exploration & Production Co. 7.7500%, 6/15/15 | 943,365 | ||||||||||
4,323,000 | Quicksilver Resources, Inc. 8.2500%, 8/1/15 | 3,523,244 | ||||||||||
1,297,000 | Range Resources Corp., 7.3750%, 7/15/13 | 1,267,818 | ||||||||||
20,868,814 | ||||||||||||
Oil Field Machinery and Equipment – 0.2% | ||||||||||||
1,436,000 | Dresser-Rand Group, Inc. 7.3750%, 11/1/14 | 1,278,040 | ||||||||||
Oil Refining and Marketing – 0.3% | ||||||||||||
1,735,000 | Frontier Oil Corp., 8.5000%, 9/15/16 | 1,717,650 | ||||||||||
Paper and Related Products – 1.2% | ||||||||||||
2,635,000 | Boise Cascade LLC, 7.1250%, 10/15/14 | 1,165,988 | ||||||||||
225,000 | Georgia-Pacific LLC 8.2500%, 5/1/16 (144A) | 225,000 | ||||||||||
5,401,000 | Georgia-Pacific LLC 7.1250%, 1/15/17 (144A) | 5,103,945 | ||||||||||
6,494,933 | ||||||||||||
Physical Therapy and Rehabilitation Centers – 0.7% | ||||||||||||
3,845,000 | HealthSouth Corp., 10.7500%, 6/15/16 | 3,921,900 | ||||||||||
Pipelines – 3.2% | ||||||||||||
2,150,000 | Dynegy Holdings, Inc., 7.5000%, 6/1/15 | 1,687,750 | ||||||||||
3,470,000 | Dynegy Holdings, Inc., 8.3750%, 5/1/16 | 2,776,000 | ||||||||||
1,150,000 | El Paso Corp., 12.0000%, 12/12/13 | 1,242,000 | ||||||||||
425,000 | El Paso Corp., 8.2500%, 2/15/16 | 414,375 | ||||||||||
5,087,000 | El Paso Corp., 7.0000%, 6/15/17 | 4,570,348 | ||||||||||
1,225,000 | Kinder Morgan Finance Co. 5.3500%, 1/5/11 | 1,191,313 | ||||||||||
3,889,000 | Kinder Morgan Finance Co. 5.7000%, 1/5/16 | 3,373,708 | ||||||||||
2,553,000 | Tennessee Gas Pipeline Co. 8.0000%, 2/1/16 (144A) | 2,604,060 | ||||||||||
17,859,554 | ||||||||||||
Publishing – Books – 0.5% | ||||||||||||
3,052,000 | Cengage Learning Acquisitions, Inc. 10.5000%, 1/15/15 (144A) | 2,075,360 | ||||||||||
1,100,000 | Cengage Learning Acquisitions, Inc. 0%, 7/15/15 (144A) | 539,000 | ||||||||||
2,614,360 | ||||||||||||
Publishing – Newspapers – 1.0% | ||||||||||||
6,906,000 | Block Communications, Inc. 8.2500%, 12/15/15 (144A) | 5,731,980 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 21
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Publishing – Periodicals – 0.9% | ||||||||||||
$ | 1,358,000 | Medimedia USA, Inc. 11.3750%, 11/15/14 (144A)§ | $ | 882,700 | ||||||||
1,308,000 | Nielsen Finance LLC/Nielsen Finance Co. 11.6250%, 2/1/14 (144A) | 1,294,920 | ||||||||||
3,050,000 | Nielsen Finance LLC/Nielsen Finance Co. 11.5000%, 5/1/16 (144A) | 2,882,250 | ||||||||||
5,059,870 | ||||||||||||
REIT – Health Care – 0.7% | ||||||||||||
2,377,000 | Senior Housing Properties Trust 8.6250%, 1/15/12 | 2,281,920 | ||||||||||
1,970,000 | Ventas Realty LP/Ventas Capital Corp 6.5000%, 6/1/16 | 1,753,300 | ||||||||||
4,035,220 | ||||||||||||
REIT – Regional Malls – 0.2% | ||||||||||||
1,300,000 | Simon Property Group L.P. 10.3500%, 4/1/19 | 1,356,900 | ||||||||||
REIT – Warehouse/Industrials – 0.2% | ||||||||||||
1,975,000 | ProLogis, 6.6250%, 5/15/18 | 1,288,875 | ||||||||||
Rental Auto/Equipment – 0.3% | ||||||||||||
2,160,000 | Hertz Corp., 8.8750%, 1/1/14 | 1,674,000 | ||||||||||
Resorts and Theme Parks – 0.5% | ||||||||||||
3,050,000 | Vail Resorts, Inc., 6.7500%, 2/15/14 | 2,745,000 | ||||||||||
Retail – Apparel and Shoe – 0.8% | ||||||||||||
3,025,000 | Burlington Coat Factory 11.1250%, 4/15/14 | 2,109,937 | ||||||||||
873,000 | Ltd. Brands, Inc., 6.9000%, 7/15/17 | 725,125 | ||||||||||
2,552,000 | Ltd. Brands, Inc., 7.6000%, 7/15/37 | 1,675,978 | ||||||||||
4,511,040 | ||||||||||||
Retail – Computer Equipment – 0.9% | ||||||||||||
4,736,000 | GameStop Corp., 8.0000%, 10/1/12 | 4,807,040 | ||||||||||
Retail – Hypermarkets – 0.4% | ||||||||||||
2,150,000 | New Albertsons, Inc., 8.3500%, 5/1/10 | 2,195,688 | ||||||||||
Retail – Leisure Products – 0.6% | ||||||||||||
4,476,000 | Steinway Musical Instruments 7.0000%, 3/1/14 (144A)§ | 3,222,720 | ||||||||||
Retail – Miscellaneous/Diversified – 0.2% | ||||||||||||
1,301,000 | Eye Care Centers of America, Inc. 10.7500%, 2/15/15 | 1,209,930 | ||||||||||
Retail – Perfume and Cosmetics – 1.0% | ||||||||||||
2,578,000 | Sally Holdings LLC/Sally Capital, Inc. 9.2500%, 11/15/14 | 2,578,000 | ||||||||||
2,862,000 | Sally Holdings LLC/Sally Capital, Inc. 10.5000%, 11/15/16 | 2,761,830 | ||||||||||
5,339,830 | ||||||||||||
Retail – Propane Distribution – 1.7% | ||||||||||||
4,846,000 | Amerigas Partners L.P., 7.2500%, 5/20/15 | 4,736,965 | ||||||||||
2,466,000 | Ferrellgas Escrow LLC / Ferrellgas Finance Escrow Corp., 6.7500%, 5/1/14 | 2,225,565 | ||||||||||
2,696,000 | Ferrellgas Partners L.P. / Ferrellgas Partners Finance Corp., 8.7500%, 6/15/12 | 2,466,840 | ||||||||||
9,429,370 | ||||||||||||
Retail – Regional Department Stores – 0.6% | ||||||||||||
3,070,000 | JC Penney Co., Inc., 9.0000%, 8/1/12 | 3,079,302 | ||||||||||
Retail – Restaurants – 0.7% | ||||||||||||
$ | 2,617,000 | Denny’s Holdings, Inc., 10.0000%, 10/1/12 | 2,440,353 | |||||||||
1,750,000 | Landry’s Restaurants, Inc. 14.0000%, 8/15/11 (144A)§ | 1,662,500 | ||||||||||
4,102,853 | ||||||||||||
Retail – Vitamins/Nutritional Supplement – 0.3% | ||||||||||||
2,482,000 | General Nutrition Centers, Inc. 6.4038%, 3/15/14‡,ß | 1,886,320 | ||||||||||
Rubber – Tires – 0.7% | ||||||||||||
3,075,000 | Goodyear Tire & Rubber Co. 7.8570%, 8/15/11 | 2,859,750 | ||||||||||
1,050,000 | Goodyear Tire & Rubber Co. 9.0000%, 7/1/15 | 955,500 | ||||||||||
3,815,250 | ||||||||||||
Satellite Telecommunications – 1.6% | ||||||||||||
7,157,000 | Intelsat Jackson Holdings, Ltd. 11.2500%, 6/15/16 | 7,318,033 | ||||||||||
1,300,000 | Intelsat Subsidiary Holding Co., Ltd. 8.8750%, 1/15/15 (144A) | 1,280,500 | ||||||||||
8,598,533 | ||||||||||||
Schools – 0.5% | ||||||||||||
2,617,000 | Education Management LLC 10.2500%, 6/1/16 | 2,512,320 | ||||||||||
Seismic Data Collection – 0.3% | ||||||||||||
1,734,000 | Cie Generale de Geophysique-Veritas 7.7500%, 5/15/17 | 1,387,200 | ||||||||||
Special Purpose Entity – 4.9% | ||||||||||||
17,983,240 | CDX North America High Yield 8.8750%, 6/29/13 (144A) | 15,645,418 | ||||||||||
1,218,000 | Fresenius U.S. Finance II, Inc. 9.0000%, 7/15/15 (144A) | 1,291,080 | ||||||||||
3,016,000 | LBI Media, Inc., 8.5000%, 8/1/17 (144A) | 934,960 | ||||||||||
1,761,000 | NSG Holdings LLC/NSG Holdings, Inc. 7.7500%, 12/15/25 (144A) | 1,373,580 | ||||||||||
9,575,000 | Petroplus Finance, Ltd. 7.0000%, 5/1/17 (144A) | 7,707,875 | ||||||||||
26,952,913 | ||||||||||||
Steel – Producers – 1.2% | ||||||||||||
1,325,000 | Mittal Steel Co. N.V., 5.0000%, 5/15/14 | 1,325,000 | ||||||||||
1,825,000 | Reliance Steel & Aluminum Co. 6.2000%, 11/15/16 | 1,406,524 | ||||||||||
1,293,000 | Steel Dynamics, Inc. 7.3750%, 11/1/12 | 1,154,003 | ||||||||||
3,550,000 | Steel Dynamics, Inc. 8.2500%, 4/15/16 (144A) | 2,804,499 | ||||||||||
6,690,026 | ||||||||||||
Telecommunication Services – 1.1% | ||||||||||||
2,175,000 | Qwest Corp., 8.3750%, 5/1/16 (144A) | 2,164,125 | ||||||||||
3,822,000 | Time Warner Telecom Holdings, Inc. 9.2500%, 2/15/14 | 3,831,555 | ||||||||||
5,995,680 | ||||||||||||
Telephone – Integrated – 3.3% | ||||||||||||
2,709,000 | Cincinnati Bell, Inc., 8.3750%, 1/15/14 | 2,675,138 | ||||||||||
2,625,000 | Frontier Communications Corp. 8.2500%, 5/1/14 | 2,579,063 | ||||||||||
1,562,000 | Level 3 Financing, Inc., 8.7500%, 2/15/17 | 1,109,020 |
See Notes to Schedules of Investments and Financial Statements.
22 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Shares or Principal Amount | Value | |||||||||||
Telephone – Integrated – (continued) | ||||||||||||
$ | 4,058,000 | Qwest Communications International, Inc. 7.2500%, 2/15/11 | $ | 3,997,130 | ||||||||
1,750,000 | Sprint Capital Corp., 8.3750%, 3/15/12 | 1,677,813 | ||||||||||
2,200,000 | Sprint Nextel Corp., 6.0000%, 12/1/16 | 1,826,000 | ||||||||||
4,112,000 | Virgin Media Finance PLC 9.1250%, 8/15/16 | 4,050,319 | ||||||||||
17,914,483 | ||||||||||||
Textile – Home Furnishings – 0.1% | ||||||||||||
425,000 | Mohawk Industries, Inc. 6.2500%, 1/15/11 | 402,780 | ||||||||||
Transportation – Marine – 0.7% | ||||||||||||
5,017,000 | Ship Finance International, Ltd. 8.5000%, 12/15/13 | 3,637,325 | ||||||||||
Transportation – Railroad – 0.8% | ||||||||||||
1,378,000 | Kansas City Southern de Mexico S.A. de C.V., 9.3750%, 5/1/12 | 1,260,870 | ||||||||||
3,560,000 | Kansas City Southern de Mexico S.A. de C.V., 7.6250%, 12/1/13 | 2,919,200 | ||||||||||
4,180,070 | ||||||||||||
Transportation – Services – 0.1% | ||||||||||||
425,000 | Bristow Group, Inc., 6.1250%, 6/15/13 | 365,500 | ||||||||||
Transportation – Truck – 0.1% | ||||||||||||
1,750,000 | Swift Transportation Co. 12.5000%, 5/15/17 (144A)§ | 551,250 | ||||||||||
Total Corporate Bonds (cost $533,394,565) | 512,566,193 | |||||||||||
Preferred Stock – 0.3% | ||||||||||||
Metal – Copper – 0.3% | ||||||||||||
22,610 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.7500% (cost $1,077,384) | 1,520,523 | ||||||||||
Money Market – 4.6% | ||||||||||||
25,081,163 | Janus Cash Liquidity Fund LLC, 0% (cost $25,081,163) | 25,081,163 | ||||||||||
Total Investments (total cost $568,275,704) – 99.9% | 549,338,960 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 805,809 | |||||||||||
Net Assets – 100% | $ | 550,144,769 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 20,732,708 | 3.8% | |||||
Canada | 4,565,020 | 0.8% | ||||||
Cayman Islands | 2,585,625 | 0.5% | ||||||
France | 1,387,200 | 0.2% | ||||||
Germany | 3,491,460 | 0.6% | ||||||
Liberia | 1,396,500 | 0.3% | ||||||
Luxembourg | 4,716,923 | 0.9% | ||||||
Mexico | 4,180,070 | 0.8% | ||||||
United Kingdom | 4,050,320 | 0.7% | ||||||
United States†† | 502,233,134 | 91.4% | ||||||
Total | $ | 549,338,960 | 100.0% |
†† | Includes Short-Term Securities (86.9% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 23
Janus Short-Term Bond Fund (unaudited) | Ticker: JASBX |
Fund Snapshot
This short duration bond Fund seeks a high level of current income in tandem with preservation of capital.
![(JASON GROOM PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pgroomja.jpg)
Jason Groom
co-portfolio manager
![(DARRELL WATTERS PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pwatterd.jpg)
Darrell Watters
co-portfolio manager
Performance Overview
For the six-month period ended April 30, 2009, Janus Short-Term Bond Fund returned 4.74%, compared to a 3.63% return of its benchmark, the Barclays Capital 1-3 Year U.S. Government/Credit Index.
Economic Update
The flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January 2009 as investors’ risk appetite increased and credit markets gained momentum. Low absolute yields in Treasuries and wide credit spreads relative to Treasuries prompted a move into credit in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, credit was one of the best performing asset categories.
In March, the Fed announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities (MBS) and agency debt to help the beleaguered housing market, which prompted the largest one-day drop in the 10-year Treasury note (almost half a percent) since the aftermath of the 1987 market crash. By the end of the period, the 10-year Treasury yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). The downward shift in the Treasury curve was most pronounced in the five and 10-year yields, which led to an overall steepening in the curve. Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Contributors to Performance
The Fund’s outperformance during the period was driven largely by our significant overweight and security selection in credits. Our significant overweight in BBB-rated credits was a key contributor as were our underweights in the AAA-and AA-rated credits, as lower-rated credits outperformed during the period. Similarly, the Fund’s 10.37% exposure in non-index, high-yield bonds at period end also boosted comparable returns, as high yield outperformed investment grade. Finally, our underweight in Treasuries and yield-curve positioning in both Treasuries and agencies added to our relative returns.
On a security level basis, our top contributor was our exposure in non-index holding Time Warner Cable, which was spun off from its parent Time Warner during the period. As the second largest cable provider in the U.S., the company has been successful in gaining market share for voice, video and data services from incumbent telecommunications companies in most cities where it operates. We also like the utility nature of its cash flows.
Roche Holdings, a new position in the Fund, boosted returns, as the bonds it issued to help finance its remaining stake in biotechnology leader Genentech performed well. We participated in the Switzerland-based pharmaceutical company’s bond issuance based on our assessment that the company could continue to demonstrate operating earnings growth and will pay down its debt over time.
Detractors from Performance
Our main detractors were not holding several securities in the index that performed relatively well; notable ones included financials HSBC and CIT Group, insurer American International Group (AIG), and media company CBS to name a few. In addition, our position in MGM Mirage, a casino operator, underperformed, as fundamentals deteriorated faster than we expected, calling into question the company’s ability to service its 2009 bond maturities. We exited the bonds on liquidity concerns.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in
24 Janus Bond & Money Market Funds April 30, 2009
(unaudited)
our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build.
With credit spreads still at high levels at period end, we think there are many opportunities in which to explore and possibly add to the portfolio. The main obstacles to the success of this strategy, in our view, might be continued lack of liquidity and rising default rates. We believe that our ability to add value with individual credit selection could help us overcome these obstacles, but are being very cautious as to how and when we add risk to the portfolio. In terms of credit selection, our focus is on companies that we believe have considerable assets, strong cash-flow generation potential and whose managements are focused on debt reduction.
Thank you for your investment in Janus Short-Term Bond Fund.
Janus Short-Term Bond Fund At A Glance
Fund Profile
April 30, 2009
Weighted Average Maturity | 2.6 Years | |
Average Effective Duration* | 2.3 Years | |
30-day Current Yield** | ||
Without Reimbursement | 3.58% | |
With Reimbursement | 3.62% | |
Weighted Average Fixed Income Credit Rating | A+ | |
Number of Bonds/Notes | 215 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
April 30, 2009
AAA | 30.1% | |
AA | 10.2% | |
A | 13.0% | |
BBB | 25.0% | |
BB | 6.4% | |
B | 2.2% | |
Other | 13.1% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18b04.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18p04.gif)
Janus Bond & Money Market Funds April 30, 2009 25
Janus Short-Term Bond Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif18m04.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Short-Term Bond Fund | 4.74% | 5.61% | 3.76% | 4.38% | 4.73% | 0.98% | 0.65% | ||||||||
Barclays Capital 1-3 Year U.S. Government/Credit Index | 3.63% | 3.95% | 4.01% | 4.80% | 5.15%** | ||||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Short Investment Grade Debt Funds | – | 1/260 | 5/179 | 7/90 | 4/24 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. The expense waiver shown reflects the application of such limit. Total returns and yields shown include fee waivers, if any, and without such waivers total returns and yields would have been lower.
The Fund’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Fund invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
26 Janus Bond & Money Market Funds April 30, 2009
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-investment grade debt securities, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Funds may include those associated with investing in foreign securities, emerging markets, initial public offerings and derivatives. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio managers.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
The Fund invests in Real Estate Investment Trusts (REITs), which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: liquidity, decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 | |
** | The Barclays Capital 1-3 Year U.S. Government/Credit Index’s since inception returns are calculated from August 31, 1992. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,047.40 | $ | 3.25 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.62 | $ | 3.21 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.64%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Bond & Money Market Funds April 30, 2009 27
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Bank Loan – 0.1% | ||||||||||||
Food – Confectionery – 0.1% | ||||||||||||
$ | 597,438 | WM Wrigley Jr. Co., 6.5000%, 9/30/14 (cost $592,045)‡ | $ | 597,097 | ||||||||
Corporate Bonds – 66.1% | ||||||||||||
Aerospace and Defense – 0.3% | ||||||||||||
1,477,000 | Northrop Grumman Systems Corp. 7.1250%, 2/15/11 | 1,572,185 | ||||||||||
Aerospace and Defense – Equipment – 0.1% | ||||||||||||
552,000 | United Technologies Corp., 6.5000% 6/1/09 | 553,620 | ||||||||||
Agricultural Chemicals – 0.2% | ||||||||||||
995,000 | Potash Corporation of Saskatchewan, Inc. 5.2500%, 5/15/14 | 1,019,640 | ||||||||||
Apparel Manufacturers – 0.0% | ||||||||||||
320,000 | Hanesbrands Inc., 5.6975%, 12/15/14‡,ß | 244,800 | ||||||||||
Appliances – 0.5% | ||||||||||||
2,655,000 | Whirlpool Corp, 8.0000%, 5/1/12 | 2,701,170 | ||||||||||
Automotive – Cars and Light Trucks – 0.7% | ||||||||||||
3,716,000 | Daimler Finance North America LLC 7.2000%, 9/1/09 | 3,735,594 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.2% | ||||||||||||
385,000 | PACCAR, Inc., 6.3750%, 2/15/12 | 397,285 | ||||||||||
386,000 | PACCAR, Inc., 6.8750%, 2/15/14 | 404,034 | ||||||||||
801,319 | ||||||||||||
Beverages – Non-Alcoholic – 0.8% | ||||||||||||
552,000 | Coca-Cola Co., 5.7500%, 3/15/11 | 589,916 | ||||||||||
2,195,000 | Dr. Pepper Snapple Group, Inc., 6.1200% 5/1/13 | 2,193,445 | ||||||||||
350,000 | PepsiAmericas, Inc., 4.3750%, 2/15/14 | 348,355 | ||||||||||
767,000 | PepsiCo, Inc., 3.7500%, 3/1/14 | 782,589 | ||||||||||
3,914,305 | ||||||||||||
Beverages – Wine and Spirits – 0.3% | ||||||||||||
1,382,000 | Diageo Capital PLC, 4.3750%, 5/3/10 | 1,395,838 | ||||||||||
Brewery – 2.2% | ||||||||||||
7,378,000 | Anheuser-Busch InBev Worldwide, Inc. 7.2000%, 1/15/14 (144A) | 7,691,808 | ||||||||||
3,778,000 | SABMiller PLC, 6.2000%, 7/1/11 (144A) | 3,803,226 | ||||||||||
11,495,034 | ||||||||||||
Building Products – Air and Heating – 0.3% | ||||||||||||
1,382,000 | American Standard, Inc. 7.6250%, 2/15/10 | 1,406,551 | ||||||||||
Building Products – Cement and Aggregate – 0.3% | ||||||||||||
1,740,000 | CRH America, Inc., 5.6250%, 9/30/11 | 1,567,575 | ||||||||||
Cable Television – 3.6% | ||||||||||||
646,000 | Comcast Corp., 1.4600%, 7/14/09 | 645,486 | ||||||||||
736,000 | Comcast Corp., 5.8500%, 1/15/10 | 749,123 | ||||||||||
3,280,000 | Comcast Corp., 5.4500%, 11/15/10 | 3,375,547 | ||||||||||
1,108,000 | COX Communications, Inc. 7.8750%, 8/15/09 | 1,121,185 | ||||||||||
1,382,000 | COX Communications, Inc. 4.6250%, 1/15/10 | 1,381,706 | ||||||||||
718,000 | COX Communications, Inc. 6.7500%, 3/15/11 | 732,699 | ||||||||||
1,385,000 | COX Communications, Inc. 7.1250%, 10/1/12 | 1,400,006 | ||||||||||
$ | 1,300,000 | CSC Holdings, Inc., 7.6250%, 4/1/11 | 1,300,000 | |||||||||
1,390,000 | Mediacom LLC/Mediacom Capital Corp. 7.8750%, 2/15/11 | 1,376,100 | ||||||||||
3,226,000 | Time Warner Cable, Inc., 5.4000%, 7/2/12 | 3,273,290 | ||||||||||
1,105,000 | Time Warner Cable, Inc., 6.2000%, 7/1/13 | 1,154,493 | ||||||||||
1,382,000 | Time Warner Cable, Inc. 8.2500%, 2/14/14 | 1,515,787 | ||||||||||
18,025,422 | ||||||||||||
Cellular Telecommunications – 1.8% | ||||||||||||
1,382,000 | Rogers Communications, Inc. 9.6250%, 5/1/11 | 1,448,386 | ||||||||||
3,054,000 | Rogers Communications, Inc. 7.8750%, 5/1/12 | 3,216,112 | ||||||||||
1,050,000 | Verizon Wireless Capital LLC 5.2500%, 2/1/12 (144A) | 1,087,415 | ||||||||||
1,705,000 | Verizon Wireless Capital LLC 7.3750%, 11/15/13 (144A) | 1,897,041 | ||||||||||
1,750,000 | Verizon Wireless Capital LLC 5.5500%, 2/1/14 (144A) | 1,835,799 | ||||||||||
9,484,753 | ||||||||||||
Commercial Banks – 2.2% | ||||||||||||
