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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: 6/30
Date of reporting period: 12/31/09
Item 1 — Reports to Shareholders
2009 SEMIANNUAL REPORT
Janus Asset Allocation Funds
HIGHLIGHTS
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics |
and holdings
Table of Contents
Janus Asset Allocation Funds
1 | ||
5 | ||
6 | ||
13 | ||
14 | ||
15 | ||
16 | ||
19 | ||
20 | ||
41 | ||
44 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.33JANUS(52687). You can also visit janus.com/info. Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. Over the past twelve months, we’ve seen one of the strongest market rebounds on record from lows reached in March driven by evidence that the U.S. and economies around the globe were beginning to improve. Throughout the market downturn and subsequent rebound, we have remained committed to our 40-year, research-driven approach and long-term investment view. As a result, we have continued to deliver strong results relative to many of our peers.
For the one-year period ended December 31, 2009, 77% of Janus retail funds, Class J Shares, ranked within Lipper’s top two quartiles based on total returns. Looking longer-term, 92% 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 December 31, 2009. (Lipper rankings are based on total returns. See complete rankings on page 4.)
Current Outlook
Improving economic conditions, positive earnings surprises and healthier capital markets have helped overall market sentiment grow more bullish as 2009 came to an end. We are encouraged by the turnaround since the unprecedented downturn that began in September 2008, but think the sustainability of the current recovery is uncertain. As we have stated in the past, we believe the U.S. Federal Reserve’s (Fed) liquidity injections and other governmental support for the financial system were necessary and that these responses have helped the U.S. and global economies avert a more severe recession. With the financial system in a much healthier position than it was a year ago and with the economy improving, focus has turned towards the Fed’s exit strategy and whether the economy can stand on its own as stimulus and other emergency measures wind down. Other concerns include reduced consumption by consumers brought on by the recession, limited private lending and ongoing weakness in housing market and its impact on consumers.
In the U.S., the S&P 500® Index gained more than 26% during the 12-month period, but still remained more than 28% below its record closing high set in October 2007. Non-U.S. equity markets delivered even stronger performance gaining more than 32% (MSCI All Country World ex-U.S. IndexSM) with emerging equity markets (MSCI EMF Index) rising nearly 63% in local currency terms.
In addition to the strong recovery by equity markets, credit markets posted impressive results. Credit spreads, or the difference between the yields on corporate bonds versus the yields on equivalent Treasury bonds, narrowed sharply after reaching historically wide levels in December 2008 amidst heightened risk aversion. The U.S. High Yield market (Barclays Capital U.S. Corporate High Yield Index) posted the strongest returns, gaining over 58%. The U.S. investment grade credit market (Barclays Capital U.S. Credit Index) rose roughly 16% during the period.
Commodity prices were strong for the year, while the U.S. dollar finished lower versus most major currencies amid a move into higher yielding currencies and concern over a rising U.S. Government deficit. Gold closed near a record high, helping to keep inflation worries in the forefront. Despite the continuation of the strong equity market rally, high unemployment and the U.S. dollar remained key concerns for investors.
Looking Ahead
During the broad market rally, markets worldwide moved higher as investors felt more comfortable moving money back into riskier assets. Individual stocks and bonds performed similarly amid a rising tide that lifted all boats. In this environment, there was little difference between the returns of low quality companies and high quality companies. We think investors should be prepared for a more discriminate environment going forward as markets normalize. Therefore, we believe individual security selection will play a greater role in determining investors’ success. As bottom-up researchers throughout our 40-year history, our goal remains to identify those companies going through positive fundamental transition, which we believe results in the best opportunities for our investors.
Janus Asset Allocation Funds | 1
Continued
Increased savings and greater diversification, with an emphasis on fixed income and dividends, is likely to be a big theme for investors over the next few years. We continue to believe a balanced strategy may provide the best opportunity for the long-term success of our investors, and we remain committed to delivering strong long-term performance on your behalf.
We thank you for your business and your continued confidence in Janus.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.335.2687 or download the file from janus.com/info. Read it carefully before investing or sending money.
There is no assurance that the investment process will consistently lead to successful investing.
The 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 MSCI 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.
The MSCI EMF Index is a market capitalization weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America and the Pacific Basin.
Barclays Capital U.S. Corporate High-Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt.
The Barclays Capital U.S. Credit Index is comprised of the Barclays Capital U.S. Corporate Index and the non-native currency subcomponent of the Barclays Capital U.S. Government-Related Index. It includes publicly issued U.S. corporates, specified foreign debentures and secured notes denominated in U.S. dollars. It is a subset of the Barclays Capital U.S. Government/Credit Index and the Barclays Capital U.S. Aggregate Bond Index.
Rankings may be based, in part, on the performance of a predecessor fund or share class and are calculated by Lipper using a performance calculation methodology that differs from that used by Janus. Differences in the methodologies may lead to variances in calculating total performance returns, in some cases this variance may be significant, thereby
2 | DECEMBER 31, 2009
Co-Chief Investment Officers’ Letter to the Shareholders
potentially affecting the ranking of the Fund[s]. The rankings are displayed for informational purposes only and should not be relied upon when making investment decisions.
Lipper, a wholly-owned subsidiary of Thomson 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 and do not include the effect of loads.
Rankings are for the share class shown only; other classes may have different performance characteristics.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the rankings for the period.
In preparing this document, Janus has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Statements in this piece that reflect projections or expectations of future financial or economic performance of a mutual fund or strategy and of the markets in general and statements of a Fund’s plans and objectives for future operations are forward-looking statements. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted with such forward-looking statements, include general economic conditions such as inflation, recession and interest rates.
Funds distributed by Janus Distributors LLC (01/10)
Janus Asset Allocation Funds | 3
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 12/31/09 | ||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||
Growth & Core | ||||||||||||||||||||||||||
Janus Balanced Fund(1);(9/92) | Mixed-Asset Target Allocation-Moderate Funds | 43 | 219/509 | 1 | 1/412 | 1 | 1/311 | 19 | 28/148 | 4 | 1/27 | 1 | 1/338 | |||||||||||||
Janus Contrarian Fund;(2/00) | Multi-Cap Core Funds | 22 | 170/795 | 46 | 308/683 | 6 | 29/519 | – | – | 17 | 37/227 | 17 | 37/227 | |||||||||||||
Janus Enterprise Fund(1);(9/92) | Mid-Cap Growth Funds | 41 | 191/474 | 25 | 103/425 | 14 | 47/353 | 93 | 166/178 | 39 | 14/35 | 26 | 115/448 | |||||||||||||
Janus Fund;(2/70) | Large-Cap Growth Funds | 36 | 290/814 | 35 | 246/702 | 27 | 154/582 | 67 | 207/310 | 16 | 3/18 | 40 | 301/754 | |||||||||||||
Janus Growth and Income Fund(1);(5/91) | Large-Cap Core Funds | 7 | 60/906 | 40 | 304/773 | 37 | 240/653 | 68 | 252/374 | 8 | 6/78 | 48 | 388/820 | |||||||||||||
Janus Orion Fund;(6/00) | Multi-Cap Growth Funds | 8 | 36/459 | 16 | 57/378 | 3 | 9/310 | – | – | 19 | 35/192 | 57 | 238/418 | |||||||||||||
Janus Research Fund(1);(5/93) | Large-Cap Growth Funds | 16 | 124/814 | 17 | 117/702 | 14 | 78/582 | 76 | 235/310 | 4 | 3/79 | 12 | 77/652 | |||||||||||||
Janus Research Core Fund(1);(6/96) | Large-Cap Core Funds | 9 | 74/906 | 40 | 302/773 | 15 | 98/653 | 35 | 129/374 | 3 | 6/201 | 57 | 466/820 | |||||||||||||
Janus Triton Fund(1);(2/05) | Small-Cap Growth Funds | 10 | 53/540 | 2 | 9/472 | – | – | – | – | 1 | 4/399 | 1 | 4/450 | |||||||||||||
Janus Twenty Fund*;(4/85) | Large-Cap Growth Funds | 14 | 111/814 | 1 | 2/702 | 1 | 3/582 | 41 | 127/310 | 6 | 2/34 | 38 | 286/766 | |||||||||||||
Janus Venture Fund*;(4/85) | Small-Cap Growth Funds | 7 | 36/540 | 47 | 220/472 | 30 | 116/397 | 84 | 181/217 | 10 | 1/10 | 20 | 25/125 | |||||||||||||
Risk-Managed | ||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||
INTECH Risk-Managed Core Fund;(2/03) | Multi-Cap Core Funds | 83 | 656/795 | 68 | 464/683 | 60 | 312/519 | – | – | 48 | 182/386 | 48 | 182/386 | |||||||||||||
Value | ||||||||||||||||||||||||||
Perkins Mid Cap Value Fund(1);(8/98) | Mid-Cap Value Funds | 76 | 191/251 | 6 | 11/210 | 5 | 8/161 | 4 | 2/61 | 3 | 1/48 | 3 | 1/48 | |||||||||||||
Perkins Small Cap Value Fund;(10/87) | Small-Cap Core Funds | 27 | 198/756 | 1 | 6/631 | 4 | 18/522 | 12 | 32/269 | 4 | 5/128 | 4 | 5/128 | |||||||||||||
Global & International | ||||||||||||||||||||||||||
Janus Global Life Sciences Fund;(12/98) | Global Healthcare/Biotechnology Funds | 18 | 8/45 | 8 | 3/41 | 33 | 12/36 | 79 | 15/18 | 17 | 2/11 | 10 | 4/42 | |||||||||||||
Janus Global Opportunities Fund(1);(6/01) | Global Funds | 49 | 266/544 | 33 | 122/378 | 65 | 185/287 | – | – | 17 | 31/185 | 65 | 201/313 | |||||||||||||
Janus Global Research Fund(1);(2/05) | Global Funds | 12 | 65/544 | 10 | 36/378 | – | – | – | – | 4 | 11/292 | 4 | 11/292 | |||||||||||||
Janus Global Technology Fund;(12/98) | Global Science & Technology Funds | 65 | 50/77 | 33 | 21/64 | 26 | 15/58 | 90 | 18/19 | 36 | 6/16 | 43 | 27/63 | |||||||||||||
Janus Overseas Fund(1);(5/94) | International Funds | 1 | 2/1275 | 1 | 7/975 | 1 | 1/700 | 13 | 48/386 | 1 | 1/99 | 1 | 1/611 | |||||||||||||
Janus Worldwide Fund(1);(5/91) | Global Funds | 27 | 142/544 | 64 | 239/378 | 74 | 211/287 | 96 | 137/143 | 42 | 7/16 | 33 | 181/558 | |||||||||||||
Fixed Income | ||||||||||||||||||||||||||
Janus Flexible Bond Fund(1);(7/87) | Intermediate Investment Grade Debt Funds | 52 | 285/549 | 6 | 25/458 | 7 | 24/395 | 18 | 39/219 | 10 | 2/19 | 7 | 30/477 | |||||||||||||
Janus High-Yield Bond Fund(1);(12/95) | High Current Yield Funds | 76 | 347/459 | 25 | 98/391 | 17 | 56/341 | 16 | 33/207 | 7 | 6/90 | 23 | 70/313 | |||||||||||||
Janus Short-Term Bond Fund(1);(9/92) | Short Investment Grade Debt Funds | 59 | 144/246 | 2 | 4/223 | 2 | 3/176 | 13 | 12/94 | 20 | 5/24 | 3 | 6/231 | |||||||||||||
Asset Allocation | ||||||||||||||||||||||||||
Janus Smart Portfolio – Conservative;(12/05) | Mixed-Asset Target Allocation Conservative Funds | 22 | 97/441 | 4 | 13/361 | – | – | – | – | 2 | 5/304 | 2 | 5/304 | |||||||||||||
Janus Smart Portfolio – Moderate;(12/05) | Mixed-Asset Target Allocation Moderate Funds | 10 | 49/509 | 1 | 3/412 | – | – | – | – | 2 | 6/369 | 2 | 6/369 | |||||||||||||
Janus Smart Portfolio – Growth;(12/05) | Mixed-Asset Target Allocation Growth Funds | 7 | 43/649 | 6 | 32/549 | – | – | – | – | 3 | 13/497 | 3 | 13/497 | |||||||||||||
(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. |
*Closed to new investors.
Past performance is no guarantee of future results. For current month end performance, call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit Janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital).
Ranking is for Class J Shares only; other classes may have different performance characteristics.
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.
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.
4 | DECEMBER 31, 2009
Useful Information About Your Fund Report (unaudited)
Management Commentary
The Management Commentary in this report includes valuable insight from the Fund’s 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 Fund’s manager in the Management Commentary are just that: opinions. They are a reflection of the manager’s best judgment at the time this report was compiled, which was December 31, 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 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 the Fund’s Expense Example, which appears in the Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for the Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (applicable to Class A Shares only); redemption fees, where applicable (and any related exchange fees); and (2) ongoing costs, including management fees; distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only); administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares only); administrative fees (applicable to Class A Shares, Class C Shares, and Class I Shares only); 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 five-month period from August 1, 2009 to December 31, 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 the Fund’s total annual fund operating expenses, excluding any expenses of an underlying fund (acquired fund fees and expenses), class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares only), brokerage commissions, interest, dividends, taxes, and extraordinary expenses, to certain limits until at least February 16, 2011. 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 Fund’s 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) and any related exchange fees. These fees are fully described in certain underlying funds’ prospectuses. 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.
Janus Asset Allocation Funds | 5
Janus Modular Portfolio Construction® Fund (unaudited)
Fund Snapshot We believe that we can provide long-term growth of capital using a sophisticated asset allocation process that dynamically diversifies across core, alpha and alternative categories. Allocations are optimized using internally-developed quantitative tools and risk-overlay in conjunction with the qualitative oversight of Janus’ investment leadership. | Dan Scherman portfolio manager |
Performance Overview
Janus Modular Portfolio Construction® (MPC) Fund’s Class I Shares returned 9.94% for the five-month period ended December 31, 2009. This compares to a return of 14.28% for the Russell 3000® Index, the Fund’s primary benchmark, during the same period. These results compare to a 10.94% return by its secondary benchmark, the MPC Allocation Composite Index, a hypothetical combination of unmanaged indices, which combines the total returns from the Russell 3000® Index (50%), the Barclays Capital U.S. Aggregate Bond Index (25%), and the Morgan Stanley Capital International (MSCI) All Country World ex-U.S. IndexSM (25%).
Market Review
Global equity indices continued to march higher for the five months ended December 31, 2009, as economic data pointed to improvement from depressed levels and corporate earnings came in generally higher than expected. Rising unemployment and weak consumer spending remained headwinds, but investors focused on a stabilizing economy and potential for recovery. Markets traded lower at the end of October, which marked the anniversary of 2008’s significant sell-off. Notably, broad indices have rallied since March to levels not seen since the beginning of the market drop in 2008. Emerging markets outperformed developed markets during the period led by Latin America and Russia. Europe led developed market regions followed closely by North America. Asia lagged significantly due to a negative return in Japan for the five-month period. In terms of sectors, materials and information technology were the best performing, while financials and utilities were relative laggards. Commodities, generally, performed strongly led by industrial metals and natural gas. Gold set record highs in December before trimming gains near period end. The Dollar Index finished slightly lower, as the U.S. currency lagged the euro.
In the U.S. fixed income market, the trend of corporate bond spreads tightening relative to Treasuries continued with the largest moves in the high-yield segment (prices move inversely to yield). Commercial mortgage-backed securities (CMBS) and investment grade corporates also posted strong gains. Investment grade aggregate indices finished higher thanks to the strong performance of corporates, which helped offset negative returns on long-term Treasuries during the period. The Treasury yield curve widened at all maturities with the largest moves in the long end (10 and 30 year maturities). Treasuries were weak, as buyers weighed the implications of the Treasury Department’s continued auctions at a time the U.S. Federal Reserve was bringing its Treasury-buying program to a close. Late in the period, evidence of an improving economy encouraged investors to sell Treasuries and buy riskier assets. During December, the Treasury yield curve widened to record spreads between two-year and ten-year notes.
Investment Process
Janus MPC Fund is structured as a proprietary fund-of-funds, which means we have the ability to select from Janus, INTECH and Perkins funds currently available to shareholders. When we want exposure to an asset class not represented by any of these managers, we are free to invest outside our corporate umbrella, as we have done this period in the case of our commodities, foreign currency and hedge fund strategy investments. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Our choice of investments is driven not only by an evaluation of the quality and sustainability of fund performance, but also by our characterization of each underlying strategy as CORE, ALPHA or ALTS (Alternative). While we employ very specific quantitative and qualitative criteria for inclusion in each of these “modules,” they can be simplified this way:
• | CORE strategies are stock and bond portfolios – both international and domestic – that seek to provide market-like exposure to the segments of the market in which each manager specializes. |
6 | DECEMBER 31, 2009
(unaudited)
• | ALPHA strategies are those that seek market-beating performance more or less independent of investment style or asset class. |
• | ALTS strategies march to their own beat and seek to diversify some of the risks assumed by investing in CORE and ALPHA strategies. |
Once we’ve defined our investable universe and parsed it into these three categories, we then employ techniques such as mean-variance optimization (as well as a measured dose of qualitative judgment) to assemble each module independently. For example, in the CORE module, we mix and match the eligible CORE funds into a portfolio that best mimics what we believe represents “the market” to a modern investor. Next, we look across the roster of available ALPHA strategies to assemble a portfolio that gives us what we believe will be the greatest return in exchange for the least amount of risk. Finally, we assemble a portfolio of ALTS assets that we believe will have the lowest possible correlation with the first two modules in an effort to diversify away some of the risks inherent in investing in the other two.
Once the three individual modules are built, we attempt to combine them in a way designed to take advantage of both the benefits of asset class diversification and the current market environment. We do this not by allocating tactically among the modules, or by investing a set percentage of Fund assets in each asset class and then periodically rebalancing back toward those targets, but instead by allocating assets on the basis of how much risk we believe shareholders can bear. When we think risky assets are performing well, we systematically allocate more to the ALPHA module; when we think they are performing poorly, we systematically allocate a greater percentage to CORE. Our allocation to ALTS is designed to remain static at roughly 10% of Fund assets.
Portfolio Review
We trailed the all-equity Russell 3000® Index, our primary benchmark, due to an underweight to equities, which significantly outperformed fixed income. We also lagged the MPC Allocation Composite Index due in part to a modest overweight in fixed income for most of the period.
The synchronized nature of the markets’ recovery off the March lows meant that most asset classes rose together, but with riskier assets outperforming more conservative ones. This theme was echoed in the Fund during the period, as the ALPHA sleeve outpaced both the CORE and ALTS sleeves.
During our quarterly re-allocation in October, we increased our ALPHA exposure by approximately 6% through a reduction to the CORE sleeve, which declined from approximately 55% of the Fund to 49%. The net effect was to raise equity and fixed income allocations to approximately 65% and 25%, respectively, with the balance in ALTS and cash. Among individual investments, we increased our weighting in Janus Contrarian Fund.
Contributors and Detractors
Within the ALPHA sleeve, Janus Global Life Sciences Fund and Janus Forty Fund detracted, while Janus Overseas Fund, Janus Contrarian Fund and Janus Orion Fund were the top contributors. Orion, an all-capitalization strategy, had the second best performance on an absolute basis for MPC Fund.
CORE detractors included Janus Fund, Janus High Yield Fund and INTECH Risk-Managed International Fund. Janus Flexible Bond, the largest holding within the CORE sleeve and MPC Fund overall, was the most significant contributor followed by Janus International Equity Fund.
The ALTS sleeve, which is designed to provide a hedge against specific risks like inflation and market volatility, underperformed both ALPHA and CORE, which we would expect in a fast-rising market. Detractors included the Wisdom Tree Japanese Yen exchange-traded fund (ETF). Despite the sleeve’s overall performance, the best absolute performer for the MPC Fund as a whole was Janus Global Real Estate Fund.
Outlook
After last year’s strong performance across most asset classes, we are expecting more muted returns in 2010, driven less by emphasis on market exposure and more on security selection in both equity and fixed income. We believe the re-emergence of stock and bond picking should play into the strength of the investment teams at Janus, Perkins and INTECH.
Janus Asset Allocation Funds | 7
Janus Modular Portfolio Construction® Fund (unaudited)
Janus Modular Portfolio Construction® Fund
(% of Net Assets)
(% of Net Assets)
Core | ||||
INTECH Risk-Managed Growth Fund – Class I Shares | 2.4% | |||
INTECH Risk-Managed International Fund – Class I Shares | 2.3% | |||
INTECH Risk-Managed Value Fund – Class I Shares | 2.4% | |||
Janus Flexible Bond Fund – Class I Shares | 22.8% | |||
Janus High-Yield Fund – Class I Shares | 2.1% | |||
Janus International Equity Fund – Class I Shares | 6.3% | |||
Janus Research Core Fund – Class I Shares | 2.6% | |||
Janus Research Fund – Class I Shares | 2.0% | |||
Janus Triton Fund – Class I Shares | 3.5% | |||
Perkins Mid Cap Value Fund – Class I Shares | 2.3% | |||
Alpha | ||||
Janus Contrarian Fund – Class I Shares | 10.3% | |||
Janus Forty Fund – Class I Shares | 10.0% | |||
Janus Global Life Sciences Fund – Class I Shares | 4.7% | |||
Janus Orion Fund – Class I Shares | 5.4% | |||
Janus Overseas Fund – Class I Shares | 10.1% | |||
Alternative | ||||
Janus Global Real Estate Fund – Class I Shares | 1.0% |
Janus Modular Portfolio Construction® Fund At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2009
8 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Five-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Modular Portfolio Construction® Fund – Class A Shares | |||||||||||
NAV | 9.97% | 28.64% | –2.01% | 13.98% | 1.34% | ||||||
MOP | 3.69% | 21.19% | –6.29% | ||||||||
Janus Modular Portfolio Construction® Fund – Class C Shares | |||||||||||
NAV | 9.65% | 28.49% | –2.39% | 14.10% | 2.09% | ||||||
CDSC | 8.57% | 27.22% | –2.39% | ||||||||
Janus Modular Portfolio Construction® Fund – Class I Shares | 9.94% | 28.87% | –1.78% | 14.11% | 1.09% | ||||||
Janus Modular Portfolio Construction® Fund – Class S Shares | 10.10% | 28.82% | –2.00% | 17.07% | 1.59% | ||||||
Janus Modular Portfolio Construction® Fund – Class T Shares | 9.71% | 28.60% | –1.93% | 14.60% | 1.34% | ||||||
Russell 3000® Index | 14.28% | 28.34% | –7.29% | ||||||||
MPC Allocation Composite Index | 10.94% | 25.98% | –2.03% | ||||||||
Lipper Quartile – Class I Shares | – | 2nd | 2nd | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Growth Funds | – | 172/649 | 276/636 | ||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
A Fund 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.
See important disclosures on the next page.
Janus Asset Allocation Funds | 9
Janus Modular Portfolio Construction® Fund (unaudited)
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any expenses of an underlying fund (acquired fund fees and expenses), the distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 and 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 Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com/info for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to Janus Modular Portfolio Construction® Fund and to the underlying funds held within the Fund, it is subject to certain potential conflicts of interest when allocating the assets of the Fund among underlying Janus funds. Performance of Janus Modular Portfolio Construction® Fund depends on that of the underlying funds, which 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.
The underlying funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the underlying fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of the underlying 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 underlying funds and selling of bonds within the underlying funds by the portfolio managers.
The underlying funds that invest in 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 of 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.
Effective July 6, 2009, Janus Adviser Modular Portfolio Construction® Fund merged into Janus Modular Portfolio Construction® Fund.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser Modular Portfolio Construction® Fund (the “JAD predecessor fund”) into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the JAD predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class T Shares of the Fund commenced operations on July 6, 2009, after the reorganization of the JAD predecessor fund into the Fund. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class I Shares prior to the reorganization, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers. If Class T Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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.
August 31, 2008 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.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule 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 3, 2008 |
10 | DECEMBER 31, 2009
(unaudited)
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 – Class A Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,098.50 | $ | 2.46 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.38 | $ | 2.85 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,095.30 | $ | 5.01 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.46 | $ | 5.80 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,098.10 | $ | 2.46 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.38 | $ | 2.85 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,099.70 | $ | 2.73 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.08 | $ | 3.16 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class T Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,097.09 | $ | 3.63 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.04 | $ | 4.21 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.56% for Class A Shares, 1.14% for Class C Shares, 0.56% for Class I Shares, 0.62% for Class S Shares and 0.83% for Class T Shares, multiplied by the average account value over the period, multiplied by 153/365 (to reflect a five-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a five-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Asset Allocation Funds | 11
Janus Modular Portfolio Construction® Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Common Stock – 0.9% | ||||||||||||
Government/Corporate – 0.9% | ||||||||||||
6,996 | Goldman Sachs Absolute Return Tracker Fund (cost $63,399) | $ | 63,590 | |||||||||
Exchange Traded Funds – 7.0% | ||||||||||||
Commodity – 4.4% | ||||||||||||
9,810 | iShares S&P GSCI Commodity-Indexed Trust (ETF)* | 312,155 | ||||||||||
Currency – 2.6% | ||||||||||||
6,577 | WisdomTree Dreyfus Japanese Yen Fund (ETF)* | 184,616 | ||||||||||
Total Exchange Traded Funds (cost $490,140) | 496,771 | |||||||||||
Mutual Funds(1) – 90.2% | ||||||||||||
Equity Funds – 65.3% | ||||||||||||
15,628 | INTECH Risk-Managed Growth Fund – Class I Shares | 172,066 | ||||||||||
23,152 | INTECH Risk-Managed International Fund – Class I Shares | 164,383 | ||||||||||
20,482 | INTECH Risk-Managed Value Fund – Class I Shares | 170,005 | ||||||||||
55,581 | Janus Contrarian Fund – Class I Shares | 733,120 | ||||||||||
22,171 | Janus Forty Fund – Class I Shares | 710,138 | ||||||||||
15,482 | Janus Global Life Sciences Fund – Class I Shares | 334,260 | ||||||||||
9,288 | Janus Global Real Estate Fund – Class I Shares | 74,022 | ||||||||||
44,574 | Janus International Equity Fund – Class I Shares | 447,967 | ||||||||||
38,530 | Janus Orion Fund – Class I Shares | 384,915 | ||||||||||
16,871 | Janus Overseas Fund – Class I Shares | 717,345 | ||||||||||
9,691 | Janus Research Core Fund – Class I Shares | 187,716 | ||||||||||
5,802 | Janus Research Fund – Class I Shares | 141,741 | ||||||||||
19,480 | Janus Triton Fund – Class I Shares | 248,371 | ||||||||||
8,433 | Perkins Mid Cap Value Fund – Class I Shares | 166,968 | ||||||||||
4,653,017 | ||||||||||||
Fixed-Income Funds – 24.9% | ||||||||||||
156,796 | Janus Flexible Bond Fund – Class I Shares | 1,629,110 | ||||||||||
17,706 | Janus High-Yield Fund – Class I Shares | 150,502 | ||||||||||
1,779,612 | ||||||||||||
Total Mutual Funds (cost $5,611,086) | 6,432,629 | |||||||||||
Money Market – 2.5% | ||||||||||||
177,362 | Janus Cash Liquidity Fund LLC, 0% (cost $177,362) | 177,362 | ||||||||||
Total Investments (total cost $6,341,987) – 100.6% | 7,170,352 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – (0.6)% | (42,458) | |||||||||||
Net Assets – 100% | $ | 7,127,894 | ||||||||||
(1) | The Fund 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 Schedule of Investments and Financial Statements.
12 | DECEMBER 31, 2009
Statement of Assets and Liabilities
Janus Modular | ||||||
As of December 31, 2009 (unaudited) | Portfolio | |||||
(all numbers in thousands except net asset value per share) | Construction® Fund | |||||
Assets: | ||||||
Investments at cost | $ | 6,342 | ||||
Unaffiliated investments at value | $ | 6,993 | ||||
Affiliated investments at value | 177 | |||||
Repurchase agreements | – | |||||
Cash | 1 | |||||
Receivables: | ||||||
Fund shares sold | 1 | |||||
Dividends | 8 | |||||
Non-interested Trustees’ deferred compensation | – | |||||
Other assets | – | |||||
Total Assets | 7,180 | |||||
Liabilities: | ||||||
Payables: | ||||||
Investments purchased | 8 | |||||
Advisory fees | 15 | |||||
Audit fees | 13 | |||||
Postage fees | 3 | |||||
Printing fees | 6 | |||||
Transfer agent fees and expenses | 3 | |||||
Administrative services fees – Class S Shares | – | |||||
Distribution fees – Class A Shares | 1 | |||||
Distribution fees – Class C Shares | 2 | |||||
Distribution fees – Class S Shares | – | |||||
Networking fees – Class A Shares | – | |||||
Networking fees – Class C Shares | – | |||||
Networking fees – Class I Shares | – | |||||
Non-interested Trustees’ fees and expenses | – | |||||
Non-interested Trustees’ deferred compensation fees | – | |||||
Accrued expenses and other payables | 1 | |||||
Total Liabilities | 52 | |||||
Net Assets | $ | 7,128 | ||||
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus)* | $ | 6,443 | ||||
Undistributed net investment income/(loss)* | 8 | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (151) | |||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 828 | |||||
Total Net Assets | $ | 7,128 | ||||
Net Assets – Class A Shares | $ | 3,162 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 332 | |||||
Net Asset Value Per Share(1) | $ | 9.51 | ||||
Maximum Offering Price Per Share(2) | $ | 10.09 | ||||
Net Assets – Class C Shares | $ | 2,257 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 238 | |||||
Net Asset Value Per Share(1) | $ | 9.46 | ||||
Net Assets – Class I Shares | $ | 1,394 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 146 | |||||
Net Asset Value Per Share(1) | $ | 9.54 | ||||
Net Assets – Class S Shares | $ | 293 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 31 | |||||
Net Asset Value Per Share(1) | $ | 9.51 | ||||
Net Assets – Class T Shares | $ | 22 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2 | |||||
Net Asset Value Per Share(1) | $ | 9.52 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Asset Allocation Funds | 13
Statement of Operations
Janus Modular | ||||||
For the five-month period ended December 31, 2009 (unaudited) | Portfolio | |||||
(all numbers in thousands) | Construction® Fund(1) | |||||
Investment Income: | ||||||
Dividends | $ | – | ||||
Dividends from affiliates | 55 | |||||
Total Investment Income | 55 | |||||
Expenses: | ||||||
Advisory fees | 2 | |||||
Transfer agent fees and expenses | 3 | |||||
Legal fees | 7 | |||||
Audit fees | 9 | |||||
Postage fees | 2 | |||||
Non-interested Trustees’ fees and expenses | – | |||||
Printing expenses | 6 | |||||
Distribution fees – Class A Shares | 3 | |||||
Distribution fees – Class C Shares | 7 | |||||
Distribution fees – Class S Shares | – | |||||
Administrative fees – Class S Shares | – | |||||
Networking fees – Class A Shares | – | |||||
Networking fees – Class C Shares | – | |||||
Networking fees – Class I Shares | – | |||||
Other expenses | – | |||||
Total Expenses | 39 | |||||
Expense and Fee Offset | – | |||||
Net Expenses | 39 | |||||
Less: Excess Expense Reimbursement | (21) | |||||
Net Expenses after Expense Reimbursement | 18 | |||||
Net Investment Income/(Loss) | 37 | |||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 20 | |||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 465 | |||||
Net Gain/(Loss) on Investments | 485 | |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 522 |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2009
Statements of Changes in Net Assets
Janus Modular | ||||||||||
For the five-month period ended December 31, 2009 (unaudited) | Portfolio | |||||||||
and the fiscal period ended July 31, 2009 | Construction® Fund | |||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 37 | $ | 56 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 20 | (159) | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 465 | 364 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 522 | 261 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | ||||||||||
Class A Shares | (31) | (3) | ||||||||
Class C Shares | (23) | (6) | ||||||||
Class I Shares | (14) | (3) | ||||||||
Class S Shares | (3) | (2) | ||||||||
Class T Shares | – | – | ||||||||
Net realized gain from investment transactions* | ||||||||||
Class A Shares | (6) | – | ||||||||
Class C Shares | (4) | – | ||||||||
Class I Shares | (2) | – | ||||||||
Class S Shares | (1) | – | ||||||||
Class T Shares | – | – | ||||||||
Net (Decrease) from Dividends and Distributions | (84) | (14) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | ||||||||||
Class A Shares | 1,226 | 1,670 | ||||||||
Class C Shares | 861 | 1,190 | ||||||||
Class I Shares | 806 | 740 | ||||||||
Class S Shares | 47 | 494 | ||||||||
Class T Shares | 20 | 1 | ||||||||
Reinvested dividends and distributions | ||||||||||
Class A Shares | 37 | 3 | ||||||||
Class C Shares | 26 | 6 | ||||||||
Class I Shares | 16 | 3 | ||||||||
Class S Shares | 3 | 2 | ||||||||
Class T Shares | – | – | ||||||||
Shares repurchased | ||||||||||
Class A Shares | (16) | (28) | ||||||||
Class C Shares | (43) | (22) | ||||||||
Class I Shares | (301) | (3) | ||||||||
Class S Shares | (255) | (40) | ||||||||
Class T Shares | – | – | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | 2,427 | 4,016 | ||||||||
Net Increase/(Decrease) in Net Assets | 2,865 | 4,263 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 4,263 | – | ||||||||
End of period | $ | 7,128 | $ | 4,263 | ||||||
Undistributed net investment income/(loss)* | $ | 8 | $ | 42 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from September 3, 2008 (inception date) through July 31, 2009. |
See Notes to Financial Statements.
Janus Asset Allocation Funds | 15
Financial Highlights
Class A Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio Construction® Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $8.76 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | .15 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .84 | (1.31) | ||||||||
Total from Investment Operations | .87 | (1.16) | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.10) | (.08) | ||||||||
Dividends (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.12) | (.08) | ||||||||
Net Asset Value, End of Period | $9.51 | $8.76 | ||||||||
Total Return** | 9.85% | (11.38)% | ||||||||
Net Assets, End of Period (in thousands) | $3,162 | $1,734 | ||||||||
Average Net Assets for the Period (in thousands) | $2,535 | $488 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.57% | 0.62% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.56% | 0.61% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.70% | 3.35% | ||||||||
Portfolio Turnover Rate*** | 38% | 78% |
Class C Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio Construction® Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $8.74 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | – | .19 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .84 | (1.37) | ||||||||
Total from Investment Operations | .84 | (1.18) | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.10) | (.08) | ||||||||
Dividends (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.12) | (.08) | ||||||||
Net Asset Value, End of Period | $9.46 | $8.74 | ||||||||
Total Return** | 9.53% | (11.58)% | ||||||||
Net Assets, End of Period (in thousands) | $2,257 | $1,288 | ||||||||
Average Net Assets for the Period (in thousands) | $1,707 | $684 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.15% | 0.48%(4) | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.14% | 0.48%(4) | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.14% | 3.37% | ||||||||
Portfolio Turnover Rate*** | 38% | 78% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from September 3, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets would be 1.46% and 1.45% respectively, without the waiver of these fees and expenses. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2009
Class I Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio Construction® Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $8.79 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .19 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .85 | (1.32) | ||||||||
Total from Investment Operations | .87 | (1.13) | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.10) | (.08) | ||||||||
Dividends (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.12) | (.08) | ||||||||
Net Asset Value, End of Period | $9.54 | $8.79 | ||||||||
Total Return** | 9.81% | (11.08)% | ||||||||
Net Assets, End of Period (in thousands) | $1,394 | $782 | ||||||||
Average Net Assets for the Period (in thousands) | $1,183 | $382 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.57% | 0.46% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.56% | 0.45% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.66% | 3.57% | ||||||||
Portfolio Turnover Rate*** | 38% | 78% |
Class S Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio Construction® Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $8.75 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .15 | .19 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .73 | (1.36) | ||||||||
Total from Investment Operations | .88 | (1.17) | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.10) | (.08) | ||||||||
Dividends (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.12) | (.08) | ||||||||
Net Asset Value, End of Period | $9.51 | $8.75 | ||||||||
Total Return** | 9.97% | (11.48)% | ||||||||
Net Assets, End of Period (in thousands) | $293 | $458 | ||||||||
Average Net Assets for the Period (in thousands) | $409 | $274 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.63% | 0.72% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.62% | 0.71% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.26% | 3.09% | ||||||||
Portfolio Turnover Rate*** | 38% | 78% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from September 3, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Asset Allocation Funds | 17
Financial Highlights (continued)
Class T Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio Construction® Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $8.78 | $8.25 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | .01 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .83 | .52 | ||||||||
Total from Investment Operations | 0.86 | .53 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.10) | – | ||||||||
Dividends (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.12) | – | ||||||||
Net Asset Value, End of Period | $9.52 | $8.78 | ||||||||
Total Return** | 9.71% | 6.42% | ||||||||
Net Assets, End of Period (in thousands) | $22 | $1 | ||||||||
Average Net Assets for the Period (in thousands) | $9 | $1 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.84% | 0.76% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.83% | 0.70% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.18% | 1.56% | ||||||||
Portfolio Turnover Rate*** | 38% | 78% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2009
Notes to Schedule of Investments (unaudited)
Barclays Capital U.S. Aggregate Bond Index | Is an unmanaged market value weighted index for U.S. dollar-denominated investment-grade debt issues, including government, corporate, mortgage-backed, and asset-backed securities with maturities of at least one year. | |
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. | |
MPC Allocation Composite Index | Is a hypothetical combination of unmanaged indices. This internally-calculated index combines the total returns from the Russell 3000® Index (50%), the Barclays Capital U.S. Aggregate Bond Index (25%), and the Morgan Stanley Capital International All Country World ex-U.S. Index (25%). | |
Russell 3000® Index | Measures the performance of the stocks of the 3,000 largest publicly-traded U.S. companies, based on market capitalization, and it measures the performance of about 98% of the total market capitalization of the publicly traded U.S. equity market. | |
ETF | Exchange-Traded Fund |
* | Non-income producing security. |
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of December 31, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Janus Modular Portfolio Construction® Fund | |||||||||||
Common Stock | $ | 63,590 | $ | – | $ | – | |||||
Exchange Traded Funds | 496,771 | – | – | ||||||||
Mutual Funds | – | 6,432,629 | – | ||||||||
Money Market | – | 177,362 | – | ||||||||
Total Investments in Securities | $ | 560,361 | $ | 6,609,991 | $ | – | |||||
Janus Asset Allocation Funds | 19
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 Modular Portfolio Construction® Fund is a series fund. The Fund operates as a “fund of funds,” meaning substantially all of the Fund’s assets will be invested in other Janus funds (the “underlying funds”) with approximately 90% of its assets allocated to Janus-managed mutual funds and approximately 10% allocated to unqualified pooled investment vehicles (e.g., ETFs) and derivatives. The Fund is 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 thirty-eight funds which include multiple series of shares, with differing investment objectives and policies. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund in this report offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. The share classes in this report are not offered directly to individual investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms. The maximum purchase in Class C Shares is $500,000 for any single purchase.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, and bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, and certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Underlying Funds
The Fund 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 Fund has a target allocation, which is how the Fund’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges within which the Fund’s asset class allocations generally will vary over short-term periods. The normal asset allocation ranges are as follows: 60%-90% stocks and 15%-30% bonds and money market instruments and 5-15% alternative investments for the Fund. A brief description of each of the underlying funds that the Fund may invest in are as follows.
POTENTIAL UNDERLYING FUNDS INVESTING PRIMARILY IN EQUITY SECURITIES
INTECH RISK-MANAGED CORE FUND 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 S&P 500® Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
INTECH RISK-MANAGED GROWTH FUND 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.
INTECH RISK-MANAGED INTERNATIONAL FUND 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.
INTECH RISK-MANAGED VALUE FUND seeks long-term growth of capital. The fund invests primarily in common
20 | DECEMBER 31, 2009
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 BALANCED FUND seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The 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. The fund normally invests at least 25% of its assets in fixed-income senior securities. Fixed-income securities may include corporate debt securities, U.S. government obligations, mortgage-backed securities and other mortgage-related products, and short-term investments.
JANUS CONTRARIAN FUND 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 with the potential for long-term growth of capital. The portfolio manager emphasizes investments in companies with 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 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 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 FORTY FUND 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 FUND seeks long-term growth 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 industry groups: 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 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 located anywhere in the world, from larger, well-established companies to smaller, emerging growth companies. The 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. 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
Janus Asset Allocation Funds | 21
Notes to Financial Statements (unaudited) (continued)
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 GROWTH AND INCOME FUND seeks long-term capital growth and current income. The fund pursues its investment objective by normally emphasizing investments in common stocks. The 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 the 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.
JANUS INTERNATIONAL EQUITY FUND 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.
JANUS INTERNATIONAL FORTY FUND 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 ORION FUND seeks long-term growth of capital. The 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. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS OVERSEAS FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside of the United States. The fund normally invests in securities of issuers from several different countries, 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.
JANUS RESEARCH CORE FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in equity securities selected for their growth potential. Eligible equity securities in which the 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). The fund may invest in companies of any size.
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.
JANUS WORLDWIDE FUND seeks long-term growth of capital in a manner consistent with the preservation of
22 | DECEMBER 31, 2009
capital. The fund pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world. The fund normally invests in issuers from several different countries, including the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
PERKINS LARGE CAP VALUE FUND 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 capitalizations equal to or greater than the median market capitalization of companies included in the Russell 1000® Value Index.
PERKINS MID CAP VALUE FUND 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 mid-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 whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap® Value Index.
PERKINS SMALL CAP VALUE FUND seeks capital appreciation. The fund pursues its investment objective by investing primarily 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.
POTENTIAL UNDERLYING FUNDS INVESTING PRIMARILY IN FIXED-INCOME SECURITIES
JANUS FLEXIBLE BOND FUND seeks to obtain maximum total return, consistent with preservation of capital. The fund pursues its investment objective by primarily investing, under normal circumstances, at least 80% of its net assets in bonds. Bonds include, but are not limited to, government bonds, corporate bonds, convertible bonds, mortgage-backed securities, and zero-coupon bonds. The 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. The fund will limit its investment in high-yield/high-risk bonds to 35% or less of its net assets. The fund generates total return from a combination of current income and capital appreciation, but income is usually the dominant portion.
JANUS HIGH-YIELD FUND seeks to obtain high current income. Capital appreciation is a secondary investment objective when consistent with its primary objective. The 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 managers believe offer attractive risk/return characteristics. The fund may at times invest all of its assets in such securities.
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.
POTENTIAL UNDERLYING FUNDS PRIMARILY UTILIZING ALTERNATIVE STRATEGIES
JANUS GLOBAL REAL ESTATE FUND 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
Janus Asset Allocation Funds | 23
Notes to Financial Statements (unaudited) (continued)
to 15% of its net assets, measured at the time of purchase.
JANUS LONG/SHORT FUND seeks strong absolute risk-adjusted returns over a full market cycle. Under 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.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America within the investment management industry.
Investment Valuation
The Fund’s net asset value (“NAV”) is partially calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for each class of an underlying fund 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 Fund and 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 Fund and 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 Fund’s and the underlying funds’ Trustees. Short-term securities held by the Fund and the underlying funds with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities held by the Fund and 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 Fund and 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 Fund and the underlying funds are identified between the closing of their principal markets and the time the 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 Fund’s and 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; (iii) a non-significant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a non-valued security and a restricted or non-public security. 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 the close of certain foreign exchanges and the NYSE. Restricted and illiquid securities are valued in accordance with procedures established by the Fund’s and the underlying 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 held by the Fund and 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 Fund and 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, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Additionally, the
24 | DECEMBER 31, 2009
Fund as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
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.
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.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Fund may be automatically reinvested into additional shares of the Fund, 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.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Fund intends 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.
In accordance with the Financial Accounting Standards Board (“FASB”) guidance, the Fund adopted the provisions of “Income Taxes.” These provisions require an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Fund’s tax return 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 Fund recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense on the Statement of Operations.
These provisions require management of the Fund to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the five-month period ended December 31, 2009, the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examinations in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB guidance, the Fund utilizes the “Fair Value Measurements and Disclosures” to define fair value, establish a framework for measuring fair value, and expand disclosure requirements regarding fair value measurements. The Fair Value Measurement Standard does not require new fair value measurements, but is applied to the extent that other accounting
Janus Asset Allocation Funds | 25
Notes to Financial Statements (unaudited) (continued)
pronouncements require or permit fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of the Fund’s investments defined pursuant to this standard. 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 under 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 December 31, 2009 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if applicable) in the Notes to Schedule of Investments.
In April 2009, FASB issued “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,” which provides additional guidance for estimating fair value in accordance with Fair Value Measurements 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. Additionally, it amends the Fair Value Measurements Standard by expanding disclosure requirements for reporting entities surrounding the major categories of assets and liabilities carried at fair value. The required disclosures have been incorporated into the “Valuation Inputs Summary” in the Notes to the Schedule of Investments. Management believes applying this guidance does not have a material impact on the financial statements.
2. | Derivative Instruments |
The Fund and underlying funds may invest in various types of derivatives which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund and underlying funds may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives.
The Fund and underlying funds may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the Fund and underlying funds invest in a derivative for speculative purposes, the Fund or underlying funds will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the cost of the derivative. The Fund and underlying funds may not use any derivative to gain exposure to an asset or class of assets prohibited by their investment restrictions from purchasing directly. The Fund’s or an underlying fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives are generally subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the underlying funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including credit risk, currency risk, leverage risk, liquidity risk, and index risk.
Derivatives may generally be traded over-the-counter (“OTC”) or on an exchange. Exchange-traded derivatives, such as futures contracts, are regulated and the terms of the options are standardized. Derivatives traded OTC, such as swap contracts, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased counterparty credit risk.
26 | DECEMBER 31, 2009
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund and certain underlying funds may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, a Fund and certain underlying funds may require the counterparty to post collateral if the Fund or underlying funds have a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Equity-Linked Structured Notes
The underlying funds, except INTECH Risk-Managed Core Fund, INTECH Risk-Managed Growth Fund, INTECH Risk-Managed International Fund, and INTECH Risk-Managed Value Fund (together, the “Risk-Managed 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.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The underlying funds, except the Risk-Managed funds, may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings of the Fund and underlying funds and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund and underlying funds may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund and underlying funds are subject to foreign currency risk in the normal course of pursuing their investment objectives through their investments in forward currency contracts.
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 Fund or underlying funds are fully collateralized by other securities, which are denoted on the Fund’s or the underlying funds’ 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 Fund’s or underlying funds’ custodian.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund and underlying funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Fund and underlying funds are subject to interest rate risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in futures contracts. The Fund and 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 Statement 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 Statement 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 held by the Fund or an underlying fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the
Janus Asset Allocation Funds | 27
Notes to Financial Statements (unaudited) (continued)
possession of the Fund’s custodian or with the counterparty broker.
With futures, there is minimal counterparty credit risk to the underlying funds since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation to buy (call option) or sell (put option) a financial instrument at an agreed upon price. The Fund and underlying 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 Fund or underlying funds are subject to interest rate risk, liquidity risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in options contracts. The Fund or underlying funds may use option contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund and 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 Fund and underlying funds, except the Risk-Managed 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 Fund and underlying funds may also invest in long-term equity anticipation securities, which are long-term option contracts that can be maintained for a period of up to three years. The Fund or underlying funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund or 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 Fund or 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 Fund or underlying funds could result in the Fund or 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 Fund or 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.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded over-the-counter expose the Fund or underlying funds to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund or underlying funds and the counterparty and by having the counterparty post collateral to cover the Fund’s or underlying funds’ exposure to the counterparty.
Holdings of the Fund designated to cover outstanding written options are noted on the Schedule of Investments (if applicable). Options written are reported as a liability on the Statement 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 Statement of Operations (if applicable).
The risk in writing call options is that the Fund or 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 Fund or 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 Fund or 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
28 | DECEMBER 31, 2009
instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund or 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 Fund or underlying funds may recognize due to written call options.
Other Options
In addition to the option strategies described above, the Fund and certain underlying funds may purchase and sell a variety of options with non-standard payout structures or other features (“exotic options”). Exotic options are traded OTC and typically have price movements that can vary markedly from simple put or call options. The risks associated with exotic options are that they cannot be as easily priced and may be subject to liquidity risk. While some exotic options have fairly active markets others are mostly thinly traded instruments. Some options are pure two-party transactions and may have no liquidity. The Fund and certain underlying funds may treat such instruments as illiquid and will limit its investments in such instruments to no more than 15% of the Fund’s net assets, when combined with all other illiquid investments of the Fund. The Fund may use exotic options to the extent that they are consistent with the Fund’s investment objective and investment policies, and applicable regulations.
The Fund and certain underlying funds may purchase and sell exotic options that have values which are determined by the correlation of two or more underlying assets. These types of options include but are not limited to outperformance options, yield curve options or other spread options.
Swaps
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. The Fund and the underlying funds, except the Risk-Managed 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. The Fund and underlying funds are subject to market risk and interest rate risk in the normal course of pursuing their investment objectives through investments in swap contracts. Swap agreements entail the risk that a party will default on its payment obligation to the Fund or underlying funds. If the other party to a swap defaults, the Fund or underlying funds would risk the loss of the net amount of the payments that it contractually is entitled to receive. If the Fund or underlying funds utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund or underlying funds and reduce the Fund’s or underlying funds’ total return. Swap contracts of the Fund are reported as an asset or liability on the Statement of Assets and Liabilities (if applicable). Realized gains and losses of the Fund are reported in “Net realized gain/(loss) from swap contracts” on the Statement 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. The Fund or underlying funds are subject to credit risk in the normal course of pursuing their investment objectives through their investments in credit default swap contracts. The Fund or underlying funds may enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which they are not otherwise exposed. With a credit default swap, 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. The Fund’s or underlying funds’ maximum risk of loss from counterparty risk, either as protection sellers or as protection buyers (undiscounted), is the notional value of the contract. The risk is mitigated by having a netting arrangement between the Fund or underlying funds and the counterparty and by posting of collateral by the counterparty to the Fund or underlying funds to cover the Fund’s or underlying funds’ exposure to the counterparty.
Funded (notional value of contract paid up front) or unfunded (notional value only paid in case of default) 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.
Janus Asset Allocation Funds | 29
Notes to Financial Statements (unaudited) (continued)
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.
The Fund’s or underlying funds’ maximum risk of loss for equity swaps, interest rate swaps and total return swaps from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund or underlying funds and the counterparty and by the posting of collateral to the Fund or underlying funds to cover the Fund’s or underlying funds’ exposure to the counterparty.
In accordance with FASB guidance, the Fund adopted the provisions for “Derivative and Hedging,” 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.
The effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2009
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Equity Contracts | $ | – | $ | 219 | $ | – | $ | – | $ | 219 | ||||||||||
Total | $ | – | $ | 219 | $ | – | $ | – | $ | 219 | ||||||||||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Equity Contracts | $ | – | $ | (268 | ) | $ | – | $ | – | $ | (268 | ) | ||||||||
Total | $ | – | $ | (268 | ) | $ | – | $ | – | $ | (268 | ) | ||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
The effect of derivatives on the Statement of Operations is indicative of the Fund’s volume throughout the period.
3. | Other Investments and Strategies |
Additional Investment Risk
The underlying funds, particularly Janus Flexible Bond 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.
Unforeseen events in the equity and fixed-income markets may at times result in an unusually high degree of volatility in the markets, both domestic and international. These events and the resulting market upheavals may have an adverse effect on the Fund such as a decline in the value and liquidity of many securities held by the Fund, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in net asset value, and an increase in Fund expenses. Such unforeseen events may make it unusually difficult to identify both investment risks and opportunities and could limit or preclude the Fund’s ability to achieve its investment objective. The market’s behavior may at times be unpredictable. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
Bank Loans
Certain underlying funds, Janus Balanced Fund, Janus Flexible Bond Fund, Janus High-Yield Fund, Janus Long/Short 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
30 | DECEMBER 31, 2009
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 the underlying funds invest generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year 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.
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.
Borrowing
The underlying fund, Janus 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, Janus Long/Short 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. Janus Long/Short Fund may also borrow money to meet redemptions in order to avoid forced, unplanned sales of portfolio securities or for other temporary or emergency purposes. This allows Janus Long/Short 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 Janus Long/Short Fund involves special risk considerations that may not be associated with other funds that may only borrow for temporary or emergency purposes. Because substantially all of Janus Long/Short Fund’s assets fluctuate in value, whereas the interest obligation resulting from a borrowing will be fixed by the terms of Janus Long/Short Fund’s agreement with its lender, the NAV per share of Janus Long/Short 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 Janus Long/Short 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, Janus Long/Short 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 Janus Long/Short 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 Janus Long/Short Fund compared with what it would have been without leverage.
Counterparties
Fund or underlying fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund 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 the Fund or underlying funds. The Fund or underlying funds may be unable to recover their investments from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s or underlying funds’ exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded on the Fund’s Statement of Assets and Liabilities.
The Fund or underlying funds may be exposed to counterparty risk through participation in various programs including, but not limited to, lending their securities to third parties, cash sweep arrangements whereby the Fund’s or underlying funds’ cash balances are invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund or underlying funds intend to enter into financial transactions with counterparties that Janus Capital believes to be
Janus Asset Allocation Funds | 31
Notes to Financial Statements (unaudited) (continued)
creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund or underlying funds focus their transactions with a limited number of counterparties, they will have greater exposure to the risks associated with one or more counterparties.
Exchange-Traded Funds
The Fund or underlying funds may invest in exchange-traded funds, which generally 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, the Fund or underlying funds would bear their pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund or underlying funds bears directly in connection with their own operations.
Exchange-Traded Notes
The Fund or underlying funds may invest directly in exchange-traded notes (“ETNs”), 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 periodic 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 Fund or 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 Fund or 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 Fund’s or underlying funds’ right to redeem their investment in an ETN, which is meant to be held until maturity. The Fund’s decision to sell its ETN holdings may be limited by the availability of a secondary market.
Floating Rate Loans
Certain underlying funds, Janus Balanced Fund, Janus Flexible Bond Fund, Janus High-Yield Fund, Janus Long/Short 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 LIBOR. 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. Floating rate loans may include fully funded term loans or revolving lines of credit.
Initial Public Offerings
The underlying funds 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.
Interfund Lending
As permitted by the Securities and Exchange Commission (“SEC”), or the 1940 Act and rules promulgated thereunder, 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 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.
Mortgage- and Asset-Backed Securities
The underlying funds may purchase fixed or variable rate mortgage-backed securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or other governmental or government-related entities. Fannie
32 | DECEMBER 31, 2009
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 the underlying funds’ yield and the underlying funds’ 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 to decline.
Mortgage Dollar Rolls
Certain underlying funds, Janus Flexible Bond Fund, Janus Global Real Estate Fund, Janus High-Yield Fund, Janus Long/Short 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 Ginnie Mae security) to a dealer and simultaneously agree to repurchase a similar security (but not the same security) in the future at a predetermined 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.
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.
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.
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 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
Janus Asset Allocation Funds | 33
Notes to Financial Statements (unaudited) (continued)
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 SEC. Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Deutsche Bank AG (the “Lending Agent”) may also invest the cash collateral in 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 on the underlying funds’ Schedules of Investments (if applicable). The lending fees and an underlying fund’s portion of the interest income earned on cash collateral are included on the underlying funds’ 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.
Securities Traded on a To-Be-Announced Basis
Certain underlying funds, Janus Flexible Bond Fund, Janus Global Real Estate Fund, Janus High-Yield Fund, Janus Long/Short 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, Fannie Mae and/or 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.
Short Sales
The underlying funds, except the Risk-Managed 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, 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 the underlying funds’ net assets may be invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls (limitation not applicable to Janus Long/Short Fund). 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 the underlying funds 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 underlying funds are fully collateralized by other securities. The underlying 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, an underlying fund may or may not receive any payments (including interest) on collateral it has deposited
34 | DECEMBER 31, 2009
with the broker. The underlying funds pay stock loan fees on assets borrowed from the security broker.
The underlying funds may also enter into short positions through derivative instruments such as option contracts, futures contracts, and swap agreements, which may expose the underlying funds to similar risks. To the extent that the underlying funds enter into short derivative positions, the underlying funds may be exposed to risks similar to those associated with short sales, including the risk that the underlying fund’s losses are theoretically unlimited.
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.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Contractual | ||||||||
Average | Investment | |||||||
Daily Net | Advisory | |||||||
Assets | Fee (%) | |||||||
Fund | of the Fund | (annual rate) | ||||||
Janus Modular Portfolio Construction® Fund | All Asset Levels | 0.07 | ||||||
Janus Capital has contractually agreed until at least February 16, 2011, to waive the advisory fee payable by the Fund in an amount equal to the amount, if any, that such Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares only), brokerage commissions, interest, dividends, taxes, and extraordinary expenses, exceed the 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.
Expense | |||||
Fund | Limit (%) | ||||
Janus Modular Portfolio Construction® Fund | 0.45 | ||||
Janus Capital was entitled to recoup such reimbursement or fee reduction from the Fund for a three-year period commencing with the operations of the Fund, provided that at no time during such period the normal operating expenses allocated to the Fund, with the exceptions noted in the expense limit table, exceed the percentages stated. This recoupment of such reimbursements expires September 3, 2011.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent and receives certain out-of-pocket expenses for transfer agent services. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Certain intermediaries may charge administrative fees to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of Class S Shares of the Fund for providing or procuring administrative services to investors in Class S Shares of the Fund. Janus Services expects to use a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, processing and aggregating purchase and redemption transactions, providing periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, and other administrative services.
Class T Shares of the Fund pays an annual administrative fee of 0.25% of net assets of Class T Shares for administrative services, including recordkeeping, subaccounting, or other shareholder services provided by intermediaries on behalf of the shareholders of the Fund. These administrative fees are paid by Class T Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Janus Services or its affiliates may also pay administrative fees to the extent the fees
Janus Asset Allocation Funds | 35
Notes to Financial Statements (unaudited) (continued)
charged by intermediaries exceed the 0.25% of net assets charged to the Fund.
Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, is the distributor of the Fund. The Fund has adopted a Distribution and Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Fund at an annual rate, as determined from time to time by the Board of Trustees, of up to 0.25% of the Class A Shares average daily net assets, of up to 1.00% of the Class C Shares average daily net assets, and of up to 0.25% of the Class S Shares average daily net assets. Payments under the Plan are not tied exclusively to actual distribution and shareholder service expenses, and the payments may exceed distribution and shareholder service expenses actually incurred by the Fund. If any of a Fund’s actual distribution and shareholder service expenses incurred during a calendar year is less than the payments made during a calendar year, the Fund will be reimbursed for the difference.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is shown as of December 31, 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 five-month period ended December 31, 2009 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were distributed to any Trustee under the Deferred Plan during the five-month period ended December 31, 2009.
Certain officers of the Fund may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer. The Fund reimburses the adviser for a portion of the compensation paid to the Chief Compliance Officer and certain compliance staff of the Trust. Total compensation of $128,761 was paid by the Trust during the five-month period ended December 31, 2009. The Fund’s portion is reported as part of “Other Expenses” on the Statement of Operations.
Class A Shares include a 5.75% upfront sales charge of the offering price for the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the five-month period ended December 31, 2009, Janus Distributors retained the following upfront sales charge:
Upfront | |||||
Fund (Class A Shares) | Sales Charge | ||||
Janus Modular Portfolio Construction® Fund | $ | 1,264 | |||
Class C Shares include a 1.00% contingent deferred sales charge paid by the redeeming shareholder to Janus Distributors. The contingent deferred sales charge applies to shares redeemed within 12 months of purchase. The redemption price may differ from the net asset value per share. During the five-month period ended December 31, 2009, redeeming shareholders of Class C Shares paid the following contingent deferred sales charge:
Contingent Deferred | |||||
Fund (Class C Shares) | Sales Charge | ||||
Janus Modular Portfolio Construction® Fund | $ | 302 | |||
The Fund’s 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 Statement of Operations (if applicable). The transfer agent fee offsets received during the period reduce “Transfer agent fees and expenses” on the Statement of Operations (if applicable). Custodian offsets received reduce “Custodian fees” on the Statement of Operations (if applicable). The Fund 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 Fund and the underlying funds may participate in an affiliated or non-affiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or non-affiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). Janus Cash Liquidity Fund LLC is an affiliated
36 | DECEMBER 31, 2009
unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 2a-7 product. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. 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 Fund.
During the five-month period ended December 31, 2009, the Fund recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Janus Modular Portfolio Construction® Fund | |||||||||||||||||||||
INTECH Risk-Managed Growth Fund – Class I Shares | 6,057 | $ | 62,629 | (799) | $ | (8,124) | $ | 341 | $ | 1,195 | $ | 172,066 | |||||||||
INTECH Risk-Managed International Fund – Class I Shares | 9,225 | 64,777 | (2,564) | (17,973) | 220 | 1,305 | 164,383 | ||||||||||||||
INTECH Risk-Managed Value Fund – Class I Shares | 8,052 | 64,346 | (1,991) | (15,838) | 154 | 875 | 170,005 | ||||||||||||||
Janus Cash Liquidity Fund LLC | 472,172 | 472,172 | (532,000) | (532,000) | – | – | 177,362 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 42,805 | 522,289 | (1,414) | (18,196) | (388) | 900 | 733,120 | ||||||||||||||
Janus Flexible Bond Fund- Class I Shares | 72,738 | 752,717 | (37,258) | (381,039) | 6,021 | 36,387 | 1,629,109 | ||||||||||||||
Janus Forty Fund – Class I Shares | 10,968 | 335,573 | (611) | (19,661) | (549) | – | 710,138 | ||||||||||||||
Janus Fund – Class I Shares | 335 | 8,148 | (1,069) | (21,848) | 4,582 | – | – | ||||||||||||||
Janus Global Life Sciences Fund – Class I Shares | 6,526 | 132,383 | (433) | (8,990) | 144 | 327 | 334,260 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 3,576 | 26,898 | (905) | (6,723) | 168 | 1,301 | 74,022 | ||||||||||||||
Janus High-Yield Fund – Class I Shares | 7,104 | 58,439 | (686) | (5,295) | 384 | 4,639 | 150,502 | ||||||||||||||
Janus International Equity Fund – Class I Shares | 21,797 | 210,935 | (1,216) | (12,156) | (91) | 1,869 | 447,967 | ||||||||||||||
Janus Orion Fund – Class I Shares | 21,018 | 194,711 | (24,058) | (217,866) | 6,348 | 492 | 384,915 | ||||||||||||||
Janus Overseas Fund – Class I Shares | 7,912 | 320,353 | (670) | (30,570) | (4,634) | 2,888 | 717,345 | ||||||||||||||
Janus Research Core Fund – Class I Shares | 4,649 | 85,566 | (3,687) | (67,514) | 1,242 | 679 | 187,716 | ||||||||||||||
Janus Research Fund – Class I Shares | 2,238 | 51,652 | (382) | (9,077) | (141) | 456 | 141,741 | ||||||||||||||
Janus Triton Fund – Class I Shares | 7,520 | 89,821 | (1,372) | (16,062) | 528 | 752 | 248,371 | ||||||||||||||
Perkins Mid Cap Value Fund – Class I Shares | 3,231 | 61,615 | (570) | (11,178) | (223) | 495 | 166,968 | ||||||||||||||
$ | 3,515,024 | $ | (1,400,110) | $ | 14,106 | $ | 54,560 | $ | 6,609,990 | ||||||||||||
Janus Capital or an affiliate invested and/or redeemed initial seed capital during the period ended December 31, 2009, as indicated in the following table.
Seed | Seed | |||||||||||||||||||
Capital at | Date of | Date of | Capital at | |||||||||||||||||
Fund | 8/1/09 | Purchases | Purchases | Redemptions | Redemption | 12/31/09 | ||||||||||||||
Janus Modular Portfolio Construction® Fund - Class A Shares | $ | 250,000 | $ | – | – | $ | – | – | $ | 250,000 | ||||||||||
Janus Modular Portfolio Construction® Fund - Class C Shares | 250,000 | – | – | – | – | 250,000 | ||||||||||||||
Janus Modular Portfolio Construction® Fund - Class I Shares | 250,000 | – | – | – | – | 250,000 | ||||||||||||||
Janus Modular Portfolio Construction® Fund - Class S Shares | 250,000 | – | – | – | – | 250,000 | ||||||||||||||
Janus Modular Portfolio Construction® Fund - Class T Shares | 1,000 | 10,000 | 10/29/2009 | – | – | 11,000 | ||||||||||||||
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. 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
Janus Asset Allocation Funds | 37
Notes to Financial Statements (unaudited) (continued)
securities for federal income tax purposes as of December 31, 2009 are noted below.
Unrealized appreciation and unrealized depreciation in the table below excludes appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Federal Tax | Unrealized | Unrealized | Net Tax Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Janus Modular Portfolio Construction® Fund | $ | 6,518,833 | $ | 651,519 | $ | – | $ | 651,519 | ||||||
6. | Expense Ratios |
The expense ratios listed in the Financial Highlights reflect expenses prior to any expense offsets (gross expense ratio) and after expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursement). Listed below are the gross expense ratios for the Fund that would have been in effect, absent the waiver of certain fees and offsets.
For the five-month period ended December 31, 2009 (unaudited)
and the fiscal period ended July 31, 2009
and the fiscal period ended July 31, 2009
Janus Modular | ||||
Portfolio Construction®Fund | ||||
Class A Shares | ||||
2009(1) | 1.45% | |||
2009(2) | 13.34% | |||
Class C Shares | ||||
2009(1) | 2.04% | |||
2009(2) | 13.46% | |||
Class I Shares | ||||
2009(1) | 1.21% | |||
2009(2) | 13.47% | |||
Class S Shares | ||||
2009(1) | 1.97% | |||
2009(2) | 16.43% | |||
Class T Shares | ||||
2009(1) | 0.32% | |||
2009(3) | 7.61% | |||
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from September 3, 2008 (inception date) through July 31, 2009. | |
(3) | Period from July 6, 2009 (inception date) through July 31, 2009. |
38 | DECEMBER 31, 2009
7. | Capital Share Transactions |
For the five-month period ended December 31, 2009 (unaudited) | Janus Modular Portfolio | |||||||||
and the fiscal period ended July 31, 2009 | Construction® Fund | |||||||||
(all numbers are in thousands) | 2009(1) | 2009(2) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 132 | 201 | ||||||||
Reinvested dividends and distributions | 4 | – | ||||||||
Shares repurchased | (2) | (3) | ||||||||
Net Increase/(Decrease) in Fund Shares | 134 | 198 | ||||||||
Shares Outstanding, Beginning of Period | 198 | – | ||||||||
Shares Outstanding, End of Period | 332 | 198 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 93 | 149 | ||||||||
Reinvested dividends and distributions | 3 | 1 | ||||||||
Shares repurchased | (5) | (3) | ||||||||
Net Increase/(Decrease) in Fund Shares | 91 | 147 | ||||||||
Shares Outstanding, Beginning of Period | 147 | – | ||||||||
Shares Outstanding, End of Period | 238 | 147 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 87 | 89 | ||||||||
Reinvested dividends and distributions | 2 | – | ||||||||
Shares repurchased | (32) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 57 | 89 | ||||||||
Shares Outstanding, Beginning of Period | 89 | – | ||||||||
Shares Outstanding, End of Period | 146 | 89 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 5 | 57 | ||||||||
Reinvested dividends and distributions | 1 | – | ||||||||
Shares repurchased | (27) | (5) | ||||||||
Net Increase/(Decrease) in Fund Shares | (21) | 52 | ||||||||
Shares Outstanding, Beginning of Period | 52 | – | ||||||||
Shares Outstanding, End of Period | 31 | 52 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 2 | 122* | ||||||||
Reinvested dividends and distributions | – | – | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 2 | 122* | ||||||||
Shares Outstanding, Beginning of Period | 122* | – | ||||||||
Shares Outstanding, End of Period | 2 | 122* |
* | Shares are not in thousands. | |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from September 3, 2008 (inception date) for Class A Shares, Class C Shares, Class I Shares and Class S Shares, and July 6, 2009 (inception date) for Class T Shares through July 31, 2009. |
8. | Purchases and Sales of Investment Securities |
For the five-month period ended December 31, 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 | |||||||||||
Fund | Securities | of Securities | Obligations | Obligations | ||||||||||
Janus Modular Portfolio Construction® Fund | $ | 3,254,993 | $ | 875,390 | $ | – | $ | – | ||||||
Janus Asset Allocation Funds | 39
Notes to Financial Statements (unaudited) (continued)
9. | 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, one of which still remains, and which was brought by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders against JCGI and Janus Capital (First Derivative Traders et al. v. Janus Capital Group Inc. et al., U.S. District Court, District of Maryland, MDL 1586, formerly referred to as Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818).
In the Wiggins case, a Motion to Dismiss was previously 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 October 2009, Janus filed a petition for a writ of certiorari with the United States Supreme Court to review the judgment of the United States Court of Appeals for the Fourth Circuit. On January 11, 2010, the Supreme Court asked the United States Solicitor General to file a brief on the question of whether Janus’ petition should be granted. As a result of these developments at the Supreme Court, the Court has stayed all further proceedings until the Supreme Court rules on Janus’ petition for a writ of certiorari. In addition to the Wiggins case, on January 20, 2010, the Court entered orders dismissing the remaining claims asserted against Janus Capital and its affiliates by fund investors in Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518 (a derivative claim involving alleged frequent trading practices).
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. On July 31, 2009, Janus filed a “Notice that Matter is Deemed Concluded.” At this time, no further proceedings are scheduled in this matter.
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.
10. | Subsequent Event |
In May 2009, in accordance with FASB guidance, the Fund adopted the provisions of “Subsequent Events,” which provides guidance to establish general standards of accounting for and disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or are available to be issued. The guidance also requires entities to disclose the date through which subsequent events were evaluated as well as the basis for that date. Management has evaluated whether any events or transactions occurred subsequent to December 31, 2009 through February 18, 2010, the date of issuance of the Fund’s financial statements, and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its 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 Fund’s 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 1-800-525-0020 (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 seven 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 11, 2009, 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, 2010 through February 1, 2011, subject to earlier termination as provided for in each agreement,
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
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 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
Janus Asset Allocation Funds | 41
Additional Information (unaudited) (continued)
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.
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 non-affiliated funds subadvised by Janus Capital (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, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, 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 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
42 | DECEMBER 31, 2009
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, the Trustees, each of whom is an Independent Trustee, concluded at their December 11, 2009 meeting 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.
Janus Asset Allocation Funds | 43
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 the 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 the 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 the Fund invested in the index.
Average annual total returns are also quoted for the 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 the 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 the Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are estimated for the fiscal year. 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. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund’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. The 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 the 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 the 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 the Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate the 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.
44 | DECEMBER 31, 2009
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Fund’s 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 Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Fund. The Fund will realize a gain (or loss) when it sells its position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statements of Operations regarding changes in net assets due to the Fund’s investment performance. The Fund’s 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 Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on the 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 Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the 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. The total return may include adjustments in accordance with generally accepted accounting principles. As a result, the total return may differ from the total return reflected for shareholder transactions.
Janus Asset Allocation Funds | 45
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
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 Funds within the Trust 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 Fund’s 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 the Fund during the reporting period. Don’t confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it 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 the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the 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.
46 | DECEMBER 31, 2009
Notes
Janus Asset Allocation Funds | 47
Notes
48 | DECEMBER 31, 2009
Notes
Janus Asset Allocation Funds | 49
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
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.
Fixed Income
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 capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
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.
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.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds.
Please consider the charges, risks, expenses and investment objectives carefully before investing or recommending to clients for investment. For a prospectus containing this and other information, please call Janus at 877.33JANUS (52687); or download the file from janus.com/info. Read it carefully before you invest or send money.
This is for information purposes only. Janus Capital Group Inc., does not guarantee that the information supplied is accurate, complete or timely or make any warranties with regards to the results obtained from its use.
Janus Distributors LLC 151 Detroit Street, Denver, CO 80206 (1/10)
Investment products offered are: NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE
C-0110-041 | 2-28-10 125-24-71116 02-10 |
2009 SEMIANNUAL REPORT
Janus Bond & Money Market Funds
Bond
Janus Flexible Bond Fund
Janus High-Yield Fund
Janus Short-Term Bond Fund
Money Market
Janus Money Market Fund
Janus Government Money Market Fund
HIGHLIGHTS
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital). 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
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. Over the past twelve months, we’ve seen one of the strongest market rebounds on record from lows reached in March driven by evidence that the U.S. and economies around the globe were beginning to improve. Throughout the market downturn and subsequent rebound, we have remained committed to our 40-year, research-driven approach and long-term investment view. As a result, we have continued to deliver strong results relative to many of our peers.