2,120,000 | American Express Bank FSB 5.5500%, 10/17/12 | 2,024,513 | ||||||||||
3,695,000 | BB&T Corp., 6.5000%, 8/1/11 | 3,760,006 | ||||||||||
3,960,000 | Credit Suisse/New York NY 5.5000%, 5/1/14 | 3,970,161 | ||||||||||
1,650,000 | U.S. Bank N.A., 6.3750%, 8/1/11 | 1,726,590 | ||||||||||
11,481,270 | ||||||||||||
Commercial Services – Finance – 0.4% | ||||||||||||
1,844,000 | Western Union Co., 6.5000%, 2/26/14 | 1,945,455 | ||||||||||
Computers – 0.6% | ||||||||||||
1,844,000 | Hewlett-Packard Co., 4.2500%, 2/24/12 | 1,912,887 | ||||||||||
920,000 | Hewlett-Packard Co., 4.7500%, 6/2/14 | 961,546 | ||||||||||
2,874,433 | ||||||||||||
Containers – Metal and Glass – 0.8% | ||||||||||||
2,030,000 | Ball Corp., 6.8750%, 12/15/12 | 2,030,000 | ||||||||||
1,980,000 | Owens-Illinois, Inc., 7.5000%, 5/15/10 | 2,039,400 | ||||||||||
4,069,400 | ||||||||||||
Cosmetics and Toiletries – 0.2% | ||||||||||||
1,063,000 | Procter & Gamble Co., 4.6000%, 1/15/14 | 1,125,702 | ||||||||||
Cruise Lines – 0.5% | ||||||||||||
2,550,000 | Royal Caribbean Cruises, Ltd. 8.0000%, 5/15/10 | 2,499,000 | ||||||||||
Data Processing and Management – 0.3% | ||||||||||||
1,566,000 | Fiserv, Inc., 6.1250%, 11/20/12 | 1,552,095 | ||||||||||
Diversified Financial Services – 0.9% | ||||||||||||
3,890,000 | American Express Travel Related Services Co., Inc. 5.2500%, 11/21/11 (144A) | 3,603,863 | ||||||||||
1,198,000 | General Electric Capital Corp. 4.2500%, 9/13/10 | 1,208,698 | ||||||||||
4,812,561 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
28 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Diversified Minerals – 0.8% | ||||||||||||
$ | 2,305,000 | BHP Billiton Finance U.S.A., Ltd. 5.5000%, 4/1/14 | $ | 2,426,861 | ||||||||
1,455,000 | Rio Tinto Finance USA, Ltd. 8.9500%, 5/1/14 | 1,506,053 | ||||||||||
3,932,914 | ||||||||||||
Diversified Operations – 1.8% | ||||||||||||
1,382,000 | Dover Corp., 6.5000%, 2/15/11 | 1,449,929 | ||||||||||
1,005,000 | Eaton Corp., 4.9000%, 5/15/13 | 994,512 | ||||||||||
1,535,000 | Illinois Tool Works, Inc. 5.1500%, 4/1/14 (144A) | 1,522,456 | ||||||||||
2,785,000 | ITT Corp., 4.9000%, 5/1/14 | 2,823,023 | ||||||||||
2,775,000 | Tyco Electronics Group S.A. 6.0000%, 10/1/12 | 2,529,746 | ||||||||||
9,319,666 | ||||||||||||
Electric – Integrated – 1.8% | ||||||||||||
1,104,000 | CMS Energy Corp., 7.7500%, 8/1/10 | 1,105,879 | ||||||||||
1,521,000 | Duke Energy Corp., 6.3000%, 2/1/14 | 1,603,960 | ||||||||||
920,000 | Georgia Power Co., 6.0000%, 11/1/13 | 999,206 | ||||||||||
1,382,000 | Monongahela Power Co. 7.9500%, 12/15/13 (144A) | 1,461,102 | ||||||||||
920,000 | Nevada Power Co., 8.2500%, 6/1/11 | 979,511 | ||||||||||
718,000 | Oncor Electric Delivery Co. 5.9500%, 9/1/13 (144A) | 722,243 | ||||||||||
1,293,000 | Virginia Electric and Power Co. 4.5000%, 12/15/10 | 1,322,733 | ||||||||||
924,000 | Wisconsin Energy Corp. 6.5000%, 4/1/11 | 966,367 | ||||||||||
9,161,001 | ||||||||||||
Electronic Components – Semiconductors – 0.3% | ||||||||||||
855,000 | National Semiconductor Corp. 1.5700%, 6/15/10‡ | 756,513 | ||||||||||
905,000 | National Semiconductor Corp. 6.1500%, 6/15/12 | 815,089 | ||||||||||
1,571,602 | ||||||||||||
Enterprise Software/Services – 0.5% | ||||||||||||
2,307,000 | CA, Inc., 4.7500%, 12/1/09 | 2,309,884 | ||||||||||
Fiduciary Banks – 0.3% | ||||||||||||
1,365,000 | Northern Trust Corp., 4.6250%, 5/1/14 | 1,380,996 | ||||||||||
Finance – Credit Card – 0.1% | ||||||||||||
552,000 | American Express Credit Corp., 5.8750% 5/2/13 | 543,813 | ||||||||||
Finance – Investment Bankers/Brokers – 4.9% | ||||||||||||
2,490,000 | Citigroup, Inc., 5.1250%, 2/14/11 | 2,333,048 | ||||||||||
3,827,000 | Credit Suisse USA, Inc. 6.1250%, 11/15/11 | 4,010,298 | ||||||||||
1,198,000 | Goldman Sachs Group, Inc. 4.5000%, 6/15/10 | 1,208,792 | ||||||||||
2,859,000 | Goldman Sachs Group, Inc. 6.8750%, 1/15/11 | 2,995,028 | ||||||||||
2,749,000 | Goldman Sachs Group, Inc. 3.2500%, 6/15/12 | 2,865,178 | ||||||||||
1,965,000 | Goldman Sachs Group, Inc. 6.0000%, 5/1/14 | 1,957,439 | ||||||||||
830,000 | JPMorgan Chase & Co., 6.7500%, 2/1/11 | 860,769 | ||||||||||
2,581,000 | JPMorgan Chase & Co., 5.6000%, 6/1/11 | 2,669,030 | ||||||||||
2,500,000 | JPMorgan Chase & Co., 3.1250%, 12/1/11 | 2,577,353 | ||||||||||
1,566,000 | Morgan Stanley, 6.7500%, 4/15/11 | 1,600,732 | ||||||||||
$ | 1,413,000 | Morgan Stanley, 2.0000%, 9/22/11 | 1,418,111 | |||||||||
24,495,778 | ||||||||||||
Finance – Other Services – 1.6% | ||||||||||||
5,533,000 | BP Capital Markets PLC, 3.1250%, 3/10/12 | 5,615,497 | ||||||||||
2,584,000 | CME Group, Inc., 5.7500%, 2/15/14 | 2,718,551 | ||||||||||
8,334,048 | ||||||||||||
Food – Confectionery – 0.7% | ||||||||||||
3,689,000 | WM Wrigley Jr. Co., 4.3000%, 7/15/10 | 3,633,665 | ||||||||||
Food – Miscellaneous/Diversified – 1.3% | ||||||||||||
1,108,000 | Dean Foods Co., 6.6250%, 5/15/09 | 1,106,436 | ||||||||||
1,477,000 | Del Monte Corp., 8.6250%, 12/15/12 | 1,506,540 | ||||||||||
626,000 | General Mills, Inc., 5.2500%, 8/15/13 | 654,194 | ||||||||||
1,845,000 | H.J. Heinz Finance Co., 6.6250%, 7/15/11 | 1,968,807 | ||||||||||
736,000 | Kraft Foods, Inc., 1.7281%, 8/11/10‡ | 717,429 | ||||||||||
498,000 | Kraft Foods, Inc., 6.7500%, 2/19/14 | 542,614 | ||||||||||
6,496,020 | ||||||||||||
Food – Retail – 1.8% | ||||||||||||
1,910,000 | Ahold Finance USA, Inc. 8.2500%, 7/15/10 | 1,933,279 | ||||||||||
2,107,000 | American Stores Co., 7.5000%, 5/1/37 | 2,107,000 | ||||||||||
345,000 | Delhaize Group, 5.8750%, 2/1/14 | 349,726 | ||||||||||
552,000 | Kroger Co., 7.2500%, 6/1/09 | 553,604 | ||||||||||
1,132,000 | Kroger Co., 6.8000%, 4/1/11 | 1,195,668 | ||||||||||
126,000 | Kroger Co., 7.5000%, 1/15/14 | 140,359 | ||||||||||
1,584,000 | Safeway, Inc., 4.9500%, 8/16/10 | 1,622,860 | ||||||||||
1,270,000 | Safeway, Inc., 6.2500%, 3/15/14 | 1,349,687 | ||||||||||
9,252,183 | ||||||||||||
Home Decoration Products – 0.4% | ||||||||||||
2,275,000 | Newell Rubbermaid, Inc., 4.0000%, 5/1/10 | 2,199,654 | ||||||||||
Hotels and Motels – 0.5% | ||||||||||||
2,780,000 | Marriott International, Inc. 4.6250%, 6/15/12 | 2,587,607 | ||||||||||
Medical – Biomedical and Genetic – 0.3% | ||||||||||||
1,382,000 | Genetech, Inc., 4.4000%, 7/15/10 | 1,419,929 | ||||||||||
Medical – Drugs – 2.2% | ||||||||||||
5,533,000 | Eli Lilly & Co., 3.5500%, 3/6/12 | 5,681,943 | ||||||||||
1,338,000 | Novartis Capital Corp., 4.1250%, 2/10/14 | 1,386,775 | ||||||||||
920,000 | Pfizer, Inc. 0%, 3/15/11 | 943,842 | ||||||||||
3,130,000 | Pfizer, Inc., 4.4500%, 3/15/12 | 3,288,619 | ||||||||||
11,301,179 | ||||||||||||
Medical – HMO – 0.9% | ||||||||||||
1,988,000 | UnitedHealth Group, Inc. 5.1250%, 11/15/10 | 1,998,240 | ||||||||||
2,764,000 | UnitedHealth Group, Inc. 5.2500%, 3/15/11 | 2,807,787 | ||||||||||
4,806,027 | ||||||||||||
Medical – Hospitals – 1.1% | ||||||||||||
5,473,000 | HCA, Inc., 8.7500%, 9/1/10 | 5,459,318 | ||||||||||
Medical – Wholesale Drug Distributors – 0.2% | ||||||||||||
870,000 | McKesson Corp., 6.5000%, 2/15/14 | 917,587 | ||||||||||
Medical Instruments – 0.8% | ||||||||||||
4,165,000 | Boston Scientific Corp., 6.0000%, 6/15/11 | 4,144,175 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 29
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Medical Labs and Testing Services – 2.1% | ||||||||||||
$ | 3,689,000 | Quest Diagnostics, Inc., 5.1250%, 11/1/10 | $ | 3,707,969 | ||||||||
3,069,000 | Roche Holdings, Inc. 4.5000%, 3/1/12 (144A) | 3,217,911 | ||||||||||
3,689,000 | Roche Holdings, Inc. 5.0000%, 3/1/14 (144A) | 3,867,230 | ||||||||||
10,793,110 | ||||||||||||
Medical Products – 2.1% | ||||||||||||
206,000 | Baxter International, Inc., 4.0000%, 3/1/14 | 213,395 | ||||||||||
1,382,000 | Covidien International Finance S.A. 5.4500%, 10/15/12 | 1,434,537 | ||||||||||
2,212,000 | Hospira, Inc., 4.9500%, 6/15/09 | 2,214,674 | ||||||||||
278,000 | Hospira, Inc., 1.7119%, 3/30/10‡ | 260,952 | ||||||||||
6,879,000 | Hospira, Inc., 5.5500%, 3/30/12 | 6,800,249 | ||||||||||
10,923,807 | ||||||||||||
Metal – Aluminum – 0.2% | ||||||||||||
1,105,000 | Rio Tinto Alcan, Inc., 6.4500%, 3/15/11 | 1,075,384 | ||||||||||
Multimedia – 0.7% | ||||||||||||
1,845,000 | News America Holdings, Inc. 9.2500%, 2/1/13 | 1,973,150 | ||||||||||
1,382,000 | COX Enterprises, Inc. 7.8750%, 9/15/10 (144A) | 1,406,343 | ||||||||||
3,379,493 | ||||||||||||
Non-Hazardous Waste Disposal – 0.7% | ||||||||||||
1,844,000 | Allied Waste North America, Inc. 6.5000%, 11/15/10 | 1,880,880 | ||||||||||
1,844,000 | Waste Management, Inc., 7.3750%, 8/1/10 | 1,884,076 | ||||||||||
3,764,956 | ||||||||||||
Office Automation and Equipment – 0.4% | ||||||||||||
2,359,000 | Xerox Corp., 2.0588%, 12/18/09‡ | 2,302,426 | ||||||||||
Oil Companies – Exploration and Production – 0.8% | ||||||||||||
2,090,000 | Anadarko Finance Co., 6.7500%, 5/1/11 | 2,153,600 | ||||||||||
1,845,000 | Forest Oil Corp., 8.0000%, 12/15/11 | 1,812,713 | ||||||||||
3,966,313 | ||||||||||||
Oil Companies – Integrated – 0.8% | ||||||||||||
1,844,000 | Chevron Corp., 3.4500%, 3/3/12 | 1,896,914 | ||||||||||
2,307,000 | ConocoPhillips, 4.7500%, 2/1/14 | 2,432,842 | ||||||||||
4,329,756 | ||||||||||||
Oil Refining and Marketing – 1.1% | ||||||||||||
3,955,000 | Frontier Oil Corp., 6.6250%, 10/1/11 | 3,895,675 | ||||||||||
1,853,000 | Valero Energy Corp., 6.8750%, 4/15/12 | 1,895,589 | ||||||||||
5,791,264 | ||||||||||||
Paper and Related Products – 0.5% | ||||||||||||
2,500,000 | Georgia-Pacific LLC, 8.1250%, 5/15/11 | 2,506,250 | ||||||||||
Pipelines – 4.1% | ||||||||||||
2,307,000 | Consolidated Natural Gas Co. 6.2500%, 11/1/11 | 2,432,997 | ||||||||||
1,382,000 | El Paso Corp., 7.0000%, 5/15/11 | 1,353,412 | ||||||||||
1,566,000 | Enterprise Products Operating LLC 4.6250%, 10/15/09 | 1,565,017 | ||||||||||
2,985,000 | Enterprise Products Operating LLC 7.5000%, 2/1/11 | 3,067,971 | ||||||||||
1,104,000 | Kinder Morgan Energy Partners L.P. 6.7500%, 3/15/11 | 1,133,073 | ||||||||||
1,382,000 | Kinder Morgan Energy Partners L.P. 7.5000%, 11/1/10 | 1,436,955 | ||||||||||
$ | 3,644,000 | Kinder Morgan Finance Co. ULC 5.3500%, 1/5/11 | 3,543,790 | |||||||||
1,113,000 | Oneok, Inc., 7.1250%, 4/15/11 | 1,138,159 | ||||||||||
5,000,000 | Williams Cos., Inc., 7.1250%, 9/1/11 | 5,050,001 | ||||||||||
20,721,375 | ||||||||||||
Private Corrections – 0.7% | ||||||||||||
3,420,000 | Corrections Corporation of America 7.5000%, 5/1/11 | 3,420,000 | ||||||||||
Property and Casualty Insurance – 0.3% | ||||||||||||
1,655,000 | Chubb Corp., 5.2000%, 4/1/13 | 1,653,294 | ||||||||||
Reinsurance – 1.7% | ||||||||||||
4,610,000 | Berkshire Hathaway Finance Corp. 4.0000%, 4/15/12 (144A) | 4,685,286 | ||||||||||
3,045,000 | Berkshire Hathaway Finance Corp. 4.6000%, 5/15/13 | 3,109,292 | ||||||||||
1,081,000 | Berkshire Hathaway Finance Corp. 5.0000%, 8/15/13 | 1,119,745 | ||||||||||
8,914,323 | ||||||||||||
REIT – Health Care – 0.3% | ||||||||||||
1,382,000 | Ventas Realty L.P./Ventas Capital Corp. 6.7500%, 6/1/10 | 1,421,733 | ||||||||||
REIT – Regional Malls – 0.5% | ||||||||||||
1,153,000 | Simon Property Group L.P. 4.6000%, 6/15/10 | 1,124,639 | ||||||||||
1,350,000 | Simon Property Group L.P. 4.8750%, 8/15/10 | 1,316,630 | ||||||||||
2,441,269 | ||||||||||||
Retail – Building Products – 0.3% | ||||||||||||
1,750,000 | Hewlett-Packard Co., 4.6250%, 8/15/10 | 1,776,479 | ||||||||||
Retail – Drug Store – 0.5% | ||||||||||||
552,000 | CVS Caremark Corp., 4.0000%, 9/15/09 | 553,329 | ||||||||||
2,307,000 | CVS Caremark Corp., 1.5613%, 6/1/10‡ | 2,263,541 | ||||||||||
2,816,870 | ||||||||||||
Retail – Hypermarkets – 0.2% | ||||||||||||
1,109,000 | New Albertsons, Inc., 6.9500%, 8/1/09 | 1,115,931 | ||||||||||
Retail – Office Supplies – 0.5% | ||||||||||||
2,305,000 | Staples, Inc., 7.7500%, 4/1/11 | 2,413,835 | ||||||||||
Retail – Regional Department Stores – 0.7% | ||||||||||||
1,845,000 | JC Penney Co., Inc., 8.0000%, 3/1/10 | 1,855,249 | ||||||||||
1,855,000 | JC Penney Co., Inc., 9.0000%, 8/1/12 | 1,860,621 | ||||||||||
3,715,870 | ||||||||||||
Retail – Restaurants – 0.9% | ||||||||||||
1,925,000 | Darden Restaurants, Inc. 4.8750%, 8/15/10 | 1,929,918 | ||||||||||
3,072,000 | Darden Restaurants, Inc. 5.6250%, 10/15/12 | 2,932,372 | ||||||||||
4,862,290 | ||||||||||||
Rubber – Tires – 0.2% | ||||||||||||
920,000 | Goodyear Tire & Rubber Co. 6.6775%, 12/1/09‡ | 907,350 | ||||||||||
Schools – 0.6% | ||||||||||||
2,305,000 | Cornell University, 4.3500%, 2/1/14 | 2,325,515 | ||||||||||
623,000 | Duke University, 4.2000%, 4/1/14 | 635,715 | ||||||||||
2,961,230 | ||||||||||||
See Notes to Schedules of Investments and Financial Statements.
30 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Steel – Producers – 0.2% | ||||||||||||
$ | 920,000 | Steel Dynamics, Inc., 7.3750%, 11/1/12 | $ | 821,100 | ||||||||
Super-Regional Banks – 2.3% | ||||||||||||
1,010,000 | Bank of America Corp., 4.2500%, 10/1/10 | 981,118 | ||||||||||
920,000 | Bank of America Corp., 4.3750%, 12/1/10 | 893,797 | ||||||||||
2,749,000 | Bank of America Corp. 1.7000%, 12/23/10 | 2,774,803 | ||||||||||
920,000 | PNC Funding Corp., 7.5000%, 11/1/09 | 938,512 | ||||||||||
1,059,000 | PNC Funding Corp., 2.3000%, 6/22/12 | 1,062,467 | ||||||||||
1,566,000 | Wells Fargo & Co., 4.6250%, 8/9/10 | 1,578,744 | ||||||||||
552,000 | Wells Fargo & Co., 6.4500%, 2/1/11 | 562,784 | ||||||||||
368,000 | Wells Fargo & Co., 5.3000%, 8/26/11 | 372,898 | ||||||||||
2,749,000 | Wells Fargo & Co., 3.0000%, 12/9/11 | 2,832,518 | ||||||||||
11,997,641 | ||||||||||||
Telecommunication Services – 0.3% | ||||||||||||
1,293,000 | Verizon Communications, Inc. 7.2500%, 12/1/10 | 1,375,195 | ||||||||||
Telephone – Integrated – 1.0% | ||||||||||||
920,000 | AT&T, Inc., 5.3000%, 11/15/10 | 955,207 | ||||||||||
1,382,000 | AT&T, Inc., 5.8750%, 8/15/12 | 1,467,707 | ||||||||||
1,014,000 | AT&T, Inc., 4.9500%, 1/15/13 | 1,050,565 | ||||||||||
1,844,000 | AT&T, Inc., 4.8500%, 2/15/14 | 1,912,176 | ||||||||||
5,385,655 | ||||||||||||
Tobacco – 0.3% | ||||||||||||
1,476,000 | Philip Morris International, Inc., 4.8750% 5/16/13 | 1,526,950 | ||||||||||
Transportation – Railroad – 0.9% | ||||||||||||
2,154,000 | Canadian Pacific Railway Co., 6.2500% 10/15/11 | 2,143,099 | ||||||||||
2,581,000 | Union Pacific Corp., 5.4500%, 1/31/13 | 2,584,998 | ||||||||||
4,728,097 | ||||||||||||
Transportation – Services – 0.7% | ||||||||||||
920,000 | Fedex Corp., 7.3750%, 1/15/14 | 1,000,711 | ||||||||||
2,310,000 | United Parcel Service, Inc., 3.8750% 4/1/14 | 2,381,254 | ||||||||||
3,381,965 | ||||||||||||
Total Corporate Bonds (cost $332,767,979) | 338,735,979 | |||||||||||
Mortgage Backed Securities – 15.6% | ||||||||||||
Fannie Mae: | ||||||||||||
2,611,000 | 5.1250%, 7/13/09 | 2,636,744 | ||||||||||
8,390,000 | 3.0000%, 7/12/10 | 8,593,214 | ||||||||||
1,135,000 | 2.8750%, 10/12/10 | 1,167,149 | ||||||||||
8,206,000 | 2.7500%, 4/11/11 | 8,441,742 | ||||||||||
5,858,000 | 6.0000%, 5/15/11 | 6,423,707 | ||||||||||
5,925,000 | 3.3750%, 5/19/11 | 6,180,569 | ||||||||||
1,180,000 | 3.6250%, 8/15/11 | 1,238,172 | ||||||||||
34,681,297 | ||||||||||||
Federal Home Loan Bank System: | ||||||||||||
5,390,000 | 2.3750%, 4/30/10 | 5,467,174 | ||||||||||
6,175,000 | 2.7500%, 6/18/10 | 6,297,382 | ||||||||||
1,340,000 | 3.5000%, 7/16/10 | 1,371,723 | ||||||||||
22,000,000 | 2.1250%, 3/23/12 | 22,228,580 | ||||||||||
35,364,859 | ||||||||||||
Freddie Mac: | ||||||||||||
3,925,000 | 2.8750%, 6/28/10 | 4,011,770 | ||||||||||
1,135,000 | 2.8750%, 11/23/10 | 1,165,441 | ||||||||||
3,429,000 | 5.1250%, 4/18/11 | 3,677,894 | ||||||||||
$ | 1,180,000 | 3.8750%, 6/29/11 | 1,242,335 | |||||||||
10,097,440 | ||||||||||||
Total Mortgage Backed Securities (cost $78,425,472) | 80,143,596 | |||||||||||
U.S. Treasury Notes/Bonds – 14.6% | ||||||||||||
1,667,000 | 2.1250%, 1/31/10 | 1,688,228 | ||||||||||
4,982,000 | 4.7500%, 2/15/10 | 5,150,920 | ||||||||||
2,493,000 | 2.0000%, 2/28/10 | 2,524,843 | ||||||||||
1,805,000 | 2.1250%, 4/30/10 | 1,834,472 | ||||||||||
1,734,000 | 4.5000%, 5/15/10 | 1,805,325 | ||||||||||
6,355,000 | 2.6250%, 5/31/10 | 6,497,244 | ||||||||||
1,255,000 | 2.8750%, 6/30/10 | 1,288,777 | ||||||||||
1,350,000 | 2.7500%, 7/31/10 | 1,386,334 | ||||||||||
4,114,000 | 2.3750%, 8/31/10 | 4,208,976 | ||||||||||
1,237,000 | 4.5000%, 11/15/10 | 1,308,272 | ||||||||||
1,475,000 | 1.2500%, 11/30/10 | 1,486,122 | ||||||||||
560,000 | 4.5000%, 2/28/11 | 596,728 | ||||||||||
26,595,000 | 0.8750%, 3/31/11 | 26,594,999 | ||||||||||
5,059,000 | 4.8750%, 4/30/11 | 5,454,234 | ||||||||||
1,386,000 | 4.6250%, 8/31/11 | 1,498,180 | ||||||||||
2,830,000 | 1.7500%, 11/15/11 | 2,869,365 | ||||||||||
4,185,000 | 1.1250%, 1/15/12 | 4,169,306 | ||||||||||
2,989,000 | 1.7500%, 1/31/14 | 2,960,993 | ||||||||||
918,000 | 1.8750%, 2/28/14 | 913,337 | ||||||||||
410,000 | 1.7500%, 3/31/14 | 405,388 | ||||||||||
Total U.S. Treasury Notes/Bonds (cost $73,746,567) | 74,642,043 | |||||||||||
Short-Term Taxable Variable Rate Demand Note – 0.2% | ||||||||||||
1,142,425 | California Infrastructure and Economic Development Bank Industrial Revenue Series B, 4.5000%, 4/1/24 (amortized cost $1,142,425)‡ | 1,142,425 | ||||||||||
Money Market – 3.0% | ||||||||||||
15,591,129 | Janus Cash Liquidity Fund LLC, 0% (cost $15,591,129) | 15,591,129 | ||||||||||
Total Investments (total cost $502,265,617) – 99.6% | 510,852,269 | |||||||||||
Cash, Receivables and Other Assets net of Liabilities, – 0.4% | 2,241,104 | |||||||||||
Net Assets – 100% | $ | 513,093,373 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 3,932,914 | 0.8% | |||||
Belgium | 349,726 | 0.1% | ||||||
Canada | 14,600,012 | 2.8% | ||||||
Liberia | 2,499,000 | 0.5% | ||||||
Luxembourg | 3,964,282 | 0.8% | ||||||
Switzerland | 3,970,161 | 0.8% | ||||||
United Kingdom | 10,814,561 | 2.1% | ||||||
United States†† | 470,721,613 | 92.1% | ||||||
Total | $ | 510,852,269 | 100.0% |
†† | Includes Short-Term Securities (89.1% excluding Short-Term Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 31
Janus Money Market Funds (unaudited)
Ticker: JAMXX
Janus Money Market Fund | ||
Average Annual Total Return | Portfolio Manager | |
For the Periods Ended April 30, 2009 | Eric Thorderson | |
Investor Shares | ||
Fiscal Year-to-Date | 0.17% | |
1 Year | 1.15% | |
5 Year | 3.01% | |
10 Year | 3.03% | |
Since Inception (February 14, 1995) | 3.67% | |
Seven-Day Current Yield | ||
Investor Shares | ||
With Reimbursement | 0.01% | |
Without Reimbursement | -0.09% | |
Expense Ratio | ||
For the Fiscal Year ended October 31, 2008 | ||
Investor Shares | ||
Total Annual Fund Operating Expenses | 0.71% | |
Ticker: JAGXX
Janus Government Money Market Fund | ||
Average Annual Total Return | Portfolio Manager | |
For the Periods Ended April 30, 2009 | Eric Thorderson | |
Investor Shares | ||
Fiscal Year-to-Date | 0.07% | |
1 Year | 0.93% | |
5 Year | 2.87% | |
10 Year | 2.93% | |
Since Inception (February 14, 1995) | 3.56% | |
Seven-Day Current Yield | ||
Investor Shares | ||
With Reimbursement | 0.01% | |
Without Reimbursement | -0.09% | |
Expense Ratio | ||
For the Fiscal Year ended October 31, 2008 | ||
Investor Shares | ||
Total Annual Fund Operating Expenses | 0.72% | |
Data presented represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Janus Capital Management LLC has agreed to waive one-half of its advisory fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. Total returns shown include fee waivers, if any, and without such waivers, the Fund’s yields and total returns would have been lower.
Included in the Total Annual Fund Operating Expenses is an administrative services fee of 0.50% of the average daily net assets of the Fund to compensate Janus Capital for providing certain administrative services including, but not limited to, recordkeeping and registration functions.
The Fund’s expense ratio shown was determined based on average assets as of the fiscal year ended October 31, 2008. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Returns include reinvestment of dividends from net investment income and distributions from capital gains.
The yield more closely reflects the current earnings of the Fund than the total return.
See Notes to Schedules of Investments and Financial Statements.
See “Explanations of Charts, Tables and Financial Statements.”
Effective May 1, 2009, Eric Thorderson is the sole portfolio manager for Janus Money Market Fund and Janus Government Money Market Fund.