For the one-year period ended December 31, 2009, 77% of Janus retail funds, Class J Shares, ranked within Lipper’s top two quartiles based on total returns. Looking longer-term, 92% 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 December 31, 2009. (Lipper rankings are based on total returns. See complete rankings on page 4.)
Current Outlook
Improving economic conditions, positive earnings surprises and healthier capital markets have helped overall market sentiment grow more bullish as 2009 came to an end. We are encouraged by the turnaround since the unprecedented downturn that began in September 2008, but think the sustainability of the current recovery is uncertain. As we have stated in the past, we believe the U.S. Federal Reserve’s (Fed) liquidity injections and other governmental support for the financial system were necessary and that these responses have helped the U.S. and global economies avert a more severe recession. With the financial system in a much healthier position than it was a year ago and with the economy improving, focus has turned towards the Fed’s exit strategy and whether the economy can stand on its own as stimulus and other emergency measures wind down. Other concerns include reduced consumption by consumers brought on by the recession, limited private lending and ongoing weakness in housing market and its impact on consumers.
In the U.S., the S&P 500® Index gained more than 26% during the 12-month period, but still remained more than 28% below its record closing high set in October 2007. Non-U.S. equity markets delivered even stronger performance gaining more than 32% (MSCI All Country World ex-U.S. IndexSM) with emerging equity markets (MSCI EMF Index) rising nearly 63% in local currency terms.
In addition to the strong recovery by equity markets, credit markets posted impressive results. Credit spreads, or the difference between the yields on corporate bonds versus the yields on equivalent Treasury bonds, narrowed sharply after reaching historically wide levels in December 2008 amidst heightened risk aversion. The U.S. High Yield market (Barclays Capital U.S. Corporate High Yield Index) posted the strongest returns, gaining over 58%. The U.S. investment grade credit market (Barclays Capital U.S. Credit Index) rose roughly 16% during the period.
Commodity prices were strong for the year, while the U.S. dollar finished lower versus most major currencies amid a move into higher yielding currencies and concern over a rising U.S. Government deficit. Gold closed near a record high, helping to keep inflation worries in the forefront. Despite the continuation of the strong equity market rally, high unemployment and the U.S. dollar remained key concerns for investors.
Looking Ahead
During the broad market rally, markets worldwide moved higher as investors felt more comfortable moving money back into riskier assets. Individual stocks and bonds performed similarly amid a rising tide that lifted all boats. In this environment, there was little difference between the returns of low quality companies and high quality companies. We think investors should be prepared for a more discriminate environment going forward as markets normalize. Therefore, we believe individual security selection will play a greater role in determining investors’ success. As bottom-up researchers throughout our 40-year history, our goal remains to identify those companies going through positive fundamental transition, which we believe results in the best opportunities for our investors.
Janus Bond & Money Market Funds | 1
Continued
Increased savings and greater diversification, with an emphasis on fixed income and dividends, is likely to be a big theme for investors over the next few years. We continue to believe a balanced strategy may provide the best opportunity for the long-term success of our investors, and we remain committed to delivering strong long-term performance on your behalf.
We thank you for your business and your continued confidence in Janus.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.335.2687 or download the file from janus.com/info. Read it carefully before investing or sending money.
There is no assurance that the investment process will consistently lead to successful investing.
The 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 MSCI 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.
The MSCI EMF Index is a market capitalization weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America and the Pacific Basin.
Barclays Capital U.S. Corporate High-Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt.
The Barclays Capital U.S. Credit Index is comprised of the Barclays Capital U.S. Corporate Index and the non-native currency subcomponent of the Barclays Capital U.S. Government-Related Index. It includes publicly issued U.S. corporates, specified foreign debentures and secured notes denominated in U.S. dollars. It is a subset of the Barclays Capital U.S. Government/Credit Index and the Barclays Capital U.S. Aggregate Bond Index.
Rankings may be based, in part, on the performance of a predecessor fund or share class and are calculated by Lipper using a performance calculation methodology that differs from that used by Janus. Differences in the methodologies may lead to variances in calculating total performance returns, in some cases this variance may be significant, thereby
2 | DECEMBER 31, 2009
Co-Chief Investment Officers’ Letter to the Shareholders
potentially affecting the ranking of the Fund[s]. The rankings are displayed for informational purposes only and should not be relied upon when making investment decisions.
Lipper, a wholly-owned subsidiary of Thomson 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 and do not include the effect of loads.
Rankings are for the share class shown only; other classes may have different performance characteristics.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the rankings for the period.
In preparing this document, Janus has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Statements in this piece that reflect projections or expectations of future financial or economic performance of a mutual fund or strategy and of the markets in general and statements of a Fund’s plans and objectives for future operations are forward-looking statements. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted with such forward-looking statements, include general economic conditions such as inflation, recession and interest rates.
Funds distributed by Janus Distributors LLC (01/10)
Janus Bond & Money Market Funds | 3
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 12/31/09 | ||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||
Growth & Core | ||||||||||||||||||||||||||
Janus Balanced Fund(1);(9/92) | Mixed-Asset Target Allocation-Moderate Funds | 43 | 219/509 | 1 | 1/412 | 1 | 1/311 | 19 | 28/148 | 4 | 1/27 | 1 | 1/338 | |||||||||||||
Janus Contrarian Fund;(2/00) | Multi-Cap Core Funds | 22 | 170/795 | 46 | 308/683 | 6 | 29/519 | – | – | 17 | 37/227 | 17 | 37/227 | |||||||||||||
Janus Enterprise Fund(1);(9/92) | Mid-Cap Growth Funds | 41 | 191/474 | 25 | 103/425 | 14 | 47/353 | 93 | 166/178 | 39 | 14/35 | 26 | 115/448 | |||||||||||||
Janus Fund;(2/70) | Large-Cap Growth Funds | 36 | 290/814 | 35 | 246/702 | 27 | 154/582 | 67 | 207/310 | 16 | 3/18 | 40 | 301/754 | |||||||||||||
Janus Growth and Income Fund(1);(5/91) | Large-Cap Core Funds | 7 | 60/906 | 40 | 304/773 | 37 | 240/653 | 68 | 252/374 | 8 | 6/78 | 48 | 388/820 | |||||||||||||
Janus Orion Fund;(6/00) | Multi-Cap Growth Funds | 8 | 36/459 | 16 | 57/378 | 3 | 9/310 | – | – | 19 | 35/192 | 57 | 238/418 | |||||||||||||
Janus Research Fund(1);(5/93) | Large-Cap Growth Funds | 16 | 124/814 | 17 | 117/702 | 14 | 78/582 | 76 | 235/310 | 4 | 3/79 | 12 | 77/652 | |||||||||||||
Janus Research Core Fund(1);(6/96) | Large-Cap Core Funds | 9 | 74/906 | 40 | 302/773 | 15 | 98/653 | 35 | 129/374 | 3 | 6/201 | 57 | 466/820 | |||||||||||||
Janus Triton Fund(1);(2/05) | Small-Cap Growth Funds | 10 | 53/540 | 2 | 9/472 | – | – | – | – | 1 | 4/399 | 1 | 4/450 | |||||||||||||
Janus Twenty Fund*;(4/85) | Large-Cap Growth Funds | 14 | 111/814 | 1 | 2/702 | 1 | 3/582 | 41 | 127/310 | 6 | 2/34 | 38 | 286/766 | |||||||||||||
Janus Venture Fund*;(4/85) | Small-Cap Growth Funds | 7 | 36/540 | 47 | 220/472 | 30 | 116/397 | 84 | 181/217 | 10 | 1/10 | 20 | 25/125 | |||||||||||||
Risk-Managed | ||||||||||||||||||||||||||
INTECH Risk-Managed Core Fund;(2/03) | Multi-Cap Core Funds | 83 | 656/795 | 68 | 464/683 | 60 | 312/519 | – | – | 48 | 182/386 | 48 | 182/386 | |||||||||||||
Value | ||||||||||||||||||||||||||
Perkins Mid Cap Value Fund(1);(8/98) | Mid-Cap Value Funds | 76 | 191/251 | 6 | 11/210 | 5 | 8/161 | 4 | 2/61 | 3 | 1/48 | 3 | 1/48 | |||||||||||||
Perkins Small Cap Value Fund;(10/87) | Small-Cap Core Funds | 27 | 198/756 | 1 | 6/631 | 4 | 18/522 | 12 | 32/269 | 4 | 5/128 | 4 | 5/128 | |||||||||||||
Global & International | ||||||||||||||||||||||||||
Janus Global Life Sciences Fund;(12/98) | Global Healthcare/Biotechnology Funds | 18 | 8/45 | 8 | 3/41 | 33 | 12/36 | 79 | 15/18 | 17 | 2/11 | 10 | 4/42 | |||||||||||||
Janus Global Opportunities Fund(1);(6/01) | Global Funds | 49 | 266/544 | 33 | 122/378 | 65 | 185/287 | – | – | 17 | 31/185 | 65 | 201/313 | |||||||||||||
Janus Global Research Fund(1);(2/05) | Global Funds | 12 | 65/544 | 10 | 36/378 | – | – | – | – | 4 | 11/292 | 4 | 11/292 | |||||||||||||
Janus Global Technology Fund;(12/98) | Global Science & Technology Funds | 65 | 50/77 | 33 | 21/64 | 26 | 15/58 | 90 | 18/19 | 36 | 6/16 | 43 | 27/63 | |||||||||||||
Janus Overseas Fund(1);(5/94) | International Funds | 1 | 2/1275 | 1 | 7/975 | 1 | 1/700 | 13 | 48/386 | 1 | 1/99 | 1 | 1/611 | |||||||||||||
Janus Worldwide Fund(1);(5/91) | Global Funds | 27 | 142/544 | 64 | 239/378 | 74 | 211/287 | 96 | 137/143 | 42 | 7/16 | 33 | 181/558 | |||||||||||||
Fixed Income | ||||||||||||||||||||||||||
Janus Flexible Bond Fund(1);(7/87) | Intermediate Investment Grade Debt Funds | 52 | 285/549 | 6 | 25/458 | 7 | 24/395 | 18 | 39/219 | 10 | 2/19 | 7 | 30/477 | |||||||||||||
Janus High-Yield Bond Fund(1);(12/95) | High Current Yield Funds | 76 | 347/459 | 25 | 98/391 | 17 | 56/341 | 16 | 33/207 | 7 | 6/90 | 23 | 70/313 | |||||||||||||
Janus Short-Term Bond Fund(1);(9/92) | Short Investment Grade Debt Funds | 59 | 144/246 | 2 | 4/223 | 2 | 3/176 | 13 | 12/94 | 20 | 5/24 | 3 | 6/231 | |||||||||||||
Asset Allocation | ||||||||||||||||||||||||||
Janus Smart Portfolio – Conservative;(12/05) | Mixed-Asset Target Allocation Conservative Funds | 22 | 97/441 | 4 | 13/361 | – | – | – | – | 2 | 5/304 | 2 | 5/304 | |||||||||||||
Janus Smart Portfolio – Moderate;(12/05) | Mixed-Asset Target Allocation Moderate Funds | 10 | 49/509 | 1 | 3/412 | – | – | – | – | 2 | 6/369 | 2 | 6/369 | |||||||||||||
Janus Smart Portfolio – Growth;(12/05) | Mixed-Asset Target Allocation Growth Funds | 7 | 43/649 | 6 | 32/549 | – | – | – | – | 3 | 13/497 | 3 | 13/497 | |||||||||||||
(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. |
*Closed to new investors.
Past performance is no guarantee of future results. For current month end performance, call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit Janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital).
Ranking is for Class J Shares only; other classes may have different performance characteristics.
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.
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.
4 | DECEMBER 31, 2009
Useful Information About Your Fund Report (unaudited)
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 the managers’ best judgment at the time this report was compiled, which was December 31, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by 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 sales charges (loads) on purchase payments (applicable to Class A Shares of the Bond Funds only); redemption fees, where applicable (and any related exchange fees); and (2) ongoing costs, including management fees; distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares of certain Bond Funds only); administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class R Shares and Class S Shares of certain Bond Funds only); administrative fees (applicable to Class A Shares, Class C Shares, Class I Shares of the Bond Funds only); 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 two-month period from November 1, 2009 to December 31, 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 each 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 each 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 annual fund operating expenses, excluding any class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class R Shares and Class S Shares only), brokerage commissions, interest, dividends, taxes and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least February 16, 2011. 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) and any related exchange 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.
Janus Bond & Money Market Funds | 5
Janus Flexible Bond Fund (unaudited)
Fund Snapshot We seek to identify the best opportunities across fixed income markets using a bottom-up fundamentally-driven process that is focused on credit-oriented investments. We believe this bottom-up, fundamentally-driven investment process that focuses on credit can generate risk-adjusted outperformance relative to peers over time. Our comprehensive bottom-up view drives decision-making at a macro level, enabling us to make informed decisions about allocations to all sectors of the fixed income universe. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
Performance Overview
During the two-month period ended December 31, 2009, Janus Flexible Bond Fund’s Class J Shares returned 1.14%, compared to a -0.29% return for the Fund’s benchmark, the Barclays Capital U.S. Aggregate Bond Index.
Economic Update
The U.S. economic recovery continued during the two-month period amid improving activity within the U.S. services and manufacturing sectors and more evidence the housing market continues to stabilize. Consumer data was mixed with spending trends showing some signs of life while overall sentiment remained low, largely due to a 10% unemployment rate. Despite headline concerns of accelerating inflation, relatively low capacity utilization and weak labor markets have helped to keep inflationary pressures in check. This has allowed the U.S. Federal Reserve (Fed) to concentrate on stimulating growth by maintaining its accommodative monetary policy for an “extended period.” The Fed’s easy-money policy of a near zero federal funds rate helped to anchor the short-end of the yield curve, while long-term rates moved higher during the period. This helped the yield curve close the period near its steepest point on record as the yield difference between the 10-year and 2-year Treasury bonds stood at 270 basis points (bps) at the end of December (down from the period and record high of 285 bps on December 22).
The steepening of the yield curve provided a negative backdrop for most U.S. government-related securities. U.S. Long Treasuries posted a decline and were among the worst performers, while short-term Treasuries ended the period with slight losses. Rising inflation concerns helped U.S. Treasury Inflation-Protected Security (TIPS) outperform the government sector. The U.S. government’s and Fed’s ongoing support for agencies (Fannie and Freddie) have kept spreads of agencies relative to U.S. Treasuries near historically tight levels at period end.
Spread tightening within corporate credit continued to be a key driver of outperformance. The top performing segment within fixed income markets, high yield, saw spreads decline 118 bps. Investment grade credit spreads narrowed 34 bps in the quarter, which helped this segment outperform the Barclays Capital U.S. Aggregate Bond Index. Overall spreads within corporate credit remained well above long-term averages at the end of December. Within the investment grade corporate rating segments, BBB-rated credits had the highest return, while AAA underperformed. Top-performing corporate sectors within the Barclays Capital U.S. Aggregate Bond Index included metals and media, while lagging sectors included textiles and transportation.
Contributors to Relative Performance
The Fund’s outperformance was due largely to our significant overweight in corporate bonds (ending weight of 78.8% versus 19.3% in the index) as well as positive security selection. We also benefited from a significant overweight in the BBB-rated segment (34.3% vs. 8.5% in the index) and a 24.5% non-index weighting in high-yield bonds. Our high-yield exposure increased from an average weighting of 13% in the third quarter, as we consider this an attractive segment in terms of relative and absolute total returns given the spread tightening potential, the more appealing yield or interest carry on these bonds and the cushion associated with the wide spreads in the event interest rates rise.
Within corporate credit, our overweights and security selection in metals and banks were the largest contributors. Banks continued to improve their liquidity profiles, repair their balance sheets and repay government loans, which has been a positive for the group. We consider bank credits a better alternative than mortgage-backed securities (MBS), where we believe tight option adjusted spreads and the potential for spread widening is likely. Our holdings in Ameriprise Financial, Inc., Citigroup, Inc., and BB&T Corp. outperformed during the period.
6 | DECEMBER 31, 2009
(unaudited)
Among individual credit contributors was Teck Resources, Ltd. Our significant exposure to this non-index name was the largest individual contributor to performance during the period. The Vancouver, Canada-based company focused on metallic (met) coal mining has continued to pay down debt and improve its financial position. We feel the management team has an executable plan to achieve investment grade status as soon as possible. We also believe the macroeconomic environment is supportive of increased demand for met coal, as steel inventories are at historic lows and steel producers have been working through existing raw material inventory. Teck Resources, Ltd. has a strong market position in both met coal and copper; the latter has also shown signs of a recovery.
Detractors from Relative Performance
In terms of detractors, our zero weighting in MBS and commercial mortgage-backed securities (CMBS) were a modest drag on relative results. With agencies and MBS option adjusted spreads near historically tight levels due to U.S. government support, and relatively low yields, these securities have become more sensitive to changes in interest rates. We favor owning Treasuries to express our view on interest rates versus taking the basis risk in agencies and MBS. For this reason and the potential upward pressure on spreads with the Fed’s purchase program scheduled to end March 31, 2010, we do not think the MBS segment of the market is attractive. We believe the better risk-adjusted returns, as well as greater transparency in the research process exist in higher quality segments of the high yield market over the CMBS market. While many are driven to the CMBS sector due to the higher ratings, we feel that better total return profiles exist with companies going through positive fundamental transformation of their capital structures with potential ratings upside offer better opportunities.
Within corporate sectors, our lack of exposure in integrated energy weighed on relative results. Among individual detractors, our lack of exposure to troubled insurer American International Group, Inc. (AIG) weighed on performance, as its bonds continued to perform well. We have not owned AIG because we do not like the lack of transparency and disclosure as well as the uncertainty around management of this very complicated work-out situation.
Outlook
Despite the significant spread tightening we’ve seen in corporate credit relative to Treasuries, we believe there is the potential for further tightening. There are a number of fundamental and structural issues within fixed income that we see as being key drivers of returns over the near term. Government intervention and rising budget deficits have led to a large and unprecedented level of financing needs for the federal government, which has resulted in an increased issuance of Treasury bonds. Meanwhile, corporate America is in the early innings of a deleveraging cycle that we believe will lead to management teams opting for capital structures with less leverage and greater liquidity profiles. We have seen management teams focus more on paying down and building liquidity since emerging from one of the most significant financial crises in history. We think this could continue and that a shrinking supply of corporate bonds coupled with investors demand for higher yields provides a positive backdrop for further spread narrowing within corporate credit.
In addition, as we have highlighted previously, we believe that the evolution of the fixed income markets, moving from four primary sectors (credit, Treasuries, government agencies and agency MBS) to two (credit and government) result in agencies and MBS being more sensitive to interest rate movements. Given agency and MBS securities are at historically tight spreads relative to Treasuries, we prefer to express our view on interest rates using Treasuries versus taking the basis risk. The U.S. government’s support of Fannie and Freddie is likely to continue and remain a key determinant of agencies spreads. Even with the Fed’s MBS purchase program scheduled to end in March, we believe the mortgage market is likely to remain under pressure due to the fragile nature of the housing market. Because of these structural issues, we think both segments will display similar return characteristics to Treasuries and that there are very few spread alternatives to pursue outside of corporate credit.
We have often emphasized the importance of credit analysis in fixed income investing. Furthermore, we believe the corporate credit sector remains an area where fundamental bottom-up analysis combined with robust risk management can improve a manager’s potential to provide risk-adjusted outperformance within fixed income.
Thank you for entrusting your assets to us and your investment in Janus Flexible Bond Fund.
Janus Bond & Money Market Funds | 7
Janus Flexible Bond Fund (unaudited)
Janus Flexible Bond Fund At A Glance
Fund Profile
December 31, 2009
Weighted Average Maturity | 5.7 Years | |
Average Effective Duration* | 4.3 Years | |
30-day Current Yield** | 4.34% | |
Weighted Average Fixed Income Credit Rating | A- | |
Number of Bonds/Notes | 275 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
December 31, 2009
AAA | 20.7% | |
AA | 5.3% | |
A | 18.0% | |
BBB | 36.0% | |
BB | 13.2% | |
B | 2.6% | |
Other | 4.2% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2009
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Emerging markets comprised 0.4% of total net assets.
8 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||||
Two-Month | |||||||||||||||
Period | |||||||||||||||
Ended | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
12/31/09 | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Flexible Bond Fund – Class A Shares | |||||||||||||||
NAV | 1.11% | 12.40% | 6.10% | 6.26% | 7.58% | 0.81% | 0.80% | ||||||||
MOP | –3.70% | 7.06% | 5.07% | 5.74% | 7.35% | ||||||||||
Janus Flexible Bond Fund – Class C Shares | |||||||||||||||
NAV | 0.97% | 11.03% | 5.39% | 5.56% | 6.91% | 1.53% | 1.53% | ||||||||
CDSC | –0.03% | 9.97% | 5.39% | 5.56% | 6.91% | ||||||||||
Janus Flexible Bond Fund – Class I Shares | 1.16% | 12.54% | 6.13% | 6.27% | 7.59% | 0.52% | 0.52% | ||||||||
Janus Flexible Bond Fund – Class J Shares | 1.14% | 12.54% | 6.13% | 6.28% | 7.59% | 0.74% | 0.72% | ||||||||
Janus Flexible Bond Fund – Class R Shares | 1.03% | 11.59% | 5.65% | 5.81% | 7.18% | 1.27% | 1.27% | ||||||||
Janus Flexible Bond Fund – Class S Shares | 1.08% | 12.07% | 5.89% | 6.05% | 7.44% | 1.02% | 1.02% | ||||||||
Barclays Capital U.S. Aggregate Bond Index | –0.29% | 5.93% | 4.97% | 6.33% | 7.35%** | ||||||||||
Lipper Quartile – Class J Shares | – | 3rd | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Intermediate Investment Grade Debt Funds | – | 285/549 | 24/395 | 39/219 | 2/19 | ||||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 4.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
See important disclosures on the next page
Janus Bond & Money Market Funds | 9
Janus Flexible Bond Fund (unaudited)
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class R Shares, and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 at period end did not exceed the expense limit so no waivers were in effect for the most recent period presented.
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/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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: 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 Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
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.
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.
Effective July 6, 2009, Janus Flexible Bond Fund designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, Class R Shares, and Class S shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser Flexible Bond Fund (the “JAD predecessor fund”) into corresponding shares of Janus Flexible Bond Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitation or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009, after the reorganization of Class I shares of the JAD predecessor fund into the corresponding share class of Janus Flexible Bond Fund. Performance shown for periods prior to July 6, 2009 reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect any fee and expense limitations and waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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.
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.”
10 | DECEMBER 31, 2009
(unaudited)
* | 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 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 – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,011.10 | $ | 1.23 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.53 | $ | 3.72 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,009.70 | $ | 2.50 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.69 | $ | 7.58 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,011.60 | $ | 0.77 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.89 | $ | 2.35 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,010.40 | $ | 1.08 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.98 | $ | 3.26 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class R Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,009.40 | $ | 2.03 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.11 | $ | 6.16 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,009.80 | $ | 1.61 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | ||||||||
† | Expenses equal to the annualized expense ratio of 0.73% for Class A Shares, 1.49% for Class C Shares, 0.46% for Class I Shares, 0.64% for Class J Shares, 1.21% for Class R Shares and 0.96% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Bond & Money Market Funds | 11
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Corporate Bonds – 75.7% | ||||||||||||
Advertising Services – 0.6% | ||||||||||||
$ | 1,275,000 | WPP Finance UK, 5.8750%, 6/15/14 | $ | 1,316,698 | ||||||||
10,022,000 | WPP Finance UK, 8.0000%, 9/15/14 | 11,397,619 | ||||||||||
12,714,317 | ||||||||||||
Agricultural Chemicals – 0.2% | ||||||||||||
3,716,000 | Mosaic Co., 7.6250%, 12/1/16 (144A) | 4,061,722 | ||||||||||
Automotive – Cars and Light Trucks – 0.6% | ||||||||||||
8,464,000 | Daimler Finance North America LLC 6.5000%, 11/15/13 | 9,278,533 | ||||||||||
3,725,000 | Daimler Finance North America LLC 8.5000%, 1/18/31 | 4,577,440 | ||||||||||
13,855,973 | ||||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.6% | ||||||||||||
12,125,000 | Volvo A.B. (U.S. Shares) 5.9500%, 4/1/15 (144A) | 12,511,957 | ||||||||||
Beverages – Non-Alcoholic – 0.7% | ||||||||||||
5,475,000 | Dr Pepper Snapple Group, Inc. 2.3500%, 12/21/12 | 5,480,831 | ||||||||||
5,065,000 | Dr. Pepper Snapple Group, Inc. 6.1200%, 5/1/13 | 5,543,232 | ||||||||||
4,369,000 | Dr. Pepper Snapple Group, Inc. 6.8200%, 5/1/18 | 4,901,223 | ||||||||||
15,925,286 | ||||||||||||
Beverages – Wine and Spirits – 0.3% | ||||||||||||
6,123,000 | Brown-Forman Corp., 5.0000%, 2/1/14 | 6,435,175 | ||||||||||
Brewery – 1.5% | ||||||||||||
8,900,000 | Anheuser-Busch InBev Worldwide, Inc. 7.2000%, 1/15/14 (144A) | 10,094,033 | ||||||||||
8,595,000 | Anheuser-Busch InBev Worldwide, Inc. 7.7500%, 1/15/19 (144A) | 10,062,983 | ||||||||||
12,750,000 | Anheuser-Busch InBev Worldwide, Inc. 5.3750%, 1/15/20 (144A) | 13,008,302 | ||||||||||
33,165,318 | ||||||||||||
Building – Residential and Commercial – 0.6% | ||||||||||||
3,050,000 | D.R. Horton, Inc. 7.8750%, 8/15/11 | 3,217,750 | ||||||||||
4,295,000 | MDC Holdings, Inc. 5.3750%, 12/15/14 | 4,262,740 | ||||||||||
3,050,000 | Ryland Group, 5.3750%, 5/15/12 | 3,095,750 | ||||||||||
2,150,000 | Toll Brothers Finance, Corp. 6.7500%, 11/1/19 | 2,105,697 | ||||||||||
12,681,937 | ||||||||||||
Building Products – Cement and Aggregate – 0.4% | ||||||||||||
1,645,000 | CRH America, Inc. 5.6250%, 9/30/11 | 1,729,221 | ||||||||||
3,205,000 | CRH America, Inc. 6.9500%, 3/15/12 | 3,471,688 | ||||||||||
4,135,000 | Martin Marietta Materials, Inc. 6.6000%, 4/15/18 | 4,256,465 | ||||||||||
9,457,374 | ||||||||||||
Cable Television – 1.3% | ||||||||||||
5,488,000 | COX Communications, Inc. 4.6250%, 1/15/10 | 5,492,566 | ||||||||||
1,650,000 | COX Communications, Inc. 6.2500%, 6/1/18 (144A) | 2,087,895 | ||||||||||
$ | 4,981,000 | COX Communications, Inc. 9.3750%, 1/15/19 (144A) | 5,301,707 | |||||||||
3,011,000 | Time Warner Cable, Inc. 6.7500%, 7/1/18 | 3,307,773 | ||||||||||
7,300,000 | Time Warner Cable, Inc. 5.0000%, 2/1/20 | 7,079,037 | ||||||||||
4,470,000 | Time Warner Cable, Inc. 6.7500%, 6/15/39 | 4,681,453 | ||||||||||
27,950,431 | ||||||||||||
Casino Hotels – 0.2% | ||||||||||||
4,805,000 | Ameristar Casinos, Inc. 9.2500%, 6/1/14 (144A) | 4,985,188 | ||||||||||
Casino Services – 0.7% | ||||||||||||
13,515,000 | International Game Technology 7.5000%, 6/15/19 | 14,645,259 | ||||||||||
Cellular Telecommunications – 0.8% | ||||||||||||
6,275,000 | America Movil S.A.B. de C.V. 5.0000%, 10/16/19 (144A) | 6,135,557 | ||||||||||
4,095,000 | Cellco Partnership / Verizon Wireless Capital LLC, 5.2500%, 2/1/12 | 4,343,259 | ||||||||||
6,275,000 | Cellco Partnership / Verizon Wireless Capital LLC, 7.3750%, 11/15/13 | 7,207,879 | ||||||||||
17,686,695 | ||||||||||||
Chemicals – Diversified – 1.6% | ||||||||||||
7,345,000 | Dow Chemical Co. 7.6000%, 5/15/14 | 8,357,817 | ||||||||||
19,180,000 | Dow Chemical Co. 8.5500%, 5/15/19 | 22,884,521 | ||||||||||
3,087,000 | E.I. du Pont de Nemours & Co. 5.0000%, 7/15/13 | 3,325,461 | ||||||||||
34,567,799 | ||||||||||||
Coatings and Paint Products – 0.9% | ||||||||||||
9,115,000 | RPM International, Inc. 6.1250%, 10/15/19 | 9,170,392 | ||||||||||
10,025,000 | Sherwin-Williams Co. 3.1250%, 12/15/14 | 9,901,101 | ||||||||||
19,071,493 | ||||||||||||
Commercial Banks – 3.1% | ||||||||||||
9,340,000 | American Express Bank FSB 5.5000%, 4/16/13 | 9,955,777 | ||||||||||
6,105,000 | BB&T Corp. 5.7000%, 4/30/14 | 6,608,345 | ||||||||||
8,915,000 | BB&T Corp. 6.8500%, 4/30/19 | 9,999,091 | ||||||||||
6,047,000 | Credit Suisse New York 5.0000%, 5/15/13 | 6,448,732 | ||||||||||
6,940,000 | Credit Suisse New York 5.5000%, 5/1/14 | 7,531,295 | ||||||||||
24,300,000 | Discover Bank 8.7000%, 11/18/19 | 26,033,902 | ||||||||||
66,577,142 | ||||||||||||
Computer Services – 0.6% | ||||||||||||
6,680,000 | Affiliated Computer Services, Inc. 4.7000%, 6/1/10 | 6,738,450 | ||||||||||
5,275,000 | Affiliated Computer Services, Inc. 5.2000%, 6/1/15 | 5,439,844 | ||||||||||
12,178,294 |
See Notes to Schedules of Investments and Financial Statements.
12 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Computers – Memory Devices – 0.7% | ||||||||||||
$ | 8,875,000 | Seagate Technology 6.3750%, 10/1/11 | $ | 9,030,313 | ||||||||
5,175,000 | Seagate Technology 10.0000%, 5/1/14 (144A) | 5,718,375 | ||||||||||
14,748,688 | ||||||||||||
Consulting Services – 0.1% | ||||||||||||
1,235,000 | FTI Consulting, Inc. 7.7500%, 10/1/16 | 1,250,438 | ||||||||||
Containers – Metal and Glass – 0.5% | ||||||||||||
1,741,000 | Ball Corp. 7.1250%, 9/1/16 | 1,784,525 | ||||||||||
1,935,000 | Ball Corp. 7.3750%, 9/1/19 | 1,988,213 | ||||||||||
3,600,000 | Owens-Brockway Glass Container, Inc. 8.2500%, 5/15/13 | 3,699,000 | ||||||||||
2,470,000 | Owens-Brockway Glass Container, Inc. 6.7500%, 12/1/14 | 2,525,575 | ||||||||||
9,997,313 | ||||||||||||
Containers – Paper and Plastic – 0.2% | ||||||||||||
550,000 | Rock-Tenn Co. 9.2500%, 3/15/16 (144A) | 597,438 | ||||||||||
3,125,000 | Rock-Tenn Co. 9.2500%, 3/15/16 | 3,394,531 | ||||||||||
3,991,969 | ||||||||||||
Cosmetics and Toiletries – 0.2% | ||||||||||||
1,380,000 | Chattem, Inc. 7.0000%, 3/1/14 | 1,417,950 | ||||||||||
2,335,000 | Estee Lauder Companies, Inc. 7.7500%, 11/1/13 | 2,712,707 | ||||||||||
4,130,657 | ||||||||||||
Cruise Lines – 0.2% | ||||||||||||
3,250,000 | Royal Caribbean Cruises, Ltd. 8.0000%, 5/15/10 | 3,306,875 | ||||||||||
Dialysis Centers – 0.2% | ||||||||||||
3,985,000 | DaVita, Inc. 6.6250%, 3/15/13 | 3,994,963 | ||||||||||
Diversified Banking Institutions – 7.2% | ||||||||||||
17,125,000 | Bank of America Corp. 7.3750%, 5/15/14 | 19,431,977 | ||||||||||
5,560,000 | Bank of America Corp. 5.4200%, 3/15/17 | 5,488,287 | ||||||||||
3,910,000 | Bank of America Corp. 5.6500%, 5/1/18 | 3,971,043 | ||||||||||
14,410,000 | Citigroup, Inc. 5.6250%, 8/27/12 | 14,821,679 | ||||||||||
10,375,000 | Citigroup, Inc. 6.0100%, 1/15/15 | 10,593,892 | ||||||||||
18,825,000 | Citigroup, Inc. 8.5000%, 5/22/19 | 21,738,226 | ||||||||||
8,335,000 | GMAC LLC 6.8750%, 9/15/11(144A) | 8,209,975 | ||||||||||
2,745,000 | Goldman Sachs Group, Inc. 3.6250%, 8/1/12 | 2,828,187 | ||||||||||
3,320,000 | Goldman Sachs Group, Inc. 5.4500%, 11/1/12 | 3,569,594 | ||||||||||
5,505,000 | Goldman Sachs Group, Inc. 6.0000%, 5/1/14 | 6,021,193 | ||||||||||
$ | 6,075,000 | Goldman Sachs Group, Inc. 6.1500%, 4/1/18 | 6,503,281 | |||||||||
8,371,000 | JPMorgan Chase & Co. 6.0000%, 1/15/18 | 8,998,783 | ||||||||||
4,590,000 | JPMorgan Chase & Co. 6.3000%, 4/23/19 | 5,049,353 | ||||||||||
15,295,000 | Morgan Stanley 4.7500%, 4/1/14 | 15,382,900 | ||||||||||
10,650,000 | Morgan Stanley 4.2000%, 11/20/14 | 10,657,434 | ||||||||||
9,875,000 | Morgan Stanley 5.6250%, 9/23/19 | 9,947,186 | ||||||||||
153,212,990 | ||||||||||||
Diversified Financial Services – 1.7% | ||||||||||||
3,450,000 | General Electric Capital Corp. 4.8000%, 5/1/13 | 3,606,182 | ||||||||||
4,840,000 | General Electric Capital Corp. 5.9000%, 5/13/14 | 5,232,388 | ||||||||||
25,956,000 | General Electric Capital Corp. 6.0000%, 8/7/19 | 26,942,873 | ||||||||||
35,781,443 | ||||||||||||
Diversified Minerals – 1.9% | ||||||||||||
3,195,000 | Teck Resources, Ltd. 7.0000%, 9/15/12 | 3,374,719 | ||||||||||
10,515,000 | Teck Resources, Ltd. 9.7500%, 5/15/14 | 12,131,681 | ||||||||||
7,875,000 | Teck Resources, Ltd. 5.3750%, 10/1/15 | 7,727,344 | ||||||||||
8,475,000 | Teck Resources, Ltd. 10.7500%, 5/15/19 | 10,127,625 | ||||||||||
9,225,000 | Teck Resources, Ltd. 6.1250%, 10/1/35 | 8,256,375 | ||||||||||
41,617,744 | ||||||||||||
Diversified Operations – 2.0% | ||||||||||||
2,215,000 | Kansas City Southern Railway 13.0000%, 12/15/13 | 2,569,400 | ||||||||||
4,692,000 | SPX Corp 7.6250%, 12/15/14 | 4,832,760 | ||||||||||
13,680,000 | Tyco Electronics Group S.A. 6.0000%, 10/1/12 | 14,514,508 | ||||||||||
8,285,000 | Tyco Electronics Group S.A. 5.9500%, 1/15/14 | 8,665,903 | ||||||||||
8,809,000 | Tyco Electronics Group S.A. 6.5500%, 10/1/17 | 9,083,321 | ||||||||||
3,810,000 | Tyco Electronics Group S.A. 7.1250%, 10/1/37 | 3,939,391 | ||||||||||
43,605,283 | ||||||||||||
Electric – Generation – 0.4% | ||||||||||||
8,160,000 | Allegheny Energy Supply Co. LLC 8.2500%, 4/15/12 (144A) | 8,927,628 | ||||||||||
Electric – Integrated – 1.8% | ||||||||||||
6,904,000 | CMS Energy Corp. 6.3000%, 2/1/12 | 7,026,897 | ||||||||||
5,950,000 | CMS Energy Corp. 1.2344%, 1/15/13‡ | 5,355,000 | ||||||||||
5,795,000 | Monongahela Power Co. 6.7000%, 6/15/14 | 6,268,272 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 13
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Electric – Integrated – (continued) | ||||||||||||
$ | 2,695,000 | Pacific Gas & Electric Co. 4.8000%, 3/1/14 | $ | 2,862,085 | ||||||||
4,040,000 | PPL Energy Supply LLC 5.7000%, 10/15/15 | 4,201,964 | ||||||||||
6,359,000 | Southern California Edison Co. 7.6250%, 1/15/10 | 6,370,459 | ||||||||||
5,664,000 | Virginia Electric and Power Co. 5.1000%, 11/30/12 | 6,117,092 | ||||||||||
38,201,769 | ||||||||||||
Electronic Components – Semiconductors – 1.2% | ||||||||||||
16,177,000 | National Semiconductor Corp. 0.5036%, 6/15/10‡ | 15,996,917 | ||||||||||
6,080,000 | National Semiconductor Corp. 6.1500%, 6/15/12 | 6,368,478 | ||||||||||
3,047,000 | National Semiconductor Corp. 6.6000%, 6/15/17 | 3,121,225 | ||||||||||
25,486,620 | ||||||||||||
Electronic Connectors – 0.7% | ||||||||||||
14,850,000 | Amphenol Corp. 4.7500%, 11/15/14 | 14,855,212 | ||||||||||
Electronics – Military – 1.8% | ||||||||||||
8,326,000 | L-3 Communications Corp. 6.1250%, 7/15/13 | 8,409,260 | ||||||||||
6,375,000 | L-3 Communications Corp. 6.1250%, 1/15/14 | 6,414,844 | ||||||||||
9,750,000 | L-3 Communications Corp. 6.3750%, 10/15/15 | 9,786,563 | ||||||||||
13,875,000 | L-3 Communications Corp. 5.2000%, 10/15/19 (144A) | 13,724,261 | ||||||||||
38,334,928 | ||||||||||||
Enterprise Software/Services – 0.8% | ||||||||||||
6,404,000 | BMC Software, Inc. 7.2500%, 6/1/18 | 6,974,256 | ||||||||||
4,000,000 | CA, Inc. 6.1250%, 12/1/14 | 4,348,872 | ||||||||||
5,850,000 | CA, Inc. 5.3750%, 12/1/19 | 5,882,819 | ||||||||||
17,205,947 | ||||||||||||
Fiduciary Banks – 0.4% | ||||||||||||
7,140,000 | Northern Trust Corp. 4.6250%, 5/1/14 | 7,608,527 | ||||||||||
Finance – Auto Loans – 1.5% | ||||||||||||
4,000,000 | Ford Motor Credit Co. LLC 9.7500%, 9/15/10 | 4,127,396 | ||||||||||
8,340,000 | Ford Motor Credit Co. LLC 7.3750%, 2/1/11 | 8,510,019 | ||||||||||
4,660,000 | Ford Motor Credit Co. LLC 7.2500%, 10/25/11 | 4,706,097 | ||||||||||
4,594,000 | Ford Motor Credit Co. LLC 7.5000%, 8/1/12 | 4,632,856 | ||||||||||
9,975,000 | PACCAR Financial Corp. 1.9500%, 12/17/12 | 9,871,749 | ||||||||||
31,848,117 | ||||||||||||
Finance – Credit Card – 0.9% | ||||||||||||
$ | 3,545,000 | American Express Co. 7.0000%, 3/19/18 | 3,904,009 | |||||||||
6,925,000 | American Express Co. 8.1250%, 5/20/19 | 8,206,547 | ||||||||||
2,875,000 | American Express Co. 6.8000%, 9/1/66‡ | 2,573,125 | ||||||||||
3,725,000 | American Express Credit Co. 7.3000%, 8/20/13 | 4,186,457 | ||||||||||
18,870,138 | ||||||||||||
Finance – Investment Bankers/Brokers – 1.9% | ||||||||||||
11,060,000 | Charles Schwab Corp. 4.9500%, 6/1/14 | 11,667,570 | ||||||||||
6,837,000 | Jefferies Group, Inc. 8.5000%, 7/15/19 | 7,473,723 | ||||||||||
2,135,000 | Jefferies Group, Inc. 3.8750%, 11/1/29 | 2,108,313 | ||||||||||
3,320,000 | Lazard Group LLC 7.1250%, 5/15/15 | 3,446,641 | ||||||||||
6,235,000 | Lazard Group LLC 6.8500%, 6/15/17 | 6,274,810 | ||||||||||
4,350,000 | TD Ameritrade Holding Corp. 4.1500%, 12/1/14 | 4,288,787 | ||||||||||
5,450,000 | TD Ameritrade Holding Corp. 5.6000%, 12/1/19 | 5,413,834 | ||||||||||
40,673,678 | ||||||||||||
Finance – Other Services – 0.7% | ||||||||||||
5,185,000 | Cantor Fitzgerald L.P. 7.8750%, 10/15/19 (144A) | 5,074,326 | ||||||||||
9,105,000 | CME Group, Inc. 5.7500%, 2/15/14 | 9,958,785 | ||||||||||
15,033,111 | ||||||||||||
Food – Meat Products – 0.2% | ||||||||||||
3,785,000 | Smithfield Foods, Inc. 7.0000%, 8/1/11 | 3,775,538 | ||||||||||
Food – Miscellaneous/Diversified – 0.4% | ||||||||||||
1,882,000 | Dole Food Co., Inc. 13.8750%, 3/15/14 (144A) | 2,263,105 | ||||||||||
6,446,000 | General Mills, Inc. 5.2500%, 8/15/13 | 6,954,203 | ||||||||||
9,217,308 | ||||||||||||
Gas – Distribution – 0.1% | ||||||||||||
1,669,000 | Southern Star Central Gas Pipeline, Inc. 6.0000%, 6/1/16 (144A) | 1,593,895 | ||||||||||
Hotels and Motels – 1.3% | ||||||||||||
2,646,000 | Hyatt Hotels Corp. 5.7500%, 8/15/15 (144A) | 2,661,860 | ||||||||||
1,985,000 | Hyatt Hotels Corp. 6.8750%, 8/15/19 (144A) | 1,982,733 | ||||||||||
8,785,000 | Marriott International, Inc. 4.6250%, 6/15/12 | 8,832,984 | ||||||||||
2,435,000 | Marriott International, Inc. 5.6250%, 2/15/13 | 2,498,585 | ||||||||||
1,735,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.8750%, 10/15/14 | 1,854,281 | ||||||||||
9,900,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.1500%, 12/1/19 | 9,862,875 | ||||||||||
27,693,318 |
See Notes to Schedules of Investments and Financial Statements.
14 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Investment Management and Advisory Services – 1.5% | ||||||||||||
$ | 7,370,000 | Ameriprise Financial, Inc. 7.3000%, 6/28/19 | $ | 8,195,882 | ||||||||
5,608,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 4,935,040 | ||||||||||
9,125,000 | BlackRock, Inc. 3.5000%, 12/10/14 | 9,010,409 | ||||||||||
9,125,000 | BlackRock, Inc. 5.0000%, 12/10/19 | 8,966,964 | ||||||||||
31,108,295 | ||||||||||||
Life and Health Insurance – 1.6% | ||||||||||||
6,225,000 | Aflac, Inc. 6.9000%, 12/17/39 | 6,132,633 | ||||||||||
8,475,000 | Prudential Financial, Inc. 3.6250%, 9/17/12 | 8,600,371 | ||||||||||
5,958,000 | Prudential Financial, Inc. 4.7500%, 6/13/15 | 5,922,663 | ||||||||||
12,465,000 | Prudential Financial, Inc. 7.3750%, 6/15/19 | 13,975,347 | ||||||||||
34,631,014 | ||||||||||||
Machinery – General Industrial – 0.3% | ||||||||||||
6,700,000 | Roper Industries, Inc. 6.2500%, 9/1/19 | 6,975,129 | ||||||||||
Medical – Biomedical and Genetic – 0.4% | ||||||||||||
4,545,000 | Bio-Rad Laboratories, Inc. 6.1250%, 12/15/14 | 4,545,000 | ||||||||||
4,235,000 | Bio-Rad Laboratories, Inc. 8.0000%, 9/15/16 (144A) | 4,467,925 | ||||||||||
9,012,925 | ||||||||||||
Medical – Generic Drugs – 0.9% | ||||||||||||
8,890,000 | Watson Pharmaceuticals, Inc. 5.0000%, 8/15/14 | 9,076,494 | ||||||||||
9,040,000 | Watson Pharmaceuticals, Inc. 6.1250%, 8/15/19 | 9,327,418 | ||||||||||
18,403,912 | ||||||||||||
Medical – Hospitals – 0.6% | ||||||||||||
3,655,000 | CHS/Community Health Systems, Inc. 8.8750%, 7/15/15 | 3,782,925 | ||||||||||
3,919,000 | HCA, Inc. 9.2500%, 11/15/16 | 4,208,026 | ||||||||||
3,695,000 | HCA, Inc. 8.5000%, 4/15/19 (144A) | 3,981,363 | ||||||||||
11,972,314 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.3% | ||||||||||||
3,380,000 | McKesson Corp. 6.5000%, 2/15/14 | 3,738,834 | ||||||||||
2,925,000 | McKesson Corp. 7.5000%, 2/15/19 | 3,468,708 | ||||||||||
7,207,542 | ||||||||||||
Medical Instruments – 1.0% | ||||||||||||
10,415,000 | Boston Scientific Corp. 4.5000%, 1/15/15 | 10,436,257 | ||||||||||
5,175,000 | Boston Scientific Corp. 6.0000%, 1/15/20 | 5,287,696 | ||||||||||
5,000,000 | Boston Scientific Corp. 7.3750%, 1/15/40 | 5,371,830 | ||||||||||
21,095,783 | ||||||||||||
Medical Labs and Testing Services – 1.2% | ||||||||||||
$ | 2,990,000 | Laboratory Corp. of America Holdings 5.6250%, 12/15/15 | 3,126,168 | |||||||||
12,965,000 | Roche Holdings, Inc. 4.5000%, 3/1/12 (144A) | 13,617,360 | ||||||||||
8,335,000 | Roche Holdings, Inc. 6.0000%, 3/1/19 (144A) | 9,158,923 | ||||||||||
25,902,451 | ||||||||||||
Medical Products – 1.1% | ||||||||||||
5,765,000 | Carefusion Corp. 4.1250%, 8/1/12 (144A) | 5,943,254 | ||||||||||
4,320,000 | Carefusion Corp. 5.1250%, 8/1/14 (144A) | 4,541,244 | ||||||||||
4,570,000 | Carefusion Corp. 6.3750%, 8/1/19 (144A) | 4,892,281 | ||||||||||
7,310,000 | Hospira, Inc. 6.4000%, 5/15/15 | 8,090,869 | ||||||||||
23,467,648 | ||||||||||||
Metal – Copper – 1.0% | ||||||||||||
9,300,000 | Freeport-McMoRan Copper & Gold, Inc. 8.2500%, 4/1/15 | 10,137,000 | ||||||||||
10,877,000 | Freeport-McMoRan Copper & Gold, Inc. 8.3750%, 4/1/17 | 11,910,315 | ||||||||||
22,047,315 | ||||||||||||
Metal Processors and Fabricators – 0.1% | ||||||||||||
2,025,000 | Timken Co. 6.0000%, 9/15/14 | 2,131,041 | ||||||||||
Multi-Line Insurance – 1.1% | ||||||||||||
2,850,000 | Genworth Financial, Inc. 8.6250%, 12/15/16 | 2,956,704 | ||||||||||
8,530,000 | MetLife, Inc. 6.7500%, 6/1/16 | 9,552,244 | ||||||||||
9,810,000 | MetLife, Inc. 7.7170%, 2/15/19 | 11,528,074 | ||||||||||
24,037,022 | ||||||||||||
Non-Hazardous Waste Disposal – 1.0% | ||||||||||||
4,125,000 | Allied Waste North America, Inc. 6.5000%, 11/15/10 | 4,289,385 | ||||||||||
5,475,000 | Allied Waste North America, Inc. 7.2500%, 3/15/15 | 5,721,375 | ||||||||||
8,095,000 | Allied Waste North America, Inc. 7.1250%, 5/15/16 | 8,621,175 | ||||||||||
3,567,000 | Waste Management, Inc. 7.3750%, 8/1/10 | 3,694,927 | ||||||||||
22,326,862 | ||||||||||||
Office Automation and Equipment – 0.5% | ||||||||||||
1,115,000 | Xerox Corp. 5.6500%, 5/15/13 | 1,161,787 | ||||||||||
2,704,000 | Xerox Corp. 8.2500%, 5/15/14 | 3,101,821 | ||||||||||
2,575,000 | Xerox, Corp. 5.6250%, 12/15/19 | 2,571,405 | ||||||||||
3,650,000 | Xerox, Corp. 6.7500%, 12/15/39 | 3,677,491 | ||||||||||
10,512,504 | ||||||||||||
Oil – Field Services – 0.2% | ||||||||||||
3,320,000 | Weatherford International, Ltd. 9.6250%, 3/1/19 | 4,139,054 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 15
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Oil and Gas Drilling – 0.9% | ||||||||||||
$ | 7,963,000 | Nabors Industries, Inc. 9.2500%, 1/15/19 | $ | 9,752,414 | ||||||||
7,628,000 | Rowan Companies, Inc. 7.8750%, 8/1/19 | 8,486,844 | ||||||||||
18,239,258 | ||||||||||||
Oil Companies – Exploration and Production – 1.4% | ||||||||||||
6,860,000 | Anadarko Petroleum Corp. 5.9500%, 9/15/16 | 7,420,441 | ||||||||||
9,358,000 | Forest Oil Corp. 8.0000%, 12/15/11 | 9,755,716 | ||||||||||
3,150,000 | Forest Oil Corp. 8.5000%, 2/15/14 (144A) | 3,291,750 | ||||||||||
3,049,000 | Kerr-McGee Corp. 6.8750%, 9/15/11 | 3,278,077 | ||||||||||
2,560,000 | Newfield Exploration Co. 7.6250%, 3/1/11 | 2,643,200 | ||||||||||
3,350,000 | Questar Market Resources 6.8000%, 3/1/20 | 3,491,722 | ||||||||||
29,880,906 | ||||||||||||
Pharmacy Services – 0.8% | ||||||||||||
3,140,000 | Express Scripts, Inc. 5.2500%, 6/15/12 | 3,336,567 | ||||||||||
8,280,000 | Express Scripts, Inc. 6.2500%, 6/15/14 | 9,034,556 | ||||||||||
3,380,000 | Express Scripts, Inc. 7.2500%, 6/15/19 | 3,840,302 | ||||||||||
16,211,425 | ||||||||||||
Pipelines – 2.5% | ||||||||||||
3,325,000 | Energy Transfer Partners L.P. 5.9500%, 2/1/15 | 3,523,180 | ||||||||||
14,290,000 | Enterprise Products Operating LLC 4.6000%, 8/1/12 | 15,091,411 | ||||||||||
2,105,000 | Kinder Morgan Energy Partners L.P. 5.9500%, 2/15/18 | 2,229,648 | ||||||||||
9,675,000 | Kinder Morgan Energy Partners L.P. 6.9500%, 1/15/38 | 10,311,257 | ||||||||||
13,631,000 | Kinder Morgan Finance Co. ULC 5.7000%, 1/5/16 | 13,085,759 | ||||||||||
4,575,000 | Midcontinent Express Pipeline LLC 5.4500%, 9/15/14 (144A) | 4,680,907 | ||||||||||
2,145,000 | Plains All American Pipeline L.P. 4.2500%, 9/1/12 | 2,529,157 | ||||||||||
2,585,000 | Plains All American Pipeline L.P. 8.7500%, 5/1/19 | 2,667,679 | ||||||||||
54,118,998 | ||||||||||||
Property Trust – 0.4% | ||||||||||||
9,100,000 | WEA Finance LLC / WT Finance Australia Pty, Ltd. 5.7500%, 9/2/15 (144A) | 9,595,404 | ||||||||||
Real Estate Management/Services – 0.7% | ||||||||||||
7,225,000 | AMB Property L.P. 6.1250%, 12/1/16 | 7,134,600 | ||||||||||
7,225,000 | AMB Property L.P. 6.6250%, 12/1/19 | 7,086,490 | ||||||||||
14,221,090 | ||||||||||||
Reinsurance – 1.1% | ||||||||||||
$ | 13,930,000 | Berkshire Hathaway Finance Corp 4.0000%, 4/15/12 | 14,598,222 | |||||||||
6,391,000 | Berkshire Hathaway Finance Corp. 5.0000%, 8/15/13 | 6,872,268 | ||||||||||
2,092,000 | Berkshire Hathaway Finance Corp. 4.6250%, 10/15/13 | 2,230,262 | ||||||||||
23,700,752 | ||||||||||||
REIT – Diversified – 0.5% | ||||||||||||
10,981,000 | Duke Realty L.P. 7.3750%, 2/15/15 | 11,580,376 | ||||||||||
REIT – Health Care – 1.0% | ||||||||||||
9,630,000 | HCP, Inc. 6.4500%, 6/25/12 | 9,914,537 | ||||||||||
3,625,000 | HCP, Inc. 5.6500%, 12/15/13 | 3,631,308 | ||||||||||
8,005,000 | Ventas Realty LP / Ventas Capital Corp. 6.5000%, 6/1/16 | 7,724,825 | ||||||||||
21,270,670 | ||||||||||||
REIT – Regional Malls – 0.1% | ||||||||||||
2,874,000 | Simon Property Group L.P. 6.7500%, 5/15/14 | 3,062,764 | ||||||||||
REIT – Warehouse/Industrial – 0.1% | ||||||||||||
3,200,000 | ProLogis 7.3750%, 10/30/19 | 3,156,496 | ||||||||||
Resorts and Theme Parks – 0.3% | ||||||||||||
6,560,000 | Vail Resorts, Inc. 6.7500%, 2/15/14 | 6,510,800 | ||||||||||
Retail – Apparel and Shoe – 1.0% | ||||||||||||
6,025,000 | Limited Brands, Inc. 8.5000%, 6/15/19 (144A) | 6,552,188 | ||||||||||
8,520,000 | Limited Brands, Inc. 7.6000%, 7/15/37 | 7,582,800 | ||||||||||
5,705,000 | Nordstrom, Inc. 6.7500%, 6/1/14 | 6,371,338 | ||||||||||
20,506,326 | ||||||||||||
Retail – Computer Equipment – 0.1% | ||||||||||||
1,850,000 | GameStop Corp. 8.0000%, 10/1/12 | 1,917,063 | ||||||||||
Retail – Office Supplies – 0.1% | ||||||||||||
1,385,000 | Staples, Inc. 7.7500%, 4/1/11 | 1,488,335 | ||||||||||
Retail – Propane Distribution – 0.2% | ||||||||||||
3,810,000 | Amerigas Partners L.P. 7.2500%, 5/20/15 | 3,810,000 | ||||||||||
Retail – Regional Department Stores – 1.3% | ||||||||||||
3,350,000 | JC Penney Corp., Inc. 9.0000%, 8/1/12 | 3,777,125 | ||||||||||
10,014,000 | JC Penney Corp., Inc. 6.8750%, 10/15/15 | 10,564,770 | ||||||||||
2,950,000 | JC Penney Corp., Inc. 5.7500%, 2/15/18 | 2,909,438 | ||||||||||
1,300,000 | JC Penney Corp., Inc. 6.3750%, 10/15/36 | 1,154,400 | ||||||||||
4,490,000 | Macy’s Retail Holdings, Inc. 5.7500%, 7/15/14 | 4,501,225 |
See Notes to Schedules of Investments and Financial Statements.
16 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Retail – Regional Department Stores – (continued) | ||||||||||||
$ | 4,490,000 | Macy’s Retail Holdings, Inc. 5.9000%, 12/1/16 | $ | 4,377,750 | ||||||||
27,284,708 | ||||||||||||
Retail – Restaurants – 0.9% | ||||||||||||
10,253,000 | Brinker International 5.7500%, 6/1/14 | 10,053,754 | ||||||||||
9,400,000 | Darden Restaurants, Inc. 5.6250%, 10/15/12 | 10,033,118 | ||||||||||
20,086,872 | ||||||||||||
Special Purpose Entity – 0.5% | ||||||||||||
5,450,000 | Harley-Davidson Funding Corp. 5.7500%, 12/15/14 (144A) | 5,533,211 | ||||||||||
2,830,000 | Petroplus Finance, Ltd. 6.7500%, 5/1/14 (144A) | 2,660,200 | ||||||||||
2,089,000 | Petroplus Finance, Ltd. 7.0000%, 5/1/17 (144A) | 1,880,100 | ||||||||||
10,073,511 | ||||||||||||
Steel – Producers – 1.3% | ||||||||||||
4,460,000 | ArcelorMittal 5.3750%, 6/1/13 | 4,706,419 | ||||||||||
3,675,000 | ArcelorMittal 9.0000%, 2/15/15 | 4,340,528 | ||||||||||
4,650,000 | ArcelorMittal 6.1250%, 6/1/18 | 4,798,037 | ||||||||||
6,700,000 | Reliance Steel & Aluminum, Co. 6.2000%, 11/15/16 | 6,604,525 | ||||||||||
6,951,000 | Steel Dynamics, Inc. 7.7500%, 4/15/16 (144A) | 7,237,729 | ||||||||||
27,687,238 | ||||||||||||
Super-Regional Banks – 0.7% | ||||||||||||
4,640,000 | Capital One Financial Corp. 7.3750%, 5/23/14 | 5,253,557 | ||||||||||
3,985,000 | National City Corp. 6.8750%, 5/15/19 | 4,218,126 | ||||||||||
5,275,000 | Wells Fargo Capital 7.7000%, 9/26/99‡ | 5,116,750 | ||||||||||
14,588,433 | ||||||||||||
Telephone – Integrated – 1.3% | ||||||||||||
4,193,000 | BellSouth Corp. 4.7500%, 11/15/12 | 4,477,306 | ||||||||||
3,550,000 | Qwest Communications International, Inc. 7.2500%, 2/15/11 | 3,567,750 | ||||||||||
19,725,000 | Sprint Capital Corp. 7.6250%, 1/30/11 | 20,193,469 | ||||||||||
28,238,525 | ||||||||||||
Television – 1.4% | ||||||||||||
9,800,000 | CBS Corp. 8.2000%, 5/15/14 | 11,140,816 | ||||||||||
12,840,000 | CBS Corp. 8.8750%, 5/15/19 | 15,360,800 | ||||||||||
3,250,000 | CBS Corp. 5.5000%, 5/15/33 | 2,722,194 | ||||||||||
29,223,810 | ||||||||||||
Transportation – Railroad – 0.3% | ||||||||||||
$ | 2,710,124 | CSX Corp. 8.3750%, 10/15/14 | 3,122,524 | |||||||||
1,675,000 | Kansas City Southern de Mexico S.A. de C.V., 7.6250%, 12/1/13 | 1,649,875 | ||||||||||
970,000 | Kansas City Southern de Mexico S.A. de C.V., 7.3750%, 6/1/14 | 945,750 | ||||||||||
5,718,149 | ||||||||||||
Wireless Equipment – 0.3% | ||||||||||||
1,525,000 | American Tower Corp. 4.6250%, 4/1/15 (144A) | 1,542,469 | ||||||||||
5,000,000 | American Tower Corp. 7.0000%, 10/15/17 | 5,537,500 | ||||||||||
7,079,969 | ||||||||||||
Total Corporate Bonds (cost $1,530,503,089) | 1,617,658,146 | |||||||||||
Preferred Stock – 0.1% | ||||||||||||
Diversified Banking Institution – 0.1% | ||||||||||||
26,800 | Citigroup, Inc., convertible, 7.5000% (T-DECS) (cost $2,680,000) | 2,796,312 | ||||||||||
U.S. Treasury Notes/Bonds – 20.6% | ||||||||||||
U.S. Treasury Notes/Bonds: | ||||||||||||
$ | 52,000,000 | 0.8750%, 1/31/11 | 52,162,500 | |||||||||
9,265,000 | 0.8750%, 2/28/11 | 9,287,440 | ||||||||||
5,780,000 | 0.8750%, 3/31/11 | 5,790,612 | ||||||||||
19,750,000 | 0.8750%, 5/31/11 | 19,773,917 | ||||||||||
43,170,000 | 1.1250%, 6/30/11 | 43,345,357 | ||||||||||
41,945,000 | 1.0000%, 9/30/11 | 41,933,549 | ||||||||||
20,475,000 | 1.0000%, 10/31/11 | 20,456,573 | ||||||||||
12,017,000 | 1.1250%, 1/15/12 | 12,005,728 | ||||||||||
25,871,000 | 4.6250%, 2/29/12 | 27,728,460 | ||||||||||
18,395,000 | 1.3750%, 5/15/12 | 18,395,000 | ||||||||||
2,907,000 | 4.7500%, 5/31/12 | 3,139,333 | ||||||||||
430,000 | 1.8750%, 6/15/12 | 434,703 | ||||||||||
14,067,000 | 1.5000%, 7/15/12 | 14,088,973 | ||||||||||
12,445,000 | 1.3750%, 9/15/12 | 12,386,658 | ||||||||||
6,266,263 | 0.6250%, 4/15/13ÇÇ | 6,372,006 | ||||||||||
4,425,000 | 2.7500%, 10/31/13 | 4,531,824 | ||||||||||
29,045,000 | 1.7500%, 1/31/14 | 28,493,610 | ||||||||||
5,613,000 | 1.8750%, 2/28/14 | 5,520,475 | ||||||||||
3,245,000 | 1.7500%, 3/31/14 | 3,167,931 | ||||||||||
22,003,000 | 2.2500%, 5/31/14** | 21,853,446 | ||||||||||
12,875,000 | 2.6250%, 7/31/14 | 12,939,375 | ||||||||||
6,285,000 | 2.3750%, 8/31/14 | 6,238,843 | ||||||||||
21,909,000 | 2.3750%, 9/30/14 | 21,724,088 | ||||||||||
2,995,000 | 2.1250%, 11/30/14 | 2,924,108 | ||||||||||
1,597,920 | 1.3750%, 7/15/18ÇÇ | 1,601,166 | ||||||||||
19,444,277 | 2.1250%, 1/15/19ÇÇ | 20,620,053 | ||||||||||
8,304,000 | 2.7500%, 2/15/19 | 7,644,870 | ||||||||||
8,363,000 | 3.1250%, 5/15/19 | 7,920,020 | ||||||||||
7,610,000 | 3.6250%, 8/15/19 | 7,481,581 | ||||||||||
Total U.S. Treasury Notes/Bonds (cost $438,924,590) | 439,962,199 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 17
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Money Market – 2.7% | ||||||||||||
56,885,575 | Janus Cash Liquidity Fund LLC, 0% (cost $56,885,575) | $ | 56,885,575 | |||||||||
Total Investments (total cost $2,028,993,254) – 99.1% | 2,117,302,232 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.9% | 19,497,584 | |||||||||||
Net Assets – 100% | $ | 2,136,799,816 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 4,540,300 | 0.2% | |||||
Canada | 42,571,823 | 2.0% | ||||||
Cayman Islands | 14,748,688 | 0.7% | ||||||
Liberia | 3,306,875 | 0.2% | ||||||
Luxembourg | 50,048,107 | 2.4% | ||||||
Mexico | 8,731,182 | 0.4% | ||||||
Sweden | 12,511,957 | 0.6% | ||||||
Switzerland | 18,119,081 | 0.8% | ||||||
United Kingdom | 12,714,317 | 0.6% | ||||||
United States†† | 1,950,009,902 | 92.1% | ||||||
Total | $ | 2,117,302,232 | 100.0% |
†† | Includes Cash Equivalents (89.4% excluding Cash Equivalents) |
See Notes to Schedules of Investments and Financial Statements.
18 | DECEMBER 31, 2009
Janus High-Yield Fund (unaudited)
Fund Snapshot We seek to identify total return opportunities within the high-yield corporate bond market with a focus on companies that are committed to improving their capital structure. We believe a bottom-up, fundamentally-driven investment process that is focused on key credit characteristics can generate risk-adjusted performance relative to our peers over time. Through our comprehensive research process, we seek to invest with conviction in the high-yield markets. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
Performance Overview
For the two-month period ended December 31, 2009, Janus High-Yield Fund’s Class J Shares returned 4.05%, compared to a 4.32% return of its benchmark, the Barclays Capital U.S. Corporate High-Yield Bond Index.
Economic Update
The U.S. economic recovery continued during the two-month period amid improving activity within the U.S. services and manufacturing sectors and more evidence the housing market continues to stabilize. Consumer data was mixed with spending trends showing some signs of revival while overall sentiment remained low, largely due to a 10% unemployment rate. Despite headline concerns of accelerating inflation, relatively low capacity utilization and weak labor markets have helped to keep inflationary pressures in check. This has allowed the U.S. Federal Reserve (Fed) to concentrate on stimulating growth by maintaining its accommodative monetary policy for an “extended period.” The Fed’s zero interest rate policy has helped to anchor the short-end of the yield curve. With the massive amount of liquidity in the system, concerns around future inflation has escalated leading to long-term rates moving higher and a steepening of the yield curve during the period. This helped the yield curve close the period near its steepest point on record as the yield difference between the 10-year and 2-year Treasury bonds stood at 270 basis points (bps) at the end of December (down from the period and record high of 285 bps on December 22). The steepening of the yield curve provided a negative backdrop for most U.S. government-related securities, as yields rose and prices declined. U.S. Long Treasuries posted a decline and were among the worst performers.
In light of the steepening of the yield curve led by high long-term interest rates, spread tightening within the high yield credit markets continued. The spread tightening proved to be more powerful than the rise in interest rates leading to the key driver of outperformance. Overall spreads within high yield and investment grade credit remained well above long-term averages at the end of December, despite having tightened from historically wide levels. Lower rated CCC credits significantly outperformed both BB and B credits, up 7.20% for the period while BB and single B segments were up 4.20% and 3.89%, respectively The Barclays Capital U.S. High Yield Index returned 4.32% for the period. Within the index, top performing sectors included diversified financials and consumer finance. Relative sector laggards included supermarkets, natural gas pipelines and refining.
Detractors from Performance
Security selection within the various credit segments was the primary detractor from our relative performance. The low-quality rally in the credit markets led to underperformance, as we continue to avoid credits that we do not feel have strong fundamentals backing them. When we look across the return profiles of the markets as well as digging into the sectors we found that it was the highest risk, highest leveraged, lowest quality issuers within the index that performed the best. We believe the added liquidity in the market has given these lower-quality issuers a temporary boost, as access to reopening capital markets, investors’ willingness to allow for exchanges within capital structures, and the increased risk-taking in the market have all resulted in this trend for the lower-quality segments of the market. Keeping this in mind, we believe the economic uncertainty and inefficient capital structures make many of the top performing credits in 2009 vulnerable. Longer term, we continue to believe that a focus on fundamentally-improving credits that have strong liquidity profiles and the ability to weather difficult economic times will outperform.
On a sector basis, our security selection and overweights within technology and diversified financials detracted the most from performance. While our technology holdings lagged in the quarter, we continue to believe they will be among the largest beneficiaries should corporate spending begin to rise.
Janus Bond & Money Market Funds | 19
Janus High-Yield Fund (unaudited)
On a security level basis, commercial and consumer finance company CIT Group, Inc. emerged from bankruptcy protection in December after a judge approved its reorganization plan. The bonds rallied post bankruptcy. Because we believed the company’s loan portfolio was worth more than the market was valuing the bonds, we initiated our position in the name. After we purchased the new bonds, they traded relatively flat for the remainder of the period, making the position a detractor relative to the index.
Our holdings in First Data Corp., a processor of financial transactions, modestly lagged. We feel the company’s CEO, Michael Capellas, is improving both the company’s capital structure and organizational structure. Regarding the capital structure, we feel Mr. Capellas has several levers that he can pull near-term that would lead to a significant de-leveraging of the balance sheet, which presently contains considerable debt the company incurred when it went private in 2007. The company also has a dominant position in its industry. We feel First Data Corp. is a good example of the type of companies that our investment process is designed to identify – a transforming balance sheet and management committed to reducing debt.
Contributors to Performance
Contributors included our holdings and overweights in chemicals and retailers as well as our holdings in wireless communications. On a security level basis, our overweight in Momentive Performance Materials, Inc. the world’s second largest producer of silicones and silicone derivatives, was a key contributor. We initiated a position during the summer after our analysis suggested the company was improving faster than the value of the bonds suggested.
Our holdings in arts and crafts retailer Michael’s Stores, Inc. contributed to performance, as its bonds rose after the company reported better-than-expected sales and margins. We invested in the bonds after the company named John Menzer, a former high-level executive at Wal-Mart Stores, Inc., to be its new CEO. We have confidence in Mr. Menzer’s management ability and feel he is committed to reducing debt the company incurred as a result of if its leverage buyout in 2006.
Outlook
Despite the significant spread tightening we’ve seen in high yield credit relative to Treasuries, we believe there is potential for further tightening. Corporate America has been very focused on increasing liquidity positions and paying down debt since emerging from one of the most significant financial crises in history. We believe the deleveraging trend in corporate America is in its early innings, as many management teams are going to opt toward capital structures with significantly less leverage and far stronger liquidity profiles as the uncertain times prevail. While spreads were tightening, the default rate among high-yield issuers declined. Many, including ourselves, expected the default rate to trend significantly higher, but the reopening of the capital markets allowed many companies with short-term debt maturities, threatening their ability to refinance, the ability to extend their maturities through new issuance of longer-dated securities. Even some of the most distressed credits within the high yield market were able to access the market via exchanges (loans for bonds) or new issuance to address their liquidity problems. The new issuance increased significantly, as the debt capital markets reopened allowing many to avoid the bankruptcy courts. We believe the reopening of capital markets and the increased risk taking in the market will allow this downward trend in the default rate to continue and should be supportive of the high yield market. While new issuances have risen, the overall supply of corporate debt has declined. We think these trends could continue and that the overall shrinking supply of corporate debt, along with investor demand for higher yields, provides a positive backdrop for further spread narrowing within high yield credit. However, unlike 2009 when a rising tide lifted all boats, we think individual security selection will play a larger role in determining relative performance.
While the sustainability of the current economic recovery is uncertain, we believe there continues to be many opportunities within high yield. As such, we remain focused on companies with strong management teams and a demonstrated commitment to de-levering their balance sheets. We continue to believe that in-depth fundamental credit research is the key to long-term success in fixed income investing. And we believe the high yield credit sector remains an area where fundamental bottom-up analysis combined with robust risk management can improve a manager’s ability to provide risk-adjusted outperformance within fixed income.
Thank you for entrusting your assets to us and for your investment in Janus High-Yield Fund.
20 | DECEMBER 31, 2009
(unaudited)
Janus High-Yield Fund At A Glance
Fund Profile
December 31, 2009
Weighted Average Maturity | 5.9 Years | |
Average Effective Duration* | 3.8 Years | |
30-day Current Yield** | 8.12% | |
Weighted Average Fixed Income Credit Rating | B+ | |
Number of Bonds/Notes | 244 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
December 31, 2009
BBB | 3.8% | |
BB | 24.4% | |
B | 46.6% | |
CCC | 17.5% | |
Other | 7.7% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2009
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Emerging markets comprised 0.7% of total net assets.
Janus Bond & Money Market Funds | 21
Janus High-Yield Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||||
Two-Month | |||||||||||||||
Period | |||||||||||||||
Ended | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
12/31/09 | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus High-Yield Fund – Class A Shares | |||||||||||||||
NAV | 3.92% | 40.45% | 5.51% | 6.20% | 7.58% | 1.11% | 1.04% | ||||||||
MOP | –0.98% | 33.78% | 4.49% | 5.68% | 7.20% | ||||||||||
Janus High-Yield Fund – Class C Shares | |||||||||||||||
NAV | 3.90% | 39.02% | 4.80% | 5.46% | 6.83% | 1.71% | 1.71% | ||||||||
CDSC | 2.88% | 37.78% | 4.80% | 5.46% | 6.83% | ||||||||||
Janus High-Yield Fund – Class I Shares | 4.21% | 40.86% | 5.63% | 6.26% | 7.63% | 0.70% | 0.70% | ||||||||
Janus High-Yield Fund – Class J Shares | 4.05% | 40.86% | 5.63% | 6.26% | 7.63% | 0.90% | 0.90% | ||||||||
Janus High-Yield Fund – Class R Shares | 3.95% | 39.42% | 5.02% | 5.70% | 7.08% | 1.45% | 1.45% | ||||||||
Janus High-Yield Fund – Class S Shares | 4.00% | 40.10% | 5.29% | 5.96% | 7.34% | 1.20% | 1.20% | ||||||||
Barclays Capital U.S. Corporate High-Yield Bond Index | 4.32% | 58.21% | 6.46% | 6.71% | 6.79% | ||||||||||
Lipper Quartile – Class J Shares | – | 4th | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for High Current Yield Funds | – | 347/459 | 56/341 | 33/207 | 6/90 | ||||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 4.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
22 | DECEMBER 31, 2009
(unaudited)
For Class I Shares, Class J Shares, Class R Shares, and Class S Shares, 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 annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class R Shares, and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses at period end did not exceed the expense limit so no waivers were in effect for the most recent period presented.