32 Janus Bond & Money Market Funds April 30, 2009
Janus Money Market Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,001.70 | $ | 3.18 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.62 | $ | 3.21 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.64%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Government Money Market Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,000.70 | $ | 3.08 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.72 | $ | 3.11 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.62%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Janus Bond & Money Market Funds April 30, 2009 33
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Certificates of Deposit – 19.2% | ||||||||||||
Banco Bilbao Vizcaya Argentaria: | ||||||||||||
$ | 50,000,000 | 0.6550%, 5/6/09 | $ | 50,000,034 | ||||||||
40,000,000 | 0.5000%, 6/22/09 | 40,000,000 | ||||||||||
Bank of Montreal: | ||||||||||||
25,000,000 | 0.3000%, 5/7/09 | 25,000,000 | ||||||||||
25,000,000 | 0.3000%, 5/27/09 | 25,000,000 | ||||||||||
20,000,000 | 0.4000%, 6/8/09 | 20,000,000 | ||||||||||
BNP Paribas, New York: | ||||||||||||
25,000,000 | 0.9100%, 5/5/09 | 25,001,373 | ||||||||||
25,000,000 | 0.4900%, 6/29/09 | 25,000,000 | ||||||||||
Societe Generale, New York: | ||||||||||||
25,000,000 | 0.3800%, 5/6/09 | 25,000,000 | ||||||||||
25,000,000 | 0.3300%, 5/15/09 | 25,000,000 | ||||||||||
25,000,000 | Standard Chartered PLC 0.5500%, 5/4/09 | 25,000,000 | ||||||||||
Toronto Dominion Bank, New York: | ||||||||||||
45,000,000 | 0.5000%, 5/4/09 | 45,000,000 | ||||||||||
25,000,000 | 0.4500%, 7/21/09 | 25,000,000 | ||||||||||
Total Certificates of Deposit (amortized cost $355,001,407) | 355,001,407 | |||||||||||
Commercial Paper – 29.6% | ||||||||||||
90,000,000 | Atlantic Asset Securitization LLC 0.3000%, 5/7/09 (Section 4(2)) | 89,995,500 | ||||||||||
Bryant Park Funding LLC: | ||||||||||||
45,820,000 | 0.3500%, 5/15/09 (Section 4(2)) | 45,813,763 | ||||||||||
40,000,000 | 0.3400%, 5/21/09 (Section 4(2)) | 39,992,444 | ||||||||||
50,000,000 | Danske Bank A/S 0.4059%, 5/6/09 (Section 4(2)) | 49,997,181 | ||||||||||
Manhattan Asset Funding Company LLC: | ||||||||||||
34,000,000 | 0.5000%, 5/20/09 (Section 4(2)) | 33,991,027 | ||||||||||
50,973,000 | 0.4000%, 5/26/09 (Section 4(2)) | 50,958,840 | ||||||||||
5,000,000 | 0.4000%, 5/27/09 (Section 4(2)) | 4,998,556 | ||||||||||
Nieuw Amsterdam Receivables Corp.: | ||||||||||||
30,000,000 | 0.5500%, 5/8/09 (Section 4(2)) | 29,996,791 | ||||||||||
30,000,000 | 0.5500%, 5/13/09 (Section 4(2)) | 29,994,499 | ||||||||||
25,000,000 | Societe Generale, New York 0.2940%, 5/4/09 | 24,999,387 | ||||||||||
Standard Chartered PLC: | ||||||||||||
25,000,000 | 0.4400%, 5/20/09 | 24,994,194 | ||||||||||
25,000,000 | 0.4300%, 5/22/09 | 24,993,729 | ||||||||||
15,000,000 | 0.4200%, 5/28/09 | 14,995,275 | ||||||||||
Victory Receivables Corp.: | ||||||||||||
30,000,000 | 0.7200%, 5/4/09 (Section 4(2)) | 29,998,198 | ||||||||||
50,000,000 | 0.3800%, 5/18/09 (Section 4(2)) | 49,991,027 | ||||||||||
Total Commercial Paper (amortized cost $545,710,411) | 545,710,411 | |||||||||||
Floating Rate Note – 2.7% | ||||||||||||
50,000,000 | Bank of America Securities LLC (same day put), 0.4000%, 5/1/09 (amortized cost $50,000,000) | 50,000,000 | ||||||||||
Repurchase Agreements – 22.8% | ||||||||||||
$ | 100,000,000 | BNP Paribas Securities Corp., 0.2000% dated 4/30/09, maturing 5/1/09 to be repurchased at $100,000,556 collateralized by $1,139,198,702 in U.S. Government Agencies 0% – 26.5124%, 3/15/17 – 8/25/38 with a value of $102,000,000 | 100,000,000 | |||||||||
100,000,000 | Calyon, NY Branch, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $100,000,694 collateralized by $102,020,718 in U.S. Government Agencies 0%, 6/30/09 with a value of $102,000,314 | 100,000,000 | ||||||||||
100,000,000 | HSBC Securities (USA), Inc., 0.1800% dated 4/30/09, maturing 5/1/09 to be repurchased at $100,000,500 collateralized by $136,200,420 in U.S. Government Agencies 0% – 6.0000%, 1/1/19 – 1/1/39 with a value of $102,002,924 | 100,000,000 | ||||||||||
33,600,000 | ING Financial Markets LLC, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $33,600,233 collateralized by $76,341,218 in U.S. Government Agencies 0% – 20.2940%, 5/13/09 – 2/25/47 with a value of $33,600,000 | 33,600,000 | ||||||||||
87,000,000 | RBC Capital Markets Corp., 0.3000% dated 4/30/09, maturing 5/1/09 to be repurchased at $87,000,725 collateralized by $89,204,725 in Commercial Paper 0%, 5/5/09 – 9/4/09 with a value of $89,109,336 | 87,000,000 | ||||||||||
Total Repurchase Agreements (amortized cost $420,600,000) | 420,600,000 | |||||||||||
Taxable Variable Rate Demand Notes – 13.7% | ||||||||||||
1,400,000 | Advocare of South Carolina, Inc. 1.5000%, 6/1/17 | 1,400,000 | ||||||||||
800,000 | Arapahoe County, Colorado, Industrial Development Revenue (Cottrell), Series B 1.6000%, 10/1/19 | 800,000 | ||||||||||
4,435,000 | Brattlebro Retreat, 1.5000%, 1/1/36 | 4,435,000 | ||||||||||
Breckenridge Terrace LLC: | ||||||||||||
4,000,000 | 1.7000%, 5/1/39 | 4,000,000 | ||||||||||
14,980,000 | 1.7000%, 5/1/39 | 14,980,000 | ||||||||||
800,000 | California Infrastructure and Economic Development, 1.4100%, 7/1/33 | 800,000 | ||||||||||
1,215,000 | Capital Markets Access 1.1000%, 7/1/25 | 1,215,000 | ||||||||||
5,700,000 | Colorado Housing Facilities Revenue (Tenderfoot Seasonal Housing LLC) Series A, 1.7000%, 7/1/35 | 5,700,000 | ||||||||||
7,365,000 | Crozer-Keystone Health Systems 1.6000%, 12/15/21 | 7,365,000 | ||||||||||
6,715,000 | Danville-Pittsylvania, Virginia Facility Revenue, (Cane Creek Project) 1.0000%, 1/1/26 | 6,715,000 |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Bond & Money Market Funds April 30, 2009
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Taxable Variable Rate Demand Notes – (continued) | ||||||||||||
Eagle County, Colorado Housing Facility Revenue, (BC Housing LLC Project) Series A: | ||||||||||||
$ | 9,100,000 | 1.7000%, 6/1/27 | $ | 9,100,000 | ||||||||
8,000,000 | 1.7000%, 5/1/39 | 8,000,000 | ||||||||||
12,150,000 | Eskaton Properties, Inc. 1.6000%, 12/1/37 | 12,150,000 | ||||||||||
5,110,000 | FJM Properties – Wilmar 1.0000%, 10/1/24 | 5,110,000 | ||||||||||
15,355,000 | HHH Supply and Investment Co. 1.1500%, 7/1/29 | 15,355,000 | ||||||||||
5,755,000 | Hunter’s Ridge, South Point 0.8500%, 6/1/25 | 5,755,000 | ||||||||||
4,650,000 | J-Jay Properties LLC, 0.8000%, 7/1/35 | 4,650,000 | ||||||||||
840,000 | Kentucky Economic Development Financial Authority Health Care Revenue, (Christian-B) 1.6000%, 11/1/15 | 840,000 | ||||||||||
1,800,000 | Lenexa, Kansas Industrial Revenue (Labone Project), 0.7500%, 9/1/09 | 1,800,000 | ||||||||||
2,805,000 | Lone Tree Building Authority 2.5500%, 12/1/17 | 2,805,000 | ||||||||||
3,700,000 | Lowell Family LLC, 0.8500%, 4/1/30 | 3,700,000 | ||||||||||
2,500,000 | Missouri State Development Financial Board (Cook Composites Co. Project), 2.3700%, 11/1/24 | 2,500,000 | ||||||||||
6,040,000 | Monongallia Health Systems 1.0000%, 7/1/40 | 6,040,000 | ||||||||||
160,000 | Phoenix, Illinois Realty Special Account Multifamily Revenue, (Brightons Mark), 1.0000%, 4/1/20 | 160,000 | ||||||||||
9,385,000 | Pilot Drive Properties, 2.0000%, 2/1/35 | 9,385,000 | ||||||||||
6,330,000 | Port Contractors, Inc., 1.0000%, 5/1/23 | 6,330,000 | ||||||||||
11,700,000 | Racetrac Capital LLC, Series 1998-A 0.7500%, 4/1/18 | 11,700,000 | ||||||||||
300,000 | Saint Joseph, Missouri Industrial Development Authority Revenue (Albaugh, Inc. Project), Series B 1.3000%, 11/1/19 | 300,000 | ||||||||||
4,895,000 | Springfield, Tennessee, Health and Educational Facilities Revenue Series A, 1.0000%, 6/1/26 | 4,895,000 | ||||||||||
700,000 | Tennessee Aluminum Processors, Inc. 3.5000%, 5/1/14 | 700,000 | ||||||||||
2,665,000 | Tift County, Georgia Development Authority, (Heatcraft), Series A 1.5000%, 2/1/18 | 2,665,000 | ||||||||||
4,060,000 | Timber Ridge County Affordable Housing Corp., Series 2003 0.7500%, 12/1/32 | 4,060,000 | ||||||||||
1,558,000 | TLW LLC, 1.2500%, 9/1/29 | 1,558,000 | ||||||||||
Tuscaloosa County, Alabama, Industrial Development Gulf Opportunity Zone (Revenue Bonds): | ||||||||||||
25,000,000 | 1.0000%, 3/1/28 | 25,000,000 | ||||||||||
45,000,000 | 1.0000%, 4/1/39 | 45,000,000 | ||||||||||
100,000 | Union City, Tennessee Industrial Development Board, (Cobank LLC Project), 0.9000%, 1/1/25 | 100,000 | ||||||||||
2,000,000 | Volunteers of America, Alabama 1.5000%, 8/1/23 | 2,000,000 | ||||||||||
$ | 9,705,000 | Washington Road Properties 1.0000%, 12/1/26 | 9,705,000 | |||||||||
3,760,000 | Weaver Rentals, 1.9800%, 1/1/27 | 3,760,000 | ||||||||||
Total Taxable Variable Rate Demand Notes (amortized cost $252,533,000) | 252,533,000 | |||||||||||
U.S. Government Agency Notes – 11.9% | ||||||||||||
Army & Air Force Exchange Services: | ||||||||||||
25,000,000 | 1.3000%, 5/12/09ß | 25,000,000 | ||||||||||
25,000,000 | 0.8000%, 5/26/09ß | 25,000,000 | ||||||||||
25,000,000 | 1.7000%, 5/29/09ß | 25,000,000 | ||||||||||
25,000,000 | 1.0000%, 6/8/09ß | 25,000,000 | ||||||||||
Fannie Mae: | ||||||||||||
10,000,000 | 1.7500%, 5/13/09 | 9,995,318 | ||||||||||
10,000,000 | 1.8000%, 6/29/09 | 9,972,023 | ||||||||||
10,000,000 | 0.3800%, 7/31/09 | 9,955,580 | ||||||||||
10,000,000 | 0.3800%, 8/3/09 | 9,952,799 | ||||||||||
Federal Home Loan Bank System: | ||||||||||||
10,000,000 | 2.5500%, 5/5/09 | 9,998,383 | ||||||||||
10,000,000 | 1.2710%, 5/15/09 | 9,994,145 | ||||||||||
10,000,000 | 0.4900%, 5/29/09 | 9,986,570 | ||||||||||
10,000,000 | 0.4300%, 6/29/09 | 9,992,852 | ||||||||||
10,000,000 | 0.4700%, 7/15/09 | 9,990,068 | ||||||||||
10,000,000 | 0.5700%, 8/17/09 | 9,982,654 | ||||||||||
Freddie Mac: | ||||||||||||
10,000,000 | 1.1500%, 7/6/09 | 9,967,779 | ||||||||||
10,000,000 | 1.2500%, 3/12/10 | 10,000,000 | ||||||||||
Total U.S. Government Agency Notes (amortized cost $219,788,171) | 219,788,171 | |||||||||||
Total Investments (total amortized cost $1,843,632,989) – 99.9% | 1,843,632,989 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 1,189,588 | |||||||||||
Net Assets – 100% | $ | 1,844,822,577 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 35
Janus Government Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2009
Principal Amount | Value | |||||||||||
Repurchase Agreements – 44.9% | ||||||||||||
$ | 50,000,000 | BNP Paribas Securities Corp., 0.2000% dated 4/30/09, maturing 5/1/09 to be repurchased at $50,000,278 collateralized by $569,599,351 in U.S. Government Agencies 0% – 23.5124%, 3/15/17 – 8/25/38 with a value of $51,000,000 | $ | 50,000,000 | ||||||||
44,800,000 | Calyon, New York, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $44,800,311 collateralized by $45,705,282 in U.S. Government Agencies 0%, 6/30/09 with a value of $45,696,141 | 44,800,000 | ||||||||||
30,700,000 | Credit Suisse Securities (USA) LLC, 0.2500% dated 4/30/09, maturing 5/1/09 to be repurchased at $30,700,154 collateralized by $167,351,376 in U.S. Government Agencies 0% – 0.8400%, 12/15/31-7/16/44 with a value of $31,314,547 | 30,700,000 | ||||||||||
Total Repurchase Agreements (amortized cost $125,500,000) | 125,500,000 | |||||||||||
Taxable Variable Rate Demand Notes – 13.8% | ||||||||||||
1,480,000 | A.E. Realty LLC, Series 2003, 1.1000% 10/1/23 | 1,480,000 | ||||||||||
95,000 | Anaheim, California Housing Authority Multifamily Housing Revenue (Cobblestone), 1.1500%, 3/15/33 | 95,000 | ||||||||||
200,000 | Anaheim, California Housing Authority Multifamily Housing Revenue (Cobblestone), 1.1500%, 7/15/33 | 200,000 | ||||||||||
225,000 | California Statewide Communities Development Authority 1.1500% 3/15/33 | 225,000 | ||||||||||
9,000,000 | Cypress Bend Real Estate Development LLC, 1.0500%, 4/1/33 | 9,000,000 | ||||||||||
6,360,000 | Florida Housing Financial Corp. Multifamily Revenue, (Stone Harbor Apartments), Series K, 0.5500%, 7/15/36 | 6,360,000 | ||||||||||
1,000,000 | Maryland State Community Development Administration Multifamily Development (Crusader-D), 0.3500%, 2/1/41 | 1,000,000 | ||||||||||
5,500,000 | Mississippi Business Finance Corp. 1.0000%, 3/1/29 | 5,500,000 | ||||||||||
5,080,000 | Mississippi Business Finance Corp. 1.0000%, 3/1/29 | 5,080,000 | ||||||||||
2,065,000 | New York City Housing Development Corp. Multifamily Revenue (Aldus St. Apartments) Series A, 0.4500%, 6/15/37 | 2,065,000 | ||||||||||
500,000 | Sacramento California Redevelopment Agency, 1.1500%, 1/15/36 | 500,000 | ||||||||||
2,530,000 | Washington State Housing Finance Community (Cambridge Apartments-B) 1.1500%, 3/15/39 | 2,530,000 | ||||||||||
$ | 4,370,000 | Washington State Housing Finance Community (New Haven Apartments PJ-B), 1.1500%, 3/15/39 | 4,370,000 | |||||||||
Total Taxable Variable Rate Demand Notes (amortized cost $38,405,000) | 38,405,000 | |||||||||||
U.S. Government Agency Notes – 27.6% | ||||||||||||
Army & Air Force Exchange Services: | ||||||||||||
25,000,000 | 2.2500%, 5/26/09ß | 25,000,000 | ||||||||||
Fannie Mae: | ||||||||||||
770,000 | 0.2500%, 6/2/09 | 769,633 | ||||||||||
5,000,000 | 0.3800%, 6/22/09 | 4,997,254 | ||||||||||
5,000,000 | 0.5265%, 7/13/09 | 4,994,658 | ||||||||||
5,000,000 | 0.5100%, 7/29/09 | 4,993,692 | ||||||||||
3,000,000 | 0.6800%, 10/1/09 | 2,991,321 | ||||||||||
3,000,000 | 0.6500%, 10/19/09 | 2,990,728 | ||||||||||
3,098,000 | 0.7600%, 11/2/09 | 3,085,891 | ||||||||||
5,000,000 | 0.9000%, 1/4/10 | 4,968,966 | ||||||||||
Federal Home Loan Bank System: | ||||||||||||
3,000,000 | 2.6500%, 5/6/09 | 3,000,000 | ||||||||||
3,141,000 | 1.5000%, 6/12/09 | 3,139,203 | ||||||||||
2,319,000 | 0.2400%, 7/1/09 | 2,318,044 | ||||||||||
3,000,000 | 2.8200%, 7/10/09 | 3,000,000 | ||||||||||
1,000,000 | 2.7200%, 9/10/09 | 990,572 | ||||||||||
Freddie Mac: | ||||||||||||
5,000,000 | 1.2500%, 3/9/10 | 5,000,000 | ||||||||||
5,000,000 | 1.2500%, 3/18/10 | 5,000,000 | ||||||||||
Total U.S. Government Agency Notes (amortized cost $77,239,962) | 77,239,962 | |||||||||||
U.S. Government Agency Variable Notes – 13.8% | ||||||||||||
Federal Farm Credit Bank: | ||||||||||||
5,000,000 | 0.3200%, 7/22/09 | 4,995,688 | ||||||||||
2,000,000 | 0.3200%, 12/21/09 | 1,997,044 | ||||||||||
Federal Home Loan Bank System: | ||||||||||||
4,000,000 | 1.0410%, 5/20/09 | 3,851,751 | ||||||||||
2,000,000 | 1.2930%, 9/10/09 | 2,000,000 | ||||||||||
1,000,000 | 1.1260%, 10/05/09 | 2,000,199 | ||||||||||
1,500,000 | 1.1040%, 12/08/09 | 1,497,095 | ||||||||||
6,840,638 | 1.7000%, 1/5/42 | 6,840,638 | ||||||||||
Freddie Mac: | ||||||||||||
800,000 | 0.4169%, 9/18/09 | 800,185 | ||||||||||
1,000,000 | 0.3650%, 9/28/09 | 1,000,150 | ||||||||||
500,000 | 0.4006%, 10/8/09 | 500,073 | ||||||||||
5,000,000 | 0.3894%, 12/7/09 | 4,999,916 | ||||||||||
3,000,000 | 0.3463%, 12/23/09 | 2,999,298 | ||||||||||
5,000,000 | 1.0850%, 2/4/10 | 5,000,000 | ||||||||||
Total U.S. Government Agency Variable Notes (amortized cost $38,482,038) | 38,482,038 | |||||||||||
Total Investments (total amortized cost $279,627,000) – 100.1% | 279,627,000 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (205,428) | |||||||||||
Net Assets – 100% | $ | 279,421,572 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
36 Janus Bond & Money Market Funds April 30, 2009
Statements of Assets and Liabilities – Bond Funds
As of April 30, 2009 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||
(all numbers in thousands except net asset value per share) | Bond Fund | Fund | Bond Fund | |||||||||||
Assets: | ||||||||||||||
Investments at cost | $ | 986,514 | $ | 568,276 | $ | 502,266 | ||||||||
Unaffiliated investments at value | $ | 910,969 | $ | 524,258 | $ | 495,261 | ||||||||
Affiliated money market investments | 82,216 | 25,081 | 15,591 | |||||||||||
Cash | 916 | – | 89 | |||||||||||
Receivables: | ||||||||||||||
Investments sold | 47,044 | 28,630 | 11,934 | |||||||||||
Fund shares sold | 1,397 | 2,141 | 4,729 | |||||||||||
Dividends | 57 | 68 | 5 | |||||||||||
Interest | 9,370 | 13,562 | 5,977 | |||||||||||
Non-interested Trustees’ deferred compensation | 22 | 13 | 12 | |||||||||||
Other assets | 7 | 25 | 3 | |||||||||||
Total Assets | 1,051,998 | 593,778 | 533,601 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Due to custodian | – | 2,202 | – | |||||||||||
Investments purchased | 133,402 | 39,312 | 19,244 | |||||||||||
Fund shares repurchased | 1,797 | 1,326 | 745 | |||||||||||
Dividends and distributions | 221 | 347 | 150 | |||||||||||
Advisory fees | 385 | 286 | 231 | |||||||||||
Transfer agent fees and expenses | 183 | 83 | 90 | |||||||||||
Non-interested Trustees’ fees and expenses | – | 2 | – | |||||||||||
Non-interested Trustees’ deferred compensation fees | 22 | 13 | 12 | |||||||||||
Accrued expenses | 55 | 62 | 36 | |||||||||||
Total Liabilities | 136,065 | 43,633 | 20,508 | |||||||||||
Net Assets | $ | 915,933 | $ | 550,145 | $ | 513,093 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 913,498 | $ | 705,934 | $ | 506,724 | ||||||||
Undistributed net investment income/(loss)* | 852 | 301 | 23 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (5,080) | (137,148) | (2,236) | |||||||||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 6,663 | (18,942) | 8,582 | |||||||||||
Total Net Assets | $ | 915,933 | $ | 550,145 | $ | 513,093 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 93,722 | 75,283 | 173,064 | |||||||||||
Net Asset Value Per Share | $ | 9.77 | $ | 7.31 | $ | 2.96 |
* | See Note 3 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 37
Statements of Operations – Bond Funds
For the six-month period ended April 30, 2009 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||
(all numbers in thousands) | Bond Fund | Fund | Bond Fund | |||||||||||
Investment Income: | ||||||||||||||
Interest | $ | 20,494 | $ | 29,849 | $ | 6,295 | ||||||||
Dividends | – | 135 | – | |||||||||||
Dividends from affiliates | 28 | 92 | 41 | |||||||||||
Fee Income | – | 45 | – | |||||||||||
Total Investment Income | 20,522 | 30,121 | 6,336 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 2,119 | 1,307 | 1,006 | |||||||||||
Transfer agent fees and expenses | 849 | 483 | 329 | |||||||||||
Registration fees | 9 | 10 | 49 | |||||||||||
Postage and mailing expenses | 22 | 28 | 11 | |||||||||||
Custodian fees | 3 | 9 | 13 | |||||||||||
Audit fees | 21 | 18 | 12 | |||||||||||
Non-interested Trustees’ fees and expenses | 5 | 3 | 2 | |||||||||||
Printing expenses | – | 8 | – | |||||||||||
Other expenses | 53 | 48 | 56 | |||||||||||
Non-recurring costs (Note 2) | – | – | – | |||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | |||||||||||
Total Expenses | 3,081 | 1,914 | 1,478 | |||||||||||
Expense and Fee Offset | (1) | (1) | – | |||||||||||
Net Expenses | 3,080 | 1,913 | 1,478 | |||||||||||
Less: Excess Expense Reimbursement | – | – | (431) | |||||||||||
Net Expenses after Expense Reimbursement | 3,080 | 1,913 | 1,047 | |||||||||||
Net Investment Income/(Loss) | 17,442 | 28,208 | 5,289 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 17,089 | (49,950) | 2,499 | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 39,940 | 77,469 | 8,415 | |||||||||||
Net Gain/(Loss) on Investments | 57,029 | 27,519 | 10,914 | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 74,471 | $ | 55,727 | $ | 16,203 |
See Notes to Financial Statements.
38 Janus Bond & Money Market Funds April 30, 2009
Statements of Changes in Net Assets – Bond Funds
For the six-month period ended | ||||||||||||||||||||||||||
April 30, 2009 (unaudited) and the | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||
fiscal year ended October 31, 2008 | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 17,442 | $ | 36,955 | $ | 28,208 | $ | 42,195 | $ | 5,289 | $ | 6,779 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 17,089 | 5,173 | (49,950) | (61,623) | 2,499 | (1,616) | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 39,940 | (39,708) | 77,469 | (87,723) | 8,415 | 11 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 74,471 | 2,420 | 55,727 | (107,151) | 16,203 | 5,174 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | (17,692) | (37,243) | (28,210) | (42,198) | (5,292) | (6,781) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | ||||||||||||||||||||
Net (Decrease) from Dividends and Distributions | (17,692) | (37,243) | (28,210) | (42,198) | (5,292) | (6,781) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | 204,571 | 338,947 | 181,876 | 105,767 | 328,898 | 123,263 | ||||||||||||||||||||
Redemption fees | N/A | N/A | 264 | 122 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 16,414 | 34,700 | 25,998 | 38,520 | 4,943 | 6,546 | ||||||||||||||||||||
Shares repurchased | (102,374) | (357,857) | (66,800) | (205,646) | (63,482) | (69,021) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 118,611 | 15,790 | 141,338 | (61,237) | 270,359 | 60,788 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 175,390 | (19,033) | 168,855 | (210,586) | 281,270 | 59,181 | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 740,543 | 759,576 | 381,290 | 591,876 | 231,823 | 172,642 | ||||||||||||||||||||
End of period | $ | 915,933 | $ | 740,543 | $ | 550,145 | $ | 381,290 | $ | 513,093 | $ | 231,823 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 852 | $ | 1,102 | $ | 301 | $ | 303 | $ | 23 | $ | 26 |
* | See Note 3 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 39
Financial Highlights – Bond Funds
For a share outstanding during the six-month | ||||||||||||||||||||||||||
period ended April 30, 2009 (unaudited) and | Janus Flexible Bond Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.09 | $9.45 | $9.42 | $9.41 | $9.76 | $9.74 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .20 | .40 | .46 | .42 | .40 | .46 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .68 | (.34) | .02 | .02 | (.34) | .01 | ||||||||||||||||||||
Total from Investment Operations | .88 | .06 | .48 | .44 | .06 | .47 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.20) | (.42) | (.45) | (.43) | (.41) | (.45) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.20) | (.42) | (.45) | (.43) | (.41) | (.45) | ||||||||||||||||||||
Net Asset Value, End of Period | $9.77 | $9.09 | $9.45 | $9.42 | $9.41 | $9.76 | ||||||||||||||||||||
Total Return** | 9.77% | 0.50% | 5.27% | 4.80% | 0.60% | 4.97% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $915,933 | $740,543 | $759,576 | $766,863 | $935,168 | $1,159,921 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $827,987 | $855,399 | $755,593 | $827,407 | $1,037,336 | $1,288,903 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.75% | 0.78% | 0.80% | 0.83% | 0.78% | 0.85% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.75% | 0.77% | 0.80% | 0.82% | 0.77% | 0.85% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.25% | 4.32% | 4.81% | 4.37% | 4.01% | 4.27% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 311% | 185% | 140%(3) | 144%(3) | 174%(3) | 149% |
For a share outstanding during the six-month | ||||||||||||||||||||||||||
period ended April 30, 2009 (unaudited) and | Janus High-Yield Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.94 | $9.53 | $9.69 | $9.48 | $9.86 | $9.55 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .44 | .73 | .73 | .71 | .65 | .67 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .37 | (2.59) | (.16) | .20 | (.38) | .31 | ||||||||||||||||||||
Total from Investment Operations | .81 | (1.86) | .57 | .91 | .27 | .98 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.44) | (.73) | (.73) | (.70) | (.65) | (.67) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption Fees | –(4) | –(4) | –(4) | –(4) | –(4) | –(4) | ||||||||||||||||||||
Total Distributions and Other | (.44) | (.73) | (.73) | (.70) | (.65) | (.67) | ||||||||||||||||||||
Net Asset Value, End of Period | $7.31 | $6.94 | $9.53 | $9.69 | $9.48 | $9.86 | ||||||||||||||||||||
Total Return** | 12.29% | (20.74)% | 6.04% | 10.00% | 2.76% | 10.62% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $550,145 | $381,290 | $591,876 | $511,619 | $523,183 | $557,836 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $428,605 | $510,868 | $579,507 | $490,849 | $548,993 | $582,992 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.90% | 0.90% | 0.87% | 0.91%(5) | 0.88% | 0.96% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.90% | 0.89% | 0.86% | 0.90% | 0.87% | 0.96% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 13.27% | 8.26% | 7.54% | 7.37% | 6.65% | 6.96% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 102% | 109% | 114% | 119% | 102% | 133% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(3) | Excluding mortgage dollar roll transactions. If mortgage dollar roll transactions had been included, the portfolio turnover rate would have been 141% in 2007, 147% in 2006 and 180% in 2005. | |
(4) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(5) | The ratio was 0.93% in 2006 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
40 Janus Bond & Money Market Funds April 30, 2009
For a share outstanding during the six-month | ||||||||||||||||||||||||||
period ended April 30, 2009 (unaudited) and | Janus Short-Term Bond Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $2.87 | $2.88 | $2.88 | $2.87 | $2.94 | $2.97 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .10 | .13 | .11 | .08 | .08 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .09 | (.01) | – | .01 | (.06) | .01 | ||||||||||||||||||||
Total from Investment Operations | .14 | .09 | .13 | .12 | .02 | .09 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.10) | (.13) | (.11) | (.08) | (.08) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | (.01) | (.04) | ||||||||||||||||||||
Total Distributions | (.05) | (.10) | (.13) | (.11) | (.09) | (.12) | ||||||||||||||||||||
Net Asset Value, End of Period | $2.96 | $2.87 | $2.88 | $2.88 | $2.87 | $2.94 | ||||||||||||||||||||
Total Return** | 4.74% | 3.24% | 4.74% | 4.08% | 0.65% | 2.94% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $513,093 | $231,823 | $172,642 | $175,258 | $201,493 | $270,761 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $325,199 | $193,360 | $172,326 | $182,285 | $233,536 | $299,461 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.64%(3) | 0.65%(3) | 0.65%(3) | 0.65%(3) | 0.65%(3) | 0.65%(3) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.65% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.28% | 3.51% | 4.63% | 3.65% | 2.75% | 2.64% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 84% | 127% | 130% | 120% | 97% | 110% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(3) | The ratio was 0.91% in 2009, 0.98% in 2008, 1.01% in 2007, 1.06% in 2006, 0.97% in 2005 and 1.00% in 2004 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 41
Statements of Assets and Liabilities – Money Market Funds
Janus Government | ||||||||||
As of April 30, 2009 (unaudited) | Janus Money | Money | ||||||||
(all numbers in thousands except net asset value per share) | Market Fund | Market Fund | ||||||||
Assets: | ||||||||||
Investments at amortized cost | $ | 1,423,033 | $ | 154,127 | ||||||
Repurchase Agreements | $ | 420,600 | $ | 125,500 | ||||||
Cash | – | 65 | ||||||||
Receivables: | ||||||||||
Investments sold | 3,872 | – | ||||||||
Fund shares sold | 1,846 | 66 | ||||||||
Interest | 681 | 167 | ||||||||
Non-interested Trustees’ deferred compensation | 45 | 7 | ||||||||
Other assets | 6 | – | ||||||||
Total Assets | 1,850,083 | 279,932 | ||||||||
Liabilities: | ||||||||||
Payables: | ||||||||||
Due to Custodian | 42 | – | ||||||||
Investments purchased | 840 | – | ||||||||
Fund shares repurchased | 3,346 | 353 | ||||||||
Dividends and distributions | 62 | 2 | ||||||||
Advisory fees | 154 | 23 | ||||||||
Administrative services fees | 742 | 107 | ||||||||
Non-interested Trustees’ fees and expenses | – | 1 | ||||||||
Non-interested Trustees’ deferred compensation fees | 45 | 6 | ||||||||
Accrued expenses and other payables | 29 | 18 | ||||||||
Total Liabilities | 5,260 | 510 | ||||||||
Net Assets | $ | 1,844,823 | $ | 279,422 | ||||||
Net Assets Consist of: | ||||||||||
Capital (par value and paid-in surplus)* | $ | 1,844,824 | $ | 279,414 | ||||||
Undistributed net investment income/(loss)* | 13 | (5) | ||||||||
Undistributed net realized gain/(loss) from investment transactions* | 3 | 16 | ||||||||
Unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | (17) | (3) | ||||||||
Total Net Assets | $ | 1,844,823 | $ | 279,422 | ||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,844,817 | 279,413 | ||||||||
Net Asset Value Per Share | $ | 1.00 | $ | 1.00 |
* | See Note 3 in Notes to Financial Statements |
See Notes to Financial Statements.