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/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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: legal, political, liquidity, and interest rate risks, a 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.
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.
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.
Effective July 6, 2009, Janus High-Yield Fund designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser High-Yield Fund (the “JAD predecessor fund”) into corresponding shares of Janus High-Yield Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009, after the reorganization of Class I Shares of the JAD predecessor fund into the corresponding share class of Janus High-Yield Fund. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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.
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 |
Janus Bond & Money Market Funds | 23
Janus High-Yield Fund (unaudited)
Fund Expenses
The examples below show 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 these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,040.40 | $ | 1.53 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.67 | $ | 4.58 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,039.00 | $ | 2.81 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,016.89 | $ | 8.39 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,042.10 | $ | 1.08 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.03 | $ | 3.21 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,040.50 | $ | 1.43 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.97 | $ | 4.28 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class R Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,039.54 | $ | 2.35 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.25 | $ | 7.01 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,041.18 | $ | 1.93 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.51 | $ | 5.75 | ||||||||
† | Expenses equal to the annualized expense ratio of 0.90% for Class A Shares, 1.65% for Class C Shares, 0.63% for Class I Shares, 0.84% for Class J Shares, 1.38% for Class R Shares and 1.13% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
24 | DECEMBER 31, 2009
Janus High-Yield Fund
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Bank Loans – 1.2% | ||||||||||||
Automotive – Cars and Light Trucks – 0.9% | ||||||||||||
$ | 11,726,360 | Ford Motor Co. 3.2400% 12/15/13‡ | $ | 10,802,909 | ||||||||
Casino Hotels – 0.2% | ||||||||||||
2,370,957 | Las Vegas Sands LLC. 0.0000% 5/23/14‡ | 2,062,915 | ||||||||||
Special Purpose Entity – 0.1% | ||||||||||||
280,000 | Universal City Development 6.5000% 11/4/16,‡ | 280,350 | ||||||||||
479,043 | Las Vegas Sands LLC 0.0000% 5/23/14‡ | 418,238 | ||||||||||
698,588 | ||||||||||||
Total Bank Loans (cost $9,974,960) | 13,564,412 | |||||||||||
Common Stock – 0.8% | ||||||||||||
Auction House – Art Dealer – 0.3% | ||||||||||||
227,360 | KAR Auction Services, Inc.* | 3,135,294 | ||||||||||
Telephone – Integrated – 0.5% | ||||||||||||
1,391,610 | Qwest Communications International Inc. | 5,858,679 | ||||||||||
Total Common Stock (cost $8,289,085) | 8,993,973 | |||||||||||
Corporate Bonds – 94.7% | ||||||||||||
Advertising Agencies – 0.3% | ||||||||||||
$ | 2,779,000 | Interpublic Group of Cos., Inc. 10.0000%, 7/15/17, (144A) | 3,084,690 | |||||||||
Advertising Services – 0.9% | ||||||||||||
2,769,000 | Visant Holding Corp., 7.6250%, 10/1/12 | 2,782,845 | ||||||||||
6,546,000 | Visant Holding Corp., 8.7500%, 12/1/13 | 6,726,015 | ||||||||||
1,457,000 | Visant Holding Corp., 10.2500% 12/1/13,‡ | 1,504,353 | ||||||||||
11,013,213 | ||||||||||||
Agricultural Chemicals – 0.2% | ||||||||||||
1,977,000 | Terra Capital, Inc., 7.7500%, 11/1/19, (144A) | 2,115,390 | ||||||||||
Airlines – 0.6% | ||||||||||||
1,667,000 | American Airlines, Inc. 10.5000% 10/15/12, (144A) | 1,742,015 | ||||||||||
1,392,000 | AMR Corp., 6.2500%, 10/15/14 | 1,442,460 | ||||||||||
1,111,000 | Delta Air Lines, Inc. 9.5000% 9/15/14, (144A) | 1,154,051 | ||||||||||
1,110,000 | Delta Air Lines, Inc. 12.2500% 3/15/15, (144A) | 1,110,000 | ||||||||||
2,225,000 | UAL Corp., convertible, 4.5000% 6/30/21 | 1,974,688 | ||||||||||
7,423,214 | ||||||||||||
Apparel Manufacturers – 1.8% | ||||||||||||
5,715,000 | Levi Strauss & Co., 9.7500%, 1/15/15 | 6,000,750 | ||||||||||
6,227,000 | Levi Strauss & Co., 8.8750%, 4/1/16 | 6,514,999 | ||||||||||
10,626,000 | Quiksilver, Inc., 6.8750%, 4/15/15 | 8,713,319 | ||||||||||
21,229,068 | ||||||||||||
Athletic Equipment – 0.1% | ||||||||||||
575,000 | Easton-Bell Sports, Inc., 9.7500% 12/1/16, (144A) | 595,844 | ||||||||||
Auction House – Art Dealer – 0.7% | ||||||||||||
7,400,000 | Kar Holdings, Inc., 10.0000%, 5/1/15 | 7,918,000 | ||||||||||
Automotive – Cars and Light Trucks – 1.7% | ||||||||||||
$ | 2,275,000 | Ford Motor Co., 4.2500%, 11/15/16 | 2,852,281 | |||||||||
18,789,000 | Ford Motor Co., 7.4500%, 7/16/31 | 16,604,779 | ||||||||||
19,457,060 | ||||||||||||
Automotive – Truck Parts and Equipment – Original – 3.4% | ||||||||||||
11,075,000 | American Axle & Manufacturing Holdings Inc., 9.2500%, 1/15/17, (144A) | 11,241,124 | ||||||||||
8,380,000 | Tenneco, Inc., 10.2500%, 7/15/13 | 8,662,825 | ||||||||||
5,712,000 | Tenneco, Inc., 8.6250%, 11/15/14 | 5,761,980 | ||||||||||
5,282,000 | TRW Automotive, Inc. 7.0000% 3/15/14, (144A) | 5,176,360 | ||||||||||
9,051,000 | TRW Automotive, Inc. 7.2500% 3/15/17, (144A) | 8,779,470 | ||||||||||
39,621,759 | ||||||||||||
Broadcast Services and Programming – 0.3% | ||||||||||||
700,000 | Clear Channel Worldwide Holdings, Inc. 9.2500%, 12/15/17 | 714,000 | ||||||||||
2,725,000 | Clear Channel Worldwide Holdings, Inc. 9.2500%, 12/15/17 | 2,806,750 | ||||||||||
3,520,750 | ||||||||||||
Building – Residential and Commercial – 0.9% | ||||||||||||
2,602,000 | M/I Homes, Inc., 6.8750%, 4/1/12 | 2,452,385 | ||||||||||
5,556,000 | Meritage Homes Corp. 6.2500%, 3/15/15 | 5,111,520 | ||||||||||
2,275,000 | Standard Pacific Escrow LLC 10.7500%, 9/15/16, (144A) | 2,320,500 | ||||||||||
9,884,405 | ||||||||||||
Building and Construction Products – Miscellaneous – 1.6% | ||||||||||||
5,375,000 | Associated Materials LLC 9.8750% 11/15/16, (144A) | 5,670,625 | ||||||||||
9,171,000 | Owens Corning, 9.0000%, 6/15/19 | 10,227,306 | ||||||||||
2,775,000 | Ply Gem Industries, Inc. 11.7500% 6/15/13 | 2,775,000 | ||||||||||
18,672,931 | ||||||||||||
Building Products – Wood – 0.4% | ||||||||||||
4,638,000 | Boise Cascade LLC, 7.1250%, 10/15/14 | 4,179,998 | ||||||||||
Cable Television – 1.7% | ||||||||||||
14,225,000 | CCH II LLC / CCH II Capital, Corp. 13.5000%, 11/30/16 | 16,749,937 | ||||||||||
3,429,000 | Mediacom Communications Corp. 9.1250%, 8/15/19, (144A) | 3,497,580 | ||||||||||
20,247,517 | ||||||||||||
Casino Hotels – 2.9% | ||||||||||||
8,283,000 | Ameristar Casinos, Inc., 9.2500% 6/1/14, (144A) | 8,593,612 | ||||||||||
8,840,000 | Boyd Gaming Corp., 7.1250%, 2/1/16 | 7,690,799 | ||||||||||
7,290,000 | Harrah’s Operating Co., Inc. 10.0000% 12/15/18, (144A) | 5,850,225 | ||||||||||
2,228,000 | Harrahs Operating Escrow LLC, 11.2500% 6/1/17, (144A) | 2,331,045 | ||||||||||
4,011,000 | MGM Mirage 10.3750% 5/15/14, (144A) | 4,351,935 | ||||||||||
3,865,000 | MGM Mirage 11.1250% 11/15/17, (144A) | 4,280,488 | ||||||||||
33,098,104 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 25
Janus High-Yield Fund
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Cellular Telecommunications – 0.9% | ||||||||||||
$ | 10,565,000 | Nextel Communications, Inc. 7.3750% 8/1/15 | $ | 10,274,463 | ||||||||
Chemicals – Diversified – 0.5% | ||||||||||||
2,525,000 | Solutia, Inc., 8.7500%, 11/1/17 | 2,629,156 | ||||||||||
2,773,000 | Innophos Holdings, Inc. 9.5000% 4/15/12, (144A) | 2,814,595 | ||||||||||
5,443,751 | ||||||||||||
Chemicals – Plastics – 0.2% | ||||||||||||
1,925,000 | PolyOne Corp., 8.8750%, 5/1/12 | 1,982,750 | ||||||||||
Chemicals – Specialty – 2.5% | ||||||||||||
3,364,000 | Ashland, Inc., 9.1250%, 6/1/17, (144A) | 3,691,990 | ||||||||||
3,050,000 | Ferro Corp., 6.5000%, 8/15/13 | 2,706,875 | ||||||||||
3,890,000 | Huntsman International LLC 5.5000% 6/30/16, (144A) | 3,452,375 | ||||||||||
3,613,000 | MacDermid, Inc. 9.5000% 4/15/17, (144A) | 3,613,000 | �� | |||||||||
6,200,000 | Momentive Performance Materials, Inc. 9.7500%, 12/1/14 | 5,967,500 | ||||||||||
7,325,000 | Momentive Performance Materials, Inc. 11.5000%, 12/1/16 | 6,482,624 | ||||||||||
1,779,000 | Nalco Co., 8.8750%, 11/15/13 | 1,832,370 | ||||||||||
1,669,000 | Nalco Co., 8.2500%, 5/15/17, (144A) | 1,773,313 | ||||||||||
29,520,047 | ||||||||||||
Coal – 1.1% | ||||||||||||
1,110,000 | Arch Coal, Inc., 8.7500%, 8/1/16, (144A) | 1,173,825 | ||||||||||
2,501,000 | Arch Western Finance LLC 6.7500% 7/1/13 | 2,482,243 | ||||||||||
2,000,000 | Cloud Peak Energy Resources LLC 8.2500%, 12/15/17, (144A) | 2,000,000 | ||||||||||
2,000,000 | Cloud Peak Energy Resources LLC 8.5000%, 12/15/19, (144A) | 2,040,000 | ||||||||||
5,650,000 | Murray Energy Corp. 10.2500% 10/15/15, (144A) | 5,621,750 | ||||||||||
13,317,818 | ||||||||||||
Commercial Services – 1.1% | ||||||||||||
5,645,000 | Iron Mountain, Inc., 6.6250%, 1/1/16 | 5,532,100 | ||||||||||
2,775,000 | Iron Mountain, Inc., 8.3750%, 8/15/21 | 2,865,188 | ||||||||||
6,394,000 | Live Nation Inc., 2.8750%, 7/15/27 | 4,955,350 | ||||||||||
13,352,638 | ||||||||||||
Commercial Services – Finance – 1.0% | ||||||||||||
5,426,000 | Cardtronics, Inc., 9.2500%, 8/15/13 | 5,581,998 | ||||||||||
6,282,000 | Cardtronics, Inc., 9.2500%, 8/15/13 | 6,462,607 | ||||||||||
12,044,605 | ||||||||||||
Computer Services – 0.8% | ||||||||||||
2,664,000 | SunGard Data Systems, Inc. 9.1250% 8/15/13 | 2,730,600 | ||||||||||
3,330,000 | SunGard Data Systems, Inc. 10.6250% 5/15/15 | 3,667,163 | ||||||||||
2,550,000 | SunGard Data Systems, Inc. 10.2500% 8/15/15 | 2,715,750 | ||||||||||
9,113,513 | ||||||||||||
Computers – Memory Devices – 0.3% | ||||||||||||
3,333,000 | Seagate Technology 10.0000% 5/1/14, (144A) | 3,682,965 | ||||||||||
Consumer Products – Miscellaneous – 0.8% | ||||||||||||
$ | 2,694,000 | Amscan Holdings, Inc., 8.7500%, 5/1/14 | 2,653,590 | |||||||||
2,223,000 | Jarden Corp., 8.0000%, 5/1/16 | 2,295,248 | ||||||||||
4,236,000 | Jarden Corp., 7.5000%, 5/1/17 | 4,225,410 | ||||||||||
9,174,248 | ||||||||||||
Containers – Metal and Glass – 0.3% | ||||||||||||
1,041,000 | Ball Corp., 7.1250%, 9/1/16 | 1,067,025 | ||||||||||
1,151,000 | Ball Corp., 7.3750%, 9/1/19 | 1,182,653 | ||||||||||
1,477,000 | Owens-Brockway Glass Container, Inc. 7.3750%, 5/15/16 | 1,525,002 | ||||||||||
3,774,680 | ||||||||||||
Containers – Paper and Plastic – 1.1% | ||||||||||||
5,029,000 | Graphic Packaging International, Inc., 9.5000%, 8/15/13 | 5,192,443 | ||||||||||
7,136,000 | Graham Packaging Co. L.P./GPC Capital Corp. I, 9.8750%, 10/15/14 | 7,278,720 | ||||||||||
12,471,163 | ||||||||||||
Cosmetics and Toiletries – 0.4% | ||||||||||||
3,282,000 | Chattem Inc., 1.6250%, 5/1/14 | 4,451,213 | ||||||||||
Data Processing and Management – 2.8% | ||||||||||||
8,568,000 | First Data Corp., 9.8750%, 9/24/15 | 7,989,660 | ||||||||||
2,775,000 | First Data Corp. 10.5500%, 9/24/15 (PIK) | 2,462,813 | ||||||||||
25,712,000 | First Data Corp., 11.2500%, 3/31/16 | 21,983,759 | ||||||||||
32,436,232 | ||||||||||||
Dialysis Centers – 0.2% | ||||||||||||
1,945,000 | DaVita, Inc., 6.6250%, 3/15/13 | 1,949,863 | ||||||||||
Direct Marketing – 0.6% | ||||||||||||
6,528,000 | Affinion Group, Inc., 11.5000%, 10/15/15 | 6,838,080 | ||||||||||
Distribution/Wholesale – 0.9% | ||||||||||||
3,523,000 | Ace Hardware Corp. 9.1250% 6/1/16, (144A) | 3,729,976 | ||||||||||
4,550,000 | McJunkin Red Man, Corp. 9.5000% 12/15/16, (144A) | 4,447,625 | ||||||||||
3,074,000 | Nebraska Book Co., Inc. 8.6250% 3/15/12 | 2,643,640 | ||||||||||
10,821,241 | ||||||||||||
Diversified Banking Inst – 1.4% | ||||||||||||
8,689,000 | GMAC LLC 6.8750%, 9/15/11, (144A) | 8,558,664 | ||||||||||
9,139,000 | GMAC LLC 8.0000%, 11/1/31, (144A) | 8,225,100 | ||||||||||
16,783,764 | ||||||||||||
Diversified Financial Services – 1.6% | ||||||||||||
11,375,000 | CIT Group, Inc., 7.0000%, 5/1/13 | 10,607,187 | ||||||||||
9,125,000 | CIT Group, Inc., 7.0000%, 5/1/17 | 7,915,937 | ||||||||||
18,523,124 | ||||||||||||
Diversified Minerals – 1.5% | ||||||||||||
8,853,000 | Teck Resources, Ltd., 10.2500%, 5/15/16 | 10,313,744 | ||||||||||
6,283,000 | Teck Resources, Ltd., 10.7500%, 5/15/19 | 7,508,185 | ||||||||||
17,821,929 |
See Notes to Schedules of Investments and Financial Statements.
26 | DECEMBER 31, 2009
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Diversified Operations – 0.7% | ||||||||||||
$ | 5,093,000 | AMH Holdings, Inc., 11.2500%, 3/1/14,‡ | $ | 4,914,745 | ||||||||
1,852,000 | Kansas City Southern Railway 13.0000% 12/15/13 | 2,148,320 | ||||||||||
1,371,000 | Kansas City Southern Railway 8.0000% 6/1/15 | 1,420,699 | ||||||||||
8,483,764 | ||||||||||||
Diversified Operations – Commercial Services – 0.9% | ||||||||||||
9,809,000 | ARAMARK Corp., 8.5000%, 2/1/15 | 10,103,270 | ||||||||||
Electric – Generation – 0.8% | ||||||||||||
2,225,000 | AES Corp., 9.7500%, 4/15/16, (144A) | 2,436,375 | ||||||||||
6,361,000 | AES Corp., 8.0000%, 10/15/17 | 6,527,976 | ||||||||||
8,964,351 | ||||||||||||
Electric – Integrated – 0.9% | ||||||||||||
5,708,000 | Calpine Construction Finance Co. L.P.,8.0000%, 6/1/16, (144A) | 5,879,240 | ||||||||||
5,800,000 | Energy Future Holdings Corp. 10.8750% 11/1/17 | 4,741,500 | ||||||||||
10,620,740 | ||||||||||||
Electronic Components – Semiconductors – 1.7% | ||||||||||||
2,875,000 | Advanced Micro Devices, Inc. 8.1250% 12/15/17, (144A) | 2,864,219 | ||||||||||
6,975,000 | Avago Technologies US/Avago Technologies Wireless 11.8750% 12/1/15 | 7,681,218 | ||||||||||
8,710,000 | National Semiconductor Corp. 6.6000% 6/15/17 | 8,922,175 | ||||||||||
19,467,612 | ||||||||||||
Electronics – Military – 1.1% | ||||||||||||
1,750,000 | L-3 Communications Corp. 6.1250% 1/15/14 | 1,760,938 | ||||||||||
10,575,000 | L-3 Communications Corp. 6.3750% 10/15/15 | 10,614,656 | ||||||||||
12,375,594 | ||||||||||||
Enterprise Software/Services – 0.3% | ||||||||||||
4,025,000 | JDA Software Group, Inc. 8.0000% 12/15/14, (144A) | 4,105,500 | ||||||||||
Finance – Auto Loans – 1.4% | ||||||||||||
2,647,000 | Ford Motor Credit Co. LLC 7.2500% 10/25/11 | 2,673,184 | ||||||||||
5,297,000 | Ford Motor Credit Co. LLC 7.5000% 8/1/12 | 5,341,802 | ||||||||||
5,405,000 | Ford Motor Credit Co. LLC 8.0000% 6/1/14 | 5,549,789 | ||||||||||
2,225,000 | Ford Motor Credit Co. LLC 8.7000% 10/1/14 | 2,326,220 | ||||||||||
15,890,995 | ||||||||||||
Finance – Credit Card – 0.1% | ||||||||||||
1,125,000 | American Express Co., 6.8000%, 9/1/66,‡ | 1,006,875 | ||||||||||
Finance – Investment Bankers/Brokers – 0.5% | ||||||||||||
5,025,000 | Cemex Finance LLC 9.5000% 12/14/16, (144A) | 5,263,688 | ||||||||||
Finance – Other Services – 0.1% | ||||||||||||
1,125,000 | Pinnacle Foods Finance LLC 9.2500% 4/1/15, (144A) | 1,141,875 | ||||||||||
Food – Meat Products – 0.8% | ||||||||||||
$ | 1,668,000 | JBS USA LLC/JBS USA Finance Inc. 11.6250%, 5/1/14, (144A) | 1,889,010 | |||||||||
1,748,000 | National Beef Packing Co. LLC/NB Finance Corp., 10.5000%, 8/1/11 | 1,752,370 | ||||||||||
2,780,000 | Smithfield Foods, Inc. 10.0000%, 7/15/14, (144A) | 3,016,300 | ||||||||||
3,057,000 | Tyson Foods Inc., 7.8500%, 4/1/16 | 3,133,425 | ||||||||||
9,791,105 | ||||||||||||
Food – Miscellaneous/Diversified – 2.1% | ||||||||||||
8,382,000 | Del Monte Corp., 6.7500%, 2/15/15 | 8,549,639 | ||||||||||
2,217,000 | Del Monte Corp. 7.5000% 10/15/19, (144A) | 2,283,510 | ||||||||||
4,932,000 | Dole Food Co., Inc., 8.7500%, 7/15/13 | 5,055,300 | ||||||||||
5,323,000 | Dole Food Co., Inc. 13.8750% 3/15/14, (144A) | 6,400,908 | ||||||||||
1,659,000 | Dole Food Co., Inc. 8.0000% 10/1/16, (144A) | 1,683,885 | ||||||||||
23,973,242 | ||||||||||||
Food – Retail – 0.3% | ||||||||||||
2,940,000 | Stater Brothers Holdings 7.7500% 4/15/15 | 2,984,100 | ||||||||||
Funeral Services and Related Items – 0.4% | ||||||||||||
5,125,000 | Stonemor Operating LLC 10.2500% 12/1/17, (144A) | 5,214,688 | ||||||||||
Gambling – Non-Hotel – 1.3% | ||||||||||||
3,328,000 | Isle of Capri Casinos, Inc. 7.0000% 3/1/14 | 2,961,920 | ||||||||||
5,479,000 | Jacobs Entertainment, Inc. 9.7500% 6/15/14 | 5,109,168 | ||||||||||
3,696,000 | Pinnacle Entertainment, Inc. 8.2500% 3/15/12 | 3,696,000 | ||||||||||
1,670,000 | Pinnacle Entertainment, Inc. 8.6250% 8/1/17, (144A) | 1,703,400 | ||||||||||
1,593,000 | Pokagon Gaming Authority 10.3750% 6/15/14, (144A) | 1,656,720 | ||||||||||
15,127,208 | ||||||||||||
Home Furnishings – 0.4% | ||||||||||||
4,875,000 | Norcraft Finance, Corp. 10.5000% 12/15/15, (144A) | 4,996,875 | ||||||||||
Independent Power Producer – 0.1% | ||||||||||||
1,472,000 | AES China Generating Co., Ltd. | 1,415,768 | ||||||||||
Machine Tools and Related Products – 0.2% | ||||||||||||
2,219,000 | Thermadyne Holdings Corp., 10.5000%,2/1/14,‡ | 2,099,729 | ||||||||||
Medical – Hospitals – 4.2% | ||||||||||||
5,864,000 | CHS/Community Health Systems, Inc. 8.8750%, 7/15/15 | 6,069,240 | ||||||||||
3,280,000 | HCA, Inc., 8.7500%, 9/1/10 | 3,357,900 | ||||||||||
2,800,000 | HCA, Inc., 7.8750%, 2/1/11 | 2,880,500 | ||||||||||
14,780,000 | HCA, Inc., 9.2500%, 11/15/16 | 15,870,024 | ||||||||||
1,388,000 | HCA, Inc., 9.8750%, 2/15/17, (144A) | 1,533,740 | ||||||||||
4,950,000 | IASIS Healthcare, 8.7500%, 6/15/14 | 5,011,875 | ||||||||||
5,589,000 | Tenet Healthcare Corp., 7.3750%, 2/1/13 | 5,602,973 | ||||||||||
7,455,000 | Tenet Healthcare Corp., 9.2500%, 2/1/15 | 7,939,575 | ||||||||||
48,265,827 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 27
Janus High-Yield Fund
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Medical – Outpatient and Home Medical Care – 0.1% | ||||||||||||
$ | 1,107,000 | National Mentor Holdings, Inc. 11.2500% 7/1/14 | $ | 1,129,140 | ||||||||
Medical Products – 0.6% | ||||||||||||
6,397,000 | Biomet Inc., 11.6250%, 10/15/17 | 7,068,685 | ||||||||||
Motion Pictures and Services – 0.4% | ||||||||||||
5,075,000 | Lions Gate Entertainment, Inc. 10.2500% 11/1/16, (144A) | 5,030,594 | ||||||||||
Music – 0.6% | ||||||||||||
3,886,000 | WMG Acquisition Corp. 9.5000% 6/15/16, (144A) | 4,162,878 | ||||||||||
3,200,000 | WMG Holdings Corp. 9.5000% 12/15/14,‡ | 3,240,000 | ||||||||||
7,402,878 | ||||||||||||
Office Furnishings – Original – 0.2% | ||||||||||||
1,943,000 | Interface, Inc. 11.3750% 11/1/13, (144A) | 2,171,303 | ||||||||||
Office Supplies and Forms – 0.5% | ||||||||||||
5,135,000 | ACCO Brands Corp. 10.6250% 3/15/15, (144A) | 5,648,500 | ||||||||||
Oil – Field Services – 0.2% | ||||||||||||
575,000 | Aquilex Holdings LLC/Aquilex Finance, Corp., 11.1250%, 12/15/16, (144A) | 573,563 | ||||||||||
1,975,000 | Calfrac Holdings L.P. 7.7500%, 2/15/15, (144A) | 1,915,750 | ||||||||||
2,489,313 | ||||||||||||
Oil Companies – Exploration and Production – 3.7% | ||||||||||||
1,951,000 | Chesapeake Energy Corp. 7.5000% 9/15/13 | 1,985,143 | ||||||||||
5,075,000 | Chesapeake Energy Corp. 7.0000% 8/15/14 | 5,138,438 | ||||||||||
4,444,000 | Continental Resources 8.2500% 10/1/19, (144A) | 4,666,200 | ||||||||||
1,443,000 | Forest Oil Corp. 8.5000% 2/15/14, (144A) | 1,507,935 | ||||||||||
2,262,000 | Forest Oil Corp., 7.7500% 5/1/14 | 2,290,275 | ||||||||||
1,110,000 | Hilcorp Energy I L.P./Hilcorp Finance Co., 9.0000% 6/1/16, (144A) | 1,126,650 | ||||||||||
1,125,000 | OPTI Canada, Inc. 9.0000% 12/15/12, (144A) | 1,150,313 | ||||||||||
2,350,000 | PetroHawk Energy Corp. 9.1250% 7/15/13 | 2,455,750 | ||||||||||
1,724,000 | Plains Exploration & Production Co., 7.7500% 6/15/15 | 1,754,170 | ||||||||||
2,780,000 | Plains Exploration & Production Co., 8.6250% 10/15/19 | 2,856,450 | ||||||||||
5,168,000 | Quicksilver Resources, Inc. 8.2500% 8/1/15 | 5,297,199 | ||||||||||
2,223,000 | Quicksilver Resources, Inc. 11.7500% 1/1/16 | 2,523,105 | ||||||||||
4,999,000 | SandRidge Energy, Inc. 9.8750% 5/15/16, (144A) | 5,261,447 | ||||||||||
1,325,000 | Swift Energy Co., 7.1250%, 6/1/17 | 1,252,125 | ||||||||||
3,975,000 | Swift Energy Co., 8.8750%, 1/15/20 | 4,074,375 | ||||||||||
43,339,575 | ||||||||||||
Oil Field Machinery and Equipment – 0.2% | ||||||||||||
1,913,000 | Dresser-Rand Group, Inc. 7.3750% 11/1/14 | 1,893,870 | ||||||||||
Oil Refining and Marketing – 0.2% | ||||||||||||
$ | 2,389,000 | Frontier Oil Corp., 8.5000%, 9/15/16 | 2,484,560 | |||||||||
Paper and Related Products – 1.1% | ||||||||||||
1,725,000 | Boise Paper Holdings LLC 9.0000% 11/1/17, (144A) | 1,787,531 | ||||||||||
7,683,000 | Georgia-Pacific LLC 7.1250% 1/15/17, (144A) | 7,779,038 | ||||||||||
2,775,000 | Newpage Corp. 11.3750% 12/31/14, (144A) | 2,802,750 | ||||||||||
12,369,319 | ||||||||||||
Physical Therapy and Rehabilitation Centers – 0.4% | ||||||||||||
4,492,000 | HealthSouth Corp., 10.7500%, 6/15/16 | 4,885,050 | ||||||||||
Pipelines – 0.9% | ||||||||||||
788,000 | Dynegy Holdings, Inc., 8.7500%, 2/15/12 | 827,400 | ||||||||||
2,875,000 | Dynegy Holdings, Inc. 7.5000% 6/1/15, (144A) | 2,645,000 | ||||||||||
1,487,000 | El Paso Corp., 12.0000%, 12/12/13 | 1,743,508 | ||||||||||
5,277,000 | Kinder Morgan Finance Co. ULC 5.7000%, 1/5/16 | 5,065,920 | ||||||||||
10,281,828 | ||||||||||||
Private Corrections – 0.2% | ||||||||||||
2,520,000 | The Geo Group, Inc. 7.7500% 10/15/17, (144A) | 2,579,850 | ||||||||||
Publishing – Books – 1.1% | ||||||||||||
3,632,000 | Cengage Learning Acquisitions, Inc. 10.5000%, 1/15/15, (144A) | 3,473,100 | ||||||||||
9,065,000 | Cengage Learning Acquisitions Inc. 13.2500%, 7/15/15, (144A),‡ | 8,804,381 | ||||||||||
12,277,481 | ||||||||||||
Publishing – Newspapers – 0.8% | ||||||||||||
9,138,000 | Block Communications, Inc. 8.2500% 12/15/15, (144A) | 8,875,283 | ||||||||||
Publishing – Periodicals – 0.4% | ||||||||||||
1,668,000 | Nielsen Finance Co. LLC 11.6250% 2/1/14 | 1,874,415 | ||||||||||
2,220,000 | Nielson Finance Co. LLC 11.5000% 5/1/16 | 2,480,850 | ||||||||||
4,355,265 | ||||||||||||
Racetracks – 0% | ||||||||||||
510,000 | Speedway Motorsports, Inc. 8.7500% 6/1/16 | 538,050 | ||||||||||
Radio – 0.4% | ||||||||||||
4,850,000 | Salem Communications Corp. 9.6250% 12/15/16, (144A) | 5,080,375 | ||||||||||
REIT – Diversified – 0.5% | ||||||||||||
5,700,000 | DuPont Fabros Technology L.P. 8.5000% 12/15/17, (144A) | 5,792,625 | ||||||||||
REIT – Health Care – 0.3% | ||||||||||||
3,064,000 | Senior Housing Properties Trust 8.6250% 1/15/12 | 3,171,240 | ||||||||||
Rental Auto/Equipment – 0.5% | ||||||||||||
5,141,000 | Hertz Corp., 10.5000%, 1/1/16 | 5,488,018 | ||||||||||
Resorts and Theme Parks – 0.5% | ||||||||||||
5,578,000 | Vail Resorts, Inc., 6.7500%, 2/15/14 | 5,536,165 |
See Notes to Schedules of Investments and Financial Statements.
28 | DECEMBER 31, 2009
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Retail – Apparel and Shoe – 1.5% | ||||||||||||
$ | 10,806,000 | Burlington Coat Factory Warehouse Corp., 11.1250%, 4/15/14 | $ | 11,157,194 | ||||||||
1,111,000 | Limited Brands, Inc., 6.9000%, 7/15/17 | 1,109,611 | ||||||||||
5,832,000 | Limited Brands, Inc., 7.6000%, 7/15/37 | 5,190,480 | ||||||||||
17,457,285 | ||||||||||||
Retail – Arts and Crafts – 1.5% | ||||||||||||
16,845,000 | Michael’s Stores, Inc., 11.3750%, 11/1/16 | 17,729,362 | ||||||||||
Retail – Automobile – 0.2% | ||||||||||||
1,910,000 | Penske Auto Group, Inc., 7.7500% 12/15/16 | 1,847,925 | ||||||||||
Retail – Bookstore – 0.3% | ||||||||||||
3,350,000 | Nebraska Book Co. 10.0000% 12/1/11, (144A) | 3,391,875 | ||||||||||
Retail – Computer Equipment – 0.6% | ||||||||||||
6,362,000 | GameStop Corp., 8.0000%, 10/1/12 | 6,592,623 | ||||||||||
Retail – Drug Store – 0.2% | ||||||||||||
1,945,000 | Rite Aid, Corp., 9.7500%, 6/12/16 | 2,110,325 | ||||||||||
Retail – Leisure Products – 0.6% | ||||||||||||
7,778,000 | Steinway Musical Instruments 7.0000% 3/1/14, (144A) | 7,058,535 | ||||||||||
Retail – Mail Order – 0.2% | ||||||||||||
2,775,000 | QVC, Inc., 7.5000%, 10/1/19, (144A) | 2,830,500 | ||||||||||
Retail – Major Department Stores – 0.5% | ||||||||||||
4,000,000 | Saks, Inc., 7.5000%, 12/1/13, (144A) | 5,915,000 | ||||||||||
Retail – Miscellaneous/Diversified – 0.1% | ||||||||||||
1,666,000 | Eye Care Centers of America, Inc. 10.7500%, 2/15/15 | 1,736,805 | ||||||||||
Retail – Propane Distribution – 0.7% | ||||||||||||
1,650,000 | Ferrellgas Partners L.P. 9.1250% 10/1/17, (144A) | 1,744,875 | ||||||||||
3,649,000 | Ferrellgas Partners L.P. / Ferrellgas Partners Finance Corp. 8.7500% 6/15/12 | 3,694,613 | ||||||||||
3,163,000 | Ferrellgas Escrow LLC / Ferrellgas Finance Escrow Corp. 6.7500% 5/1/14 | 3,115,555 | ||||||||||
8,555,043 | ||||||||||||
Retail – Regional Department Stores – 1.6% | ||||||||||||
1,665,000 | JC Penney Corp Inc., 7.4000%, 4/1/37 | 1,652,513 | ||||||||||
4,725,000 | Macy’s Retail Holdings, Inc. 7.4500%, 7/15/17 | 4,890,375 | ||||||||||
12,002,000 | Neiman Marcus Group, Inc. 10.3750% 10/15/15 | 11,761,959 | ||||||||||
18,304,847 | ||||||||||||
Retail – Restaurants – 1.0% | ||||||||||||
6,327,000 | Denny’s Holdings, Inc. 10.0000% 10/1/12 | 6,469,358 | ||||||||||
5,675,000 | Landry’s Restaurants, Inc. 11.6250% 12/1/15, (144A) | 5,075,375 | ||||||||||
11,544,733 | ||||||||||||
Retail – Toy Store – 0.3% | ||||||||||||
2,850,000 | Toys R Us Property Co LLC 8.5000% 12/1/17, (144A) | 2,899,875 | ||||||||||
Rubber – Tires – 0.8% | ||||||||||||
$ | 4,169,000 | Goodyear Tire & Rubber Co. 7.8570% 8/15/11 | 4,309,704 | |||||||||
2,778,000 | Goodyear Tire & Rubber Co. 9.0000% 7/1/15 | 2,889,120 | ||||||||||
1,664,000 | Goodyear Tire & Rubber Co. 10.5000% 5/15/16 | 1,838,720 | ||||||||||
9,037,544 | ||||||||||||
Satellite Telecommunications – 0.9% | ||||||||||||
1,598,000 | Intelsat Subsidiary Holding Co., Ltd., 8.8750% 1/15/15, (144A),§ | 1,645,940 | ||||||||||
7,851,000 | Intelsat Jackson Holdings, Ltd. 11.2500% 6/15/16 | 8,498,708 | ||||||||||
10,144,648 | ||||||||||||
Seismic Data Collection – 0.2% | ||||||||||||
1,670,000 | Cie Generale de Geophysique-Veritas 9.5000%, 5/15/16, (144A) | 1,786,900 | ||||||||||
Soap and Cleaning Preparations – 0.4% | ||||||||||||
5,100,000 | Johnsondiversey, Inc., 8.2500% 11/15/19, (144A) | 5,163,750 | ||||||||||
Special Purpose Entity – 3.0% | ||||||||||||
5,115,000 | CCM Merger, Inc., 8.0000%,8/1/13, (144A) | 4,149,544 | ||||||||||
14,208,000 | Kar Holdings, Inc., 8.7500%, 5/1/14 | 14,651,999 | ||||||||||
13,038,000 | Petroplus Finance, Ltd. 7.0000% 5/1/17, (144A) | 11,734,199 | ||||||||||
1,125,000 | Universal City Development Partners, Ltd. 8.8750%, 11/15/15, (144A) | 1,101,094 | ||||||||||
575,000 | Universal City Development Partners, Ltd. 10.8750%, 11/15/16, (144A) | 576,438 | ||||||||||
2,275,000 | UPC Germany GmbH 8.1250% 12/1/17, (144A) | 2,300,594 | ||||||||||
34,513,868 | ||||||||||||
Steel – Producers – 0.5% | ||||||||||||
5,998,000 | Steel Dynamics, Inc. 7.7500% 4/15/16, (144A) | 6,245,418 | ||||||||||
Steel Pipe and Tube – 0.1% | ||||||||||||
1,650,000 | Mueller Water Products, 7.3750%, 6/1/17 | 1,526,250 | ||||||||||
Super-Regional Banks – 0.2% | ||||||||||||
2,850,000 | Wells Fargo Capital XIII 7.7000% 9/26/99,‡ | 2,764,500 | ||||||||||
Telecommunication Services – 1.7% | ||||||||||||
2,850,000 | Clearwire Communications LLC 12.0000%, 12/1/15, (144A) | 2,892,750 | ||||||||||
5,700,000 | Clearwire Communications LLC 12.0000%, 12/1/15, (144A) | 5,785,499 | ||||||||||
2,780,000 | Global Crossing, Ltd. 12.0000% 9/15/15, (144A) | 3,051,050 | ||||||||||
5,100,000 | Qwest Corp., 8.3750%, 5/1/16, (144A) | 5,469,750 | ||||||||||
2,643,000 | Time Warner Telecom Holdings, Inc. 9.2500%, 2/15/14 | 2,725,594 | ||||||||||
19,924,643 | ||||||||||||
Telephone – Integrated – 4.7% | ||||||||||||
4,450,000 | Frontier Communications Corp. 8.2500% 5/1/14 | 4,639,125 | ||||||||||
2,775,000 | Frontier Communications Corp. 8.1250% 10/1/18 | 2,809,688 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 29
Janus High-Yield Fund
Schedule of Investments
As of December, 31, 2009
Shares or Principal Amount | Value | |||||||||||
Telephone – Integrated – (continued) | ||||||||||||
$ | 3,334,000 | Level 3 Communications Corp. 10.0000% 5/1/11 | $ | 3,367,340 | ||||||||
5,541,000 | Level 3 Financing, Inc., 9.2500% 11/1/14 | 5,236,245 | ||||||||||
2,775,000 | Level 3 Financing, Inc., 8.7500% 2/15/17 | 2,532,188 | ||||||||||
850,000 | Qwest Capital Funding, Inc. 7.7500% 2/15/31 | 722,500 | ||||||||||
2,224,000 | Sprint Capital Corp., 8.3750%, 3/15/12 | 2,301,840 | ||||||||||
6,250,000 | Sprint Capital, Corp., 6.8750%, 11/15/28 | 5,195,313 | ||||||||||
4,171,000 | Sprint Nextel Corp., 6.0000%, 12/1/16 | 3,806,038 | ||||||||||
5,711,000 | Sprint Nextel Corp., 8.3750%, 8/15/17 | 5,825,219 | ||||||||||
6,389,000 | Virgin Media Finance PLC 9.1250% 8/15/16 | 6,732,408 | ||||||||||
6,282,000 | Virgin Media Finance PLC 9.5000% 8/15/16 | 6,745,297 | ||||||||||
3,955,000 | Virgin Media Finance PLC 8.3750% 10/15/19 | 4,068,706 | ||||||||||
53,981,907 | ||||||||||||
Television – 0.7% | ||||||||||||
8,300,000 | Belo, Corp., 8.0000%, 11/15/16 | 8,528,250 | ||||||||||
Transportation – Marine – 0.9% | ||||||||||||
3,945,000 | Navios Maritime Holdings, Inc. 8.8750% 11/1/17, (144A) | 4,097,869 | ||||||||||
6,972,000 | Ship Finance International, Ltd. 8.5000% 12/15/13 | 6,579,825 | ||||||||||
10,677,694 | ||||||||||||
Transportation – Railroad – 0.7% | ||||||||||||
1,802,000 | Kansas City Southern de Mexico S.A. de C.V., 9.3750%, 5/1/12 | 1,869,575 | ||||||||||
6,537,000 | Kansas City Southern de Mexico S.A. de C.V., 7.6250%, 12/1/13 | 6,438,945 | ||||||||||
8,308,520 | ||||||||||||
Transportation – Services – 0.2% | ||||||||||||
2,264,000 | Bristow Group Inc., 6.1250%, 6/15/13 | 2,235,700 | ||||||||||
Transportation – Truck – 0.8% | ||||||||||||
10,422,000 | Saint Acquisition Corp. 12.5000% 5/15/17, (144A) | 8,767,508 | ||||||||||
Total Corporate Bonds (cost $1,008,726,797) | 1,098,603,636 | |||||||||||
Preferred Stock – 0.5% | ||||||||||||
Metal – Copper – 0.1% | ||||||||||||
13,785 | Freeport-McMoRan Copper & Gold, Inc. convertible 6.7500% 5/1/10 | 1,588,032 | ||||||||||
Special Purpose Entity – 0.4% | ||||||||||||
361,215 | Dole Food Automatic Exchange 7.0000% (144A),§ | 4,182,183 | ||||||||||
Total Preferred Stock (cost $5,180,852) | 5,770,215 | |||||||||||
Money Market – 1.9% | ||||||||||||
22,001,000 | Janus Cash Liquidity Fund LLC, 0% (cost $22,001,000) | 22,001,000 | ||||||||||
Total Investments (total cost $1,054,172,694) – 99.1% | 1,148,933,236 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.9% | 10,815,906 | |||||||||||
Net Assets – 100% | $ | 1,159,749,142 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 32,925,491 | 2.9% | |||||
Canada | 24,038,162 | 2.0% | ||||||
Cayman Islands | 3,682,965 | 0.3% | ||||||
France | 1,786,900 | 0.2% | ||||||
Germany | 2,300,594 | 0.2% | ||||||
Marshall Islands | 4,097,869 | 0.4% | ||||||
Mexico | 8,308,520 | 0.7% | ||||||
Singapore | 7,681,219 | 0.7% | ||||||
United Kingdom | 17,546,412 | 1.5% | ||||||
United States†† | 1,046,565,104 | 91.1% | ||||||
Total | $ | 1,148,933,236 | 100.0% |
†† | Includes Cash Equivalents (89.2% excluding Cash Equivalents) |
See Notes to Schedules of Investments and Financial Statements.
30 | DECEMBER 31, 2009
Janus Short-Term Bond Fund (unaudited)
Fund Snapshot We believe a bottom-up, fundamentally-driven investment process that focuses on credit-oriented investments can generate risk-adjusted performance relative to our peers over time. Our comprehensive bottom-up view drives decision-making at a macro level, enabling us to make informed decisions about overall portfolio allocations. | Jason Groom co-portfolio manager | Darrell Watters co-portfolio manager |
Performance Overview
For the two-month period ended December 31, 2009, Janus Short-Term Bond Fund’s Class J Shares returned 0.86%, compared to a 0.06% return of its benchmark, the Barclays Capital 1-3 Year U.S. Government/Credit Index.
Market Environment
The U.S. economic recovery continued during the two-month period amid improving activity within the U.S. services and manufacturing sectors and more evidence the housing market continues to stabilize. Consumer data was mixed with spending trends showing some signs of life while overall sentiment remained low, largely due to a 10% unemployment rate. Despite headline concerns of accelerating inflation, relatively low capacity utilization and weak labor markets have helped to keep inflationary pressures in check. This has allowed the U.S. Federal Reserve (Fed) to concentrate on stimulating growth by maintaining its accommodative monetary policy for an “extended period.” The Fed’s easy-money policy of a near zero federal funds rate helped to anchor the short-end of the yield curve, while long-term rates moved higher during the period. This helped the yield curve close the period near its steepest point on record as the yield difference between the 10-year and 2-year Treasury bonds stood at 270 basis points (bps) at the end of December (down from the period and record high of 285 bps on December 22).
The steepening of the yield curve provided a negative backdrop for most U.S. Government-related securities. U.S. long maturity Treasuries posted declines and were among the worst performers, while short-term Treasuries ended the period with slight losses. Rising inflation concerns helped U.S. TIPS outperform the government sector. The U.S. Government’s and Fed’s ongoing support for agencies (Fannie and Freddie) have kept spreads of agencies relative to U.S. Treasuries near historically tight levels at period end.
Spread tightening within corporate credit continued to be a key driver of outperformance for this segment. The top performing group within fixed income, high yield, saw spreads decline 118 bps. Investment grade credit spreads narrowed 34 bps in the quarter, which helped this segment outperform the Barclays Capital U.S. 1-3 Year Government Credit Index. Overall spreads within corporate credit remained well above long-term averages at the end of December. Within the investment grade corporate rating segments, BBB-rated credits had the highest return, while AAA underperformed. Top-performing corporate sectors within the Barclays Capital 1-3 Year Government Credit Index included life insurance and paper, while lagging sectors included aerospace/defense, integrated energy and technology.
Contributors to Performance
Our more than triple the index weighting in corporate credits (68.6% vs. 17.8% as of period end) and our security selection in corporates were key contributors. Within credits, our significant overweight in BBB-rated credits was among top contributors. We also benefited from our non-index exposure in high-yield debt, which outperformed investment grade credits during the period. Our high-yield exposure increased from 9.1% at the end of the third quarter to 13.6% by period end, as we consider this an attractive segment in terms of relative and absolute total returns given the more appealing yield or interest carry on these bonds and the potential cushion associated with the wide spreads in the event interest rates rise.
Our large underweights in both Treasuries and agency/government sponsored debt were also contributors to our outperformance. On a corporate sector basis, our significant overweights in real estate investment trusts (REITs) and banks were the largest contributors followed by our overweight in metals. Banks continued to repair their balance sheets and repay government loans, which has been a positive for the group. Within REITs, we are favoring regional malls and health care with best-in-class
Janus Bond & Money Market Funds | 31
Janus Short-Term Bond Fund (unaudited)
assets, which we feel are relatively unaffected by concerns over commercial real estate.
On a security level basis, the world’s largest steel maker ArcelorMittal benefited from a turnaround and subsequent stability in steel prices, which was part of why we were attracted to the company’s credits. In addition, management is following through with its pledge to pay down debt, which we think will help it maintain its investment grade rating. Our non-index exposure in Macy’s also contributed, as its credits posted moderate gains. We established a position after the company’s debt was downgraded to high-yield early in 2009. We feel management is focused on reducing the company’s debt.
Detractors from Performance
Corporate sector detractors included our underweights in non-captive consumer finance and security selection in non-captive diversified finance and electric utilities. Among individual detractors, our lack of exposure to troubled insurer American International Group (AIG) weighed on performance, as its bonds continued to perform well. We have not owned AIG because we do not like the lack of transparency and disclosure.
Outlook
Despite the significant spread tightening we’ve seen in corporate credit relative to Treasuries, we believe there is the potential for further tightening. There are a number of fundamental and structural issues within fixed income that we see as being key drivers of returns over the near term. Government intervention and rising budget deficits have led to a large and unprecedented level of financing needs for the Federal Government, which has resulted in an increased issuance of Treasury bonds. Meanwhile, corporate America has focused more on paying down its debt since emerging from the most significant financial crisis in history. We think this could continue and that a shrinking supply of corporate bonds coupled with investors demand for higher yields provides a positive backdrop for further spread narrowing within corporate credit.
In addition, we think agencies will be more sensitive to interest rate movements, given their historically tight spreads relative to U.S. Treasuries. The U.S. Government’s support of agencies such as Fannie and Freddie is likely to continue and remain a key determinant of agencies spreads. Because of these structural issues, we think agencies will display similar return characteristics to Treasuries and that there are very few spread alternatives to pursue outside of corporate credit.
We have often emphasized the importance of credit analysis in fixed income investing. Furthermore, we believe the corporate credit sector remains an area where fundamental bottom-up analysis combined with robust risk management can improve a manager’s ability to provide risk-adjusted outperformance within fixed income.
Thank you for your investment in Janus Short-Term Bond Fund.
32 | DECEMBER 31, 2009
(unaudited)
Janus Short-Term Bond Fund At A Glance
Fund Profile
December 31, 2009
Weighted Average Maturity | 2.2 Years | |
Average Effective Duration* | 1.9 Years | |
30-day Current Yield** | ||
Without Reimbursement | 1.64% | |
With Reimbursement | 1.72% | |
Weighted Average Fixed Income Credit Rating | A+ | |
Number of Bonds/Notes | 282 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
December 31, 2009
AAA | 31.2% | |
AA | 10.8% | |
A | 17.6% | |
BBB | 24.4% | |
BB | 11.5% | |
Other | 4.5% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2009
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Janus Bond & Money Market Funds | 33
Janus Short-Term Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||||
Two-Month | |||||||||||||||
Period | |||||||||||||||
Ended | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
12/31/09 | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Short-Term Bond Fund – Class A Shares | |||||||||||||||
NAV | 0.51% | 8.16% | 4.36% | 4.33% | 4.45% | 1.10% | 0.80% | ||||||||
MOP | –4.19% | 3.02% | 3.35% | 3.82% | 4.15% | ||||||||||
Janus Short-Term Bond Fund – Class C Shares | |||||||||||||||
NAV | 0.38% | 7.83% | 3.82% | 3.73% | 3.79% | 1.85% | 1.55% | ||||||||
CDSC | –0.62% | 6.79% | 3.82% | 3.73% | 3.79% | ||||||||||
Janus Short-Term Bond Fund – Class I Shares | 0.55% | 8.06% | 4.52% | 4.53% | 4.67% | 0.85% | 0.55% | ||||||||
Janus Short-Term Bond Fund – Class J Shares | 0.86% | 8.56% | 4.80% | 4.79% | 4.91% | 0.90% | 0.72% | ||||||||
Janus Short-Term Bond Fund – Class S Shares | 0.46% | 7.57% | 4.14% | 4.15% | 4.28% | 1.24% | 1.05% | ||||||||
Barclays Capital 1-3 Year U.S. Government/Credit Index | 0.06% | 3.83% | 4.32% | 4.86% | 5.10%** | ||||||||||
Lipper Quartile – Class J Shares | – | 3rd | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Short Investment Grade Debt Funds | – | 144/246 | 3/176 | 12/94 | 5/24 | ||||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 4.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
34 | DECEMBER 31, 2009
(unaudited)
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 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/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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: legal, political, liquidity and interest rate risks, a 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.
The Fund may invest in derivatives which can be highly volatile and involve additional risks than if the underlying securities were held directly by the Fund. 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 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.
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.
Effective July 6, 2009, Janus Short-Term Bond Fund designated its initial share class as “Class J Shares” and commenced offering Class A Shares, Class C Shares, Class I Shares and Class S Shares.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of each respective class, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
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 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. |
Janus Bond & Money Market Funds | 35
Janus Short-Term Bond Fund (unaudited)
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 – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,005.10 | $ | 1.36 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,003.80 | $ | 2.61 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.34 | $ | 7.93 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,005.50 | $ | 0.94 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.38 | $ | 2.85 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,008.60 | $ | 1.31 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.27 | $ | 3.97 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,004.60 | $ | 1.78 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.86 | $ | 5.40 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.81% for Class A Shares, 1.56% for Class C Shares, 0.56% for Class I Shares, 0.78% for Class J Shares and 1.06% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
36 | DECEMBER 31, 2009
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Bank Loans – 0.5% | ||||||||||||
Cable/Satellite TV – 0.4% | ||||||||||||
6,181,151 | Discovery Communications Holding LLC 2.2506%, 5/14/14‡ | $ | 6,029,219 | |||||||||
Food – Miscellaneous/Diversified – 0.1% | ||||||||||||
200,399 | Dole Food Co., Inc., 0.2844%, 4/12/13‡ | 202,188 | ||||||||||
1,132,875 | Dole Food Co., Inc., 8.0000%, 4/12/13‡ | 1,142,992 | ||||||||||
348,505 | Dole Food Co., Inc., 8.0000%, 4/12/13‡ | 351,617 | ||||||||||
1,696,797 | ||||||||||||
Total Bank Loans (cost $7,705,588) | 7,726,016 | |||||||||||
Corporate Bonds – 64.1% | ||||||||||||
Advertising Services – 0.3% | ||||||||||||
2,389,000 | Visant Corp., 7.6250%, 10/1/12 | 2,400,945 | ||||||||||
1,769,000 | WPP Finance UK, 5.8750%, 6/15/14 | 1,826,853 | ||||||||||
4,227,798 | ||||||||||||
Aerospace and Defense – 0.2% | ||||||||||||
2,000,000 | BAE Systems PLC 4.9500%, 6/1/14 (144A) | 2,082,488 | ||||||||||
1,529,000 | Northrop Grumman Systems Corp. 7.1250%, 2/15/11 | 1,618,564 | ||||||||||
3,701,052 | ||||||||||||
Agricultural Chemicals – 0.1% | ||||||||||||
1,029,000 | Potash Corporation of Saskatchewan Inc. 5.2500%, 5/15/14 | 1,105,768 | ||||||||||
Airlines – 1.2% | ||||||||||||
8,825,000 | Southwest Airlines Co. 6.5000%, 3/1/12 | 9,390,418 | ||||||||||
10,120,000 | Southwest Airlines Co. 5.2500%, 10/1/14 | 10,250,244 | ||||||||||
19,640,662 | ||||||||||||
Automotive – Cars and Light Trucks – 1.3% | ||||||||||||
9,555,000 | Daimler Finance North America LLC 5.7500%, 9/8/11 | 10,036,687 | ||||||||||
10,990,000 | Daimler Finance North America LLC 7.3000%, 1/15/12 | 11,947,690 | ||||||||||
21,984,377 | ||||||||||||
Beverages – Non-Alcoholic – 0.2% | ||||||||||||
2,272,000 | Dr. Pepper Snapple Group, Inc. 6.1200%, 5/1/13 | 2,486,520 | ||||||||||
365,000 | PepsiAmericas, Inc., 4.3750%, 2/15/14 | 379,753 | ||||||||||
2,866,273 | ||||||||||||
Beverages – Wine and Spirits – 0.3% | ||||||||||||
1,435,000 | Diageo Capital PLC, 4.3750%, 5/3/10 | 1,454,295 | ||||||||||
2,860,000 | Diageo Capital PLC, 3.8750%, 4/1/11 | 2,951,926 | ||||||||||
4,406,221 | ||||||||||||
Brewery – 1.3% | ||||||||||||
9,557,000 | Anheuser-Busch InBev Worldwide Inc., 3.0000%, 10/15/12 (144A) | 9,601,774 | ||||||||||
7,644,000 | Anheuser-Busch InBev Worldwide Inc., 7.2000%, 1/15/14 (144A) | 8,669,527 | ||||||||||
3,918,000 | SABMiller PLC 6.2000%, 7/1/11 (144A) | 4,146,427 | ||||||||||
22,417,728 | ||||||||||||
Building Products – Air and Heating – 0.1% | ||||||||||||
$ | 1,435,000 | American Standard, Inc. 7.6250%, 2/15/10 | 1,443,256 | |||||||||
Building Products – Cement and Aggregate – 0.9% | ||||||||||||
2,763,000 | CRH America, Inc., 5.6250%, 9/30/11 | 2,904,460 | ||||||||||
5,115,000 | CRH America, Inc., 6.9500%, 3/15/12 | 5,540,619 | ||||||||||
5,735,000 | CRH America, Inc., 5.3000%, 10/15/13 | 5,976,903 | ||||||||||
14,421,982 | ||||||||||||
Building Products – Wood – 0.1% | ||||||||||||
2,515,000 | Masco Corp., 0.5543%, 3/12/10‡ | 2,504,746 | ||||||||||
Cable Television – 0.9% | ||||||||||||
767,000 | Comcast Corp., 5.8500%, 1/15/10 | 767,852 | ||||||||||
3,404,000 | Comcast Corp., 5.4500%, 11/15/10 | 3,517,966 | ||||||||||
1,435,000 | COX Communications, Inc. 4.6250%, 1/15/10 | 1,436,194 | ||||||||||
743,000 | COX Communications, Inc. 6.7500%, 3/15/11 | 781,223 | ||||||||||
1,435,000 | COX Communications, Inc. 7.1250%, 10/1/12 | 1,594,050 | ||||||||||
1,337,000 | CSC Holdings, Inc., 7.6250%, 4/1/11 | 1,380,453 | ||||||||||
3,343,000 | Time Warner Cable, Inc. 5.4000%, 7/2/12 | 3,571,757 | ||||||||||
1,145,000 | Time Warner Cable, Inc. 6.2000%, 7/1/13 | 1,257,732 | ||||||||||
1,431,000 | Time Warner Cable, Inc. 8.2500%, 2/14/14 | 1,672,474 | ||||||||||
15,979,701 | ||||||||||||
Cellular Telecommunications – 0.7% | ||||||||||||
1,435,000 | Rogers Communications, Inc. 9.6250%, 5/1/11 | 1,574,578 | ||||||||||
2,870,000 | Verizon Wireless Capital LLC 3.7500%, 5/20/11 | 2,959,446 | ||||||||||
1,074,000 | Verizon Wireless Capital LLC 5.2500%, 2/1/12 | 1,139,111 | ||||||||||
2,914,000 | Verizon Wireless Capital LLC 7.8750%, 5/1/12 | 3,265,720 | ||||||||||
1,747,000 | Verizon Wireless Capital LLC 7.3750%, 11/15/13 | 2,006,720 | ||||||||||
1,794,000 | Verizon Wireless Capital LLC 5.5500%, 2/1/14 | 1,946,989 | ||||||||||
12,892,564 | ||||||||||||
Chemicals – Diversified – 1.0% | ||||||||||||
2,865,000 | Dow Chemical Co., 4.8500%, 8/15/12 | 3,011,003 | ||||||||||
5,255,000 | Dow Chemical Co., 7.6000%, 5/15/14 | 5,979,622 | ||||||||||
7,483,000 | Rohm & Hoss Co., 5.6000%, 3/15/13 | 7,897,768 | ||||||||||
16,888,393 | ||||||||||||
Coal – 0.2% | ||||||||||||
2,865,000 | Peabody Energy Corp. 6.8750%, 3/15/13 | 2,897,231 | ||||||||||
Commercial Banks – 6.8% | ||||||||||||
14,812,000 | American Express Bank FSB 5.5500%, 10/17/12 | 15,840,382 | ||||||||||
15,785,000 | ANZ National International, Ltd. 2.3750%, 12/21/12 (144A) | 15,670,022 | ||||||||||
8,130,000 | Banco Santander Chile 2.8750%, 11/13/12 (144A) | 8,189,821 | ||||||||||
4,780,000 | Barclays Bank PLC, 5.4500%, 9/12/12 | 5,169,259 | ||||||||||
9,565,000 | Barclays Bank PLC, 2.5000%, 1/23/13 | 9,553,991 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 37
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Commercial Banks – (continued) | ||||||||||||
$ | 8,599,000 | BB&T Corp., 6.5000%, 8/1/11 | $ | 9,133,032 | ||||||||
4,780,000 | Commonwealth Bank of Australia 2.7500%, 10/15/12 (144A) | 4,813,666 | ||||||||||
6,690,000 | Commonwealth Bank of Australia 3.7500%, 10/15/14 (144A) | 6,706,270 | ||||||||||
4,077,000 | Credit Suisse/New York NY 5.5000%, 5/1/14 | 4,424,364 | ||||||||||
3,575,000 | National Australia Bank 5.3500%, 6/12/13 (144A) | 3,847,919 | ||||||||||
3,960,000 | National City Bank of Kentucky 6.3000%, 2/15/11 | 4,092,030 | ||||||||||
10,515,000 | Svenska Handelsbanken AB 2.8750%, 9/14/12 (144A) | 10,579,867 | ||||||||||
1,709,000 | U.S. Bank N.A., 6.3750%, 8/1/11 | 1,837,148 | ||||||||||
9,565,000 | Westpac Banking Corp. 2.2500%, 11/19/12 | 9,542,446 | ||||||||||
3,825,000 | Westpac Banking Corp. 4.2000%, 2/27/15 | 3,888,005 | ||||||||||
113,288,222 | ||||||||||||
Commercial Services – Finance – 0.5% | ||||||||||||
6,683,000 | Equifax, Inc., 4.4500%, 12/1/14 | 6,716,535 | ||||||||||
1,912,000 | Western Union Co., 6.5000%, 2/26/14 | 2,125,676 | ||||||||||
8,842,211 | ||||||||||||
Computer Services – 0.9% | ||||||||||||
14,355,000 | Affiliated Computer Services, Inc. 4.7000%, 6/1/10 | 14,480,606 | ||||||||||
Computers – 0.2% | ||||||||||||
3,820,000 | Hewlett-Packard Co., 2.2500%, 5/27/11 | 3,874,252 | ||||||||||
Computers – Memory Devices – 0.7% | ||||||||||||
12,234,000 | Seagate Technology, 6.3750%, 10/1/11 | 12,448,095 | ||||||||||
Cosmetics and Toiletries – 0.9% | ||||||||||||
14,334,000 | Procter & Gamble International 1.3500%, 8/26/11 | 14,407,691 | ||||||||||
Data Processing and Management – 0.1% | ||||||||||||
1,627,000 | Fiserv, Inc., 6.1250%, 11/20/12 | 1,771,593 | ||||||||||
Diversified Banking Institutions – 3.9% | ||||||||||||
1,050,000 | Bank of America Corp. 4.2500%, 10/1/10 | 1,076,837 | ||||||||||
954,000 | Bank of America Corp. 4.3750%, 12/1/10 | 984,870 | ||||||||||
955,000 | Bank of America Corp. 4.8750%, 9/15/12 | 1,000,690 | ||||||||||
5,905,000 | Bank of America Corp. 7.3750%, 5/15/14 | 6,700,486 | ||||||||||
3,825,000 | Citigroup, 5.2500%, 2/27/12 | 3,952,047 | ||||||||||
9,270,000 | Citigroup, 5.3000%, 10/17/12 | 9,656,957 | ||||||||||
6,401,000 | Citigroup Inc., 5.1250%, 2/14/11 | 6,604,443 | ||||||||||
910,000 | Goldman Sachs Group, Inc. 3.6250%, 8/1/12 | 937,578 | ||||||||||
4,780,000 | Goldman Sachs Group, Inc. 5.7000%, 9/1/12 | 5,141,664 | ||||||||||
4,205,000 | Goldman Sachs Group, Inc. 5.2500%, 10/15/13 | 4,465,765 | ||||||||||
2,020,000 | Goldman Sachs Group, Inc. 6.0000%, 5/1/14 | 2,209,411 | ||||||||||
860,000 | JPMorgan Chase & Co. 6.7500%, 2/1/11 | 907,171 | ||||||||||
$ | 2,675,000 | JPMorgan Chase & Co. 5.3750%, 10/1/12 | 2,894,698 | |||||||||
2,580,000 | Morgan Stanley, 5.0500%, 1/21/11 | 2,675,940 | ||||||||||
3,247,000 | Morgan Stanley, 6.7500%, 4/15/11 | 3,440,141 | ||||||||||
6,690,000 | Morgan Stanley, 6.7500%, 10/15/13 | 7,310,819 | ||||||||||
5,735,000 | Morgan Stanley, 4.7500%, 4/1/14 | 5,767,959 | ||||||||||
65,727,476 | ||||||||||||
Diversified Financial Services – 1.1% | ||||||||||||
4,016,000 | American Express Travel Related Services Co., 5.2500% 11/21/11 (144A) | 4,211,487 | ||||||||||
1,244,000 | General Electric Capital Corp. 4.2500%, 9/13/10 | 1,279,004 | ||||||||||
8,600,000 | General Electric Capital Corp. 6.1250%, 2/22/11 | 9,087,603 | ||||||||||
3,712,000 | General Electric Capital Corp. 5.9000%, 5/13/14 | 4,012,939 | ||||||||||
18,591,033 | ||||||||||||
Diversified Minerals – 0.5% | ||||||||||||
2,389,000 | BHP Billiton Finance U.S.A., Ltd. 5.5000%, 4/1/14 | 2,620,329 | ||||||||||
1,505,000 | Rio Tinto Finance USA Ltd. 8.9500%, 5/1/14 | 1,803,443 | ||||||||||
4,870,000 | Teck Resources, Ltd., 7.0000%, 9/15/12 | 5,143,938 | ||||||||||
9,567,710 | ||||||||||||
Diversified Operations – 0.8% | ||||||||||||
1,436,000 | Dover Corp., 6.5000%, 2/15/11 | 1,517,018 | ||||||||||
1,043,000 | Eaton Corp., 4.9000%, 5/15/13 | 1,103,669 | ||||||||||
10,841,000 | Tyco Electronics Group S.A. 6.0000%, 10/1/12 | 11,502,323 | ||||||||||
14,123,010 | ||||||||||||
Electric – Distribution – 0.3% | ||||||||||||
5,770,000 | SP Powerassets, Ltd. 5.0000% 10/22/13 (144A) | 6,097,240 | ||||||||||
Electric – Integrated – 1.0% | ||||||||||||
1,145,000 | CMS Energy Corp., 7.7500%, 8/1/10 | 1,162,914 | ||||||||||
1,130,000 | CMS Energy Corp., 8.5000%, 4/15/11 | 1,184,024 | ||||||||||
1,910,000 | CMS Energy Corp., 6.3000%, 2/1/12 | 1,944,000 | ||||||||||
1,575,000 | Duke Energy Corp., 6.3000%, 2/1/14 | 1,731,900 | ||||||||||
954,000 | Georgia Power Co., 6.0000%, 11/1/13 | 1,060,407 | ||||||||||
1,435,000 | Monongahela Power Co. 7.9500%, 12/15/13 (144A) | 1,576,998 | ||||||||||
958,000 | Nevada Power Co., 8.2500%, 6/1/11 | 1,035,554 | ||||||||||
4,776,000 | NiSource, Inc., 5.4000%, 7/15/14 | 4,904,011 | ||||||||||
743,000 | Oncor Electric Delivery Co. 5.9500%, 9/1/13 | 797,145 | ||||||||||
958,000 | Wisconsin Energy Corp. 6.5000%, 4/1/11 | 1,013,411 | ||||||||||
16,410,364 | ||||||||||||
Electronic Components – Semiconductors – 0.6% | ||||||||||||
2,870,000 | Avago Technologies Finance 11.8750%, 12/1/15 | 3,160,588 | ||||||||||
920,000 | National Semiconductor Corp. 0.5036%, 6/15/10‡ | 909,759 | ||||||||||
6,475,000 | National Semiconductor Corp. 6.1500%, 6/15/12 | 6,782,218 | ||||||||||
10,852,565 |
See Notes to Schedules of Investments and Financial Statements.