42 Janus Bond & Money Market Funds April 30, 2009
Statements of Operations – Money Market Funds
Janus Government | ||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Janus Money | Money | ||||||||
(all numbers in thousands) | Market Fund | Market Fund | ||||||||
Investment Income: | ||||||||||
Interest | $ | 9,635 | $ | 1,178 | ||||||
Total Investment Income | 9,635 | 1,178 | ||||||||
Expenses: | ||||||||||
Advisory fees | 1,901 | 296 | ||||||||
Transfer agent fees and expenses | 2 | – | ||||||||
Audit fees | 7 | 4 | ||||||||
Non-interested Trustees’ fees and expenses | 11 | 3 | ||||||||
Administrative services fees | 4,754 | 741 | ||||||||
Money market insurance program expense | 423 | 55 | ||||||||
Non-recurring costs (Note 2) | – | – | ||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | ||||||||
Total Expenses | 7,098 | 1,099 | ||||||||
Expense and Fee Offset | (2) | – | ||||||||
Net Expenses | 7,096 | 1,099 | ||||||||
Less: Excess Expense Reimbursement | (978) | (182) | ||||||||
Net Expenses after Expense Reimbursement | 6,118 | 917 | ||||||||
Net Investment Income/(Loss) | 3,517 | 261 | ||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||
Net realized gain/(loss) from investment transactions | – | 16 | ||||||||
Change in unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | (34) | (5) | ||||||||
Net Gain/(Loss) on Investments | (34) | 11 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 3,483 | $ | 272 |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 43
Statements of Changes in Net Assets – Money Market Funds
Janus Government | ||||||||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Janus Money | Money | ||||||||||||||||
and for the fiscal year ended October 31, 2008 | Market Fund | Market Fund | ||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 3,517 | $ | 51,783 | $ | 261 | $ | 5,248 | ||||||||||
Net realized gain/(loss) from investment transactions | – | 15 | 16 | 1 | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | (34) | 12 | (5) | 2 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 3,483 | 51,810 | 272 | 5,251 | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | ||||||||||||||||||
Investor Shares | (3,416) | (51,867) | (243) | (5,270) | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Investor Shares | – | (14) | – | (1) | ||||||||||||||
Net Decrease from Dividends and Distributions | (3,416) | (51,881) | (243) | (5,271) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Investor Shares | 390,351 | 1,521,432 | 70,858 | 247,174 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Investor Shares | 3,071 | 46,527 | 236 | 5,174 | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Investor Shares | (532,104) | (1,306,364) | (103,949) | (128,213) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (138,682) | 261,595 | (32,855) | 124,135 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | (138,615) | 261,524 | (32,826) | 124,115 | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 1,983,438 | 1,721,914 | 312,248 | 188,133 | ||||||||||||||
End of period | $ | 1,844,823 | $ | 1,983,438 | $ | 279,422 | $ | 312,248 | ||||||||||
Undistributed net investment income/(loss)* | $ | 13 | $ | (88) | $ | (5) | $ | (23) |
* | See Note 3 in the Notes to Financial Statements. |
See Notes to Financial Statements.
44 Janus Bond & Money Market Funds April 30, 2009
Financial Highlights – Money Market Funds
For a share outstanding during the six-month | ||||||||||||||||||||||||||
period ended April 30, 2009 (unaudited) and | Janus Money Market Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | – | .03 | .05 | .04 | .02 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | – | .03 | .05 | .04 | .02 | .01 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.03) | (.05) | (.04) | (.02) | (.01) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | – | (.03) | (.05) | (.04) | (.02) | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.17% | 2.76% | 4.93% | 4.39% | 2.41% | 0.75% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,844,823 | $1,983,438 | $1,721,914 | $1,412,927 | $1,360,997 | $1,588,804 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,917,174 | $1,931,685 | $1,577,950 | $1,362,170 | $1,449,569 | $1,790,472 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.64%(3) | 0.61%(3) | 0.60%(3) | 0.60%(3) | 0.60%(3) | 0.60%(3) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.64% | 0.61% | 0.60% | 0.60% | 0.60% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.37% | 2.68% | 4.82% | 4.31% | 2.36% | 0.74% |
For a share outstanding during the six-month | ||||||||||||||||||||||||||
period ended April 30, 2009 (unaudited) and | Janus Government Money Market Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | – | .02 | .05 | .04 | .02 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | – | .02 | .05 | .04 | .02 | .01 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.02) | (.05) | (.04) | (.02) | (.01) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | – | (.02) | (.05) | (.04) | (.02) | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.07% | 2.46% | 4.79% | 4.31% | 2.34% | 0.68% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $279,422 | $312,248 | $188,133 | $176,188 | $186,361 | $224,084 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $298,832 | $225,293 | $177,655 | $176,580 | $198,231 | $253,183 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.62%(4) | 0.62%(4) | 0.61%(4) | 0.61%(4) | 0.61%(4) | 0.60%(4) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.62% | 0.62% | 0.61% | 0.61% | 0.61% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.18% | 2.33% | 4.69% | 4.22% | 2.29% | 0.66% |
* | See Note 3 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(3) | The ratio was 0.75% in 2009, 0.71% in 2008, 0.70% in 2007, 0.70% in 2006, 0.70% in 2005, and 0.70% in 2004 before waiver of certain fees incurred by the Fund. | |
(4) | The ratio was 0.74% in 2009, 0.72% in 2008, 0.71% in 2007, 0.71% in 2006, 0.71% in 2005, and 0.70% in 2004 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2009 45
Notes to Schedules of Investments (unaudited)
Barclays Capital 1-3 Year Government/Credit Index | Is composed of all bonds of investment grade with a maturity between one and three years. | |
Barclays Capital U.S. Aggregate Bond Index | Is an unmanaged market value weighted index for U.S. dollar-denominated investment-grade fixed-rate debt issues, including government, corporate, mortgage-backed, and asset-backed securities with maturities of at least one year. | |
Barclays Capital U.S. Corporate High-Yield Bond Index | Is composed of fixed-rate, publicly issued, non-investment grade debt. | |
Lipper High Current Yield Funds | Funds that aim at high (relative) current yield from fixed income securities, have no quality or maturity restrictions, and tend to invest in lower grade debt issues. | |
Lipper Intermediate Investment Grade Debt Funds | Funds that invest at least 65% of their assets in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of five to ten years. | |
Lipper Short Investment Grade Debt Funds | Funds that invest at least 65% of their assets in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of less than three years. | |
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. | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
Section 4(2) | Securities subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the Securities Act of 1933, as amended. |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
‡ | Rate is subject to change. Rate shown reflects current rate. | |
ß | Security is illiquid. | |
Ç | Security is traded on a “to-be-announced” basis. | |
ÇÇ | Security is a U.S. Treasury Inflation-Protected Security (TIPS). |
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2009)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Flexible Bond Fund | ||||||||||||
Source Gas LLC, 5.9000%, 4/1/17 (144A) | 4/11/07-9/20/07 | $ | 1,383,772 | $ | 1,011,356 | 0.1% | ||||||
Janus High-Yield Fund | ||||||||||||
Ace Hardware Corp., 9.1250%, 6/1/16 (144A) | 5/8/08 | $ | 1,898,050 | $ | 1,742,125 | 0.3% | ||||||
Innophos Holdings, Inc., 9.5000%, 4/15/12 (144A) | 4/11/07 | 1,409,000 | 986,300 | 0.2% | ||||||||
Landry’s Restaurants, Inc., 14.0000%, 8/15/11 (144A) | 4/21/09 | 1,548,750 | 1,662,500 | 0.3% | ||||||||
Medimedia USA, Inc., 11.3750%, 11/15/14 (144A) | 11/1/06-12/18/07 | 1,386,718 | 882,700 | 0.2% | ||||||||
Steinway Musical Instruments, 7.0000%, 3/1/14 (144A) | 9/13/06-6/6/07 | 4,438,019 | 3,222,720 | 0.6% | ||||||||
Swift Transportation Co., 12.5000%, 5/15/17 (144A) | 4/17/09-4/29/09 | 520,625 | 551,250 | 0.1% | ||||||||
$ | 11,201,162 | $ | 9,047,595 | 1.7% | ||||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2009. The issuer incurs all registration costs.
46 Janus Bond & Money Market Funds April 30, 2009
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 April 30, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of April 30, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Bond | |||||||||||
Janus Flexible Bond Fund | $ | – | $ | 993,185,390 | $ | – | |||||
Janus High-Yield Fund | – | 549,338,960 | – | ||||||||
Janus Short-Term Bond Fund | – | 510,852,269 | – | ||||||||
Money Market | |||||||||||
Janus Money Market Fund | – | 1,843,632,989 | – | ||||||||
Janus Government Money Market Fund | – | 279,627,000 | – | ||||||||
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2009 are noted below.
Fund | Aggregate Value | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 51,173,013 | |||
The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rates in the security description are as of April 30, 2009.
Money market funds may hold securities with stated maturities of greater than 397 days when those securities have features that allow a fund to “put” back the security to the issuer or to a third party within 397 days of acquisition. The maturity dates shown in the security descriptions are the stated maturity dates.
Repurchase agreements held by a Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or subcustodian. The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
Janus Bond & Money Market Funds April 30, 2009 47
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund (collectively the “Bond Funds”) and Janus Money Market Fund and Janus Government Money Market Fund (collectively the “Money Market Funds”) are series funds. The Bond Funds and the Money Market Funds (collectively the “Funds” and individually a “Fund”) are part 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. The Trust offers twenty-eight funds. The Bond Funds invest primarily in income-producing securities, and the Money Market Funds invest in short-term money market securities. Each Bond Fund is classified as diversified as defined in the 1940 Act. The Funds are no-load investments.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Investments held by the Money Market Funds are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Short positions shall be valued in accordance with the same methodologies, except that in the event that a last sale price is not available, the latest ask price shall be used instead of a bid price. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. 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; and (iii) a non-significant event such as a market closing early or not opening, or a security trading halt. The Funds may use a systematic fair valuation model provided by an independent pricing service to value foreign equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the Funds’ Trustees.
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 Trust 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.
Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each fund in the Trust.
Securities Lending
Under procedures adopted by the Trustees, the Funds may seek to earn additional income by lending securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. There is the risk of delay in recovering a loaned
48 Janus Bond & Money Market Funds April 30, 2009
security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in non-affiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedules of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statements of Operations (if applicable).
The Securities Lending Program was suspended and effective November 19, 2008, the Funds no longer had any securities on loan. Management continues to review the program and may resume securities lending.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds and certain pooled investment vehicles, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Bond Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate.
The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Operations (if applicable).
Forward currency contracts held by the Bond Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts. Such collateral is in the possession of the Funds’ custodian.
Futures Contracts
The Bond Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds 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 are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statements of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statements of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Bond Funds may utilize swap agreements as a means to gain exposure to certain common stocks and/or to “hedge” or protect their portfolios from adverse movements in securities prices or interest rates. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified
Janus Bond & Money Market Funds April 30, 2009 49
Notes to Financial Statements (unaudited) (continued)
intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Swap agreements entail the risk that a party will default on its payment obligation to a Fund. If the other party to a swap defaults, a Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If a 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 contracts are reported as an asset or liability on the Statements of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statements of Operations (if applicable).
Various types of swaps such as credit default (funded and unfunded), equity, interest rate, and total return swaps are described below.
Credit default swaps are a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments.
Funded or unfunded credit default swaps are based on an index of credit default swaps (“CDXs”) or other similarly structured products. CDXs are designed to track segments of the credit default swap market and provide investors with exposure to specific reference baskets of issuers of bonds or loans. These instruments have the potential to allow an investor to obtain the same investment exposure as an investor who invests in an individual credit default swap, but with the potential added benefit of diversification. The CDX reference baskets are normally priced daily and rebalanced every six months in conjunction with leading market makers in the credit industry. The liquidity of the market for CDXs is normally subject to liquidity in the secured loan and credit derivatives markets. A Fund investing in CDXs is normally only permitted to take long positions in these instruments.
Equity swaps involve the exchange by two parties of future cash flow (e.g., one cash flow based on a referenced interest rate and the other based on the performance of stock or a stock index).
Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments).
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.
Options Contracts
The Bond Funds may purchase or write covered and uncovered put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Bond Funds may utilize American-style and European-style options. An American-style option is an option contract that can be exercised at any time between the time of purchase and the option’s expiration date. A European-style option is an option contract that can only be exercised on the option’s expiration date. The Bond Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Bond Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Bond Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
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.
The Bond Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
50 Janus Bond & Money Market Funds April 30, 2009
Holdings designated to cover outstanding written options are noted in the Schedules of Investments (if applicable). Options written are reported as a liability on the Statements of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statements of Operations (if applicable).
The risk in writing call options is that the Funds give 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 Funds 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 Funds pay a premium whether or not the options are exercised. 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 Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Mortgage Dollar Rolls
The Bond Funds may enter into “mortgage dollar rolls.” In a “mortgage dollar roll” transaction, the Funds sell a mortgage-related security (such as a Government National Mortgage Association (“Ginnie Mae”) security) to a dealer and simultaneously agree to repurchase a similar security (but not the same security) in the future at a pre-determined price. The Funds will not be entitled to receive interest and principal payments while the dealer holds the security. The difference between the sale price and the future purchase price is recorded as an adjustment to investment income.
The Funds’ obligations under a dollar roll agreement must be covered by cash, U.S. Government securities or other liquid high-grade debt obligations equal in value to the securities subject to repurchase by the Funds maintained in a segregated account. To the extent that the Funds collateralize their obligations under a dollar roll agreement, the asset coverage requirements of the 1940 Act will not apply to such transactions. Furthermore, under certain circumstances, an underlying mortgage-backed security that is part of a dollar roll transaction may be considered illiquid.
Successful use of mortgage dollar rolls depends on the portfolio managers’ ability to predict interest rates and mortgage payments. Dollar roll transactions involve the risk that the market value of the securities the Funds are required to purchase may decline below the agreed upon repurchase price.
Securities Traded on a To-Be-Announced Basis
The Bond Funds may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the Funds commit to purchasing or selling securities for which specific information is not yet known at the time of the trade, particularly the face amount and maturity date in Ginnie Mae, Federal National Mortgage Association (“Fannie Mae”) and/or Federal Home Loan Mortgage Corporation (“Freddie Mac”) transactions.
Securities purchased on a TBA basis are not settled until they are delivered to the Funds, normally 15 to 45 days later. Beginning on the date the Funds enter into a TBA transaction, cash, U.S. Government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
Mortgage- and Asset-Backed Securities
The Funds may purchase fixed or variable rate mortgage-backed securities issued by Ginnie Mae, Fannie Mae, Freddie Mac, or other governmental or government-related entities. Fannie Maes and Freddie Macs are not backed by the full faith and credit of the U.S. Government. The Funds may purchase other mortgage- and asset-backed securities through single- and multi-seller conduits, collateralized debt obligations, structured investment vehicles, and other similar securities. Asset-backed securities may be backed by automobile loans, equipment leases, credit card receivables, or other collateral. In the event the underlying securities fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact a Fund’s yield and your return. In addition, mortgage-backed securities may be supported by some form of government or private guarantee and/or insurance. However, there is no assurance that the guarantors or insurers will meet their obligations.
Unlike traditional debt instruments, payments on these securities include both interest and a partial payment of principal. Prepayment risk, which results from prepayments of the principal of underlying loans, may shorten the effective maturities of these securities and may result in a Fund having to reinvest proceeds at a lower interest rate.
In addition to prepayment risk, investments in mortgage-backed securities, including those comprised of subprime mortgages, and investments in other asset-backed securities comprised of under-performing assets may be subject to a higher degree of credit risk, valuation risk, and liquidity risk. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
Janus Bond & Money Market Funds April 30, 2009 51
Notes to Financial Statements (unaudited) (continued)
Mortgage- and asset- backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing a Fund’s sensitivity to interest changes and causing its price to decline.
Floating Rate Loans
The Bond Funds may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates, which adjust periodically, and are tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
The Bond Funds may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment from another holder of, or participation interest in, loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Funds have the right to receive payments of principal, interest and any fees to which they are entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which a Fund invests are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
The Funds may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the Funds may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The Funds utilize an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements and the related rate range during the six-month period ended April 30, 2009 is indicated in the table below:
Average Monthly | ||||||||
Fund | Value | Rates | ||||||
Bond | ||||||||
Janus High-Yield Fund | $ | 6,232,352 | 0% - 6.5625% | |||||
Janus Short-Term Bond Fund | 587,366 | 3.1000% - 7.7500% | ||||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Bond Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of a Fund’s net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls. The Funds may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which a Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the
52 Janus Bond & Money Market Funds April 30, 2009
borrowed security. There is no assurance that a Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedules of Investments (if applicable). The Funds are also required to pay the lender of the security any dividends or interest that accrues on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, a Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Funds pay stock loan fees on assets borrowed from the security broker.
A Fund may also enter into short positions through derivative instruments such as option contracts, futures contracts and swap agreements which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
Foreign Currency Translations
The Bond Funds do 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.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Bond Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Exchange-Traded Notes
The Bond Funds may invest directly in exchange-traded notes (“ETN”), which are senior, unsecured, unsubordinated debt securities whose returns are linked to a particular index and provide exposure to the total returns of various market indices, including indices linked to stocks, bonds, commodities and currencies. This type of debt security differs from other types of bonds and notes. ETN returns are based upon the performance of a market index minus applicable fees; no period coupon payments are distributed and no principal protections exist. ETNs do not pay cash distributions. Instead, the value of dividends, interest, and investment gains are captured in the Funds’ total return. The Funds will invest in these securities when desiring exposure to debt securities or commodities. When evaluating ETNs for investment, Janus Capital will consider the potential risks involved, expected tax efficiency, rate of return, and credit risk. When the Funds invest in ETNs, they will bear their proportionate share of any fees and expenses borne by the ETN. There may be restrictions on the Funds’ right to redeem their investment in an ETN, which are meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
Equity-Linked Structured Notes
The Bond Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be
Janus Bond & Money Market Funds April 30, 2009 53
Notes to Financial Statements (unaudited) (continued)
more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Bond Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Additional Investment Risk
The Bond Funds may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to a 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 a Fund. A Fund may be unable to recover its investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded in a Fund’s Statement of Assets and Liabilities.
A 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 a Fund’s cash balances are invested in one or more money market funds, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A 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 a Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
Dividends are declared daily and distributed monthly for the Funds. Realized capital gains, if any, are declared and distributed in December. The majority of dividends and net realized capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The Bond 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 REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Funds’ tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any,
54 Janus Bond & Money Market Funds April 30, 2009
related to unrecognized tax benefits as income tax expense in the Statements of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2006-2008 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2009, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examinations in progress and are 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.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standard Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 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. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Various inputs are used in determining the value of the Funds’ investments defined pursuant to SFAS No. 157. These inputs are summarized into three broad levels:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing a security and are developed based on market data obtained from sources independent of the reporting entity. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the security and would be based on the best information available in the circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of April 30, 2009 to value each Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if required) in the Notes to Schedules of Investments.
In April 2009, FASB issued FASB staff position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds’ financial statement disclosures.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
In September 2008, FASB issued a FASB Staff Position No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45” (the “Position”), which was effective for fiscal years ending after November 15, 2008. The Position amends FASB Statement No. 133 (“FAS 133”), Accounting for Derivative Instruments and Hedging Activities, and also amends FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The amendments to FAS 133 include required disclosure for (i) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of
Janus Bond & Money Market Funds April 30, 2009 55
Notes to Financial Statements (unaudited) (continued)
the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. Management has evaluated the impact of SFAS No. 133-1 and FIN 45-4 and there is no impact on the Funds’ financial statement disclosures.
Temporary Money Market Fund Guarantee Program
The United States Department of the Treasury (the “Treasury Department”), through the Exchange Stabilization Fund (“ESF”), has established a Temporary Guarantee Program for money market mutual funds (the “Program”). The Board of Trustees of the Janus Funds has approved the participation of each Janus money market fund, including Janus Government Money Market Fund and Janus Money Market Fund, in the Program through April 30, 2009. The Janus money market funds will not participate in the U.S. Treasury’s Guarantee Program after April 30, 2009. Subject to the terms of the Program and the availability of money available to the ESF for that purpose, the Treasury Department will guarantee the share price of participating money market funds that seek to maintain a stable net asset value of $1.00 per share, subject to certain conditions.
The cost to a Money Market Fund of participating in the Program is borne by all shareholders of the Fund, including subsequent shareholders who are not protected by the Program. That cost will likely reduce the yield on the Fund. The cost of participating in the Program is 0.025% (0.01% for the term ended December 19, 2008 and 0.015% for the term ended April 30, 2009) of the net assets of each Fund as of September 19, 2008 and is not reflected in the fee table of the Funds’ current prospectus.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based on average daily net assets and calculated at the annual rate shown in the table below for each Fund.
Average | ||||||||
Daily Net | ||||||||
Fund | Assets of Fund | Management Fee % | ||||||
Bond | ||||||||
Janus Flexible Bond Fund | First $ | 300 Million | 0.58% | |||||
Over $ | 300 Million | 0.48% | ||||||
Janus High-Yield Fund | First $ | 300 Million | 0.65% | |||||
Over $ | 300 Million | 0.55% | ||||||
Janus Short-Term Bond Fund | First $ | 300 Million | 0.64% | |||||
Over $ | 300 Million | 0.54% | ||||||
Until at least March 1, 2010, provided that Janus Capital remains investment adviser to the Bond Funds, Janus Capital has agreed to reimburse Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses) exceed the following annual rate noted below. If applicable, amounts reimbursed to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Fund | Expense Limit % | ||||
Bond | |||||
Janus Flexible Bond Fund | 0.93% | ||||
Janus High-Yield Fund | 0.90% | ||||
Janus Short-Term Bond Fund | 0.64% | ||||
Each of the Money Market Funds pays Janus Capital 0.20% of its average daily net assets as an investment advisory fee. However, Janus Capital has agreed to waive one-half of each Fund’s advisory fees. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. In addition, the Money Market Funds pay Janus Capital an administrative services fee. This fee is 0.50% of average daily net assets. The Money Market Funds pay those expenses not assumed by Janus Capital. The expenses not assumed by Janus Capital include interest and taxes, fees and expenses of Trustees who are not interested persons of Janus Capital, audit fees and expenses, and extraordinary expenses.
Each Bond Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted averaged annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.12% of net assets on the proportion of assets sold directly and 0.25% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for each of the Funds for transfer agent services.
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 Funds. 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 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 Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2009 on the Statements of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a
56 Janus Bond & Money Market Funds April 30, 2009
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” for the Bond Funds, and “Unrealized net appreciation/(depreciation) of investments for non-interested Trustees’ deferred compensation” for the Money Market Funds on the Statements of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statements 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. No deferred fees were distributed to any Trustee under the Deferred Plan during the six-month period ended April 30, 2009.
For the six-month period ended April 30, 2009, Janus Capital assumed $4,842 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the Statements of Operations.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer and compliance staff of the Trust. Total compensation of $63,757 was paid by the Trust during the six-month period ended April 30, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
A 2.00% redemption fee may be imposed on shares of Janus High-Yield Fund held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund’s asset levels and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in-Capital.
Total redemption fees received by the Funds for the six-month period ended April 30, 2009 are indicated in the table below:
Fund | Redemption Fee | ||||
Bond | |||||
Janus High-Yield Fund | $ | 263,417 | |||
The Bond Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statements of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statements of Assets and Liabilities (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Assets and Liabilities (if applicable). The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Pursuant to the terms and conditions of an SEC exemptive order and the provisions of the 1940 Act, the Bond Funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Funds may be used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Funds are 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.
During the six-month period ended April 30, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Janus Bond & Money Market Funds April 30, 2009 57
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/09 | |||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 459,072,319 | $ | (376,855,657) | $ | 28,444 | $ | 82,216,662 | ||||||
Janus High Yield Fund | 162,910,813 | (137,829,650) | 10,242 | 25,081,163 | ||||||||||
Janus Short-Term Bond Fund | 177,635,352 | (162,044,223) | 13,453 | 15,591,129 | ||||||||||
$ | 799,618,484 | $ | (676,729,530) | $ | 52,139 | $ | 122,888,954 | |||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||
Bond | ||||||||||||||
Janus High-Yield Fund | $ | 81,315 | $ | (20,717,612) | $ | 47,127 | $ | – | ||||||
Janus Short-Term Bond Fund | 11,899 | (2,387,409) | 8,290 | – | ||||||||||
$ | 93,214 | $ | (23,105,021) | $ | 55,417 | $ | – | |||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 9,264,490 | $ | (44,465,490) | $ | – | $ | – | ||||||
Janus High-Yield Fund | 5,607,657 | (30,977,738) | 34,395 | – | ||||||||||
Janus Short-Term Bond Fund | 4,481,494 | (26,388,368) | 18,887 | – | ||||||||||
$ | 19,353,641 | $ | (101,831,596) | $ | 53,282 | $ | – | |||||||
3. | 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 Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 986,738,176 | $ | 16,602,695 | $ | (10,155,481) | $ | 6,447,214 | ||||||
Janus High-Yield Fund | 575,424,337 | 12,433,887 | (38,519,264) | (26,085,377) | ||||||||||
Janus Short-Term Bond Fund | 502,298,271 | 9,046,552 | (492,554) | 8,553,998 | ||||||||||
Money Market | ||||||||||||||
Janus Money Market Fund | 1,843,632,989 | – | – | – | ||||||||||
Janus Government Money Market Fund | 279,627,000 | – | – | – | ||||||||||
Net capital loss carryovers as of October 31, 2008 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
58 Janus Bond & Money Market Funds April 30, 2009
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2008
Accumulated | ||||||||||||||||||||
Fund | October 31, 2010 | October 31, 2013 | October 31, 2014 | October 31, 2015 | October 31, 2016 | Capital Losses | ||||||||||||||
Bond | ||||||||||||||||||||
Janus Flexible Bond Fund | $ | – | $ | – | $ | – | $ | (2,839,282) | $ | – | $ | (2,839,282) | ||||||||
Janus High-Yield Fund | (25,200,139) | – | – | – | (50,120,235) | (75,320,374) | ||||||||||||||
Janus Short-Term Bond Fund | – | (681,569) | (1,853,016) | (560,770) | (1,158,399) | (4,253,754) | ||||||||||||||
Money Market | ||||||||||||||||||||
Janus Money Market Fund | – | – | – | – | – | – | ||||||||||||||
Janus Government Money Market Fund | – | – | – | – | – | – | ||||||||||||||
During the year ended October 31, 2008, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Capital Loss | |||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||
Bond | |||||||||||||||||
Janus Flexible Bond Fund | $ | 23,300,637 | |||||||||||||||
4. | Capital Share Transactions |
For the six-month period ended April 30, 2009 (unaudited) | ||||||||||||||||||||||||||||
and the fiscal year ended October 31, 2008 | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||||
(all numbers in thousands) | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||||
Bond Funds | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||
Transactions in Fund Shares: | ||||||||||||||||||||||||||||
Shares sold | 21,166 | 35,302 | 26,466 | 12,184 | 112,149 | 42,691 | ||||||||||||||||||||||
Reinvested dividends and distributions | 1,700 | 3,631 | 3,755 | 4,476 | 1,683 | 2,267 | ||||||||||||||||||||||
Shares repurchased | (10,655) | (37,789) | (9,860) | (23,865) | (21,644) | (23,928) | ||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 12,211 | 1,144 | 20,361 | (7,205) | 92,188 | 21,030 | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 81,511 | 80,367 | 54,922 | 62,127 | 80,876 | 59,846 | ||||||||||||||||||||||
Shares Outstanding, End of Period | 93,722 | 81,511 | 75,283 | 54,922 | 173,064 | 80,876 |
Janus Bond & Money Market Funds April 30, 2009 59
Notes to Financial Statements (unaudited) (continued)
For the six-month period ended April 30, 2009 (unaudited) | ||||||||||||||||||||
and the fiscal year ended October 31, 2008 | ||||||||||||||||||||
(all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | ||||||||||||||||||
Money Market Funds | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Transactions in Fund Shares – Investor Shares: | ||||||||||||||||||||
Shares sold | 390,351 | 1,521,432 | 70,858 | 247,174 | ||||||||||||||||
Reinvested dividends and distributions | 3,070 | 46,528 | 236 | 5,174 | ||||||||||||||||
Shares repurchased | (532,104) | (1,306,364) | (103,949) | (128,213) | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (138,683) | 261,596 | (32,855) | 124,135 | ||||||||||||||||
Shares Outstanding, Beginning of Period | 1,983,500 | 1,721,904 | 312,268 | 188,133 | ||||||||||||||||
Shares Outstanding, End of Period | 1,844,817 | 1,983,500 | 279,413 | 312,268 |
5. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2009, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 937,177,001 | $ | 876,810,501 | $ | 434,998,470 | $ | 388,505,825 | ||||||
Janus High-Yield Fund | 359,294,830 | 200,434,585 | – | – | ||||||||||
Janus Short-Term Bond Fund | 359,318,386 | 44,108,632 | 43,177,142 | 88,286,548 | ||||||||||
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court, four of which still remain: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC), Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly named Perkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On December 30, 2008, the Court granted partial summary judgment in Janus Capital’s favor
60 Janus Bond & Money Market Funds April 30, 2009
with respect to Plaintiffs’ damage demand as it relates to what was categorized as “approved” market timing based on the Court’s finding that there was no evidence that investors suffered damages that exceed the $50 million they are entitled to receive under the regulatory settlement. The Court did not grant summary judgment on the remaining causes of action and requested the parties to submit additional briefing with respect to what was categorized as “unapproved” market timing. Having completed the supplemental briefing, the parties are awaiting a ruling from the Court. On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the Court with prejudice. The plaintiff appealed that dismissal to the United States Court of Appeals for the Fourth Circuit, which reversed the order of dismissal and remanded the case back to the Court for further proceedings. Finally, a Motion to Dismiss the Wiggins suit (action (iv) above) was granted and the matter was dismissed in May 2007. Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. In May 2009, the Fourth Circuit reversed the order of dismissal and remanded the case back to the Court for further proceedings.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). In September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings as well as a Motion to Discharge Order to Show Cause. This action is pending.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements (Edward Keely v. Janus Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege some or all of the following claims in addition to other allegations: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims. On May 8, 2009, after a four-day trial in the Keely matter, the jury found in favor of Plaintiff. The Court entered judgment in Keely’s favor for approximately $4.8 million in damages plus pre- and post- judgment interest, attorneys’ fees, and damage enhancement under the Colorado Wage Act. Janus Holdings is evaluating all of its options, including the possibility of an appeal. Trial in the Malley matter has not yet been set.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
7. | Subsequent Events |
The Board of Trustees of Janus Adviser Series (“JAD”), a registered investment company advised by Janus Capital, has approved an Agreement and Plan of Reorganization (the “Plan”) pursuant to which certain JAD Funds will merge with and into, and be acquired by, corresponding similarly managed funds of the Janus Investment Fund Trust. Under the Plan, INTECH Risk-Managed Core Fund, Janus Balanced Fund, Janus Contrarian Fund, Janus Enterprise Fund, Janus Flexible Bond Fund, Janus Fund, Janus Growth and Income Fund, Janus High-Yield Fund, Janus Orion Fund, Janus Overseas Fund, Janus Research Core Fund, Janus Triton Fund, Janus Worldwide Fund, Perkins Mid Cap Value Fund, and Perkins Small Cap Value Fund will acquire assets and liabilities from similarly managed JAD Funds. The merger is a part of several significant enhancements Janus Capital has recently undertaken to reorganize and simplify its mutual fund offerings by creating one combined mutual fund platform. The closing date of the merger is expected to be on or about July 6, 2009. For more information regarding these changes, please refer to the March 17, 2009 Supplement to the Prospectus.
Effective May 1, 2009, J. Eric Thorderson will take sole responsibility as Executive Vice President and Portfolio Manager of Janus Government Money Market Fund and Janus Money Market Fund, which he has managed or co-managed since February 1999 and February 2004, respectively.
Janus Bond & Money Market Funds April 30, 2009 61
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is 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) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During The Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent 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.
At a meeting held on December 9, 2008, 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, 2009 through February 1, 2010, subject to earlier termination as provided for in each agreement, except that with respect to Janus Worldwide Fund, the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or proposed to take to improve long-term Fund performance. At a meeting held on March 12, 2009, the Trustees again considered the investment advisory agreement for Janus Worldwide Fund, and after consideration of information previously provided to them, as well as updated information regarding the steps taken or planned to improve the Fund’s long-term performance, the Trustees approved the continuation of the investment advisory agreement for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve long-term Fund performance.
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.
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 and strategy 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 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, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including
62 Janus Bond & Money Market Funds April 30, 2009
monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
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 quality of those services had been consistent with or superior to quality norms in the industry and 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 continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of their peers for certain periods, the Trustees also concluded that Janus Capital had taken or was taking appropriate steps to address those instances of under-performance. With respect to Janus Worldwide Fund, at the December 9, 2008 meeting the Trustees considered the continuing underperformance of the Fund, and requested that Janus Capital consider additional steps to improve long-term Fund performance. At the March 12, 2009 meeting, the Trustees requested that Janus Capital promptly report to the Trustees regarding the completion of steps that Janus Capital planned to take in an effort to improve the Fund’s long-term performance.
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 Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after applicable contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
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. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only 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 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 administrative 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 that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by the Trustees’ independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information 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. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation 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
Janus Bond & Money Market Funds April 30, 2009 63
Additional Information (unaudited) (continued)
similar strategies and the fees Janus Capital and the subadvisers charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was 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 by Janus Capital.
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 that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group identified by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the 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 several Funds that have caused or will cause 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, 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 economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates 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 their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s 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 pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital 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 receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, each of whom is an Independent Trustee, concluded that the proposed continuation of the investment advisory agreement and, if applicable, the subadvisory agreement for each Fund for another year was in the best interest of the respective Funds and their shareholders, except for Janus Worldwide Fund. With respect to that Fund, at their December 9, 2008 meeting the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or propose to take to improve long-term Fund performance. At their March 12, 2009 meeting the Trustees approved the continuation of the investment advisory agreement for that Fund for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve the Fund’s long-term performance. The Trustees also noted that they had previously approved revised and/or new investment advisory and subadvisory agreements for each Fund subadvised by Perkins Investment Management LLC, and that such amended or new agreements were not effective unless approved by those Funds’ shareholders.
64 Janus Bond & Money Market Funds April 30, 2009
Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. 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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2008. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each 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.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated. Each Fund’s Schedule of Investments relies upon the industry group and country classifications published by Bloomberg L.P.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
Janus Bond & Money Market Funds April 30, 2009 65
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ 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 Funds’ net assets. Because Funds 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 Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, 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 increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds 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.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ 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 Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
66 Janus Bond & Money Market Funds April 30, 2009
expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t 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 a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus Bond & Money Market Funds April 30, 2009 67
Notes
68 Janus Bond & Money Market Funds April 30, 2009
Notes
Janus Bond & Money Market Funds April 30, 2009 69
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/09)
C-0609-046 | 111-24-102 06-09 |
2009 Semiannual Report
Janus Smart Portfolios
Janus Smart Portfolio – Moderate
Janus Smart Portfolio – Conservative
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your portfolio
• Portfolio performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199janus.gif)
Table of Contents
Janus Smart Portfolios
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Portfolio Report | 4 | |
Management Commentary and Schedules of Investments | ||
Janus Smart Portfolio – Growth | 5 | |
Janus Smart Portfolio – Moderate | 11 | |
Janus Smart Portfolio – Conservative | 17 | |
Statements of Assets and Liabilities | 23 | |
Statements of Operations | 24 | |
Statements of Changes in Net Assets | 25 | |
Financial Highlights | 26 | |
Notes to Schedules of Investments | 28 | |
Notes to Financial Statements | 29 | |
Additional Information | 48 | |
Explanations of Charts, Tables and Financial Statements | 51 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders (unaudited)
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199psmithgi.jpg)
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. During the past six months we have seen some of the most challenging market and economic conditions in a generation. Throughout these turbulent times, we have maintained our disciplined, long-term investment approach and research-driven philosophy.
As a result, our long-term results generally remained strong relative to our peers. For the one-year period ended April 30, 2009, 50% of Janus retail funds ranked within Lipper’s top two quartiles. Looking longer-term, 85% of our funds achieved first- or second-quartile Lipper rankings for the three-year period and 86% ranked in Lipper’s top two quartiles for the five-year period ended April 30, 2009. (Lipper rankings are based on total returns. See complete rankings on page 3.)
Major Market Themes
Despite a relatively strong finish, most markets were modestly lower as the most recent six-month period (ended April 30, 2009) came to a close. Consequences from the credit crisis and recession concerns dictated market performance for much of the period. U.S. markets reached 12-year lows and most global markets declined to 5-year lows in March, before rallying late in the period.
The U.S. economy was still in the throes of a recession at period end. Declining asset values in U.S. residential real estate continued to weigh on financial institutions and their ability to extend credit to consumers. Compounding the headwinds for the consumer was a labor market that continued to struggle with more than 5.7 million jobs lost since January 2008. However, late in the period, some signs emerged that the rate of decline in the U.S. economy could be slowing. Retail sales improved through April (though they remained at low absolute levels) and mortgage applications were on the rise in March and April. A slowing in the rate of decline in U.S. manufacturing and consumer confidence indicators provided some additional support to the equity markets.
Improving credit markets, better-than expected earnings reports from some large banks and easing of accounting rules for banks’ troubled assets, also helped to fuel the late period rally, suggesting to the market that the ailing banking industry could be on the mend. Financials remained the worst performing global sector during the six-month period, despite leading the rally off of the March lows. Materials and information technology outperformed, posting modest gains while growth stocks significantly outperformed value stocks. Stocks of mid-sized companies were the strongest performers in the period while large-cap stocks topped small-caps. Within fixed income, the flight-to-quality that was strongly evident in the second half of 2008 finally eased beginning in January. Driven by the performance of the lower quality debt, high-yield corporate spreads relative to Treasuries narrowed. Long-term government bond yields rebounded from historic lows reached in December.
Outlook
At the end of the period, we were encouraged by the slowing in the rate of decline in the U.S. and global economies and the continued progress toward normalization in the credit markets. Though we were pleased to see stocks on the rise, we believe it may be some time before credit markets return to normal and the economy and equity markets fully recover.
We think the moves to date by central banks and governments worldwide will help the global economy recover. However, their actions will likely take time to work and could, in the longer term, fuel inflation. That said, we are not overly concerned about inflation rising over the near term, nor do we believe economic growth will necessarily return to the rapid pace of recent years. Looking forward, the economy will likely be characterized by de-leveraging across consumers and businesses, and a higher personal savings rate.
Given that we have not seen a significant differentiation of fundamentals expressed in stock prices yet, we feel the opportunities for bottom-up, research-driven security selection are tremendous. Our unconstrained approach to research fosters an entrepreneurial culture that encourages our investment team to “go anywhere” to find the most compelling investment ideas around the globe. And we believe we have the right team in place to take advantage of this period in history.
We sincerely appreciate your continued investment in Janus funds. We recognize the confidence that you have placed in us
Janus Smart Portfolios April 30, 2009 1
Continued
and we continue in our quest to deliver strong, consistent fund performance to you, our investors.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
The opinions are those of the authors as of April 30, 2009 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Past performance is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Rankings discussed do not indicate positive fund performance. Most funds have experienced negative or poor short-term performance.
2 Janus Smart Portfolios April 30, 2009
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/09 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 52 | 435/844 | 40 | 284/724 | 39 | 233/610 | 60 | 184/310 | 15 | 3/20 | 47 | 380/808 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 52 | 286/550 | 10 | 43/476 | 8 | 30/393 | 77 | 142/184 | 32 | 14/43 | 25 | 130/528 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 96 | 438/457 | 22 | 77/349 | 4 | 10/290 | N/A | N/A | 25 | 43/174 | 86 | 381/443 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 80 | 672/844 | 19 | 132/724 | 12 | 72/610 | 44 | 134/310 | 4 | 3/87 | 17 | 118/710 | |||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 3 | 15/587 | 1 | 5/501 | N/A | N/A | N/A | N/A | 1 | 1/443 | 1 | 4/508 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 80 | 668/844 | 1 | 1/724 | 1 | 2/610 | 21 | 63/310 | 5 | 2/40 | 35 | 283/824 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 48 | 279/587 | 36 | 176/501 | 34 | 136/408 | 65 | 132/204 | 10 | 1/10 | 27 | 77/286 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Global Healthcare/Biotechnology Funds | 75 | 39/51 | 45 | 21/46 | 54 | 24/44 | 19 | 3/15 | 15 | 2/13 | 29 | 15/51 | |||||||||||||
Janus Global Technology Fund (12/98) | Global Science & Technology Funds | 18 | 14/81 | 16 | 12/76 | 28 | 19/69 | 29 | 6/20 | 25 | 5/19 | 25 | 19/76 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 3 | 12/524 | 2 | 4/385 | 1 | 2/290 | 11 | 15/148 | 4 | 1/27 | 1 | 2/346 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 98 | 736/756 | 41 | 247/612 | 5 | 21/460 | N/A | N/A | 18 | 38/213 | 18 | 38/213 | |||||||||||||
Janus Research Core Fund(1)(2) (6/96) | Large-Cap Core Funds | 88 | 802/914 | 83 | 646/783 | 21 | 136/650 | 25 | 90/360 | 4 | 8/212 | 82 | 722/884 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 57 | 514/914 | 73 | 567/783 | 26 | 169/650 | 30 | 105/360 | 8 | 6/81 | 48 | 417/884 | |||||||||||||
INTECH Risk-Managed Core Fund(3) (2/03) | Multi-Cap Core Funds | 55 | 415/756 | 58 | 354/612 | 37 | 167/460 | N/A | N/A | 42 | 157/377 | 42 | 157/377 | |||||||||||||
Perkins Mid Cap Value Fund - Investor Shares(1)(4)(5) (8/98) | Mid-Cap Value Funds | 9 | 27/320 | 4 | 10/256 | 4 | 6/192 | 3 | 2/67 | 4 | 2/56 | 4 | 2/56 | |||||||||||||
Perkins Small Cap Value Fund - Investor Shares(4)(6) (10/87) | Small-Cap Core Funds | 1 | 7/763 | 2 | 7/614 | 8 | 39/496 | 14 | 32/231 | 6 | 7/125 | 6 | 7/125 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 5 | 25/583 | 4 | 16/482 | 5 | 20/402 | 21 | 44/209 | 10 | 2/20 | 6 | 32/535 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 11 | 50/457 | 15 | 55/387 | 14 | 46/334 | 9 | 18/203 | 6 | 5/92 | 16 | 51/325 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 1 | 1/260 | 2 | 4/214 | 3 | 5/179 | 8 | 7/90 | 16 | 4/24 | 5 | 12/254 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 8 | 40/506 | 21 | 79/380 | 56 | 165/297 | N/A | N/A | 11 | 21/206 | 43 | 145/342 | |||||||||||||
Janus Global Research Fund(1) (2/05) | Global Funds | 56 | 280/506 | 10 | 35/380 | N/A | N/A | N/A | N/A | 6 | 18/321 | 6 | 18/321 | |||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 46 | 541/1,197 | 2 | 12/894 | 1 | 2/707 | 3 | 10/369 | 2 | 2/107 | 1 | 2/647 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 68 | 344/506 | 57 | 216/380 | 91 | 271/297 | 91 | 140/153 | 39 | 7/17 | 62 | 371/599 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 75 | 504/677 | 14 | 75/539 | N/A | N/A | N/A | N/A | 8 | 38/533 | 8 | 38/533 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 32 | 167/524 | 6 | 23/385 | N/A | N/A | N/A | N/A | 5 | 19/380 | 5 | 19/380 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 32 | 133/428 | 10 | 33/335 | N/A | N/A | N/A | N/A | 5 | 13/317 | 5 | 13/317 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Formerly named Janus Fundamental Equity Fund. | |
(3) | Formerly named INTECH Risk-Managed Stock Fund. | |
(4) | Rating is for the Investor Share class only; other classes may have different performance characteristics. | |
(5) | Formerly named Janus Mid Cap Value Fund. | |
(6) | Formerly named Janus Small Cap Value Fund. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc., a wholly-owned subsidiary of Reuters, is a nationally recognized organization that ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
Janus Smart Portfolios April 30, 2009 3
Useful Information About Your Portfolio Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Portfolios’ manager as well as statistical information to help you understand how your Portfolio’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Portfolios’ manager in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2009. As the investing environment changes, so could the manager’s opinions. These views are unique to the manager and aren’t necessarily shared by his fellow employees or by Janus in general.
Portfolio Expenses
We believe it’s important for our shareholders to have a clear understanding of Portfolio expenses and the impact they have on investment return.
The following is important information regarding each Portfolio’s Expense Example, which appears in each Portfolio’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Portfolio.
Example
As a shareholder of a Portfolio, you incur two types of costs (1) transaction costs, such as underlying funds’ redemption fees, where applicable (and any related exchange fees), and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio 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-month period from November 1, 2008 to April 30, 2009.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, 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 first line 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 second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’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 Portfolio 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.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive each Portfolio’s total operating expenses, excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes and extraordinary expenses including, but not limited to, acquired fund fees and expenses to certain limits until at least March 1, 2010. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Portfolios’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as underlying funds’ redemption fees (where applicable). Redemption fees are fully described in the prospectus. Therefore, the second line of each table is 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.
4 Janus Smart Portfolios April 30, 2009
Janus Smart Portfolio - Growth (unaudited) | Ticker: JSPGX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ and Perkins’ fundamental research with those using the mathematical approach of INTECH. The Portfolio seeks income and a secondary emphasis of growth of capital with approximately 20% allocated to bonds and money markets and 80% to stocks.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Growth returned 2.85% during the six-month period ended April 30, 2009. This compares to a return of -8.53% for the S&P 500® Index, the Portfolio’s primary benchmark, during the same period. These results compare to a return of -1.57% by its secondary benchmark, the Growth Allocation Index. We believe this is an important perspective from which to view the portfolio’s results since the Growth Allocation Index includes stocks and bonds in roughly the same proportion as the portfolio (80% equity and 20% fixed income).
Market Review
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve (Fed) announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected economic reports added fuel to the rally. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunications were the best relative performers.
In fixed income, the flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and credit markets gained momentum through March and April. Overall, fixed income investors experienced strong gains during the six-month period ended April 30, 2009. The Fed helped fuel the shift to riskier securities by lowering the federal funds rate in December from 1% to a range of zero to 0.25%, a historic move. The low absolute yields in Treasuries and historically wide relative spreads to Treasuries in the high yield market appeared to prompt a move into corporate bonds in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, high yield bonds were the best performing fixed income segment. In March, the Fed announcement on buying government debt prompted a large one-day drop in the 10-year Treasury note yield. By period end, the 10-year Treasury’s yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Similar to the fall, correlations among asset groups remained high through most of the period. We believe this is a temporary phenomenon (a typical characteristic of market crises) that appeared on its way to resolving itself, as diversification benefits became more noteworthy late in the period.
Contributors to Performance
Janus Adviser Flexible Bond Fund, which was the largest holding with an average weighting of 19.75% during the six-month period, was the largest contributor to relative performance with its 9.89% return. The next highest contributor was Janus Adviser International Growth Fund, which returned 13.02% and carried a 9.34% average weighting. Janus Adviser International Equity Fund was the third largest contributor, as it returned 8.55% and had an 11.18% average weighting.
Detractors from Performance
Janus Adviser INTECH Risk-Managed Value Fund was the largest individual detractor, as it returned -12.53% and had an average weighting of 13.90%. Among other detractors was
Janus Smart Portfolios April 30, 2009 5
Janus Smart Portfolio - Growth (unaudited)
Janus Adviser INTECH Risk-Managed Growth Fund, which returned -5.62% and had an average weighting of 10.49%. Janus Overseas Fund was also a minor detractor, as it was only invested in the Portfolio in November and December at an average position size of 0.29% and returned -6.07% for those two months.
Investment Process
Janus Smart Portfolio – Growth is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk. The Portfolio is also designed to blend the three core competencies that Janus practices as an organization: mathematically driven, risk-managed strategies and fundamentally driven, growth and value-oriented investments. We believe that combining these very different approaches in a single investment can potentially produce a Portfolio with a unique and powerful performance profile.
The investment process involves setting return expectations for a broad range of possible Janus mutual funds that we believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Growth. Finally, we select the appropriate Janus funds that replicate our desired exposure. The allocations assigned to each selected underlying fund were consistent with our view of current market conditions and the long-term trade-off between risk and reward potential that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time. Any portfolio risk management process we’ve discussed includes an effort to monitor and manage risk and should not be confused with nor does it imply low risk or the ability to control risk.
During the period, oversight by the Janus Asset Allocation Committee was added to the process. We believe this is a positive change in that it provides additional input on the overall allocation, and we think will ultimately serve Smart Portfolio shareholders well.
Investment Strategy
We made several adjustments to the portfolio during the period. We started a target allocation of 2% for Perkins Mid-Cap Value Fund and added 1% each to Janus Adviser INTECH Risk-Managed Value (to a 17% overall weighting), Janus Adviser International Equity (to 13%) and Janus High-Yield Fund (to 3%). We reduced the target allocation for Janus Twenty Fund and Janus Adviser Flexible Bond Fund by 2% each to weightings of 6% and 16%, respectively. Janus Orion Fund was also trimmed by 1% to a new target weighting of 2%. In addition to adding value exposure, these changes reflect our confidence in both the INTECH and Perkins investment teams while reducing portfolio risk incrementally. The increase in high yield reflects our more constructive outlook for the asset class in general.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build. In our opinion, there has not been a significant fundamental difference between what we view as low and high quality companies. As a result, we think there were still many individual opportunities in the market at period end, which offer favorable risk/reward profiles in our view.
In our opinion, the return to normalcy in the markets that we witnessed late in the period should benefit the Portfolio in two unique ways. First, we believe a more normal market environment should allow asset correlations to normalize and thereby allow the benefits of diversification to once again assert itself in full measure. Secondly, we think calmer markets should emphasize the benefits of security selection that characterizes the investment processes of many of the underlying funds in which we invest.
Thank you for investing in Janus Smart Portfolio – Growth.
6 Janus Smart Portfolios April 30, 2009
(unaudited)
Janus Smart Portfolio – Growth (% of Net Assets)
Janus Adviser Flexible Bond Fund – Class I Shares | 17.3% | |||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 13.8% | |||
Janus Adviser International Equity Fund – Class I Shares | 12.0% | |||
Janus Adviser International Growth Fund – Class I Shares | 10.1% | |||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 9.9% | |||
Janus Growth and Income Fund | 7.9% | |||
Janus Research Fund | 7.0% | |||
Janus Twenty Fund | 6.8% | |||
Janus High-Yield Fund | 3.5% | |||
Janus Adviser Large Cap Growth Fund – Class I Shares | 3.0% | |||
Janus Adviser Contrarian Fund – Class I Shares | 2.7% | |||
Janus Orion Fund | 2.7% | |||
Perkins Mid Cap Value Fund(1) – Investor Shares | 2.0% | |||
Janus Adviser Perkins Small Company Value Fund(2) – Class I Shares | 1.4% |
(1) | Formerly named Janus Mid Cap Value Fund. | |
(2) | Formerly named Janus Adviser Small Company Value Fund. |
Janus Smart Portfolio - Growth At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23p02.gif)
*Includes cash and cash equivalents of (0.1)%.
Janus Smart Portfolios April 30, 2009 7
Janus Smart Portfolio - Growth (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23m02.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Growth | 2.85% | –30.14% | –1.71% | 1.08% | 1.07% | ||||||
S&P 500® Index | –8.53% | –35.31% | –8.26% | ||||||||
Growth Allocation Index | –1.57% | –30.28% | –4.44% | ||||||||
Lipper Quartile | – | 3rd | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Growth Funds | – | 504/677 | 38/533 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. Total returns shown include fee waivers, if any, and without such waivers total returns would have been lower.
The Portfolio’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Portfolio invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
8 Janus Smart Portfolios April 30, 2009
(unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
The proprietary mathematical investment process used by INTECH, the subadviser to certain underlying funds, may not achieve the desired results. Additionally, the rebalancing techniques used by Janus Capital and INTECH may result in a higher portfolio turnover rate and related expenses compared to a “buy and hold” fund strategy. A higher portfolio turnover rate increases the likelihood of higher net taxable gains or losses for shareholders.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,028.50 | $ | 1.21 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.60 | $ | 1.20 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.24%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
Janus Smart Portfolios April 30, 2009 9
Janus Smart Portfolio - Growth
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 100.1% | ||||||||||||
Equity Funds – 79.3% | ||||||||||||
496,384 | Janus Adviser Contrarian Fund – Class I Shares | $ | 3,990,928 | |||||||||
1,701,628 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 14,685,047 | ||||||||||
3,092,804 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 20,474,366 | ||||||||||
2,415,463 | Janus Adviser International Equity Fund – Class I Shares | 17,850,270 | ||||||||||
465,327 | Janus Adviser International Growth Fund – Class I Shares | 15,030,063 | ||||||||||
236,526 | Janus Adviser Large Cap Growth Fund – Class I Shares | 4,380,461 | ||||||||||
202,369 | Janus Adviser Perkins Small Company Value Fund(2) – Class I Shares | 2,011,548 | ||||||||||
523,988 | Janus Growth and Income Fund | 11,658,732 | ||||||||||
550,830 | Janus Orion Fund | 3,949,454 | ||||||||||
552,215 | Janus Research Fund | 10,331,944 | ||||||||||
210,611 | Janus Twenty Fund | 10,126,165 | ||||||||||
189,108 | Perkins Mid Cap Value Fund(3) – Investor Shares | 2,974,676 | ||||||||||
117,463,654 | ||||||||||||
Fixed-Income Funds – 20.8% | ||||||||||||
2,073,619 | Janus Adviser Flexible Bond Fund – Class I Shares | 25,671,402 | ||||||||||
701,571 | Janus High-Yield Fund | 5,135,496 | ||||||||||
30,806,898 | ||||||||||||
Total Investments (total cost $188,915,395) – 100.1% | 148,270,552 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (199,423) | |||||||||||
Net Assets – 100% | $ | 148,071,129 | ||||||||||
(1) | The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. | |
(2) | Formerly named Janus Adviser Small Company Value Fund. | |
(3) | Formerly named Janus Mid Cap Value Fund. |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Smart Portfolios April 30, 2009
Janus Smart Portfolio - Moderate (unaudited) | Ticker: JSPMX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ and Perkins’ fundamental research with those using the mathematical approach of INTECH. The Portfolio seeks income and a secondary emphasis of growth of capital with approximately 40% allocated to bonds and money markets and 60% to stocks.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Moderate returned 5.04% during the six-month period ended April 30, 2009. This compares to a return of -8.53% for the S&P 500® Index, the Portfolio’s primary benchmark, during the same period. These results compare to a return of 0.49% by its secondary benchmark, the Moderate Allocation Index. We believe the latter is an important perspective from which to view the portfolio’s results since the Moderate Allocation Index includes stocks and bonds in roughly the same proportion as the portfolio (60% equity and 40% fixed income).