38 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Electronics – Military – 1.3% | ||||||||||||
$ | 7,983,000 | L-3 Communications Corp. 6.1250%, 7/15/13 | $ | 8,062,830 | ||||||||
13,837,000 | L-3 Communications Corp. 6.3750%, 10/15/15 | 13,888,889 | ||||||||||
21,951,719 | ||||||||||||
Fiduciary Banks – 0.2% | ||||||||||||
1,910,000 | Northern Trust Corp., 5.5000%, 8/15/13 | 2,089,340 | ||||||||||
1,407,000 | Northern Trust Corp., 4.6250%, 5/1/14 | 1,499,327 | ||||||||||
3,588,667 | ||||||||||||
Finance – Auto Loans – 0.4% | ||||||||||||
7,525,000 | PACCAR Financial, Corp. 1.9500%, 12/17/12 | 7,447,109 | ||||||||||
Finance – Credit Card – 0% | ||||||||||||
575,000 | American Express Credit Co. 5.8750%, 5/2/13 | 617,066 | ||||||||||
Finance – Investment Bankers/Brokers – 1.7% | ||||||||||||
10,285,000 | Charles Schwab Corp., 4.9500%, 6/1/14 | 10,849,997 | ||||||||||
3,964,000 | Credit Suisse USA, Inc. 6.1250%, 11/15/11 | 4,274,714 | ||||||||||
6,690,000 | Merrill Lynch & Co., Inc. 5.4500%, 2/5/13 | 7,039,693 | ||||||||||
6,695,000 | TD Ameritrade Holding Corp. 2.9500%, 12/1/12 | 6,618,583 | ||||||||||
28,782,987 | ||||||||||||
Finance – Mortgage Loan Banker – 0.2% | ||||||||||||
2,575,000 | Countrywide Home Loan 4.0000%, 3/22/11 | 2,629,824 | ||||||||||
Finance – Other Services – 0.6% | ||||||||||||
4,779,000 | BP Capital Markets PLC 1.5500%, 8/11/11 | 4,813,600 | ||||||||||
2,679,000 | CME Group, Inc., 5.7500%, 2/15/14 | 2,930,213 | ||||||||||
1,910,000 | National Rural Utilities Cooperative Finance Corp., 2.6250%, 9/16/12 | 1,921,859 | ||||||||||
9,665,672 | ||||||||||||
Food – Confectionery – 0.4% | ||||||||||||
6,050,000 | WM Wrigley Jr. Co., 4.3000%, 7/15/10‡ | 6,108,122 | ||||||||||
Food – Miscellaneous/Diversified – 0.5% | ||||||||||||
4,780,000 | Campbell Soup Co., 3.3750%, 8/15/14 | 4,858,512 | ||||||||||
648,000 | General Mills, Inc., 5.2500%, 8/15/13 | 699,088 | ||||||||||
1,912,000 | H.J. Heinz Finance Co. 6.6250%, 7/15/11 | 2,053,085 | ||||||||||
762,000 | Kraft Foods, Inc., 0.7725%, 8/11/10‡ | 761,931 | ||||||||||
514,000 | Kraft Foods, Inc., 6.7500%, 2/19/14 | 568,398 | ||||||||||
8,941,014 | ||||||||||||
Food – Retail – 0.3% | ||||||||||||
355,000 | Delhaize Group, 5.8750%, 2/1/14 | 381,275 | ||||||||||
1,170,000 | Kroger Co., 6.8000%, 4/1/11 | 1,242,410 | ||||||||||
1,646,000 | Safeway, Inc., 4.9500%, 8/16/10 | 1,689,348 | ||||||||||
1,318,000 | Safeway, Inc., 6.2500%, 3/15/14 | 1,447,515 | ||||||||||
4,760,548 | ||||||||||||
Home Decoration Products – 0% | ||||||||||||
675,000 | Newell Rubbermaid, Inc. 4.0000%, 5/1/10 | 679,994 | ||||||||||
Hotels and Motels – 0.8% | ||||||||||||
$ | 9,651,000 | Marriott International, Inc. 4.6250%, 6/15/12 | 9,703,714 | |||||||||
4,220,000 | Starwood Hotels & Resorts Worldwide, Inc., 7.8750%, 10/15/14 | 4,510,125 | ||||||||||
14,213,839 | ||||||||||||
Instruments – Scientific – 0.3% | ||||||||||||
4,945,000 | Thermo Fisher Scientific, Inc. 2.1500%, 12/28/12 (144A) | 4,876,729 | ||||||||||
Investment Management and Advisory Services – 0.9% | ||||||||||||
15,770,000 | BlackRock, Inc., 2.2500%, 12/10/12 | 15,700,959 | ||||||||||
Life and Health Insurance – 1.3% | ||||||||||||
10,330,000 | Prudential Financial, Inc. 5.1000%, 12/14/11 | 10,781,937 | ||||||||||
8,065,000 | Prudential Financial, Inc. 3.6250%, 9/17/12 | 8,184,306 | ||||||||||
955,000 | Prudential Financial, Inc. 4.5000%, 7/15/13 | 965,800 | ||||||||||
1,550,000 | Prudential Financial, Inc. 6.2000%, 1/15/15 | 1,667,603 | ||||||||||
21,599,646 | ||||||||||||
Machinery – General Industrial – 0.2% | ||||||||||||
2,696,000 | Wabtec Corp. DE, 6.8750%, 7/31/13 | 2,722,960 | ||||||||||
Medical – Biomedical and Genetic – 0.1% | ||||||||||||
1,435,000 | Genetech, Inc., 4.4000%, 7/15/10 | 1,464,538 | ||||||||||
Medical – Drugs – 0.2% | ||||||||||||
2,860,000 | Merck & Co, Inc., 1.8750%, 6/30/11 | 2,886,947 | ||||||||||
Medical – Generic Drugs – 0.4% | ||||||||||||
6,950,000 | Watson Pharmaceuticals, Inc. 5.0000%, 8/15/14 | 7,095,797 | ||||||||||
Medical – HMO – 0.3% | ||||||||||||
2,060,000 | UnitedHealth Group, Inc. 5.1250%, 11/15/10 | 2,131,276 | ||||||||||
2,866,000 | UnitedHealth Group, Inc. 5.2500%, 3/15/11 | 2,969,772 | ||||||||||
5,101,048 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.1% | ||||||||||||
902,000 | McKesson Corp., 6.5000%, 2/15/14 | 997,760 | ||||||||||
Medical Instruments – 0.5% | ||||||||||||
1,915,000 | Beckman Coulter, Inc., 6.0000%, 6/1/15 | 2,087,825 | ||||||||||
4,301,000 | Boston Scientific Corp. 6.0000%, 6/15/11 | 4,494,545 | ||||||||||
2,570,000 | Boston Scientific, Corp. 4.5000%, 1/15/15 | 2,575,245 | ||||||||||
9,157,615 | ||||||||||||
Medical Labs and Testing Services – 0.4% | ||||||||||||
3,824,000 | Roche Holdings, Inc. 5.0000%, 3/1/14 (144A) | 4,091,057 | ||||||||||
3,184,000 | Roche Holdings, Inc. 4.5000%, 3/1/12 (144A) | 3,344,209 | ||||||||||
7,435,266 | ||||||||||||
Medical Products – 1.1% | ||||||||||||
2,895,000 | Carefusion Corp. 4.1250%, 8/1/12 (144A) | 2,984,513 | ||||||||||
2,180,000 | Carefusion Corp. 5.1250%, 8/1/14 (144A) | 2,291,647 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 39
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Medical Products – (continued) | ||||||||||||
$ | 1,435,000 | Covidien International Finance S.A. 5.4500%, 10/15/12 | $ | 1,552,770 | ||||||||
7,130,000 | Hospira, Inc., 5.5500%, 3/30/12 | 7,599,625 | ||||||||||
2,866,000 | Hospira, Inc., 6.4000%, 5/15/15 | 3,172,152 | ||||||||||
17,600,707 | ||||||||||||
Metal – Aluminum – 0.1% | ||||||||||||
1,145,000 | Rio Tinto Alcan, Inc., 6.4500%, 3/15/11 | 1,201,279 | ||||||||||
Multimedia – 0.2% | ||||||||||||
1,417,000 | COX Enterprises, Inc. 7.8750%, 9/15/10 (144A) | 1,472,755 | ||||||||||
1,912,000 | News America Holdings, Inc. 9.2500% 2/1/13 | 2,230,816 | ||||||||||
3,703,571 | ||||||||||||
Non-Hazardous Waste Disposal – 0.2% | ||||||||||||
1,912,000 | Allied Waste North America, Inc. 6.5000%, 11/15/10 | 1,988,195 | ||||||||||
1,912,000 | Waste Management, Inc. 7.3750% 8/1/10 | 1,980,572 | ||||||||||
3,968,767 | ||||||||||||
Office Automation and Equipment – 0.3% | ||||||||||||
3,290,000 | Xerox Corp., 5.5000%, 5/15/12 | 3,476,938 | ||||||||||
1,066,000 | Xerox Corp., 8.2500%, 5/15/14 | 1,222,833 | ||||||||||
4,699,771 | ||||||||||||
Oil Companies – Exploration and Production – 1.3% | ||||||||||||
10,198,000 | Anadarko Finance Co., 6.7500%, 5/1/11 | 10,776,552 | ||||||||||
2,840,000 | Anadarko Petroleum Corp. 5.7500%, 6/15/14 | 3,077,589 | ||||||||||
4,597,000 | Forest Oil Corp., 8.0000%, 12/15/11 | 4,792,373 | ||||||||||
1,915,000 | Range Resources Corp. 7.3750%, 7/15/13 | 1,948,513 | ||||||||||
955,000 | Whiting Petroleum Corp. 7.2500%, 5/1/12 | 959,775 | ||||||||||
21,554,802 | ||||||||||||
Oil Companies – Integrated – 1.1% | ||||||||||||
4,770,000 | Chevron Corp., 3.4500%, 3/3/12 | 4,957,547 | ||||||||||
2,389,000 | ConocoPhillips, 4.7500%, 2/1/14 | 2,565,050 | ||||||||||
10,990,000 | Shell International Financial 1.3000%, 9/22/11 | 11,018,365 | ||||||||||
18,540,962 | ||||||||||||
Oil Refining and Marketing – 1.1% | ||||||||||||
9,607,000 | Frontier Oil Corp., 6.6250%, 10/1/11 | 9,667,044 | ||||||||||
8,191,000 | Valero Energy Corp., 6.8750%, 4/15/12 | 8,943,597 | ||||||||||
18,610,641 | ||||||||||||
Paper and Related Products – 0.9% | ||||||||||||
14,051,000 | Georgia-Pacific LLC, 8.1250%, 5/15/11 | 14,753,550 | ||||||||||
Pharmacy Services – 1.2% | ||||||||||||
14,295,000 | Express Scripts, Inc., 5.2500%, 6/15/12 | 15,189,881 | ||||||||||
3,935,000 | Express Scripts, Inc., 6.2500%, 6/15/14 | 4,293,597 | ||||||||||
19,483,478 | ||||||||||||
Pipelines – 2.6% | ||||||||||||
2,389,000 | Consolidated Natural Gas Co. 6.2500%, 11/1/11 | 2,571,806 | ||||||||||
1,435,000 | El Paso Corp., 7.0000%, 5/15/11 | 1,466,494 | ||||||||||
5,545,000 | Energy Transfer Partners L.P. 5.6500%, 8/1/12 | 5,893,509 | ||||||||||
$ | 3,090,000 | Enterprise Products Operating LLC 7.5000%, 2/1/11 | 3,274,071 | |||||||||
7,078,000 | Enterprise Products Operating LLC 4.6000%, 8/1/12 | 7,474,949 | ||||||||||
1,435,000 | Kinder Morgan Energy Partners L.P. 7.5000%, 11/1/10 | 1,502,370 | ||||||||||
1,145,000 | Kinder Morgan Energy Partners L.P. 6.7500%, 3/15/11 | 1,210,879 | ||||||||||
2,670,000 | Kinder Morgan Energy Partners L.P. 5.8500%, 9/15/12 | 2,873,387 | ||||||||||
3,085,000 | Kinder Morgan Energy Partners 5.0000%, 12/15/13 | 3,238,664 | ||||||||||
6,812,000 | Kinder Morgan Finance Co. ULC 5.3500%, 1/5/11 | 6,880,120 | ||||||||||
1,148,000 | Oneok, Inc., 7.1250%, 4/15/11 | 1,214,204 | ||||||||||
1,325,000 | Plains All American Pipeline L.P. 4.2500%, 9/1/12 | 1,367,379 | ||||||||||
4,770,000 | Williams Cos., Inc., 7.1250%, 9/1/11 | 5,097,732 | ||||||||||
44,065,564 | ||||||||||||
Property and Casualty Insurance – 0.1% | ||||||||||||
1,716,000 | Chubb Corp., 5.2000%, 4/1/13 | 1,810,620 | ||||||||||
Property Trust – 1.1% | ||||||||||||
11,470,000 | WEA Finance LLC/WCI Finance LLC 5.4000%, 10/1/12 (144A) | 12,167,215 | ||||||||||
5,530,000 | Westfield Capital Corp. 4.3750%, 11/15/10 (144A) | 5,682,075 | ||||||||||
17,849,290 | ||||||||||||
Reinsurance – 0.6% | ||||||||||||
4,780,000 | Berkshire Hathaway Finance Corp. 4.0000%, 4/15/12 | 5,009,297 | ||||||||||
3,151,000 | Berkshire Hathaway Finance Corp. 4.6000%, 5/15/13 | 3,327,768 | ||||||||||
1,122,000 | Berkshire Hathaway Finance Corp. 5.0000%, 8/15/13 | 1,206,491 | ||||||||||
9,543,556 | ||||||||||||
REIT – Diversified – 0.6% | ||||||||||||
9,080,000 | Duke Realty L.P., 5.8750%, 8/15/12 | 9,340,088 | ||||||||||
REIT – Health Care – 1.9% | ||||||||||||
4,300,000 | HCP Inc., 4.8750%, 9/15/10 | 4,387,617 | ||||||||||
7,645,000 | HCP Inc., 5.9500%, 9/15/11 | 7,887,493 | ||||||||||
3,939,000 | HCP Inc., 5.6250%, 2/28/13 | 3,952,542 | ||||||||||
5,746,000 | HCP, Inc., 5.6500%, 12/15/13 | 5,755,998 | ||||||||||
4,850,000 | Healthcare Realty Trust, Inc. 8.1250%, 5/1/11 | 5,095,075 | ||||||||||
5,475,000 | Healthcare Realty Trust, Inc. 5.1250%, 4/1/14 | 5,282,745 | ||||||||||
5,000 | Ventas Realty Trust L.P./Ventas Capital Corp., 6.7500%, 6/1/10 | 5,010 | ||||||||||
32,366,480 | ||||||||||||
REIT – Office Property – 0.6% | ||||||||||||
9,513,000 | Reckson Operating Partnership L.P. 5.1500%, 1/15/11 | 9,479,391 | ||||||||||
REIT – Regional Malls – 1.2% | ||||||||||||
1,192,000 | Simon Property Group L.P. 4.6000%, 6/15/10 | 1,209,649 | ||||||||||
1,398,000 | Simon Property Group L.P. 4.8750%, 8/15/10 | 1,426,262 |
See Notes to Schedules of Investments and Financial Statements.
40 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
REIT – Regional Malls – (continued) | ||||||||||||
$ | 6,690,000 | Simon Property Group L.P. 7.7500%, 1/20/11 | $ | 6,983,785 | ||||||||
3,317,000 | Simon Property Group L.P. 5.3750%, 6/1/11 | 3,443,268 | ||||||||||
6,690,000 | Simon Property Group L.P. 5.3000%, 5/30/13 | 6,902,775 | ||||||||||
19,965,739 | ||||||||||||
REIT – Shopping Centers – 0.3% | ||||||||||||
4,785,000 | Equity One, Inc., 6.2500%, 12/15/14 | 4,707,598 | ||||||||||
REIT – Warehouse/Industry – 0.2% | ||||||||||||
2,850,000 | ProLogis, 5.2500%, 11/15/10 | 2,869,352 | ||||||||||
Retail – Apparel and Shoe – 0.3% | ||||||||||||
3,152,000 | Limited Brands, Inc., 6.1250%, 12/1/12 | 3,230,800 | ||||||||||
2,235,000 | Nordstrom, Inc., 6.7500%, 6/1/14 | 2,496,046 | ||||||||||
5,726,846 | ||||||||||||
Retail – Building Products – 0.1% | ||||||||||||
1,814,000 | Hewlett-Packard Co., 4.6250%, 8/15/10 | 1,857,006 | ||||||||||
Retail – Discount – 0.1% | ||||||||||||
995,000 | Wal-Mart Stores, Inc., 3.2000%, 5/15/14 | 1,013,259 | ||||||||||
Retail – Drug Store – 0.1% | ||||||||||||
2,389,000 | CVS Caremark Corp., 0.5556%, 6/1/10‡ | 2,389,989 | ||||||||||
Retail – Office Supplies – 0.2% | ||||||||||||
2,389,000 | Staples, Inc., 7.7500%, 4/1/11 | 2,567,243 | ||||||||||
Retail – Regional Department Stores – 1.5% | ||||||||||||
1,912,000 | JC Penny Co., Inc., 8.0000%, 3/1/10 | 1,933,510 | ||||||||||
1,912,000 | JC Penney Corp Inc., 9.0000%, 8/1/12 | 2,155,780 | ||||||||||
21,025,000 | Macy’s Retail Holdings, Inc. 6.6250%, 4/1/11 | 21,682,031 | ||||||||||
25,771,321 | ||||||||||||
Retail – Restaurants – 0.9% | ||||||||||||
7,247,000 | Brinker International, 5.7500%, 6/1/14 | 7,106,169 | ||||||||||
1,996,000 | Darden Restaurants, Inc. 4.8750%, 8/15/10 | 2,011,571 | ||||||||||
5,281,000 | Darden Restaurants, Inc. 5.6250%, 10/15/12 | 5,636,691 | ||||||||||
14,754,431 | ||||||||||||
Steel – Producers – 1.5% | ||||||||||||
7,655,000 | AK Steel Corp., 7.7500%, 6/15/12 | 7,731,550 | ||||||||||
9,347,000 | ArcelorMittal, 5.3750%, 6/1/13 | 9,863,431 | ||||||||||
7,165,000 | ArcelorMittal USA, Inc. 6.5000%, 4/15/14 | 7,647,169 | ||||||||||
25,242,150 | ||||||||||||
Super-Regional Banks – 1.2% | ||||||||||||
7,645,000 | Bank One Corp., 5.9000%, 11/15/11 | 8,159,447 | ||||||||||
1,627,000 | Wells Fargo & Co., 4.6250%, 8/9/10 | 1,668,627 | ||||||||||
575,000 | Wells Fargo & Co., 6.4500%, 2/1/11 | 607,227 | ||||||||||
383,000 | Wells Fargo & Co., 5.3000%, 8/26/11 | 405,629 | ||||||||||
8,600,000 | Wells Fargo & Co., 4.9500%, 10/16/13 | 9,001,190 | ||||||||||
19,842,120 | ||||||||||||
Telecommunication Services – 0.1% | ||||||||||||
1,337,000 | Verizon Communications, Inc. 7.2500%, 12/1/10 | 1,412,910 | ||||||||||
Telephone – Integrated – 1.4% | ||||||||||||
1,435,000 | AT&T, Inc., 5.8750%, 8/15/12 | 1,566,595 | ||||||||||
1,052,000 | AT&T, Inc., 4.9500%, 1/15/13 | 1,122,358 | ||||||||||
$ | 6,690,000 | Qwest Communications International, Inc. 7.2500% 2/15/11 | 6,723,450 | |||||||||
13,380,000 | Sprint Capital Corp., 7.6250%, 1/30/11 | 13,697,775 | ||||||||||
23,110,178 | ||||||||||||
Television – 1.1% | ||||||||||||
15,480,000 | CBS Corp., 6.6250%, 5/15/11 | 16,222,359 | ||||||||||
1,435,000 | CBS Corp., 8.2000%, 5/15/14 | 1,631,334 | ||||||||||
17,853,693 | ||||||||||||
Textile – Home Furnishings – 0.1% | ||||||||||||
955,000 | Mohawk Industries, Inc. 6.5000%, 1/15/11 | 978,875 | ||||||||||
Tobacco – 0.1% | ||||||||||||
1,529,000 | Philip Morris International, Inc. 4.8750%, 5/16/13 | 1,614,098 | ||||||||||
Transportation – Railroad – 0.3% | ||||||||||||
2,230,000 | Canadian Pacific Railway Co. 6.2500%, 10/15/11 | 2,378,342 | ||||||||||
2,674,000 | Union Pacific Corp., 5.4500%, 1/31/13 | 2,877,435 | ||||||||||
5,255,777 | ||||||||||||
Transportation – Services – 0.2% | ||||||||||||
954,000 | Fedex Corp., 7.3750%, 1/15/14 | 1,082,455 | ||||||||||
2,254,000 | United Parcel Service, Inc. 3.8750%, 4/1/14 | 2,341,848 | ||||||||||
3,424,303 | ||||||||||||
Total Corporate Bonds (cost $1,045,306,629) | 1,075,215,051 | |||||||||||
Mortgage-Backed Securities – 4.3% | ||||||||||||
Fannie Mae: | ||||||||||||
8,910,000 | 3.0000%, 7/12/10 | 9,043,676 | ||||||||||
1,245,000 | 2.8750%, 10/12/10 | 1,267,171 | ||||||||||
8,086,000 | 2.7500%, 4/11/11 | 8,286,921 | ||||||||||
5,588,000 | 6.0000%, 5/15/11 | 5,982,451 | ||||||||||
5,650,000 | 3.3750%, 5/19/11 | 5,849,033 | ||||||||||
1,125,000 | 3.6250%, 8/15/11 | 1,172,099 | ||||||||||
31,601,351 | ||||||||||||
Freddie Mac: | ||||||||||||
4,310,000 | 2.8750%, 6/28/10 | 4,364,991 | ||||||||||
1,245,000 | 2.8750%, 11/23/10 | 1,271,583 | ||||||||||
3,269,000 | 5.1250%, 4/18/11 | 3,450,224 | ||||||||||
1,080,000 | 3.8750%, 6/29/11 | 1,126,762 | ||||||||||
17,170,000 | 2.1250%, 3/23/12 | 17,433,130 | ||||||||||
27,646,690 | ||||||||||||
Federal Home Loan Bank System: | ||||||||||||
5,140,000 | 2.3750%, 4/30/10 | 5,176,993 | ||||||||||
6,560,000 | 2.7500%, 6/18/10 | 6,635,440 | ||||||||||
1,475,000 | 3.5000%, 7/16/10 | 1,499,669 | ||||||||||
13,312,102 | ||||||||||||
Total Mortgage-Backed Securities (cost $71,225,114) | 72,560,143 | |||||||||||
U.S. Treasury Notes/Bonds – 27.0% | ||||||||||||
1,592,000 | 2.1250%, 1/31/10 | 1,594,300 | ||||||||||
4,982,000 | 4.7500%, 2/15/10 | 5,008,076 | ||||||||||
2,493,000 | 2.0000%, 2/28/10 | 2,500,110 | ||||||||||
1,805,000 | 2.1250%, 4/30/10 | 1,816,633 | ||||||||||
1,734,000 | 4.5000%, 5/15/10 | 1,761,161 | ||||||||||
6,355,000 | 2.6250%, 5/31/10 | 6,417,806 | ||||||||||
1,255,000 | 2.8750%, 6/30/10 | 1,271,423 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 41
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
U.S. Treasury Notes/Bonds – (continued) | ||||||||||||
1,350,000 | 2.7500%, 7/31/10 | $ | 1,369,248 | |||||||||
4,114,000 | 2.3750%, 8/31/10 | 4,168,478 | ||||||||||
1,237,000 | 4.5000%, 11/15/10 | 1,280,054 | ||||||||||
1,475,000 | 1.2500%, 11/30/10 | 1,485,371 | ||||||||||
560,000 | 4.5000%, 2/28/11 | 584,522 | ||||||||||
26,595,000 | 0.8750%, 3/31/11 | 26,643,828 | ||||||||||
5,059,000 | 4.8750%, 4/30/11 | 5,328,549 | ||||||||||
173,547,000 | 1.1250%, 6/30/11** | 174,251,948 | ||||||||||
53,005,000 | 1.0000%, 7/31/11 | 53,085,727 | ||||||||||
20,966,000 | 1.0000%, 8/31/11 | 20,976,651 | ||||||||||
1,386,000 | 4.6250%, 8/31/11 | 1,469,702 | ||||||||||
2,830,000 | 1.7500%, 11/15/11 | 2,865,706 | ||||||||||
139,240,000 | 0.7500%, 11/30/11** | 138,331,738 | ||||||||||
360,000 | 1.1250%, 1/15/12 | 359,662 | ||||||||||
357,000 | 1.8750%, 6/15/12 | 360,905 | ||||||||||
Total U.S. Treasury Notes/Bonds (cost $452,604,816) | 452,931,598 | |||||||||||
Money Market – 3.1% | ||||||||||||
52,666,519 | Janus Cash Liquidity Fund LLC, 0% (cost $52,666,519) | 52,666,519 | ||||||||||
Short-Term Variable Rate Demand Note – 0.1% | ||||||||||||
1,142,425 | California Infrastructure and Economic Development Bank Industrial Revenue Series B, 3.7500%, 4/1/24 (amortized cost $1,142,425)‡ | 1,142,425 | ||||||||||
Total Investments (total cost $1,630,651,091) – 99.1% | 1,662,241,752 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.9% | 15,804,063 | |||||||||||
Net Assets – 100% | $ | 1,678,045,815 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 33,222,078 | 2.0% | |||||
Belgium | 381,275 | 0.0% | ||||||
Canada | 32,326,297 | 2.0% | ||||||
Cayman Islands | 12,448,095 | 0.8% | ||||||
Chile | 8,189,821 | 0.5% | ||||||
Luxembourg | 37,326,215 | 2.2% | ||||||
Netherlands | 13,970,291 | 0.8% | ||||||
New Zealand | 15,670,022 | 0.9% | ||||||
Singapore | 9,257,827 | 0.6% | ||||||
Sweden | 10,579,867 | 0.6% | ||||||
Switzerland | 4,424,364 | 0.3% | ||||||
United Kingdom | 26,964,426 | 1.6% | ||||||
United States†† | 1,457,481,174 | 87.7% | ||||||
Total | $ | 1,662,241,752 | 100.0% |
†† | Includes Cash Equivalents (84.4% excluding Cash Equivalents) |
Financial Futures – Short | ||||||
430 Contracts | U.S. Treasury Note 5 Year expires March 2010, principal amount $49,581,662, value $49,183,938 cumulative appreciation | $ | 397,724 | |||
See Notes to Schedules of Investments and Financial Statements.
42 | DECEMBER 31, 2009
Janus Money Market Funds (unaudited)
Co-Portfolio Manager | ||
Janus Money Market Fund | Eric Thorderson | |
Average Annual Total Return | Co-Portfolio Manager | |
For the Periods Ended December 31, 2009 | David Spilsted | |
Class J Shares | ||
Two-Month Period Ended 12/31/09 | 0.00% | |
1 Year | 0.07% | |
5 Year | 2.86% | |
10 Year | 2.71% | |
Since Inception (February 14, 1995) | 3.50% | |
Seven-Day Current Yield | ||
Class J Shares | ||
With Reimbursement | 0.0078% | |
Without Reimbursement | 0.0078% | |
Expense Ratio | ||
Estimated for the fiscal year | ||
Class J Shares | ||
Total Annual Fund Operating Expenses | 0.75% | |
Co-Portfolio Manager | ||
Janus Government Money Market Fund | Eric Thorderson | |
Average Annual Total Return | Co-Portfolio Manager | |
For the Periods Ended December 31, 2009 | David Spilsted | |
Class J Shares | ||
Two-Month Period Ended 12/31/09 | 0.00% | |
1 Year | 0.01% | |
5 Year | 2.73% | |
10 Year | 2.60% | |
Since Inception (February 14, 1995) | 3.40% | |
Seven-Day Current Yield | ||
Class J Shares | ||
With Reimbursement | 0.0099% | |
Without Reimbursement | 0.0099% | |
Expense Ratio | ||
Estimated for the fiscal year | ||
Class J Shares | ||
Total Annual Fund Operating Expenses | 0.74% | |
Data presented represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital)or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 administration 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.
Expense information shown reflects estimated annualized expenses that the share class of the Fund expects to incur during the fiscal year. 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.
Due to certain investment strategies, the Fund may have an increased position in cash.
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 July 6, 2009, the Fund designated its Investor Shares as “Class J Shares.”
Janus Bond & Money Market Funds | 43
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 | Ending | Expenses Paid | ||||||||||||
Account Value | Account Value | During Period | ||||||||||||
Expense Example | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 0.43 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.89 | $ | 1.33 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.26%, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of voluntary waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month 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 | Ending | Expenses Paid | ||||||||||||
Account Value | Account Value | During Period | ||||||||||||
Expense Example | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 0.40 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,024.00 | $ | 1.22 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.24%, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of voluntary waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
44 | DECEMBER 31, 2009
Janus Money Market Fund
Schedule of Investments
As of December 31, 2009 (unaudited)
Principal Amount | Value | |||||||||||
Certificates of Deposit – 26.2% | ||||||||||||
Banco Bilboa Vizcaya Argentaria: | ||||||||||||
$ | 25,000,000 | 0.1800%, 2/8/10 | $ | 25,000,000 | ||||||||
25,000,000 | 0.2150%, 2/17/10 | 25,000,488 | ||||||||||
Bank of Montreal, Chicago: | ||||||||||||
25,000,000 | 0.2000%, 1/7/10 | 25,000,000 | ||||||||||
29,000,000 | 0.1700%, 2/2/10 | 29,000,000 | ||||||||||
20,000,000 | 0.2000%, 2/22/10 | 20,000,000 | ||||||||||
Bank of Tokyo: | ||||||||||||
19,000,000 | 0.1800%, 1/15/10 | 19,000,000 | ||||||||||
30,000,000 | 0.1800%, 1/19/10 | 30,000,000 | ||||||||||
BNP Paribas Securities Corp.: | ||||||||||||
25,000,000 | 0.2300%, 1/15/10 | 25,000,000 | ||||||||||
25,000,000 | 0.2100%, 3/3/10 | 25,000,000 | ||||||||||
20,000,000 | 0.1900%, 3/31/10 | 20,000,000 | ||||||||||
Canadian Imperial Bank of Commerce: | ||||||||||||
25,000,000 | 0.1700%, 1/20/10 | 25,000,000 | ||||||||||
Credit Industriel et Commercial: | ||||||||||||
25,000,000 | 0.3000%, 1/12/10 | 25,000,000 | ||||||||||
22,000,000 | 0.2000%, 1/25/10 | 22,000,000 | ||||||||||
25,000,000 | 0.2200%, 1/25/10 | 25,000,000 | ||||||||||
24,000,000 | Societe Generale, New York 0.1800%, 1/13/10 | 24,000,000 | ||||||||||
25,000,000 | Toronto Dominion Bank, New York 0.1700%, 2/2/10 | 25,000,000 | ||||||||||
Total Certificates of Deposit (amortized cost $389,000,488) | 389,000,488 | |||||||||||
Commercial Paper – 19.9% | ||||||||||||
Bryant Park Funding LLC: | ||||||||||||
25,000,000 | 0.1700%, 1/6/10 (Section 4(2)) | 24,999,410 | ||||||||||
23,000,000 | 0.1700%, 1/15/10 (Section 4(2)) | 22,998,479 | ||||||||||
20,000,000 | Danske Corp. 0.1900%, 1/6/10 (Section 4(2)) | 19,999,472 | ||||||||||
Manhattan Asset Funding Company LLC: | ||||||||||||
32,750,000 | 0.2000%, 1/8/10 (Section 4(2)) | 32,748,726 | ||||||||||
15,000,000 | 0.2200%, 1/13/10 (Section 4(2)) | 14,998,900 | ||||||||||
20,000,000 | 0.2100%, 1/22/10 (Section 4(2)) | 19,997,550 | ||||||||||
Nieuw Amsterdam Receivables Corp.: | ||||||||||||
30,000,000 | 0.2000%, 1/4/10 (Section 4(2)) | 29,999,500 | ||||||||||
30,000,000 | 0.2000%, 1/8/10 (Section 4(2)) | 29,998,833 | ||||||||||
25,000,000 | Societe Generale, New York 0.1800%, 1/21/10 | 24,997,500 | ||||||||||
Standard Chartered Bank: | ||||||||||||
24,000,000 | 0.2300%, 1/4/10 (Section 4(2)) | 23,999,540 | ||||||||||
25,000,000 | 0.2200%, 1/6/10 (Section 4(2)) | 24,999,236 | ||||||||||
25,000,000 | 0.1500%, 1/29/10 (Section 4(2)) | 24,997,084 | ||||||||||
Total Commercial Paper (amortized cost $294,734,230) | 294,734,230 | |||||||||||
Floating Rate Note – 2.0% | ||||||||||||
30,000,000 | Bank of America Securities LLC (same day put), 0.2125%, 1/4/10 (amortized cost $30,000,000) | 30,000,000 | ||||||||||
Taxable Variable Rate Demand Notes – 16.3% | ||||||||||||
620,000 | Arapahoe County, Colorado, Industrial Development Revenue (Cottrell), Series B 0.8000%, 10/1/19 | 620,000 | ||||||||||
4,435,000 | Brattlebro Retreat, 0.2900%, 1/1/36 | 4,435,000 | ||||||||||
Breckenridge Terrace LLC: | ||||||||||||
4,000,000 | 0.6500%, 5/1/39 | 4,000,000 | ||||||||||
$ | 14,980,000 | 0.6500%, 5/1/39 | 14,980,000 | |||||||||
800,000 | California Infrastructure and Economic Development, 1.2300%, 7/1/33 | 800,000 | ||||||||||
1,190,000 | Capital Markets Access 0.3200%, 7/1/25 | 1,190,000 | ||||||||||
5,700,000 | Colorado Housing Facilities Revenue (Tenderfoot Seasonal Housing LLC) Series A, 0.6500%, 7/1/35 | 5,700,000 | ||||||||||
7,130,000 | Crozer-Keystone Health Systems 1.0000%, 12/15/21 | 7,130,000 | ||||||||||
6,715,000 | Danville-Pittsylvania, Virginia Facility Revenue, (Cane Creek Project) 0.2900%, 1/1/26 | 6,715,000 | ||||||||||
Eagle County, Colorado Housing Facility Revenue, (BC Housing LLC Project) Series A: | ||||||||||||
9,100,000 | 0.6500%, 6/1/27 | 9,100,000 | ||||||||||
8,000,000 | 0.6500%, 5/1/39 | 8,000,000 | ||||||||||
11,995,000 | Eskaton Properties, Inc. 1.0000%, 12/1/37 | 11,995,000 | ||||||||||
4,950,000 | FJM Properties – Wilmar 1.0000%, 10/1/24 | 4,950,000 | ||||||||||
15,280,000 | HHH Supply and Investment Co. 0.4000%, 7/1/29 | 15,280,000 | ||||||||||
5,620,000 | Hunter’s Ridge, South Point 0 .3000%, 6/1/25 | 5,620,000 | ||||||||||
4,650,000 | J-Jay Properties LLC, 0.3000%, 7/1/35 | 4,650,000 | ||||||||||
740,000 | Kentucky Economic Development Financial Authority Health Care Revenue, (Christian-B) 1.0000%, 11/1/15 | 740,000 | ||||||||||
2,570,000 | Lone Tree Building Authority 1.9500%, 12/1/17 | 2,570,000 | ||||||||||
9,000,000 | Louisiana Local Government Environmental Facilities 0.2000%, 7/1/47 | 9,000,000 | ||||||||||
3,700,000 | Lowell Family LLC, 0.2800%, 4/1/30 | 3,700,000 | ||||||||||
6,115,000 | Mississippi Business Finance, Corp. 1.1800%, 12/1/39 | 6,115,000 | ||||||||||
2,360,000 | Missouri State Development Financial Board (Cook Composites Co. Project) 0.0900%, 11/1/24 | 2,360,000 | ||||||||||
6,040,000 | Monongallia Health Systems 0.5000%, 7/1/40 | 6,040,000 | ||||||||||
160,000 | Phoenix, Illinois Realty Special Account Multifamily Revenue, (Brightons Mark) 0.4500%, 4/1/20 | 160,000 | ||||||||||
12,980,000 | Racetrac Capital LLC, Series 1998-A 0.2400%, 4/1/18 | 12,980,000 | ||||||||||
300,000 | Saint Joseph, Missouri Industrial Development Authority Revenue (Albaugh, Inc. Project), Series B 0.6500%, 11/1/19 | 300,000 | ||||||||||
4,775,000 | Springfield, Tennessee, Health and Educational Facilities Revenue, Series A 0.2900%, 6/1/26 | 4,775,000 | ||||||||||
2,600,000 | Tift County, Georgia Development Authority, (Heatcraft), Series A 0.2900%, 2/1/18 | 2,600,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 45
Janus Money Market Fund
Schedule of Investments
As of December 31, 2009 (unaudited)
Principal Amount | Value | |||||||||||
Taxable Variable Rate Demand Notes – (continued) | ||||||||||||
$ | 3,960,000 | Timber Ridge County Affordable Housing Corp., Series 2003 0.3300%, 12/1/32 | $ | 3,960,000 | ||||||||
Tuscaloosa County, Alabama, Industrial Development Gulf Opportunity Zone (Revenue Bonds): | ||||||||||||
25,000,000 | 0.3200%, 3/1/28 | 25,000,000 | ||||||||||
45,000,000 | 0.3200%, 4/1/39 | 45,000,000 | ||||||||||
100,000 | Union City, Tennessee Industrial Development Board, (Cobank LLC Project), 0.3300%, 1/1/25 | 100,000 | ||||||||||
1,910,000 | Volunteers of America, Alabama 0.2900%, 8/1/23 | 1,910,000 | ||||||||||
9,705,000 | Washington Road Properties 0.2900%, 12/1/26 | 9,705,000 | ||||||||||
Total Taxable Variable Rate Demand Notes (amortized cost $242,180,000) | 242,180,000 | |||||||||||
U.S. Government Agency Notes – 16.9% | ||||||||||||
Army & Air Force Exchange Services: | ||||||||||||
6,053,000 | 0.2500%, 1/4/10 | 6,053,000 | ||||||||||
20,000,000 | 0.4000%, 1/12/10ß | 20,000,000 | ||||||||||
30,000,000 | 0.5200%, 1/22/10ß | 30,000,000 | ||||||||||
15,000,000 | 0.3000%, 1/26/10ß | 15,000,000 | ||||||||||
Fannie Mae: | ||||||||||||
5,000,000 | 0.3600%, 2/22/10 | 4,997,398 | ||||||||||
10,000,000 | 0.2000%, 3/17/10 | 9,995,832 | ||||||||||
10,000,000 | 0.2000%, 3/24/10 | 9,995,380 | ||||||||||
5,000,000 | 0.3900%, 3/29/10 | 4,995,217 | ||||||||||
25,000,000 | 0.1489%, 5/3/10 | 24,987,208 | ||||||||||
5,000,000 | 0.1900%, 6/2/10 | 4,995,933 | ||||||||||
Federal Home Loan Bank System: | ||||||||||||
5,000,000 | 0.1000%, 1/5/10 | 4,999,944 | ||||||||||
5,000,000 | 0.3600%, 1/13/10 | 4,999,391 | ||||||||||
Freddie Mac: | ||||||||||||
5,000,000 | 0.3300%, 1/8/10 | 4,999,674 | ||||||||||
10,000,000 | 0.2300%, 1/11/10 | 9,999,352 | ||||||||||
25,000,000 | 0.2186%, 1/26/10 | 24,996,151 | ||||||||||
10,000,000 | 0.2000%, 3/15/10 | 9,995,943 | ||||||||||
10,000,000 | 0.2000%, 3/22/10 | 9,995,493 | ||||||||||
10,000,000 | 0.2100%, 4/7/10 | 9,994,321 | ||||||||||
20,000,000 | 0.1700%, 4/19/10 | 19,989,657 | ||||||||||
5,000,000 | 0.1650%, 5/10/10 | 4,997,003 | ||||||||||
5,000,000 | 0.1700%, 5/11/10 | 4,996,888 | ||||||||||
5,000,000 | 0.1900%, 6/1/10 | 4,995,960 | ||||||||||
5,000,000 | 0.2000%, 6/14/10 | 4,995,381 | ||||||||||
Total U.S. Government Agency Notes (amortized cost $250,975,126) | 250,975,126 | |||||||||||
Total Investments (total amortized cost $1,206,889,844) – 81.3% | 1,206,889,844 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 18.7% | 278,081,083 | |||||||||||
Net Assets – 100% | $ | 1,484,970,927 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
46 | DECEMBER 31, 2009
Janus Government Money Market Fund
Schedule of Investments
As of December 31, 2009 (unaudited)
Principal Amount | Value | |||||||||||
Repurchase Agreements – 13.7% | ||||||||||||
$ | 30,700,000 | Credit Suisse Securities (USA) LLC 0.0000%, dated 12/31/09, maturing 1/4/10 to be repurchased at $30,700,000 collateralized by $360,724,152 in U.S. Government Agencies 0.3092% – 8.5000%, 9/15/12 – 9/20/38 with a value of $31,314,778 (amortized cost $30,700,000) | $ | 30,700,000 | ||||||||
Taxable Variable Rate Demand Notes – 20.4% | ||||||||||||
1,380,000 | A.E. Realty LLC, Series 2003 0.4000%, 10/1/23 | 1,380,000 | ||||||||||
95,000 | Anaheim, California Housing Authority Multifamily Housing Revenue (Cobblestone), 0.4000%, 3/15/33 | 95,000 | ||||||||||
95,000 | Anaheim, California Housing Authority Multifamily Housing Revenue (Cobblestone), 0.4000%, 7/15/33 | 95,000 | ||||||||||
125,000 | California Statewide Communities Development Authority 0.4000%, 3/15/33 | 125,000 | ||||||||||
4,120,000 | Cunat Capital, Corp., 0.2800%, 4/1/36 | 4,120,000 | ||||||||||
9,000,000 | Cypress Bend Real Estate Development LLC, 0.3800%, 4/1/33 | 9,000,000 | ||||||||||
6,360,000 | Florida Housing Financial Corp. Multifamily Revenue, (Stone Harbor Apartments) Series K, 0.2600%, 7/15/36 | 6,360,000 | ||||||||||
1,975,000 | GMC Financing LLC, 1.0000%, 6/1/30 | 1,975,000 | ||||||||||
3,110,000 | Johnson Capital Management LLC, 0.3900%, 6/1/47 | 3,110,000 | ||||||||||
115,000 | Lakeshore Professional Properties LLC, 0.3900%, 7/1/45 | 115,000 | ||||||||||
1,000,000 | Maryland State Community Development Administration Multifamily Development (Crusader-D), 0.1800%, 2/1/41 | 1,000,000 | ||||||||||
5,500,000 | Mississippi Business Finance Corp. Mississippi Revenue (John Fayard) Series A, 1.0000%, 3/1/29 | 5,500,000 | ||||||||||
5,080,000 | Mississippi Business Finance Corp. Mississippi Revenue (John Fayard) Series B, 1.0000%, 3/1/29 | 5,080,000 | ||||||||||
2,065,000 | New York City Housing Development Corp. Multifamily Revenue (Aldus St. Apartments) Series A, 0.2100%, 6/15/37 | 2,065,000 | ||||||||||
500,000 | Sacramento California Redevelopment Agency, 0.4500%, 1/15/36 | 500,000 | ||||||||||
350,000 | Shepherd Capital LLC, 0.3900%, 10/1/53 | 350,000 | ||||||||||
4,825,000 | Tyler Enterprises LLC, 0.4000%, 10/1/22 | 4,825,000 | ||||||||||
Total Taxable Variable Rate Demand Notes (amortized cost $45,695,000) | 45,695,000 | |||||||||||
U.S. Government Agency Notes – 49.8% | ||||||||||||
Army & Air Force Exchange Services: | ||||||||||||
5,000,000 | 0.3000%, 1/5/10ß | 5,000,000 | ||||||||||
5,000,000 | 0.3600%, 1/6/10ß | 5,000,000 | ||||||||||
5,000,000 | 0.5200%, 1/22/10ß | 5,000,000 | ||||||||||
5,000,000 | 0.3000%, 1/26/10ß | 5,000,000 | ||||||||||
Fannie Mae: | ||||||||||||
$ | 5,000,000 | 0.9000%, 1/4/10 | 5,000,000 | |||||||||
5,000,000 | 0.1200%, 1/13/10 | 4,999,797 | ||||||||||
5,000,000 | 0.2000%, 3/17/10 | 4,997,999 | ||||||||||
5,000,000 | 0.2000%, 3/24/10 | 4,997,690 | ||||||||||
3,000,000 | 0.1900%, 6/2/10 | 2,997,560 | ||||||||||
1,322,000 | 0.1950%, 6/16/10 | 1,320,802 | ||||||||||
5,000,000 | 0.1460%, 6/18/10 | 4,996,002 | ||||||||||
Federal Home Loan Bank System: | ||||||||||||
4,000,000 | 0.3750%, 1/21/10 | 3,999,154 | ||||||||||
2,590,000 | 0.1986%, 2/3/10 | 2,589,522 | ||||||||||
3,366,000 | 0.1289%, 2/19/10 | 3,365,410 | ||||||||||
Freddie Mac: | ||||||||||||
5,000,000 | 0.1250%, 2/16/10 | 4,999,191 | ||||||||||
5,600,000 | 0.1250%, 2/18/10 | 5,599,054 | ||||||||||
5,000,000 | 0.2000%, 3/22/10 | 4,997,746 | ||||||||||
3,625,000 | 0.3000%, 3/29/10 | 3,622,334 | ||||||||||
5,000,000 | 0.2100%, 4/7/10 | 4,997,161 | ||||||||||
5,000,000 | 0.1700%, 4/19/10 | 4,997,414 | ||||||||||
5,000,000 | 0.1200%, 4/20/10 | 4,998,175 | ||||||||||
5,000,000 | 0.1200%, 4/22/10 | 4,998,141 | ||||||||||
10,167,000 | 0.1650%, 5/10/10 | 10,161,648 | ||||||||||