Market Review
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve (Fed) announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected economic reports added fuel to the rally. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunications were the best relative performers.
In fixed income, the flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and credit markets gained momentum through March and April. Overall, fixed income investors experienced strong gains during the six-month period ended April 30, 2009. The Fed helped fuel the shift to riskier securities by lowering the federal funds rate in December from 1% to a range of zero to 0.25%, a historic move. The low absolute yields in Treasuries and historically wide relative spreads to Treasuries in the high yield market appeared to prompt a move into corporate bonds in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, high yield bonds were the best performing fixed income segment. In March, the Fed announcement on buying government debt prompted a large one-day drop in the 10-year Treasury note yield. By period end, the 10-year Treasury’s yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Similar to the fall, correlations among asset groups remained high through most of the period. We believe this is a temporary phenomenon (a typical characteristic of market crises) that appeared well on its way to resolving itself, as diversification benefits became more noteworthy late in the period.
Contributors to Performance
Janus Adviser Flexible Bond Fund, which was easily the largest holding with an average weighting of 36.13% during the six-month period, was by far the largest contributor to performance with its 9.89% return. The next highest contributor was Janus Adviser International Growth Fund, which returned 13.02% and carried a 7.71% average weighting. Janus Adviser International Equity Fund was the third largest contributor, as it returned 8.55% and had a 7.85% average weighting.
Detractors from Performance
Janus Adviser INTECH Risk-Managed Value Fund was the largest individual detractor, as it returned -12.53% and had an average weighting of 10.17%. Among other detractors was
Janus Smart Portfolios April 30, 2009 11
Janus Smart Portfolio - Moderate (unaudited)
Janus Adviser INTECH Risk-Managed Growth Fund, which returned -5.62% and had an average weighting of 8.06%. Janus Overseas Fund was also a minor detractor, as it was only invested in the Portfolio in November and December at an average position size of 0.27% and generated a -6.07% return for those two months.
Investment Process
Janus Smart Portfolio – Moderate is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk. The Portfolio is also designed to blend three of the core competencies that Janus practices as an organization: mathematically-driven, risk-managed strategies and fundamentally-driven, growth and value-oriented investments. We believe that combining these very different approaches in a single investment can potentially produce a Portfolio with a unique and powerful performance profile.
The investment process involves setting return expectations for a broad range of Janus mutual funds that we believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Moderate. Finally, we select the appropriate Janus funds that replicate our desired exposure. The allocations assigned to each selected underlying fund were consistent with our view of current market conditions and the long-term trade-off between risk and reward potential that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time. Any portfolio risk management process we’ve discussed includes an effort to monitor and manage risk and should not be confused with nor does it imply low risk or the ability to control risk.
During the period, oversight by the Janus Asset Allocation Committee was added to the process. We believe this is a positive change in that it provides additional input on the overall allocation, and we think will ultimately serve Smart Portfolio shareholders well.
Investment Strategy
During the period, changes to target allocations for the various investments included a new allocation of 2% to Janus Adviser Perkins Small Company Value Fund and a 1% increase to 13% for Janus Adviser INTECH Risk-Managed Value Fund. Likewise, Janus Twenty Fund’s target allocation was decreased by 2% to 2% and Janus High-Yield Fund’s allocation dropped by 1% to 3%. In addition to adding value exposure, these changes reflect our confidence in both the INTECH and Perkins investment teams while reducing portfolio risk incrementally. The high-yield allocation was reduced due to heightened volatility in that asset class.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build. In our opinion, there has not been a significant fundamental difference between what we view as low and high quality companies. As a result, we think there were still many individual opportunities in the market at period end, which offer favorable risk/reward profiles in our view.
In our opinion, the return to normalcy in the markets that we witnessed late in the period should benefit the Portfolio in two unique ways. First, we believe a more normal market environment should allow asset correlations to normalize and thereby allow the benefits of diversification to once again assert itself in full measure. Secondly, we think calmer markets should emphasize the benefits of security selection that characterizes the investment processes of many of the underlying funds in which we invest.
Thank you for investing in Janus Smart Portfolio – Moderate.
12 Janus Smart Portfolios April 30, 2009
(unaudited)
Janus Smart Portfolio – Moderate (% of Net Assets)
Janus Adviser Flexible Bond Fund – Class I Shares | 33.1% | |||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 10.5% | |||
Janus Adviser International Growth Fund – Class I Shares | 8.6% | |||
Janus Adviser International Equity Fund – Class I Shares | 8.6% | |||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 8.0% | |||
Janus Growth and Income Fund | 7.7% | |||
Janus Research Fund | 4.9% | |||
Janus Short-Term Bond Fund | 4.6% | |||
Janus High-Yield Fund | 3.4% | |||
Janus Orion Fund | 2.9% | |||
Janus Adviser Large Cap Growth Fund – Class I Shares | 2.9% | |||
Janus Twenty Fund | 2.8% | |||
Janus Adviser Perkins Small Company Value Fund(1) – Class I Shares | 2.1% |
(1) | Formerly named Janus Adviser Small Company Value Fund. |
Janus Smart Portfolio - Moderate At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23p03.gif)
*Includes cash and cash equivalents of (0.1)%
Janus Smart Portfolios April 30, 2009 13
Janus Smart Portfolio - Moderate (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23m03.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Moderate | 5.04% | –20.78% | 0.35% | 1.04% | 1.01% | ||||||
S&P 500® Index | –8.53% | –35.31% | –8.26% | ||||||||
Moderate Allocation Index | 0.49% | –22.30% | –2.08% | ||||||||
Lipper Quartile | – | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 167/524 | 19/380 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. Total returns shown include fee waivers, if any, and without such waivers total returns would have been lower.
The Portfolio’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Portfolio invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
14 Janus Smart Portfolios April 30, 2009
(unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
The proprietary mathematical investment process used by INTECH, the subadviser to certain underlying funds, may not achieve the desired results. Additionally, the rebalancing techniques used by Janus Capital and INTECH may result in a higher portfolio turnover rate and related expenses compared to a “buy and hold” fund strategy. A higher portfolio turnover rate increases the likelihood of higher net taxable gains or losses for shareholders.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08-4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,050.40 | $ | 1.02 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.80 | $ | 1.00 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.20%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
Janus Smart Portfolios April 30, 2009 15
Janus Smart Portfolio - Moderate
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 100.1% | ||||||||||||
Equity Funds – 59.0% | ||||||||||||
1,093,968 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | $ | 9,440,943 | |||||||||
1,864,824 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 12,345,133 | ||||||||||
1,367,216 | Janus Adviser International Equity Fund – Class I Shares | 10,103,727 | ||||||||||
315,757 | Janus Adviser International Growth Fund – Class I Shares | 10,198,966 | ||||||||||
183,947 | Janus Adviser Large Cap Growth Fund – Class I Shares | 3,406,703 | ||||||||||
253,774 | Janus Adviser Perkins Small Company Value Fund(2) – Class I Shares | 2,522,515 | ||||||||||
408,739 | Janus Growth and Income Fund | 9,094,435 | ||||||||||
475,434 | Janus Orion Fund | 3,408,865 | ||||||||||
308,700 | Janus Research Fund | 5,775,780 | ||||||||||
68,212 | Janus Twenty Fund | 3,279,616 | ||||||||||
69,576,683 | ||||||||||||
Fixed – Income Funds – 41.1% | ||||||||||||
3,156,740 | Janus Adviser Flexible Bond Fund – Class I Shares | 39,080,436 | ||||||||||
542,550 | Janus High-Yield Fund | 3,971,467 | ||||||||||
1,830,281 | Janus Short-Term Bond Fund | 5,417,631 | ||||||||||
48,469,534 | ||||||||||||
Total Investments (total cost $138,001,034) – 100.1% | 118,046,217 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (118,020) | |||||||||||
Net Assets – 100% | $ | 117,928,197 | ||||||||||
(1) | The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. | |
(2) | Formerly named Janus Adviser Small Company Value Fund. |
See Notes to Schedules of Investments and Financial Statements.
16 Janus Smart Portfolios April 30, 2009
Janus Smart Portfolio - Conservative (unaudited) | Ticker: JSPCX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ fundamental research with those using the mathematical approach of INTECH. The Portfolio seeks income and a secondary emphasis of growth of capital with approximately 60% allocated to bonds and money markets and 40% to stocks.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Conservative returned 5.69% during the six-month period ended April 30, 2009. This compares to a return of -8.53% for the S&P 500® Index, the Portfolio’s primary benchmark, during the same period. These results compare to a 2.70% return by its secondary benchmark, the Conservative Allocation Index. We believe the latter is an important perspective from which to view the portfolio’s results since the Conservative Allocation Index includes stocks and bonds in roughly the same proportion as the portfolio (40% equity and 60% fixed income).
Market Review
Continuing fallout from the credit crisis and concerns that the recession may be prolonged dictated market performance through most of the six-month period ended April 30, 2009. A market rebound, however, that started in the middle of March and continued into April suggested investors were beginning to speculate that the worst of the economic and financial crisis may be over. The U.S. market’s recovery off 12-year lows only partially eased the losses for the six-month period, as most indices finished more than 8% lower. Sentiment began to improve in March amid some positive news coming out of the financials sector. A significant boost came in late March when the U.S. Federal Reserve (Fed) announced it would buy up to $1.15 trillion in Treasuries, mortgage-backed securities and agency debt to help credit markets and the beleaguered housing market. The rally continued into April, as some large banks reported better-than-expected earnings, fueling hopes that the rate of decline in the ailing banking industry could be slowing. A proposed easing of accounting rules (that became a reality in April) for banks’ troubled assets, as well as better-than-expected economic reports added fuel to the rally. Although the financials sector was the best performing since the markets began rallying in March, it was the worst for the six-month period followed distantly by industrials. Information technology and telecommunications were the best relative performers.
In fixed income, the flight-to-quality trade that has dominated the fixed income markets throughout the credit crisis finally eased in January and credit markets gained momentum through March and April. Overall, fixed income investors experienced strong gains during the six-month period ended April 30, 2009. The Fed helped fuel the shift to riskier securities by lowering the federal funds rate in December from 1% to a range of zero to 0.25%, a historic move. The low absolute yields in Treasuries and historically wide relative spreads to Treasuries in the high yield market appeared to prompt a move into corporate bonds in January; this trend resumed in March and April after a brief uptick in spreads in February. For the overall period, high yield bonds were the best performing fixed income segment. In March, the Fed announcement on buying government debt prompted a large one-day drop in the 10-year Treasury note yield. By period end, the 10-year Treasury’s yield rebounded from its lows but still finished the period down almost 1% (prices move inversely to yield). Similar to high yield, commercial mortgage-backed securities (CMBS) rallied late in the period to eke out slight gains. MBS, benefiting from the Fed’s buying program, and a tightening in investment grade credit spreads (although less pronounced than in high yield), helped the investment grade aggregate indices to an almost 8% gain during the period.
Similar to the fall, correlations among asset groups remained high through most of the period. We believe this is a temporary phenomenon (a typical characteristic of market crises) that appeared on its way to resolving itself, as diversification benefits became more noteworthy late in the period.
Contributors to Performance
Given its relatively conservative mix of stocks and bonds, Janus Smart Portfolio – Conservative outperformed its more aggressive siblings in Janus Smart Portfolio suite. Janus Adviser Flexible Bond Fund, which was easily the largest holding with an average weighting of 53.3% during the six-month period, was by far the largest contributor to performance with its 9.89% return. The next highest contributor was Janus Adviser International Equity Fund, which returned 8.55% and carried a 4.8% average weighting. Janus High-Yield Fund was the third largest contributor, as it returned 12.44% and had a 4.75% average weighting.
Janus Smart Portfolios April 30, 2009 17
Janus Smart Portfolio - Conservative (unaudited)
Detractors from Performance
Janus Adviser INTECH Risk-Managed Value Fund was the largest individual detractor, as it returned -12.53% and had an average weighting of 7.6% in the Portfolio. Among other detractors was Janus Adviser INTECH Risk-Managed Growth Fund, which returned -5.62% and had an average weighting of 5.93%. Janus Overseas Fund was also a minor detractor, as it was only invested in the Portfolio in November and December at an average position size of 0.30% and generated a -6.07% return for those two months.
Investment Process
Janus Smart Portfolio – Conservative is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk. The Portfolio is also designed to blend the three core competencies that Janus practices as an organization: mathematically-driven, risk-managed strategies and fundamentally-driven, growth and value-oriented investments. We believe that combining these very different approaches in a single investment can potentially produce a Portfolio with a unique and powerful performance profile.
The investment process involves setting return expectations for a broad range of Janus mutual funds that we believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Conservative. Finally, we select the appropriate Janus funds that replicate our desired exposure. The allocations assigned to each selected underlying fund were consistent with our view of current market conditions and the long-term trade-off between risk and reward potential that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time. Any portfolio risk management process we’ve discussed includes an effort to monitor and manage risk and should not be confused with nor does it imply low risk or the ability to control risk.
During the period, oversight by the Janus Asset Allocation Committee was added to the process. We believe this is a positive change in that it provides additional input on the overall allocation, and we think will ultimately serve Smart Portfolio shareholders well.
Fund Positioning
During the period, we changed target allocations for four investments. Janus Adviser Flexible Bond Fund saw its target allocation increased by 2% to 49%, while Janus High – Yield Fund’s allocation declined by 2% to 5% due to our concerns of heightened volatility in that asset class. In addition, Janus Adviser INTECH Risk-Managed Value Fund’s allocation increased by 1%, while Janus Adviser International Growth Fund’s target allocation declined by 1%.
Outlook
The slowing rate of decline in the U.S. and global economies as well as improvement in the credit markets through period end have given many equity and fixed income market participants a sense that an economic rebound may not be as far in the future as feared. There is a battle between reflationary policy and deflationary pressure; the question is which one will ultimately win. Over the next six to 18 months, we believe deflationary pressure will outweigh the reflationary policies that are in place. We think all of the moves by central banks and governments around the globe will help the global economy recover, but they will take time to take hold and ultimately fuel inflation. Rising unemployment, declining wages and increased uncertainty in the market hinder the near-term economic outlook and will likely keep inflation at bay in our view. Once the economy stabilizes and we start to see consumption rise, we believe inflationary pressures will build. In our opinion, there has not been a significant fundamental difference between what we view as low and high quality companies. As a result, we think there were still many individual opportunities in the market at period end, which offer favorable risk/reward profiles in our view.
In our opinion, the return to normalcy in the markets that we witnessed late in the period should benefit the Portfolio in two unique ways. First, we believe a more normal market environment should allow asset correlations to normalize and thereby allow the benefits of diversification to once again assert itself in full measure. Secondly, we think calmer markets should emphasize the benefits of security selection that characterizes the investment processes of many of the underlying funds in which we invest.
Thank you for investing in Janus Smart Portfolio – Conservative.
18 Janus Smart Portfolios April 30, 2009
(unaudited)
Janus Smart Portfolio – Conservative (% of Net Assets)
Janus Adviser Flexible Bond Fund – Class I Shares | 50.9% | |||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 8.0% | |||
Janus Short-Term Bond Fund | 6.5% | |||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 6.0% | |||
Janus Growth and Income Fund | 5.5% | |||
Janus Adviser International Equity Fund – Class I Shares | 5.5% | |||
Janus High-Yield Fund | 5.1% | |||
Janus Adviser Contrarian Fund – Class I Shares | 3.6% | |||
Janus Adviser International Growth Fund – Class I Shares | 3.2% | |||
Janus Research Fund | 2.9% | |||
Janus Orion Fund | 2.9% |
Janus Smart Portfolio - Conservative At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2009
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23p01.gif)
*Includes cash and cash equivalents of (0.1)%
Janus Smart Portfolios April 30, 2009 19
Janus Smart Portfolio - Conservative (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-09-017503/d68199jif23m01.gif)
Average Annual Total Return – for the periods ended April 30, 2009 | Expense Ratios – for the fiscal year ended October 31, 2008 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Conservative | 5.69% | –12.81% | 1.92% | 1.04% | 0.96% | ||||||
S&P 500® Index | –8.53% | –35.31% | –8.26% | ||||||||
Conservative Allocation Index | 2.70% | –13.98% | 0.27% | ||||||||
Lipper Quartile | – | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Conservative Funds | – | 133/428 | 13/317 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2010. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. Total returns shown include fee waivers, if any, and without such waivers total returns would have been lower.
The Portfolio’s expense ratios shown were determined based on average net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which the Portfolio invests or has invested during the period.) Further information is available in the prospectus. Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
20 Janus Smart Portfolios April 30, 2009
(unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with the Janus “fund of funds” portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
The proprietary mathematical investment process used by INTECH, the subadviser to certain underlying funds, may not achieve the desired results. Additionally, the rebalancing techniques used by Janus Capital and INTECH may result in a higher portfolio turnover rate and related expenses compared to a “buy and hold” fund strategy. A higher portfolio turnover rate increases the likelihood of higher net taxable gains or losses for shareholders.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/08) | (4/30/09) | (11/1/08- 4/30/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,056.90 | $ | 0.87 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.95 | $ | 0.85 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.17%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
Janus Smart Portfolios April 30, 2009 21
Janus Smart Portfolio - Conservative
Schedule of Investments (unaudited)
As of April 30, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 100.1% | ||||||||||||
Equity Funds – 37.6% | ||||||||||||
387,429 | Janus Adviser Contrarian Fund – Class I Shares | $ | 3,114,929 | |||||||||
612,185 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 5,283,159 | ||||||||||
1,062,374 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 7,032,918 | ||||||||||
648,713 | Janus Adviser International Equity Fund – Class I Shares | 4,793,992 | ||||||||||
85,571 | Janus Adviser International Growth Fund – Class I Shares | 2,763,951 | ||||||||||
218,740 | Janus Growth and Income Fund | 4,866,964 | ||||||||||
354,650 | Janus Orion Fund | 2,542,841 | ||||||||||
137,613 | Janus Research Fund | 2,574,747 | ||||||||||
32,973,501 | ||||||||||||
Fixed-Income Funds – 62.5% | ||||||||||||
3,603,025 | Janus Adviser Flexible Bond Fund – Class I Shares | 44,605,446 | ||||||||||
604,186 | Janus High-Yield Fund | 4,422,639 | ||||||||||
1,938,503 | Janus Short-Term Bond Fund | 5,737,968 | ||||||||||
54,766,053 | ||||||||||||
Total Investments (total cost $95,150,275) – 100.1% | 87,739,554 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (86,721) | |||||||||||
Net Assets – 100% | $ | 87,652,833 | ||||||||||
(1) | This Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. |
See Notes to Schedules of Investments and Financial Statements.
22 Janus Smart Portfolios April 30, 2009
Statements of Assets and Liabilities
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
As of April 30, 2009 (unaudited) | Portfolio - | Portfolio - | Portfolio - | |||||||||||
(all numbers in thousands except net asset value per share) | Growth | Moderate | Conservative | |||||||||||
Assets: | ||||||||||||||
Investments at cost | $ | 188,915 | $ | 138,001 | $ | 95,150 | ||||||||
Investments at value | $ | 148,271 | $ | 118,046 | $ | 87,740 | ||||||||
Receivables: | ||||||||||||||
Portfolio shares sold | 84 | 272 | 75 | |||||||||||
Dividends | 152 | 199 | 224 | |||||||||||
Non-interested Trustees’ deferred compensation | 3 | 3 | 2 | |||||||||||
Other assets | 13 | 1 | 1 | |||||||||||
Total Assets | 148,523 | 118,521 | 88,042 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Investments purchased | 153 | 442 | 183 | |||||||||||
Portfolio shares repurchased | 72 | 19 | 114 | |||||||||||
Advisory fees | 108 | 71 | 51 | |||||||||||
Transfer agent fees and expenses | 90 | 51 | 31 | |||||||||||
Non-interested Trustees’ fees and expenses | 5 | 4 | 5 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 3 | 3 | 2 | |||||||||||
Accrued expenses | 21 | 3 | 3 | |||||||||||
Total Liabilities | 452 | 593 | 389 | |||||||||||
Net Assets | $ | 148,071 | $ | 117,928 | $ | 87,653 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 200,513 | $ | 145,061 | $ | 100,279 | ||||||||
Undistributed net investment income/(loss)* | 516 | 717 | 821 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (12,312) | (7,894) | (6,035) | |||||||||||
Unrealized appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | (40,646) | (19,956) | (7,412) | |||||||||||
Total Net Assets | $ | 148,071 | $ | 117,928 | $ | 87,653 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 17,142 | 12,812 | 9,025 | |||||||||||
Net Asset Value Per Share | $ | 8.64 | $ | 9.20 | $ | 9.71 |
* | See Note 3 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2009 23
Statements of Operations
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Portfolio - | Portfolio - | Portfolio - | |||||||||||
(all numbers in thousands) | Growth | Moderate | Conservative | |||||||||||
Investment Income: | ||||||||||||||
Dividends from affiliates | $ | 2,691 | $ | 2,205 | $ | 1,709 | ||||||||
Total Investment Income | 2,691 | 2,205 | 1,709 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 34 | 26 | 20 | |||||||||||
Transfer agent fees and expenses | 202 | 128 | 85 | |||||||||||
Postage and mailing expenses | 23 | 10 | 1 | |||||||||||
Audit fees | 6 | 6 | 6 | |||||||||||
Non-interested Trustees’ fees and expenses | 6 | 6 | 6 | |||||||||||
Printing expenses | 16 | 15 | 17 | |||||||||||
Other expenses | 7 | 8 | 5 | |||||||||||
Total Expenses | 294 | 199 | 140 | |||||||||||
Expense and Fee Offset | – | – | – | |||||||||||
Net Expenses | 294 | 199 | 140 | |||||||||||
Less: Excess Expense Reimbursement | (135) | (94) | (72) | |||||||||||
Net Expenses after Expense Reimbursement | 159 | 105 | 68 | |||||||||||
Net Investment Income/(Loss) | 2,532 | 2,100 | 1,641 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment transactions | (6,660) | (3,848) | (2,965) | |||||||||||
Capital gain distributions from Underlying Funds | 1,657 | 1,011 | 366 | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 6,030 | 5,995 | 5,511 | |||||||||||
Net Gain/(Loss) on Investments | 1,027 | 3,158 | 2,912 | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 3,559 | $ | 5,258 | $ | 4,553 |
See Notes to Financial Statements.
24 Janus Smart Portfolios April 30, 2009
Statements of Changes in Net Assets
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Portfolio - | Portfolio - | Portfolio - | |||||||||||||||||||||||
and for the fiscal year ended October 31, 2008 | Growth | Moderate | Conservative | |||||||||||||||||||||||
(all numbers in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 2,532 | $ | 3,566 | $ | 2,100 | $ | 3,491 | $ | 1,641 | $ | 2,795 | ||||||||||||||
Net realized gain/(loss) from investment transactions | (6,660) | (10,967) | (3,848) | (7,402) | (2,965) | (4,379) | ||||||||||||||||||||
Capital gain distributions from Underlying Funds | 1,657 | 3,848 | 1,011 | 2,444 | 366 | 994 | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 6,030 | (72,123) | 5,995 | (39,208) | 5,511 | (17,170) | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 3,559 | (75,676) | 5,258 | (40,675) | 4,553 | (17,760) | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | (3,455) | (3,164) | (3,453) | (2,927) | (2,872) | (1,824) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | (5,239) | – | (2,811) | – | (926) | ||||||||||||||||||||
Net Decrease from Dividends and Distributions | (3,455) | (8,403) | (3,453) | (5,738) | (2,872) | (2,750) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | 19,599 | 98,569 | 19,544 | 78,191 | 17,619 | 81,751 | ||||||||||||||||||||
Reinvested dividends and distributions | 3,405 | 8,341 | 3,428 | 5,704 | 2,848 | 2,739 | ||||||||||||||||||||
Shares repurchased | (18,462) | (55,867) | (17,605) | (49,733) | (17,714) | (49,465) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 4,542 | 51,043 | 5,367 | 34,162 | 2,753 | 35,025 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 4,646 | (33,036) | 7,172 | (12,251) | 4,434 | 14,515 | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 143,425 | 176,461 | 110,756 | 123,007 | 83,219 | 68,704 | ||||||||||||||||||||
End of period | $ | 148,071 | $ | 143,425 | $ | 117,928 | $ | 110,756 | $ | 87,653 | $ | 83,219 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 516 | $ | 1,439 | $ | 717 | $ | 2,070 | $ | 821 | $ | 2,052 |
* | See Note 3 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2009 25
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2009 (unaudited) | Janus Smart Portfolio – Growth | |||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.62 | $13.95 | $11.34 | $10.00 | ||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .15 | .24 | .16 | .05 | ||||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .08 | (4.93) | 2.62 | 1.29 | ||||||||||||||||||||||
Total from Investment Operations | .23 | (4.69) | 2.78 | 1.34 | ||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.21) | (.24) | (.13) | – | ||||||||||||||||||||||
Distributions (from capital gains)* | – | (.40) | (.04) | – | ||||||||||||||||||||||
Total Distributions | (.21) | (.64) | (.17) | – | ||||||||||||||||||||||
Net Asset Value, End of Period | $8.64 | $8.62 | $13.95 | $11.34 | ||||||||||||||||||||||
Total Return ** | 2.85% | (35.15)% | 24.81% | 13.40% | ||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $148,071 | $143,425 | $176,461 | $66,794 | ||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $135,039 | $183,091 | $124,708 | $34,131 | ||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.24%(3) | 0.25%(3) | 0.25%(3) | 0.25%(3) | ||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.24% | 0.24% | 0.24% | 0.24% | ||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.78% | 1.95% | 1.32% | 0.98% | ||||||||||||||||||||||
Portfolio Turnover Rate*** | 25% | 55% | 19% | 28% |
For a share outstanding during the six-month period ended April 30, 2009 (unaudited) | Janus Smart Portfolio – Moderate | |||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.05 | $12.95 | $11.04 | $10.00 | ||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .17 | .31 | .23 | .09 | ||||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .27 | (3.64) | 1.86 | .95 | ||||||||||||||||||||||
Total from Investment Operations | .44 | (3.33) | 2.09 | 1.04 | ||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.29) | (.29) | (.16) | – | ||||||||||||||||||||||
Distributions (from capital gains)* | – | (.28) | (.02) | – | ||||||||||||||||||||||
Total Distributions | (.29) | (.57) | (.18) | – | ||||||||||||||||||||||
Net Asset Value, End of Period | $9.20 | $9.05 | $12.95 | $11.04 | ||||||||||||||||||||||
Total Return ** | 5.04% | (26.77)% | 19.16% | 10.40% | ||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $117,928 | $110,756 | $123,007 | $51,266 | ||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $106,634 | $132,650 | $87,462 | $25,078 | ||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.20%(4) | 0.21%(4) | 0.21%(4) | 0.21%(4) | ||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.20% | 0.20% | 0.20% | 0.20% | ||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.97% | 2.63% | 2.24% | 1.97% | ||||||||||||||||||||||
Portfolio Turnover Rate*** | 28% | 71% | 15% | 16% |
* | See Note 3 in Notes to Financial Statements. | |
** | 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 30, 2005 (inception date) through October 31, 2006. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The ratio was 0.44% in 2009, 0.26% in 2008, 0.28% in 2007 and 0.39% in 2006 before waiver of certain fees incurred by the Portfolio. | |
(4) | The ratio was 0.38% in 2009, 0.24% in 2008, 0.27% in 2007 and 0.42% in 2006 before waiver of certain fees incurred by the Portfolio. |
See Notes to Financial Statements.
26 Janus Smart Portfolios April 30, 2009
For a share outstanding during the six-month period ended April 30, 2009 (unaudited) | Janus Smart Portfolio – Conservative | |||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.52 | $12.09 | $10.82 | $10.00 | ||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .19 | .33 | .26 | .13 | ||||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .33 | (2.46) | 1.23 | .69 | ||||||||||||||||||||||
Total from Investment Operations | .52 | (2.13) | 1.49 | .82 | ||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.33) | (.29) | (.20) | – | ||||||||||||||||||||||
Distributions (from capital gains)* | – | (.15) | (.02) | – | ||||||||||||||||||||||
Total Distributions | (.33) | (.44) | (.22) | – | ||||||||||||||||||||||
Net Asset Value, End of Period | $9.71 | $9.52 | $12.09 | $10.82 | ||||||||||||||||||||||
Total Return ** | 5.69% | (18.26)% | 13.98% | 8.20% | ||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $87,653 | $83,219 | $68,704 | $19,489 | ||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $81,886 | $88,345 | $41,512 | $9,992 | ||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.17%(3) | 0.17%(3) | 0.18%(3) | 0.18%(3) | ||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.17% | 0.17% | 0.17% | 0.17% | ||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.04% | 3.16% | 3.04% | 2.78% | ||||||||||||||||||||||
Portfolio Turnover Rate*** | 29% | 90% | 16% | 20% |
* | See Note 3 in Notes to Financial Statements. | |
** | 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 30, 2005 (inception date) through October 31, 2006. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The ratio was 0.34% in 2009, 0.25% in 2008, 0.36% in 2007 and 0.69% in 2006 before waiver of certain fees incurred by the Portfolio. |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2009 27
Notes to Schedules of Investments (unaudited)
Barclays Capital U.S. Aggregate Bond Index | Is an unmanaged market value weighted index for U.S. dollar-denominated investment-grade fixed-rate debt issues, including government, corporate, mortgage-backed, and asset-backed securities with maturities of at least one year. | |
Conservative Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Barclays Capital U.S. Aggregate Bond Index (60%), the Dow Jones Wilshire 5000 Index (28%) and the MSCI EAFE® Index (12%). | |
Dow Jones Wilshire 5000 Index | An index that measures the performance of all U.S. headquartered equity securities with readily available price data. Over 5,000 capitalization-weighted security returns are used and the Dow Jones Wilshire 5000 Index is considered one of the premier measures of the entire U.S. stock market. | |
Growth Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (50%), the MSCI EAFE® Index (25%), the Barclays Capital U.S. Aggregate Bond Index (20%) and the MSCI Emerging Markets IndexSM (5%). | |
Lipper Mixed-Asset Target Allocation Conservative Funds | The Lipper Mixed-Asset Target Allocation Conservative Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Conservative Funds for the respective time periods. | |
Lipper Mixed-Asset Target Allocation Growth Funds | The Lipper Mixed-Asset Target Allocation Growth Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Growth Funds for the respective time periods. | |
Lipper Mixed-Asset Target Allocation Moderate Funds | Funds that, by portfolio practice, maintain a mix of between 40%-60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. | |
Moderate Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (40%), the Barclays Capital U.S. Aggregate Bond Index (40%), the MSCI EAFE® Index (18%) and the MSCI Emerging Markets IndexSM(2%). | |
Morgan Stanley Capital International EAFE® Index | Is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International Emerging Markets IndexSM | Is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. | |
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. |
The following is a summary of the inputs that were used to value the Portfolios’ investments in securities and other financial instruments as of April 30, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of April 30, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Janus Smart Portfolio – Growth | $ | – | $ | 148,270,552 | $ | – | |||||
Janus Smart Portfolio – Moderate | – | 118,046,217 | – | ||||||||
Janus Smart Portfolio – Conservative | – | 87,739,554 | – | ||||||||
28 Janus Smart Portfolios April 30, 2009
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Smart Portfolio – Growth, Janus Smart Portfolio – Moderate and Janus Smart Portfolio – Conservative (collectively the “Portfolios” and individually a “Portfolio”) are series Portfolios. The Portfolios each operate as a “fund of funds,” meaning substantially all of the Portfolios’ assets will be invested in other Janus mutual funds (the “underlying funds”). Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. The Portfolios are part 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. The Trust offers twenty-eight funds. Each Portfolio in this report is classified as diversified as defined in the 1940 Act. The Portfolios are no-load investments.
Underlying Funds
Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. Each Portfolio has a target allocation, which is how each Portfolio’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges within which each Portfolio’s asset class allocations generally will vary over short-term periods. The normal asset allocation ranges are as follows: (1) 75%-85% stocks and 15%-25% bonds and money market instruments for Janus Smart Portfolio – Growth; (2) 55%-65% stocks and 35%-45% bonds and money market instruments for Janus Smart Portfolio – Moderate; and (3) 35%-45% stocks and 55%-65% bonds and money market instruments for Janus Smart Portfolio – Conservative. A brief description of each of the underlying funds that the Portfolios may invest in are as follows.
POTENTIAL UNDERLYING FUNDS INVESTING PRIMARILY IN EQUITY SECURITIES
JANUS ADVISER BALANCED FUND – CLASS I and JANUS BALANCED FUND seek long-term capital growth, consistent with preservation of capital and balanced by current income. Each fund pursues its investment objective by normally investing 50-60% of its assets in equity securities selected primarily for their growth potential and 40-50% of its assets in securities selected primarily for their income potential. Each fund normally invests at least 25% of its assets in fixed-income senior securities.
JANUS ADVISER CONTRARIAN FUND – CLASS I and JANUS CONTRARIAN FUND seek long-term growth of capital. Each fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities with the potential for long-term growth of capital. The portfolio manager emphasizes investments in companies with an attractive price/free cash flow, which is the relationship between the price of a stock and the company’s available cash from operations minus capital expenditures. The portfolio manager will typically seek attractively valued companies that are improving their free cash flow and returns on invested capital. Such companies may also include special situations companies that are experiencing management changes and/or are currently out of favor.
JANUS ADVISER FORTY FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-40 common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS ADVISER GLOBAL REAL ESTATE FUND – CLASS I seeks total return through a combination of capital appreciation and current income. The fund invests, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, preferred stocks and other equity securities, including, but not limited to, real estate investment trusts (REITs) and similar REIT-like entities. As a fundamental policy, the fund will concentrate 25% or more of its net assets in securities of issuers in real estate or real estate-related industries. The fund’s investment in companies engaged in businesses outside the real estate industry which possess significant real estate holdings will be deemed to be in the real estate industry for purposes of the fund’s investment objective and its policy on industry concentration. The fund expects under normal market conditions to maintain investments in issuers from several different developed countries, including the United States. Under unusual circumstances, the fund may invest all of its assets in a single country. The fund may invest in emerging markets, but will normally limit such investments to 15% of its net assets, measured at the time of purchase. Within the parameters of its specific investment policies, the fund may invest in foreign equity and debt securities.
JANUS ADVISER GLOBAL RESEARCH FUND – CLASS I and JANUS GLOBAL RESEARCH FUND seek long-term growth of capital. Each fund pursues its investment objective by
Janus Smart Portfolios April 30, 2009 29
Notes to Financial Statements (unaudited) (continued)
investing primarily in common stocks selected for their growth potential. Each fund may invest in companies of any size and located anywhere in the world, from larger, well-established companies to smaller, emerging growth companies. Each fund normally invests at least 40% of its net assets in securities of issuers from different countries located throughout the world, excluding the United States. Each fund may have significant exposure to emerging markets.
JANUS ADVISER GROWTH AND INCOME FUND – CLASS I and JANUS GROWTH AND INCOME FUND seek long-term capital growth and current income. Each fund pursues its investment objective by normally emphasizing investments in common stocks. Each fund will normally invest up to 75% of its assets in equity securities selected primarily for their growth potential and at least 25% of its assets in securities the portfolio manager believes have income potential. Eligible equity securities in which each fund may invest include: (i) domestic and foreign common stocks; (ii) preferred stocks; (iii) securities convertible into common stocks or preferred stocks, such as convertible preferred stocks, bonds, and debentures; and (iv) other securities with equity characteristics (including the use of derivatives). Equity securities may make up part or all of the income component if they currently pay dividends or the portfolio manager believes they have potential for increasing or commencing dividend payments.
JANUS ADVISER INTECH RISK-MANAGED CORE FUND – CLASS I and INTECH RISK-MANAGED CORE FUND (formerly named INTECH RISK-MANAGED STOCK FUND) seek long-term growth of capital. Each fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the S&P 500® Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED GROWTH FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Russell 1000® Growth Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED INTERNATIONAL FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Morgan Stanley Capital International (“MSCI”) EAFE® (Europe, Australasia, Far East) Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED VALUE FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Russell 1000® Value Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTERNATIONAL EQUITY FUND – CLASS I seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in equity securities. The fund normally invests in a core group of 50-70 equity securities of issuers from different countries located throughout the world, excluding the United States. The fund may, under unusual circumstances, invest all of its assets in a single country. The fund may invest in emerging markets, but will normally limit such investments to 15% of its net assets, measured at the time of purchase. Within the parameters of its specific investment policies, the fund may invest in foreign equity and debt securities.
JANUS ADVISER INTERNATIONAL FORTY FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 30-50 foreign equity securities selected for their growth potential. The fund normally invests in issuers from several different countries located throughout the world, excluding the United States. Although the fund intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. The fund may have significant exposure to emerging markets. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS ADVISER INTERNATIONAL GROWTH FUND – CLASS I and JANUS OVERSEAS FUND seek long-term growth of capital. Each fund invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside of the United States. Each fund normally invests in securities of issuers from several different countries, excluding the United States. Although each fund intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. Each fund may have significant exposure to emerging markets.
JANUS ADVISER LARGE CAP GROWTH FUND – CLASS I seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in common stocks of large-sized companies. Large-sized companies are those whose market capitalization falls within the range of companies in the Russell 1000® Index at the time of purchase.
JANUS ADVISER LONG/SHORT FUND – CLASS I seeks strong absolute risk-adjusted returns over a full market cycle. Under
30 Janus Smart Portfolios April 30, 2009
normal circumstances, the fund generally pursues its investment objective by taking both long and short positions in domestic and foreign equity securities, including those in emerging markets. The fund’s portfolio managers believe that a combination of long and short positions may provide positive returns regardless of market conditions through a complete market cycle, and may offer reduced risk. In choosing both long and short positions, the portfolio managers utilize fundamental research. In other words, the fund’s portfolio managers look at companies one at a time to determine if a company is an attractive investment opportunity and if it is consistent with the fund’s investment policies.
JANUS ADVISER MID CAP GROWTH FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities of mid-sized companies whose market capitalization falls, at the time of purchase, in the 12-month average of the capitalization range of the Russell Midcap® Growth Index. Market capitalization is a commonly used measure of the size and value of a company.
JANUS ADVISER ORION FUND – CLASS I and JANUS ORION FUND seek long-term growth of capital. Each fund pursues its investment objective by normally investing primarily in a core group of 20-30 domestic and foreign common stocks selected for their growth potential. Each fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS ADVISER PERKINS LARGE CAP VALUE FUND – CLASS I seeks capital appreciation. The fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in the common stocks of large-sized companies whose stock prices the portfolio managers believe to be undervalued. The fund invests, under normal circumstances, at least 80% of its assets in equity securities of companies having, at the time of purchase, market capitalization equal to or greater than the median market capitalization of companies included in the Russell 1000® Value Index.
JANUS ADVISER PERKINS MID CAP VALUE FUND (formerly named JANUS ADVISER MID CAP VALUE FUND) – CLASS I and PERKINS MID CAP VALUE FUND (formerly named JANUS MID CAP VALUE FUND) –INVESTOR SHARES seek capital appreciation. Each fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. Each fund primarily invests in the common stocks of mid-sized companies whose stock prices the portfolio managers believe to be undervalued. Each fund invests, under normal circumstances, at least 80% of its assets in equity securities of companies whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap® Value Index.
JANUS ADVISER PERKINS SMALL COMPANY VALUE FUND (formerly named JANUS ADVISER SMALL COMPANY VALUE FUND) – CLASS I seeks capital appreciation. The fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in the common stocks of small companies whose stock prices are believed to be undervalued by the fund’s portfolio managers. The fund invests, under normal circumstances, at least 80% of its assets in equity securities of small companies whose market capitalization, at the time of initial purchase, is less than the 12-month average of the maximum market capitalization for companies included in the Russell 2000® Value Index.
JANUS ADVISER RESEARCH CORE FUND (formerly named JANUS ADVISER FUNDAMENTAL EQUITY FUND) – CLASS I and JANUS RESEARCH CORE FUND (formerly named JANUS FUNDAMENTAL EQUITY FUND) seek long-term growth of capital. Each fund pursues its investment objective by investing primarily in equity securities selected for their growth potential. Eligible equity securities in which each fund may invest include: (i) domestic and foreign common stocks; (ii) preferred stocks; (iii) securities convertible into common stocks or preferred stocks such as convertible preferred stocks, bonds, and debentures; and (iv) other securities with equity characteristics (including the use of derivatives). Each fund may invest in companies of any size.
JANUS ADVISER SMALL-MID GROWTH FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. The fund invests, under normal circumstances, at least 80% of its net assets in equity securities of small- and medium-sized companies. Generally, small- and medium-sized companies have a market capitalization of less than $10 billion. Market capitalization is a commonly used measure of the size and value of a company.
JANUS ADVISER WORLDWIDE FUND – CLASS I and JANUS WORLDWIDE FUND seek long-term growth of capital in a manner consistent with the preservation of capital. Each fund pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world. Each fund normally invests in issuers from several different countries, including the United States. Each fund may, under unusual circumstances, invest in a single country. Each fund may have significant exposure to emerging markets.
JANUS ENTERPRISE FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential, and normally invests at least 50% of its equity
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Notes to Financial Statements (unaudited) (continued)
assets in medium-sized companies. Medium-sized companies are those whose market capitalization falls within the range of companies in the Russell Midcap® Growth Index.
JANUS FUND seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. Although the fund may invest in companies of any size, it generally invests in larger, more established companies.
JANUS GLOBAL LIFE SCIENCES FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes have a life science orientation. Generally speaking, the “life sciences” relate to maintaining or improving quality of life. The fund implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. As a fundamental policy, the fund normally invests at least 25% of its total assets in the “life sciences” sector, which may include companies in the following industries: health care; pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. The fund may have significant exposure to emerging markets.
JANUS GLOBAL OPPORTUNITIES FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world with the potential for long-term growth of capital. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS GLOBAL TECHNOLOGY FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. These companies generally fall into two categories: (i) companies that the portfolio manager believes have or will develop products, processes, or services that will provide significant technological advancements or improvements and (ii) companies that the portfolio manager believes rely extensively on technology in connection with their operations or services. The fund implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS RESEARCH FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS TRITON FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. In pursuing that objective, the fund invests in equity securities of small- and medium-sized companies. Generally, small- and medium-sized companies have a market capitalization of less than $10 billion. Market capitalization is a commonly used measure of the size and value of a company.
JANUS TWENTY FUND seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-30 common stocks selected for their growth potential.
JANUS VENTURE FUND seeks capital appreciation. The fund pursues its investment objective by investing at least 50% of its equity assets in small-sized companies. Small-sized companies are those who have market capitalizations of less than $1 billion or annual gross revenues of less than $500 million. Companies whose capitalization or revenues fall outside these ranges after the fund’s initial purchase continue to be considered small-sized. The fund may also invest in larger companies with strong growth potential or relatively well-known and large companies with potential for capital appreciation.
POTENTIAL UNDERLYING FUNDS INVESTMENTING PRIMARILY IN FIXED-INCOME SECURITIES
JANUS ADVISER FLEXIBLE BOND FUND – CLASS I and JANUS FLEXIBLE BOND FUND seek to obtain maximum total return, consistent with preservation of capital. Each fund pursues its investment objective by primarily investing, under normal circumstances, at least 80% of its assets in bonds. Bonds include, but are not limited to, government bonds, corporate bonds, convertible bonds, mortgage-backed securities, and zero-coupon bonds. Each fund will invest at least 65% of its assets in investment grade debt securities and will maintain an average-weighted effective maturity of five to ten years. Each fund will limit its investment in high-yield/high-risk bonds to 35% or less of its net assets. Each fund generates total return from a combination of current income and capital appreciation, but income is usually the dominant portion. Due to the nature of the securities in which each fund invests, it may have relatively high portfolio turnover compared to other funds.
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JANUS ADVISER HIGH-YIELD FUND – CLASS I and JANUS HIGH-YIELD FUND seek to obtain high current income. Capital appreciation is a secondary objective when consistent with its primary objective. Each fund pursues its investment objectives by investing, under normal circumstances, at least 80% of its net assets in high-yield/high-risk securities rated below investment grade. Securities rated below investment grade may include their unrated equivalents or other high-yielding securities the portfolio manager believes offer attractive risk/return characteristics. Each fund may at times invest all of its assets in such securities. Due to the nature of the securities in which each fund invests, it may have relatively high portfolio turnover compared to other funds.
JANUS SHORT-TERM BOND FUND seeks as high a level of current income as is consistent with preservation of capital. The fund invests, under normal circumstances, at least 80% of its net assets in short- and intermediate-term securities such as corporate bonds or notes or government securities, including agency securities. The fund may invest up to 35% of its net assets in high-yield/high risk bonds. The fund expects to maintain an average-weighted effective maturity of three years or less under normal circumstances. Due to the nature of the securities in which the fund invests, it may have relatively high portfolio turnover compared to other funds.
POTENTIAL UNDERLYING FUND INVESTMENTING PRIMARILY IN CASH EQUIVALENTS
JANUS MONEY MARKET FUND – INVESTOR SHARES seeks capital preservation and liquidity with current income as a secondary objective. The fund pursues its investment objectives by investing primarily in high quality debt obligations and obligations of financial institutions. Debt obligations may include commercial paper, notes and bonds, and variable amount master demand notes. Obligations of financial institutions include certificates of deposit and time deposits. The fund also intends to invest in repurchase agreements.
CASH EQUIVALENTS include money market instruments (such as certificates of deposit, time deposits, and repurchase agreements), shares of affiliated money market funds or high-quality debt obligations (such as U.S. Government obligations, commercial paper, and other short-term corporate instruments).
The following accounting policies have been consistently followed by the Portfolios and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
A Portfolio’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Portfolio invests on the day of valuation. In the case of underlying funds with share classes, the NAV for each class 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.
Securities held by the underlying funds are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities held by the underlying funds traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the underlying funds’ Trustees. Short-term securities held by the underlying funds with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Investments held by the underlying money market fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium. Debt securities held by the underlying funds with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Short positions shall be valued in accordance with the same methodologies, except that in the event that a last sale price is not available, the latest ask price shall be used instead of a bid price. Foreign securities and currencies held by the underlying funds are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the underlying funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the underlying funds’ Trustees. 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; and (iii) a non-significant event such as a market closing early or not opening, or a security trading halt. The underlying funds may use a systematic fair valuation model provided by an independent pricing service to value foreign equity securities in order to adjust for stale pricing, which may occur between
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Notes to Financial Statements (unaudited) (continued)
the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the underlying funds’ Trustees.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Trust 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 of the underlying funds 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 and capital gain distributions, if any, from the underlying funds are recorded on the ex-dividend date.
Expenses
Each Portfolio bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the funds or portfolios in the Trust. Additionally, each Portfolio, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds.
Securities Lending
Under procedures adopted by the Trustees, the underlying funds may seek to earn additional income by lending securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The underlying funds do not have the right to vote on securities while they are being lent; however, the underlying funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in non-affiliated money market funds or accounts, mutually agreed to by the underlying funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral of the underlying funds are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the underlying funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedules of Investments (if applicable). The lending fees and each Portfolio’s portion of the interest income earned on cash collateral are included on the Statements of Operations (if applicable).
The Securities Lending Program was suspended and effective November 19, 2008, the underlying funds no longer had any securities on loan. Management continues to review the program and may resume securities lending.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the underlying funds may be party to interfund lending agreements between the underlying funds and other Janus Capital-sponsored mutual funds and certain pooled investment vehicles, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of each of the borrowing underlying fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The underlying funds, except INTECH Risk-Managed Core Fund, Janus Adviser INTECH Risk-Managed Core Fund, Janus Adviser INTECH Risk-Managed Growth Fund, Janus Adviser INTECH Risk-Managed International Fund, Janus Adviser INTECH Risk-Managed Value Fund (together, the “Risk-Managed funds”) and Janus Money Market Fund, may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings of the underlying funds and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate.
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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 contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statements of Operations (if applicable).
Forward currency contracts held by the underlying funds are fully collateralized by other securities, which are denoted in each Schedule of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts. Such collateral is in the possession of the underlying funds’ custodian.
Futures Contracts
The underlying funds, except Janus Money Market Fund, may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The underlying funds 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 are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statements of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statements of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities of the underlying funds are designated as collateral for market value on futures contracts as noted in the Schedules of Investments (if applicable). Such collateral is in the possession of the underlying funds’ custodian.
Swaps
The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may utilize swap agreements as a means to gain exposure to certain common stocks and/or to “hedge” or protect their portfolios from adverse movements in securities prices or interest rates. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. Swap agreements entail the risk that a party will default on its payment obligation to an underlying fund. If the other party to a swap defaults, an underlying fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If an underlying fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the underlying fund and reduce the underlying fund’s total return. Swap contracts of the underlying funds are reported as an asset or liability on the Statements of Assets and Liabilities (if applicable). Realized gains and losses of the underlying funds are reported in “Net realized gain/(loss) from swap contracts” on the Statements of Operations (if applicable).
Various types of swaps such as credit default (funded and unfunded), equity, interest rate, and total return swaps are described below.
Credit default swaps are a specific kind of counterparty agreement that allows the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments.
Funded or unfunded credit default swaps are based on an index of credit default swaps (“CDXs”) or other similarly structured products. CDXs are designed to track segments of the credit default swap market and provide investors with exposure to specific reference baskets of issuers of bonds or loans. These instruments have the potential to allow an investor to obtain the same investment exposure as an investor who invests in an individual credit default swap, but with the potential added benefit of diversification. The CDX reference baskets are normally priced daily and rebalanced every six months in conjunction with leading market makers in the credit industry. The liquidity of the market for CDXs is normally subject to liquidity in the secured loan and credit derivatives markets. Certain underlying funds investing in CDXs are normally only permitted to take long positions in these instruments.
Equity swaps involve the exchange by two parties of future cash flow (e.g., one cash flow based on a referenced interest rate and the other based on the performance of stock or a stock index).
Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments).
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.
Options Contracts
The underlying funds, except Janus Money Market Fund, may purchase or write covered or uncovered put and call options
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Notes to Financial Statements (unaudited) (continued)
on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The underlying funds may utilize American-style and European-style options. An American-style option is an option contract that can be exercised at any time between the time of purchase and the option’s expiration date. A European-style option is an option contract that can only be exercised on the option’s expiration date. The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The underlying funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The underlying funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the underlying funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the underlying funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the underlying funds could result in the underlying funds buying or selling a security at a price different from the current market value.
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 by the underlying funds.
The underlying funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedules of Investments (if applicable). Options written are reported as a liability on the Statements of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statements of Operations” (if applicable).
The risk in writing call options is that the underlying funds give 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 underlying funds 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 underlying funds pay a premium whether or not the options are exercised. 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 underlying funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the underlying funds may recognize due to written call options.
Mortgage Dollar Rolls
The underlying funds, Janus Adviser Global Real Estate Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may enter into “mortgage dollar rolls.” In a “mortgage dollar roll” transaction, the underlying funds sell a mortgage-related security (such as a Government National Mortgage Association (“Ginnie Mae”) security) to a dealer and simultaneously agree to repurchase a similar security (but not the same security) in the future at a pre-determined price. The underlying funds will not be entitled to receive interest and principal payments while the dealer holds the security. The difference between the sale price and the future purchase price is recorded as an adjustment to investment income of the underlying funds.
The underlying funds’ obligations under a dollar roll agreement must be covered by cash, U.S. Government securities or other liquid high-grade debt obligations equal in value to the securities subject to repurchase by the underlying funds, maintained in a segregated account. To the extent that the underlying funds collateralize their obligations under a dollar roll agreement, the asset coverage requirements of the 1940 Act will not apply to such transactions. Furthermore, under certain circumstances, an underlying mortgage-backed security that is part of a dollar roll transaction may be considered illiquid.
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Successful use of mortgage dollar rolls depends on the portfolio managers’ ability to predict interest rates and mortgage payments. Dollar roll transactions involve the risk that the market value of the securities the underlying funds are required to purchase may decline below the agreed upon repurchase price.
Securities Traded on a To-Be-Announced Basis
The underlying funds, Janus Adviser Global Real Estate Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the underlying funds commit to purchasing or selling securities for which specific information is not yet known at the time of the trade, particularly the face amount and maturity date in Ginnie Mae, Federal National Mortgage Association (“Fannie Mae”) and/or Federal Home Loan Mortgage Corporation (“Freddie Mac”) transactions.
Securities purchased on a TBA basis are not settled until they are delivered to the underlying funds, normally 15 to 45 days later. Beginning on the date the underlying funds enter into a TBA transaction, cash, U.S. Government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
Mortgage- and Asset-Backed Securities
The underlying funds may purchase fixed or variable rate mortgage-backed securities issued by Ginnie Mae, Fannie Mae, Freddie Mac, or other governmental or government-related entities. Fannie Maes and Freddie Macs are not backed by the full faith and credit of the U.S. Government. The underlying funds may purchase other mortgage- and asset-backed securities through single- and multi-seller conduits, collateralized debt obligations, structured investment vehicles, and other similar securities. Asset-backed securities may be backed by automobile loans, equipment leases, credit card receivables, or other collateral. In the event the underlying securities fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact an underlying funds’ yield and your return. In addition, mortgage-backed securities may be supported by some form of government or private guarantee and/or insurance. However, there is no assurance that the guarantors or insurers will meet their obligations.
Unlike traditional debt instruments, payments on these securities include both interest and a partial payment of principal. Prepayment risk, which results from prepayments of the principal of underlying loans, may shorten the effective maturities of these securities and may result in an underlying fund having to reinvest proceeds at a lower interest rate.
In addition to prepayment risk, investments in mortgage-backed securities, including those comprised of subprime mortgages, and investments in other asset-backed securities comprised of under-performing assets may be subject to a higher degree of credit risk, valuation risk, and liquidity risk. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
Mortgage- and asset- backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing an underlying fund’s sensitivity to interest changes and causing its price decline.
Floating Rate Loans
The underlying funds, Janus Adviser Balanced Fund, Janus Balanced Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates, which adjust periodically, and are tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The underlying funds may invest in obligations of borrowers who are in bankruptcy proceedings.
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Notes to Financial Statements (unaudited) (continued)
Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
The underlying funds, Janus Adviser Balanced Fund, Janus Adviser Flexible Bond Fund, Janus Adviser Long/Short Fund, Janus Balanced Fund, Janus Flexible Bond Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment from another holder of, or participation interest in, loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the underlying funds have the right to receive payments of principal, interest and any fees to which they are entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The underlying funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which an underlying fund invests are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
The underlying funds may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the underlying funds may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The underlying funds utilize an independent third party to value individual bank loans on a daily basis.
Short Sales
The underlying funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the underlying funds own or selling short a security that the underlying funds have the right to obtain, for delivery at a specified date in the future. The underlying funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The underlying funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The underlying funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the underlying funds lose the opportunity to participate in the gain.
The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may also engage in other short sales. The underlying funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the underlying funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of an underlying fund’s, except Janus Adviser Long/Short Fund’s, net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls. The underlying funds may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which an underlying fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that an underlying fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. The underlying funds are also required to pay the lender of the security any dividends or interest that accrue on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, an underlying fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The underlying funds pay stock loan fees on assets borrowed from the security broker.
An underlying fund may also enter into short positions through derivative instruments such as option contracts, futures contracts and swap agreements which may expose the underlying fund to similar risks. To the extent that the underlying fund enters into short derivative positions, the underlying fund may be exposed to risks similar to those associated with short sales, including the risk that the underlying fund’s losses are theoretically unlimited.
Foreign Currency Translations
The underlying funds do 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.
38 Janus Smart Portfolios April 30, 2009
Currency gains and losses of the underlying funds 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.
Foreign currency-denominated assets and forward currency contracts of the underlying funds may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Borrowing
An underlying fund, Janus Adviser Long/Short Fund, may borrow money from banks for investment purposes to the extent permitted by the 1940 Act. This practice is known as leverage. Currently, under the 1940 Act, an underlying fund may borrow from banks up to one-third of its total assets (including the amount borrowed) provided that it maintains continuous asset coverage of 300% with respect to such borrowings and sells (within three days) sufficient portfolio holdings to restore such coverage if it should decline to less than 300% due to market fluctuations or otherwise, even if disadvantageous from an investment standpoint. In addition to borrowing for leverage purposes, an underlying fund also may borrow money to meet redemptions in order to avoid forced, unplanned sales of portfolio securities or for other temporary or emergency purposes. This allows an underlying fund greater flexibility to buy and sell portfolio securities for investment or tax considerations, rather than for cash flow considerations.
The use of borrowing by an underlying fund involves special risk considerations that may not be associated with other funds having similar policies. Because substantially all of an underlying fund’s assets fluctuate in value, whereas the interest obligation resulting from a borrowing will be fixed by the terms of an underlying fund’s agreement with its lender, the NAV per share of an underlying fund will tend to increase more when its portfolio securities increase in value and decrease more when its portfolio securities decrease in value than would otherwise be the case if an underlying fund did not borrow funds. In addition, interest costs on borrowings may fluctuate with changing market rates of interest and may partially offset or exceed the return earned on borrowed funds. Under adverse market conditions, an underlying fund might have to sell portfolio securities to meet interest or principal payments at a time when fundamental investment considerations would not favor such sales. The interest that an underlying fund must pay on borrowed money, together with any additional fees to maintain a line of credit or any minimum average balances required to be maintained, are additional costs that will reduce or eliminate any net investment income and may also offset any potential capital gains. Unless the appreciation and income, if any, on assets acquired with borrowed funds exceed the costs of borrowing, the use of leverage will diminish the investment performance of an underlying fund compared with what it would have been without leverage.
When-Issued Securities
The underlying funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the underlying funds may hold liquid assets as collateral with the underlying funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The underlying funds, except Janus Money Market Fund, may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, an underlying fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the underlying fund bears directly in connection with its own operations.
Exchange-Traded Notes
The underlying funds, except Janus Money Market Fund, may invest directly in exchange-traded notes (“ETN”), which are senior, unsecured, unsubordinated debt securities whose returns are linked to a particular index and provide exposure to the total returns of various market indices, including indices linked to stocks, bonds, commodities and currencies. This type of debt security differs from other types of bonds and notes. ETN returns are based upon the performance of a market index minus applicable fees; no period coupon payments are distributed and no principal protections exist. ETNs do not pay cash distributions. Instead, the value of dividends, interest, and investment gains are captured in the underlying funds’ total return. The underlying funds will invest in these securities when desiring exposure to debt securities or commodities. When evaluating ETNs for investment, Janus Capital will consider the potential risks involved, expected tax efficiency, rate of return, and credit risk. When the underlying funds invest in ETNs, they will bear their proportionate share of any fees and expenses borne by the ETN. There may be restrictions on the underlying funds’ right to redeem their investment in an ETN, which are meant to be held until maturity. The underlying funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
Janus Smart Portfolios April 30, 2009 39
Notes to Financial Statements (unaudited) (continued)
Equity-Linked Structured Notes
The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The underlying funds, except Janus Money Market Fund, may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on an underlying fund with a small asset base. An underlying fund may not experience similar performance as its assets grow.
Additional Investment Risk
The underlying funds, particularly Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer. The Risk-Managed funds do not intend to invest in high-yield/high-risk bonds.
Counterparties
The Portfolios’ or underlying funds’ transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Portfolios or underlying funds (“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 a Portfolio or underlying fund. A Portfolio or underlying fund may be unable to recover its investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed.
A Portfolio or underlying 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 a Portfolios’ or underlying funds’ cash balances are invested in one or more money market funds, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A Portfolio or underlying 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 a Portfolio or underlying fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Restricted Security Transactions
Restricted securities held by the underlying funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the underlying funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
The Portfolios generally declare and distribute dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Portfolios will be automatically reinvested into additional shares of that Portfolio, based on the discretion of the shareholder.
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 REIT’s 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
40 Janus Smart Portfolios April 30, 2009
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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Portfolios intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Portfolio’s tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Portfolios recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.
FIN 48 requires management of the Portfolios to analyze all open tax years, fiscal years 2006-2008 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2009, the Portfolios did not have a liability for any unrecognized tax benefits. The Portfolios have no examinations in progress and are 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.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 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. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Various inputs are used in determining the value of the Portfolios’ investments defined pursuant to SFAS No. 157. These inputs are summarized into three broad levels:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing a security and are developed based on market data obtained from sources independent of the reporting entity. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the security and would be based on the best information available in the circumstances.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of April 30, 2009 to value each Portfolio’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if required) in the Schedules of Investments.
In April 2009, FASB issued FASB staff position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FASB Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently evaluating the impact the adoption of FSP 157-4 will have on the Portfolios’ financial statement disclosures.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures
Janus Smart Portfolios April 30, 2009 41
Notes to Financial Statements (unaudited) (continued)
about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Portfolios’ financial statement disclosures.
In September 2008, FASB issued a FASB Staff Position No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45” (the “Position”), which was effective for fiscal years ending after November 15, 2008. The Position amends FASB Statement No. 133 (“FAS 133”), Accounting for Derivative Instruments and Hedging Activities, and also amends FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The amendments to FAS 133 include required disclosure for (i) the nature and terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. Management has evaluated the impact of SFAS No. 133-1 and FIN 45-4 and has determined there is no impact on the Portfolios’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Portfolios pay a monthly advisory fee to Janus Capital based on average daily net assets and calculated at the annual rate shown in the table below for each Portfolio.
Advisory | |||||
Portfolio | Fee % | ||||
Janus Smart Portfolio - Growth | 0.05% | ||||
Janus Smart Portfolio - Moderate | 0.05% | ||||
Janus Smart Portfolio - Conservative | 0.05% | ||||
Until at least March 1, 2010, provided that Janus Capital remains investment adviser to the Portfolios, Janus Capital has agreed to reimburse the Portfolios by the amount, if any, that the Portfolio’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses) exceed the following annual rate noted below. If applicable, amounts reimbursed to the Portfolios by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Portfolio | Expense Limit Fee % | ||||
Janus Smart Portfolio - Growth | 0.24% | ||||
Janus Smart Portfolio - Moderate | 0.20% | ||||
Janus Smart Portfolio - Conservative | 0.17% | ||||
Each Portfolio pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Portfolios’ transfer agent, an asset-weighted averaged annual fee based on the proportion of each Portfolio’s total net assets sold directly and the proportion of each Portfolio’s net assets sold through financial intermediaries. The applicable fee rates are 0.12% of net assets on the proportion of assets sold directly and 0.25% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for each of the Portfolios for transfer agent services.
Janus Capital has entered into an agreement with Wilshire Associates Inc. (“Wilshire”), a global investment technology, investment consulting, and investment management firm, to act as a consultant to Janus Capital. Wilshire provides research and advice regarding asset allocation methodologies, which Janus Capital uses when determining asset class allocations for the Portfolios. For its consulting services, Janus Capital pays Wilshire an annual fee, payable monthly, that is comprised of a combination of an initial program establishment fee, fixed fee, and an asset-based fee.
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 Portfolios. 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 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 Portfolios as unrealized appreciation/(depreciation) and is shown as of April 30, 2009 on the Statements of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a 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 Statements of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statements 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. No deferred
42 Janus Smart Portfolios April 30, 2009
fees were distributed to any Trustee under the Deferred Plan during the six-month period ended April 30, 2009.
Certain officers of the Portfolios may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Portfolios, except for the Portfolios” Chief Compliance Officer. Effective January 1, 2006, the Portfolios began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer and compliance staff of the Trust. Total compensation of $63,757 was paid by the Trust during the six-month period ended April 30, 2009. Each Portfolio’s portion is reported as part of “Other Expenses” on the Statements of Operations.
The Portfolios’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statements of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statements of Assets and Liabilities (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Assets and Liabilities (if applicable). The Portfolios could have employed the assets used by the transfer agent to produce income if they had not entered into an expense offset arrangement.
Pursuant to the terms and conditions of an SEC exemptive order and the provisions of the 1940 Act, the Portfolios and underlying funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Portfolios and underlying funds are used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Portfolios and underlying funds are 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.
3. | 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 Portfolios have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/(depreciation) on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Portfolio | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Janus Smart Portfolio - Growth | $ | 196,910,109 | $ | 1,545,144 | $ | (50,184,701) | $ | (48,639,557) | ||||||
Janus Smart Portfolio - Moderate | 144,435,723 | 2,112,537 | (28,502,043) | (26,389,506) | ||||||||||
Janus Smart Portfolio - Conservative | 99,102,564 | 1,929,617 | (13,292,627) | (11,363,010) | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2008, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2008
Portfolio | October 31, 2016 | ||||
Janus Smart Portfolio - Growth | $ | (3,343,688) | |||
Janus Smart Portfolio - Moderate | (2,048,121) | ||||
Janus Smart Portfolio - Conservative | (2,173,333) | ||||
Janus Smart Portfolios April 30, 2009 43
Notes to Financial Statements (unaudited) (continued)
4. | Capital Share Transactions |
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||||
For the six-month period ended April 30, 2009 (unaudited) | Portfolio- | Portfolio- | Portfolio- | |||||||||||||||||||||||||
and the fiscal year ended October 31, 2008 | Growth | Moderate | Conservative | |||||||||||||||||||||||||
(all numbers are in thousands) | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||
Transactions in Portfolio Shares: | ||||||||||||||||||||||||||||
Shares sold | 2,450 | 8,245 | 2,254 | 6,813 | 1,900 | 7,335 | ||||||||||||||||||||||
Reinvested dividends and distributions | 428 | 648 | 399 | 473 | 308 | 239 | ||||||||||||||||||||||
Shares repurchased | (2,367) | (4,912) | (2,075) | (4,554) | (1,925) | (4,514) | ||||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 511 | 3,981 | 578 | 2,732 | 283 | 3,060 | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 16,631 | 12,650 | 12,234 | 9,502 | 8,742 | 5,682 | ||||||||||||||||||||||
Shares Outstanding, End of Period | 17,142 | 16,631 | 12,812 | 12,234 | 9,025 | 8,742 |
5. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2009, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) was as follows:
Proceeds from | ||||||||||||||
Purchases of | Sales of | |||||||||||||
Long-Term | Long-Term | |||||||||||||
Purchases of | Proceeds from Sales | U.S. Government | U.S. Government | |||||||||||
Portfolio | Securities | of Securities | Obligations | Obligations | ||||||||||
Janus Smart Portfolio - Growth | $ | 22,479,444 | $ | 16,800,614 | $ | – | $ | – | ||||||
Janus Smart Portfolio - Moderate | 20,225,458 | 14,801,451 | – | – | ||||||||||
Janus Smart Portfolio - Conservative | 13,919,408 | 11,702,037 | – | – | ||||||||||
6. | Affiliated Fund of Funds Transactions |
The Portfolios invest in certain mutual funds within the Janus family of funds. While each Portfolio can invest in any or all of the underlying funds, it is expected that each Portfolio will normally invest in only some of the underlying funds at any particular time. All of the realized gain/(loss) recognized by the Portfolios is derived from affiliates. A Portfolio’s investment in any of the underlying funds may exceed 25% of such Portfolio’s total assets. In such instances, the financial statement for the underlying fund may be obtained on the underlying fund’s website at janus.com. During the six-month period ended April 30, 2009, the Portfolios recorded distributions from affiliated investment companies as dividend income and had the following affiliated purchases and sales:
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Smart Portfolio – Growth | |||||||||||||||||||||
Janus Adviser Contrarian Fund – Class I Shares | 69,040 | $ | 515,448 | (29,572) | $ | (328,250) | $ | (130,233) | $ | – | $ | 3,990,928 | |||||||||
Janus Adviser Flexible Bond Fund – Class I Shares | 164,995 | 2,001,074 | (614,448) | (7,185,212) | 226,263 | 578,238 | 25,671,402 | ||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 108,881 | 893,371 | (257,508) | (3,502,455) | (1,485,467) | 194,608 | 14,685,047 | ||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 734,617 | 4,780,902 | (189,270) | (2,081,727) | (976,759) | 548,434 | 20,474,366 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 501,462 | 3,252,723 | (137,565) | (1,793,740) | (952,794) | 162,429 | 17,850,270 | ||||||||||||||
Janus Adviser International Growth Fund – Class I Shares | 123,211 | 3,395,918 | (22,460) | (1,002,166) | (408,117) | 712,563 | 15,030,063 | ||||||||||||||
Janus Adviser Large Cap Growth Fund – Class I Shares | 20,622 | 353,722 | (12,405) | (280,484) | (82,467) | 52,806 | 4,380,461 | ||||||||||||||
Janus Adviser Perkins Small Company Value Fund(1) – Class I Shares | 130,714 | 1,127,149 | (16,302) | (159,195) | (27,184) | 5,912 | 2,011,548 | ||||||||||||||
Janus Growth and Income Fund | 47,446 | 963,725 | (27,910) | (986,977) | (458,934) | 54,371 | 11,658,732 | ||||||||||||||
Janus High-Yield Fund | 82,391 | 568,020 | (126,400) | (1,072,946) | (248,350) | 316,183 | 5,135,496 | ||||||||||||||
Janus Orion Fund | 36,152 | 226,894 | (135,388) | (1,573,442) | (760,742) | 38,780 | 3,949,454 | ||||||||||||||
Janus Overseas Fund | 913 | 21,459 | (16,913) | (653,641) | (205,792) | 114 | – | ||||||||||||||
Janus Research Fund | 64,635 | 1,058,649 | (30,394) | (872,171) | (410,133) | 24,884 | 10,331,944 | ||||||||||||||
Janus Twenty Fund | 12,339 | 533,171 | (27,630) | (1,863,105) | (731,951) | 1,940 | 10,126,165 | ||||||||||||||
Perkins Mid Cap Value Fund(2) – Class I Shares | 196,464 | 2,787,218 | (7,356) | (105,482) | (7,720) | – | 2,974,676 | ||||||||||||||
$ | 22,479,443 | $ | (23,460,993) | $ | (6,660,380) | $ | 2,691,262 | $ | 148,270,552 | ||||||||||||
44 Janus Smart Portfolios April 30, 2009
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Smart Portfolio – Moderate | |||||||||||||||||||||
Janus Adviser Flexible Bond Fund – Class I Shares | 317,179 | $ | 3,873,565 | (645,381) | $ | (7,522,646) | $ | 201,799 | $ | 822,113 | $ | 39,080,436 | |||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 104,733 | 857,171 | (73,698) | (1,018,479) | (454,713) | 109,866 | 9,440,943 | ||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 564,729 | 3,646,708 | (146,202) | (1,604,020) | (724,306) | 304,576 | 12,345,133 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 307,099 | 2,008,108 | (103,639) | (1,350,762) | (716,525) | 90,071 | 10,103,727 | ||||||||||||||
Janus Adviser International Growth Fund – Class I Shares | 106,516 | 2,923,809 | (21,178) | (944,935) | (381,169) | 441,046 | 10,198,966 | ||||||||||||||
Janus Adviser Large Cap Growth Fund – Class I Shares | 28,899 | 493,877 | (13,266) | (299,956) | (88,543) | 38,104 | 3,406,703 | ||||||||||||||
Janus Adviser Perkins Small Company Value Fund(1) ��� Class I Shares | 262,668 | 2,252,065 | (8,894) | (76,600) | (8,472) | – | 2,522,515 | ||||||||||||||
Janus Growth and Income Fund | 64,572 | 1,313,610 | (29,855) | (1,057,525) | (493,758) | 40,497 | 9,094,435 | ||||||||||||||
Janus High-Yield Fund | 82,025 | 565,803 | (92,060) | (786,336) | (190,541) | 235,534 | 3,971,467 | ||||||||||||||
Janus Orion Fund | 107,387 | 664,559 | (37,138) | (448,944) | (237,532) | 23,578 | 3,408,865 | ||||||||||||||
Janus Overseas Fund | 656 | 15,424 | (12,156) | (449,718) | (127,826) | 82 | – | ||||||||||||||
Janus Research Fund | 56,112 | 922,782 | (23,140) | (658,559) | (306,206) | 12,941 | 5,775,780 | ||||||||||||||
Janus Short-Term Bond Fund | 157,560 | 462,051 | (425,767) | (1,217,767) | 17,379 | – | 5,417,631 | ||||||||||||||
Janus Twenty Fund | 5,195 | 225,925 | (21,316) | (1,207,260) | (331,644) | 86,473 | 3,279,616 | ||||||||||||||
$ | 20,225,457 | $ | (18,643,507) | $ | (3,842,057) | $ | 2,204,881 | $ | 118,046,217 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/09 | |||||||||||||||
Janus Smart Portfolio – Conservative | |||||||||||||||||||||
Janus Adviser Contrarian Fund – Class I Shares | 91,881 | $ | 686,484 | (40,894) | $ | (453,916) | $ | (163,898) | $ | – | $ | 3,114,929 | |||||||||
Janus Adviser Flexible Bond Fund – Class I Shares | 372,104 | 4,531,674 | (535,385) | (6,371,608) | 76,917 | 916,861 | 44,605,446 | ||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 75,534 | 613,300 | (54,845) | (777,579) | (342,551) | 58,941 | 5,283,159 | ||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 360,793 | 2,339,203 | (108,337) | (1,200,149) | (513,773) | 164,017 | 7,032,918 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 204,782 | 1,326,308 | (69,040) | (859,446) | (424,418) | 38,058 | 4,793,992 | ||||||||||||||
Janus Adviser International Growth Fund – Class I Shares | 33,180 | 926,718 | (27,795) | (1,240,198) | (505,813) | 148,463 | 2,763,951 | ||||||||||||||
Janus Growth and Income Fund | 53,221 | 1,070,341 | (22,278) | (790,864) | (355,836) | 20,752 | 4,866,964 | ||||||||||||||
Janus High-Yield Fund | 119,207 | 819,825 | (68,378) | (591,505) | (151,640) | 250,025 | 4,422,639 | ||||||||||||||
Janus Orion Fund | 92,266 | 566,078 | (36,701) | (446,699) | (229,185) | 16,661 | 2,542,841 | ||||||||||||||
Janus Overseas Fund | 570 | 13,412 | (10,570) | (437,963) | (158,057) | 69 | – | ||||||||||||||
Janus Research Fund | 30,112 | 491,365 | (13,960) | (402,069) | (184,556) | 5,453 | 2,574,747 | ||||||||||||||
Janus Short-Term Bond Fund | 182,598 | 534,701 | (374,654) | (1,072,194) | 10,658 | 89,663 | 5,737,968 | ||||||||||||||
$ | 13,919,409 | $ | (14,644,190) | $ | (2,942,152) | $ | 1,708,963 | $ | 87,739,554 | ||||||||||||
(1) | Formerly named Janus Adviser Small Company Value Fund. | |
(2) | Formerly named Janus Mid Cap Value Fund. |
7. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
Janus Smart Portfolios April 30, 2009 45
Notes to Financial Statements (unaudited) (continued)
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court, four of which still remain: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC), Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly named Perkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On December 30, 2008, the Court granted partial summary judgment in Janus Capital’s favor with respect to Plaintiffs’ damage demand as it relates to what was categorized as “approved” market timing based on the Court’s finding that there was no evidence that investors suffered damages that exceed the $50 million they are entitled to receive under the regulatory settlement. The Court did not grant summary judgment on the remaining causes of action and requested the parties to submit additional briefing with respect to what was categorized as “unapproved” market timing. Having completed the supplemental briefing, the parties are awaiting a ruling from the Court. On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the Court with prejudice. The plaintiff appealed that dismissal to the United States Court of Appeals for the Fourth Circuit, which reversed the order of dismissal and remanded the case back to the Court for further proceedings. Finally, a Motion to Dismiss the Wiggins suit (action (iv) above) was granted and the matter was dismissed in May 2007. Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. In May 2009, the Fourth Circuit reversed the order of dismissal and remanded the case back to the Court for further proceedings.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). In September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings as well as a Motion to Discharge Order to Show Cause. This action is pending.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements (Edward Keely v. Janus Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege some or all of the following claims in addition to other allegations: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims. On May 8, 2009, after a four-day trial in the Keely matter, the jury found in favor of Plaintiff. The Court entered judgment in Keely’s favor for approximately $4.8 million in damages plus pre- and post- judgment interest, attorneys’ fees, and damage enhancement under the Colorado Wage Act. Janus Holdings is evaluating all of its options, including the possibility of an appeal. Trial in the Malley matter has not yet been set.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
46 Janus Smart Portfolios April 30, 2009
8. | Subsequent Event |
The Board of Trustees of Janus Adviser Series (“JAD”), a registered investment company advised by Janus Capital, has approved an Agreement and Plan of Reorganization (the “Plan”) pursuant to which certain JAD Funds will merge with and into, and be acquired by, corresponding similarly managed funds of the Janus Investment Fund Trust. Under the Plan, INTECH Risk-Managed Core Fund, Janus Balanced Fund, Janus Contrarian Fund, Janus Enterprise Fund, Janus Flexible Bond Fund, Janus Fund, Janus Growth and Income Fund, Janus High-Yield Fund, Janus Orion Fund, Janus Overseas Fund, Janus Research Core Fund, Janus Triton Fund, Janus Worldwide Fund, Perkins Mid Cap Value Fund, and Perkins Small Cap Value Fund will acquire assets and liabilities from similarly managed JAD Funds. The merger is a part of several significant enhancements Janus Capital has recently undertaken to reorganize and simplify its mutual fund offerings by creating one combined mutual fund platform. The closing date of the merger is expected to be on or about July 6, 2009. For more information regarding these changes, please refer to the March 17, 2009 Supplement to the Prospectus.
Janus Smart Portfolios April 30, 2009 47
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Portfolios use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Portfolios’ website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Portfolio’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Portfolios file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Portfolios’ Form N-Q: (i) is 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) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During The Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent 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.
At a meeting held on December 9, 2008, 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, 2009 through February 1, 2010, subject to earlier termination as provided for in each agreement, except that with respect to Janus Worldwide Fund, the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or proposed to take to improve long-term Fund performance. At a meeting held on March 12, 2009, the Trustees again considered the investment advisory agreement for Janus Worldwide Fund, and after consideration of information previously provided to them, as well as updated information regarding the steps taken or planned to improve the Fund’s long-term performance, the Trustees approved the continuation of the investment advisory agreement for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve long-term Fund performance.
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.
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 and strategy 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 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, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including
48 Janus Smart Portfolios April 30, 2009
monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
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 quality of those services had been consistent with or superior to quality norms in the industry and 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 continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of their peers for certain periods, the Trustees also concluded that Janus Capital had taken or was taking appropriate steps to address those instances of under-performance. With respect to Janus Worldwide Fund, at the December 9, 2008 meeting the Trustees considered the continuing underperformance of the Fund, and requested that Janus Capital consider additional steps to improve long-term Fund performance. At the March 12, 2009 meeting, the Trustees requested that Janus Capital promptly report to the Trustees regarding the completion of steps that Janus Capital planned to take in an effort to improve the Fund’s long-term performance.
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 Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after applicable contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
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. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only 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 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 administrative 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 that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by the Trustees’ independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information 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. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation 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
Janus Smart Portfolios April 30, 2009 49
Additional Information (unaudited) (continued)
similar strategies and the fees Janus Capital and the subadvisers charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was 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 by Janus Capital.
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 that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group identified by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the 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 several Funds that have caused or will cause 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, 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 economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates 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 their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s 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 pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital 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 receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, each of whom is an Independent Trustee, concluded that the proposed continuation of the investment advisory agreement and, if applicable, the subadvisory agreement for each Fund for another year was in the best interest of the respective Funds and their shareholders, except for Janus Worldwide Fund. With respect to that Fund, at their December 9, 2008 meeting the Trustees approved the continuation of the investment advisory agreement for an interim period of three months, to assess the steps Janus Capital had taken or propose to take to improve long-term Fund performance. At their March 12, 2009 meeting the Trustees approved the continuation of the investment advisory agreement for that Fund for another interim period of three months, to continue their assessment of Janus Capital’s efforts to improve the Fund’s long-term performance. The Trustees also noted that they had previously approved revised and/or new investment advisory and subadvisory agreements for each Fund subadvised by Perkins Investment Management LLC, and that such amended or new agreements were not effective unless approved by those Funds’ shareholders.
50 Janus Smart Portfolios April 30, 2009
Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Portfolio (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Portfolio with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Portfolio invested in the index.
Average annual total returns are also quoted for each Portfolio. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Portfolio’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects a Portfolio’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Portfolio as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Portfolio’s Schedule of Investments. This schedule reports the types of securities held in each Portfolio on the last day of the reporting period. Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period.
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Portfolios on the last day of the reporting period.
The Portfolios’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on underlying fund shares owned and the receivable for Portfolio shares sold to investors but not yet settled. The Portfolios’ liabilities include payables for securities purchased but not yet settled, Portfolio shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities.
The section entitled “Net Assets Consist of” breaks down the components of the Portfolios’ net assets. Because Portfolios 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 Portfolios’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Portfolios’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Portfolio holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from underlying fund shares and interest earned from interest-bearing securities in the Portfolios.
The next section reports the expenses incurred by the Portfolios, 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 increase or decrease in the value of securities held in the Portfolios. The Portfolios realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Portfolios during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Portfolio holdings and by gains (or losses) realized during the reporting period.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Portfolios’ net assets during the reporting period. Changes
Janus Smart Portfolios April 30, 2009 51
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
in the Portfolios’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Portfolios’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Portfolios’ investment performance. The Portfolios’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Portfolio to pay the distribution. If investors reinvest their dividends, the Portfolios’ net assets will not be affected. If you compare each Portfolio’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Portfolio’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Portfolios through purchases or withdrawals via redemptions. The Portfolios’ net assets will increase and decrease in value as investors purchase and redeem shares from the Portfolios.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Portfolio’s NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Portfolio. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Portfolios for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Portfolios’ expenses may be reduced through expense reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Portfolio during the reporting period. Don’t confuse this ratio with a Portfolio’s yield. The net investment income ratio is not a true measure of a Portfolio’s yield because it doesn’t take into account the dividends distributed to the Portfolio’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Portfolio. Portfolio turnover is affected by market conditions, changes in the asset size of a Portfolio, the nature of the Portfolio’s investments, changes in the target allocation and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
52 Janus Smart Portfolios April 30, 2009
Notes
Janus Smart Portfolios April 30, 2009 53
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
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Portfolios distributed by Janus Distributors LLC (6/09)
C-0609-046 | 111-24-106 06-09 |
Item 2 — | Code of Ethics Not applicable to semiannual reports. |
Item 3 — | Audit Committee Financial Expert Not applicable to semiannual reports. |
Item 4 — | Principal Accountant Fees and Services Not applicable to semiannual reports. |
Item 5 — | Audit Committee of Listed Registrants Not applicable. |
Item 6 | — Investments |
(a) | Please see Schedule of Investments contained in the Reports to Shareholders included under Item 1 of this Form N-CSR. |
(b) | Using credible information that is available to the public, the Funds have not divested from any securities of any issuers that conduct or have direct investments in certain business operations in Sudan. |
Item 7 — | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not applicable. |
Item 8 — | Portfolio Managers of Closed-End Management Investment Companies Not applicable. |
Item 9 — | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers Not applicable. |
Item 10 — | Submission of Matters to a Vote of Security Holders There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees. |
Item 11 — | Controls and Procedures |
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have evaluated the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures were effective, as of that date. | ||
(b) | There was no change in the Registrant’s internal control over financial reporting during Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12 — | Exhibits |
(a)(1) | Not applicable because the Registrant has posted its Code of Ethics (as defined in Item 2(b) of Form N-CSR) on its website pursuant to paragraph (f)(2) of Item 2 of Form N-CSR. | ||
(a)(2) | Separate certifications for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT. | ||
(a)(3) | Not applicable to open-end companies. | ||
(b) | A certification for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached as Ex99.906CERT. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Janus Investment Fund | ||||
By: | /s/ Robin C. Beery | |||
Robin C. Beery, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||||
Date: June 26, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Robin C. Beery | |||
Robin C. Beery, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||||
Date: June 26, 2009 | ||||
By: | /s/ Jesper Nergaard | |||
Jesper Nergaard, | ||||
Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer of Janus Investment Fund (Principal Accounting Officer and Principal Financial Officer) | ||||
Date: June 26, 2009 |