3,000,000 | 0.1900%, 6/1/10 | 2,997,576 | ||||||||||
Total U.S. Government Agency Notes (amortized cost $111,632,376) | 111,632,376 | |||||||||||
U.S. Government Agency Variable Notes – 5.2% | ||||||||||||
6,727,526 | Federal Home Loan Bank System 0.6500%, 1/15/42 | 6,727,526 | ||||||||||
5,000,000 | Freddie Mac, 0.1394%, 2/4/10 | 5,000,000 | ||||||||||
Total U.S. Government Agency Variable Notes (amortized cost $11,727,526) | 11,727,526 | |||||||||||
Total Investments (total amortized cost $199,754,902) – 89.1% | 199,754,902 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 10.9% | 24,499,336 | |||||||||||
Net Assets – 100% | $ | 224,254,238 | ||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds | 47
Statements of Assets and Liabilities – Bond Funds
As of December 31, 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 | $ | 2,028,993 | $ | 1,054,173 | $ | 1,630,651 | ||||||||
Unaffiliated investments at value | $ | 2,060,416 | $ | 1,126,932 | $ | 1,609,575 | ||||||||
Affiliated money market investments | 56,886 | 22,001 | 52,667 | |||||||||||
Cash | 12 | 26 | 3 | |||||||||||
Receivables: | ||||||||||||||
Fund shares sold | 6,216 | 2,720 | 6,880 | |||||||||||
Dividends | 8 | 2 | 9 | |||||||||||
Interest | 24,231 | 21,949 | 14,817 | |||||||||||
Non-interested Trustees’ deferred compensation | 53 | 28 | 41 | |||||||||||
Other assets | 33 | 392 | 9 | |||||||||||
Variation margin | – | – | 124 | |||||||||||
Total Assets | 2,147,855 | 1,174,050 | 1,684,125 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Investments purchased | – | 9,831 | – | |||||||||||
Fund shares repurchased | 9,225 | 2,997 | 4,904 | |||||||||||
Dividends and distributions | 571 | 573 | 100 | |||||||||||
Advisory fees | 743 | 550 | 709 | |||||||||||
Transfer agent fees and expenses | 37 | 20 | 6 | |||||||||||
Administrative fees – Class J Shares | 171 | 173 | 271 | |||||||||||
Administrative fees – Class R Shares | 1 | – | N/A | |||||||||||
Administrative fees – Class S Shares | 16 | 1 | 1 | |||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | 52 | 19 | 12 | |||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 149 | 56 | 27 | |||||||||||
Distribution fees and shareholder servicing fees – Class R Shares | 1 | – | N/A | |||||||||||
Distribution fees and shareholder servicing fees – Class S Shares | 16 | 1 | 1 | |||||||||||
Networking fees – Class A Shares | – | – | – | |||||||||||
Networking fees – Class C Shares | – | – | – | |||||||||||
Networking fees – Class I Shares | – | – | – | |||||||||||
Non-interested Trustees’ fees and expenses | 13 | 7 | 5 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 53 | 28 | 41 | |||||||||||
Accrued expenses | 7 | 45 | 2 | |||||||||||
Total Liabilities | 11,055 | 14,301 | 6,079 | |||||||||||
Net Assets | $ | 2,136,800 | $ | 1,159,749 | $ | 1,678,046 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 2,038,280 | $ | 1,186,308 | $ | 1,645,548 | ||||||||
Undistributed net investment income/(loss)* | 755 | 828 | (78) | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 9,461 | (122,145) | 591 | |||||||||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 88,304 | 94,758 | 31,985 | |||||||||||
Total Net Assets | $ | 2,136,800 | $ | 1,159,749 | $ | 1,678,046 | ||||||||
Net Assets – Class A Shares | $ | 247,678 | $ | 92,444 | $ | 65,925 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 23,847 | 10,880 | 21,518 | |||||||||||
Net Asset Value Per Share(1) | $ | 10.39 | $ | 8.50 | $ | 3.06 | ||||||||
Maximum Offering Price Per Share(2) | $ | 10.91 | $ | 8.92 | $ | 3.21 | ||||||||
Net Assets – Class C Shares | $ | 178,880 | $ | 67,141 | $ | 32,991 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 17,221 | 7,900 | 10,788 | |||||||||||
Net Asset Value Per Share(1) | $ | 10.39 | $ | 8.50 | $ | 3.06 | ||||||||
Net Assets – Class I Shares | $ | 515,576 | $ | 26,684 | $ | 87,474 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 49,642 | 3,140 | 28,587 | |||||||||||
Net Asset Value Per Share | $ | 10.39 | $ | 8.50 | $ | 3.06 | ||||||||
Net Assets – Class J Shares | $ | 1,126,009 | $ | 965,653 | $ | 1,487,158 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 108,413 | 113,709 | 485,190 | |||||||||||
Net Asset Value Per Share | $ | 10.39 | $ | 8.49 | $ | 3.07 | ||||||||
Net Assets – Class R Shares | $ | 3,588 | $ | 1,069 | N/A | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 346 | 126 | N/A | |||||||||||
Net Asset Value Per Share | $ | 10.39 | $ | 8.49 | N/A | |||||||||
Net Assets – Class S Shares | $ | 65,069 | $ | 6,758 | $ | 4,498 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,263 | 794 | 1,471 | |||||||||||
Net Asset Value Per Share | $ | 10.39 | $ | 8.51 | $ | 3.06 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
48 | DECEMBER 31, 2009
Statements of Operations – Bond Funds
For the two-month period ended December 31, 2009 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||
(all numbers in thousands) | Bond Fund(1) | Fund(1) | Bond Fund(1) | |||||||||||
Investment Income: | ||||||||||||||
Interest | $ | 17,098 | $ | 17,630 | $ | 9,101 | ||||||||
Dividends from affiliates | 16 | 10 | 17 | |||||||||||
Fee Income | – | 22 | 11 | |||||||||||
Total Investment Income | 17,114 | 17,662 | 9,129 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 1,437 | 1,060 | 1,419 | |||||||||||
Transfer agent fees and expenses | 40 | 23 | 18 | |||||||||||
Registration fees | 48 | 29 | 49 | |||||||||||
Custodian fees | 3 | 1 | 3 | |||||||||||
Audit fees | 1 | 1 | 6 | |||||||||||
Non-interested Trustees’ fees and expenses | 13 | 6 | 7 | |||||||||||
Administrative fees – Class J Shares | 334 | 331 | 515 | |||||||||||
Administrative fees – Class R Shares | 1 | – | N/A | |||||||||||
Administrative fees – Class S Shares | 31 | 2 | 2 | |||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | 100 | 36 | 22 | |||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 285 | 107 | 48 | |||||||||||
Distribution fees and shareholder servicing fees – Class R Shares | 3 | 1 | N/A | |||||||||||
Distribution fees and shareholder servicing fees – Class S Shares | 31 | 2 | 2 | |||||||||||
Networking fees – Class A Shares | 11 | 3 | – | |||||||||||
Networking fees – Class C Shares | 10 | 3 | – | |||||||||||
Networking fees – Class I Shares | – | – | – | |||||||||||
Other expenses | 46 | 38 | 37 | |||||||||||
Non-recurring costs (Note 4) | – | – | – | |||||||||||
Cost assumed by Janus Capital Management LLC (Note 4) | – | – | – | |||||||||||
Total Expenses | 2,394 | 1,643 | 2,128 | |||||||||||
Expense and Fee Offset | – | – | (1) | |||||||||||
Net Expenses | 2,394 | 1,643 | 2,127 | |||||||||||
Less: Excess Expense Reimbursement | – | – | (120) | |||||||||||
Net Expenses after Expense Reimbursement | 2,394 | 1,643 | 2,007 | |||||||||||
Net Investment Income/(Loss) | 14,720 | 16,019 | 7,122 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 10,106 | 8,301 | 687 | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (4,397) | 19,324 | (675) | |||||||||||
Net Gain/(Loss) on Investments | 5,709 | 27,625 | 12 | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 20,429 | $ | 43,644 | $ | 7,134 |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 49
Statements of Changes in Net Assets – Bond Funds
For the two-month period ended December 31, 2009 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||
and the fiscal year ended October 31, 2009 | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 14,720 | $ | 48,224 | $ | 16,019 | $ | 76,100 | $ | 7,122 | $ | 20,655 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 10,106 | 33,784 | 8,301 | (42,414) | 687 | 5,043 | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (4,397) | 125,978 | 19,324 | 171,845 | (675) | 32,492 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 20,429 | 207,986 | 43,644 | 205,531 | 7,134 | 58,190 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | ||||||||||||||||||||||||||
Class A Shares | (1,715) | (3,018) | (1,245) | (2,470) | (245) | (171) | ||||||||||||||||||||
Class C Shares | (988) | (1,552) | (832) | (1,539) | (99) | (61) | ||||||||||||||||||||
Class I Shares | (3,664) | (2,987) | (326) | (499) | (396) | (86) | ||||||||||||||||||||
Class J Shares | (8,243) | (39,850) | (13,135) | (71,629) | (6,594) | (20,188) | ||||||||||||||||||||
Class R Shares | (21) | (33) | (13) | (28) | N/A | N/A | ||||||||||||||||||||
Class S Shares | (505) | (877) | (85) | (161) | (18) | (22) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||||||||||
Class A Shares | (1,373) | – | – | – | (14) | – | ||||||||||||||||||||
Class C Shares | (988) | – | – | – | (8) | – | ||||||||||||||||||||
Class I Shares | (2,818) | – | – | – | (21) | – | ||||||||||||||||||||
Class J Shares | (6,281) | – | – | – | (361) | – | ||||||||||||||||||||
Class R Shares | (19) | – | – | – | N/A | N/A | ||||||||||||||||||||
Class S Shares | (409) | – | – | – | (1) | – | ||||||||||||||||||||
Net (Decrease) from Dividends and Distributions | (27,024) | (48,317) | (15,636) | (76,326) | (7,757) | (20,528) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Class A Shares | 30,869 | 99,964 | 10,035 | 32,160 | 24,945 | 44,791 | ||||||||||||||||||||
Class C Shares | 25,431 | 58,100 | 5,398 | 23,589 | 10,465 | 23,813 | ||||||||||||||||||||
Class I Shares | 70,977 | 307,620 | 6,073 | 15,328 | 21,470 | 71,096 | ||||||||||||||||||||
Class J Shares | 76,927 | 466,061 | 82,926 | 467,613 | 341,529 | 1,260,160 | ||||||||||||||||||||
Class R Shares | 583 | 1,990 | 72 | 43 | N/A | N/A | ||||||||||||||||||||
Class S Shares | 7,062 | 23,950 | 1,299 | 2,904 | 1,460 | 6,819 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | ||||||||||||||||||||||||||
Class A Shares | N/A | 182,146 | N/A | 55,786 | N/A | N/A | ||||||||||||||||||||
Class C Shares | N/A | 107,892 | N/A | 36,350 | N/A | N/A | ||||||||||||||||||||
Class I Shares | N/A | 140,078 | N/A | 11,556 | N/A | N/A | ||||||||||||||||||||
Class R Shares | N/A | 1,321 | N/A | 879 | N/A | N/A | ||||||||||||||||||||
Class S Shares | N/A | 58,255 | N/A | 3,581 | N/A | N/A | ||||||||||||||||||||
Redemption fees | ||||||||||||||||||||||||||
Class I Shares | N/A | N/A | 12 | – | N/A | N/A | ||||||||||||||||||||
Class J Shares | N/A | N/A | 18 | 346 | N/A | N/A | ||||||||||||||||||||
Class R Shares | N/A | N/A | – | – | N/A | N/A | ||||||||||||||||||||
Class S Shares | N/A | N/A | 1 | 5 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||||||||||
Class A Shares | 2,615 | 2,200 | 1,062 | 2,021 | 172 | 78 | ||||||||||||||||||||
Class C Shares | 1,078 | 824 | 628 | 1,114 | 73 | 42 | ||||||||||||||||||||
Class I Shares | 5,507 | 2,842 | 229 | 441 | 24 | 17 | ||||||||||||||||||||
Class J Shares | 13,757 | 37,151 | 12,345 | 66,465 | 6,796 | 18,905 | ||||||||||||||||||||
Class R Shares | 31 | 26 | 13 | 28 | N/A | N/A | ||||||||||||||||||||
Class S Shares | 895 | 858 | 65 | 117 | 8 | 8 | ||||||||||||||||||||
Shares repurchased | ||||||||||||||||||||||||||
Class A Shares | (16,183) | (65,835) | (5,848) | (13,009) | (2,785) | (1,492) | ||||||||||||||||||||
Class C Shares | (8,311) | (13,725) | (2,268) | (5,010) | (1,098) | (409) | ||||||||||||||||||||
Class I Shares | (12,233) | (11,062) | (2,243) | (6,688) | (3,783) | (1,535) | ||||||||||||||||||||
Class J Shares | (47,879) | (277,166) | (34,384) | (148,029) | (73,089) | (335,458) | ||||||||||||||||||||
Class R Shares | (135) | (367) | (1) | – | N/A | N/A | ||||||||||||||||||||
Class S Shares | (13,240) | (17,691) | (606) | (1,170) | (1,520) | (2,318) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 137,751 | 1,105,432 | 74,826 | 546,420 | 324,667 | 1,084,517 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 131,156 | 1,265,101 | 102,834 | 675,625 | 324,044 | 1,122,179 | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 2,005,644 | 740,543 | 1,056,915 | 381,290 | 1,354,002 | 231,823 | ||||||||||||||||||||
End of period | $ | 2,136,800 | $ | 2,005,644 | $ | 1,159,749 | $ | 1,056,915 | $ | 1,678,046 | $ | 1,354,002 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 755 | $ | 1,171 | $ | 828 | $ | 445 | $ | (78) | $ | 152 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from November 1, 2008 through October 31, 2009. |
See Notes to Financial Statements.
50 | DECEMBER 31, 2009
Financial Highlights - Bond Funds
Class A Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | Janus High-Yield Fund | ||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.41 | $9.97 | $8.29 | $7.61 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .08 | .14 | .13 | .27 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .04 | .44 | .20 | .68 | ||||||||||||||
Total from Investment Operations | .12 | .58 | .33 | .95 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.14) | (.12) | (.27) | ||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | ||||||||||||||
Total Distributions | (.14) | (.14) | (.12) | (.27) | ||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.41 | $8.50 | $8.29 | ||||||||||||||
Total Return** | 1.11% | 5.87% | 4.04% | 12.63% | ||||||||||||||
Net Assets, End of Period (in thousands) | $247,678 | $231,112 | $92,444 | $84,972 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $239,927 | $218,408 | $87,524 | $75,369 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.73% | 0.80% | 0.90% | 0.96% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.73% | 0.80% | 0.90% | 0.96% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.20% | 4.28% | 8.71% | 10.07% | ||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 96% | 97% |
Class A Shares
For a share outstanding during the two-month period ended | Janus Short-Term Bond Fund | |||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $3.06 | $3.01 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | .04 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | .05 | ||||||||
Total from Investment Operations | .01 | .09 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.01) | (.04) | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.01) | (.04) | ||||||||
Net Asset Value, End of Period | $3.06 | $3.06 | ||||||||
Total Return** | 0.51% | 3.05% | ||||||||
Net Assets, End of Period (in thousands) | $65,925 | $43,636 | ||||||||
Average Net Assets for the Period (in thousands) | $52,728 | $18,271 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.81% | 0.82% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.81% | 0.81% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.76% | 2.78% | ||||||||
Portfolio Turnover Rate*** | 29% | 57% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 51
Financial Highlights - Bond Funds (continued)
Class C Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | Janus High-Yield Fund | ||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.41 | $9.97 | $8.29 | $7.61 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .06 | .12 | .11 | .27 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .04 | .44 | .21 | .68 | ||||||||||||||
Total from Investment Operations | .10 | .56 | .32 | .95 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.12) | (.11) | (.27) | ||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | ||||||||||||||
Total Distributions | (.12) | (.12) | (.11) | (.27) | ||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.41 | $8.50 | $8.29 | ||||||||||||||
Total Return** | 0.97% | 5.61% | 3.90% | 12.36% | ||||||||||||||
Net Assets, End of Period (in thousands) | $178,880 | $161,218 | $67,141 | $61,744 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $170,509 | $137,244 | $64,185 | $51,080 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.49% | 1.57% | 1.65% | 1.71% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.49% | 1.57% | 1.65% | 1.71% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.44% | 3.51% | 7.96% | 9.27% | ||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 96% | 97% |
Class C Shares
For a share outstanding during the two-month period ended | Janus Short-Term Bond Fund | |||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $3.06 | $3.01 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | .05 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | .05 | ||||||||
Total from Investment Operations | .01 | .10 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.01) | (.05) | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.01) | (.05) | ||||||||
Net Asset Value, End of Period | $3.06 | $3.06 | ||||||||
Total Return** | 0.38% | 3.31% | ||||||||
Net Assets, End of Period (in thousands) | $32,991 | $23,567 | ||||||||
Average Net Assets for the Period (in thousands) | $28,960 | $8,848 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.56% | 1.57% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.56% | 1.56% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.01% | 2.01% | ||||||||
Portfolio Turnover Rate*** | 29% | 57% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
52 | DECEMBER 31, 2009
Class I Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | Janus High-Yield Fund | ||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.41 | $9.97 | $8.28 | $7.61 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .08 | .15 | .13 | .28 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .04 | .44 | .22 | .67 | ||||||||||||||
Total from Investment Operations | .12 | .59 | .35 | .95 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.15) | (.13) | (.28) | ||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | ||||||||||||||
Total Distributions | (.14) | (.15) | (.13) | (.28) | ||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.41 | $8.50 | $8.28 | ||||||||||||||
Total Return** | 1.16% | 5.96% | 4.21% | 12.60% | ||||||||||||||
Net Assets, End of Period (in thousands) | $515,576 | $453,037 | $26,684 | $22,052 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $481,129 | $202,602 | $22,213 | $14,845 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.46% | 0.48% | 0.63% | 0.66% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.46% | 0.48% | 0.63% | 0.66% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.47% | 4.55% | 8.99% | 10.33% | ||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 96% | 97% |
Class I Shares
For a share outstanding during the two-month period ended | Janus Short-Term Bond Fund | |||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $3.06 | $3.01 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .03 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | .05 | ||||||||
Total from Investment Operations | .02 | .08 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.02) | (.03) | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.02) | (.03) | ||||||||
Net Asset Value, End of Period | $3.06 | $3.06 | ||||||||
Total Return** | 0.55% | 2.75% | ||||||||
Net Assets, End of Period (in thousands) | $87,474 | $69,785 | ||||||||
Average Net Assets for the Period (in thousands) | $78,036 | $8,399 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.56% | 0.59% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.56% | 0.57% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.03% | 2.85% | ||||||||
Portfolio Turnover Rate*** | 29% | 57% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 53
Financial Highlights - Bond Funds (continued)
Class J Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | |||||||||||||||||||||||||
December 31, 2009 (unaudited) and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.42 | $9.09 | $9.45 | $9.42 | $9.41 | $9.76 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .08 | .43 | .42 | .46 | .42 | .40 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .03 | 1.33 | (.36) | .02 | .02 | (.34) | ||||||||||||||||||||
Total from Investment Operations | .11 | 1.76 | .06 | .48 | .44 | .06 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.43) | (.42) | (.45) | (.43) | (.41) | ||||||||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.14) | (.43) | (.42) | (.45) | (.43) | (.41) | ||||||||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.42 | $9.09 | $9.45 | $9.42 | $9.41 | ||||||||||||||||||||
Total Return** | 1.04% | 19.74% | 0.50% | 5.27% | 4.80% | 0.60% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,126,009 | $1,086,604 | $740,543 | $759,576 | $766,863 | $935,168 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,108,195 | $915,900 | $855,399 | $755,593 | $827,407 | $1,037,336 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.64% | 0.73% | 0.78% | 0.80% | 0.83% | 0.78% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.64% | 0.73% | 0.77% | 0.80% | 0.82% | 0.77% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.30% | 4.34% | 4.32% | 4.81% | 4.37% | 4.01% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 185% | 140%(4) | 144%(4) | 174%(4) |
Class J Shares
For a share outstanding during the two-month period ended | Janus High-Yield Fund | |||||||||||||||||||||||||
December 31, 2009 (unaudited) and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.28 | $6.94 | $9.53 | $9.69 | $9.48 | $9.86 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .13 | .93 | .73 | .73 | .71 | .65 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .20 | 1.34 | (2.59) | (.16) | .20 | (.38) | ||||||||||||||||||||
Total from Investment Operations | .33 | 2.27 | (1.86) | .57 | .91 | .27 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.12) | (.93) | (.73) | (.73) | (.70) | (.65) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption Fees | –(5) | –(5) | –(5) | –(5) | –(5) | –(5) | ||||||||||||||||||||
Total Distributions and Other | (.12) | (.93) | (.73) | (.73) | (.70) | (.65) | ||||||||||||||||||||
Net Asset Value, End of Period | $8.49 | $8.28 | $6.94 | $9.53 | $9.69 | $9.48 | ||||||||||||||||||||
Total Return** | 4.05% | 35.34% | (20.74)% | 6.04% | 10.00% | 2.76% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $965,653 | $881,347 | $381,290 | $591,876 | $511,619 | $523,183 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $918,296 | $574,291 | $510,868 | $579,507 | $490,849 | $548,993 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.84% | 0.89% | 0.90% | 0.87% | 0.91% | 0.88% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.84% | 0.89% | 0.89% | 0.86% | 0.90% | 0.87% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 8.77% | 12.44% | 8.26% | 7.54% | 7.37% | 6.65% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 96% | 97% | 109% | 114% | 119% | 102% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | See Note 6 in Notes to Financial Statements. | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | 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. | |
(5) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. |
See Notes to Financial Statements.
54 | DECEMBER 31, 2009
Class J Shares
For a share outstanding during the two-month period ended | Janus Short-Term Bond Fund | |||||||||||||||||||||||||
December 31, 2009 (unaudited) and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.06 | $2.87 | $2.88 | $2.88 | $2.87 | $2.94 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .01 | .10 | .10 | .13 | .11 | .08 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .02 | .19 | (.01) | – | .01 | (.06) | ||||||||||||||||||||
Total from Investment Operations | .03 | .29 | .09 | .13 | .12 | .02 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02) | (.10) | (.10) | (.13) | (.11) | (.08) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (.01) | ||||||||||||||||||||
Total Distributions | (.02) | (.10) | (.10) | (.13) | (.11) | (.09) | ||||||||||||||||||||
Net Asset Value, End of Period | $3.07 | $3.06 | $2.87 | $2.88 | $2.88 | $2.87 | ||||||||||||||||||||
Total Return** | 0.86% | 10.35% | 3.24% | 4.74% | 4.08% | 0.65% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,487,158 | $1,212,465 | $231,823 | $172,642 | $175,258 | $201,493 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,359,098 | $588,441 | $193,360 | $172,326 | $182,285 | $233,536 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.78% | 0.72% | 0.65% | 0.65% | 0.65% | 0.65% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.78% | 0.72% | 0.64% | 0.64% | 0.64% | 0.64% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.80% | 3.46% | 3.51% | 4.63% | 3.65% | 2.75% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 29% | 57% | 127% | 130% | 120% | 97% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | See Note 6 in Notes to Financial Statements. | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 55
Financial Highlights - Bond Funds (continued)
Class R Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | Janus High-Yield Fund | ||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.42 | $9.97 | $8.28 | $7.61 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .07 | .13 | .12 | .26 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .03 | .45 | .21 | .67 | ||||||||||||||
Total from Investment Operations | .10 | .58 | .33 | .93 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.07) | (.13) | (.12) | (.26) | ||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | ||||||||||||||
Total Distributions | (.13) | (.13) | (.12) | (.26) | ||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.42 | $8.49 | $8.28 | ||||||||||||||
Total Return** | 0.94% | 5.81% | 3.95% | 12.33% | ||||||||||||||
Net Assets, End of Period (in thousands) | $3,588 | $3,120 | $1,069 | $959 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $3,268 | $2,700 | $991 | $885 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.21% | 1.25% | 1.38% | 1.41% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.21% | 1.24% | 1.38% | 1.41% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.73% | 3.83% | 8.23% | 9.83% | ||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 96% | 97% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
56 | DECEMBER 31, 2009
Class S Shares
For a share outstanding during the two-month period ended | Janus Flexible Bond Fund | Janus High-Yield Fund | ||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.42 | $9.97 | $8.29 | $7.61 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .07 | .14 | .12 | .27 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .03 | .45 | .22 | .67 | ||||||||||||||
Total from Investment Operations | .10 | .59 | .34 | .94 | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (.07) | (.14) | (.12) | (.27) | ||||||||||||||
Distributions (from capital gains)* | (.06) | – | – | – | ||||||||||||||
Redemption fees | N/A | N/A | – | .01 | ||||||||||||||
Total Distributions and Other | (.13) | (.14) | (.12) | (.26) | ||||||||||||||
Net Asset Value, End of Period | $10.39 | $10.42 | $8.51 | $8.29 | ||||||||||||||
Total Return** | 0.98% | 5.89% | 4.12% | 12.55% | ||||||||||||||
Net Assets, End of Period (in thousands) | $65,069 | $70,553 | $6,758 | $5,841 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $73,179 | $67,591 | $6,119 | $5,037 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.96% | 0.99% | 1.13% | 1.18% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.96% | 0.99% | 1.13% | 1.18% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.98% | 4.10% | 8.48% | 9.82% | ||||||||||||||
Portfolio Turnover Rate*** | 96% | 215% | 96% | 97% |
Class S Shares
For a share outstanding during the two-month period ended | Janus Short-Term Bond Fund | |||||||||
December 31, 2009 (unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $3.06 | $3.01 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | .03 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | .05 | ||||||||
Total from Investment Operations | .01 | .08 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.01) | (.03) | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.01) | (.03) | ||||||||
Net Asset Value, End of Period | $3.06 | $3.06 | ||||||||
Total Return** | 0.46% | 2.62% | ||||||||
Net Assets, End of Period (in thousands) | $4,498 | $4,549 | ||||||||
Average Net Assets for the Period (in thousands) | $4,275 | $2,543 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.06% | 1.07% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.06% | 1.06% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.53% | 2.59% | ||||||||
Portfolio Turnover Rate*** | 29% | 57% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 57
Statements of Assets and Liabilities – Money Market Funds
Janus Government | ||||||||||
As of December 31, 2009 (unaudited) | Janus Money | Money | ||||||||
(all numbers in thousands except net asset value per share) | Market Fund | Market Fund | ||||||||
Assets: | ||||||||||
Investments at amortized cost | $ | 1,206,890 | $ | 169,055 | ||||||
Repurchase Agreements | $ | – | $ | 30,700 | ||||||
Cash | 278,160 | 24,683 | ||||||||
Receivables: | ||||||||||
Fund shares sold | 2,630 | 285 | ||||||||
Interest | 285 | 39 | ||||||||
Non-interested Trustees’ deferred compensation | 36 | 6 | ||||||||
Other assets | 1 | 69 | ||||||||
Total Assets | 1,488,002 | 224,837 | ||||||||
Liabilities: | ||||||||||
Payables: | ||||||||||
Fund shares repurchased | 2,612 | 540 | ||||||||
Dividends and distributions | 68 | 4 | ||||||||
Advisory fees | 127 | 19 | ||||||||
Administrative fees | 179 | 10 | ||||||||
Non-interested Trustees’ fees and expenses | – | – | ||||||||
Non-interested Trustees’ deferred compensation fees | 36 | 6 | ||||||||
Accrued expenses and other payables | 9 | 4 | ||||||||
Total Liabilities | 3,031 | 583 | ||||||||
Net Assets | $ | 1,484,971 | $ | 224,254 | ||||||
Net Assets Consist of: | ||||||||||
Capital (par value and paid-in surplus)* | $ | 1,485,006 | $ | 224,210 | ||||||
Undistributed net investment income/(loss)* | (32) | 29 | ||||||||
Undistributed net realized gain/(loss) from investment transactions* | – | 16 | ||||||||
Unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | (3) | (1) | ||||||||
Total Net Assets | $ | 1,484,971 | $ | 224,254 | ||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,484,999 | 224,210 | ||||||||
Net Asset Value Per Share | $ | 1.00 | $ | 1.00 |
* | See Note 5 in Notes to Financial Statements |
See Notes to Financial Statements.
58 | DECEMBER 31, 2009
Statements of Operations – Money Market Funds
Janus Government | ||||||||||
For the two-month period ended December 31, 2009 (unaudited) | Janus Money | Money | ||||||||
(all numbers in thousands) | Market Fund(1) | Market Fund(1) | ||||||||
Investment Income: | ||||||||||
Interest | $ | 654 | $ | 122 | ||||||
Total Investment Income | 654 | 122 | ||||||||
Expenses: | ||||||||||
Advisory fees | 502 | 76 | ||||||||
Non-interested Trustees’ fees and expenses | 15 | 2 | ||||||||
Administrative fees | 1,255 | 189 | ||||||||
Other Expenses | 5 | 2 | ||||||||
Total Expenses | 1,777 | 269 | ||||||||
Less: Excess Expense Reimbursement | (1,129) | (179) | ||||||||
Net Expenses after Expense Reimbursement | 648 | 90 | ||||||||
Net Investment Income/(Loss) | 6 | 32 | ||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||
Change in unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | 3 | – | ||||||||
Net Gain/(Loss) on Investments | 3 | – | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 9 | $ | 32 |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 59
Statements of Changes in Net Assets – Money Market Funds
Janus Government | ||||||||||||||||||
For the two-month period ended December 31, 2009 (unaudited) | Janus Money | Money | ||||||||||||||||
and the fiscal year ended October 31, 2009 | Market Fund | Market Fund | ||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 6 | $ | 3,520 | $ | 32 | $ | 272 | ||||||||||
Net realized gain/(loss) from investment transactions | – | 1 | – | 16 | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 3 | (24) | – | (4) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 9 | 3,497 | 32 | 284 | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | ||||||||||||||||||
Class J Shares | (16) | (3,458) | (2) | (250) | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Class J Shares | – | – | – | – | ||||||||||||||
Net Decrease from Dividends and Distributions | (16) | (3,458) | (2) | (250) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Class J Shares | 84,824 | 697,726 | 9,969 | 102,392 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Class J Shares | 12 | 3,101 | 2 | 242 | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Class J Shares | (117,573) | (1,166,589) | (14,278) | (186,385) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (32,737) | (465,762) | (4,307) | (83,751) | ||||||||||||||
Net Increase/(Decrease) in Net Assets | (32,744) | (465,723) | (4,277) | (83,717) | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 1,517,715 | 1,983,438 | 228,531 | 312,248 | ||||||||||||||
End of period | $ | 1,484,971 | $ | 1,517,715 | $ | 224,254 | $ | 228,531 | ||||||||||
Undistributed net investment income/(loss)* | $ | (32) | $ | (22) | $ | 29 | $ | (1) |
* | See Note 5 in the Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from November 1, 2008 through October 31, 2009. |
See Notes to Financial Statements.
60 | DECEMBER 31, 2009
Financial Highlights - Money Market Funds
Class J Shares
For a share outstanding during the two-month period ended | ||||||||||||||||||||||||||
December 31, 2009 (unaudited) | Janus Money Market Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
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 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | – | – | .03 | .05 | .04 | .02 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | (.03) | (.05) | (.04) | (.02) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | – | – | (.03) | (.05) | (.04) | (.02) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.00% | 0.18% | 2.76% | 4.93% | 4.39% | 2.41% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,484,971 | $1,517,715 | $1,983,438 | $1,721,914 | $1,412,927 | $1,360,997 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,501,474 | $1,785,483 | $1,931,685 | $1,577,950 | $1,362,170 | $1,449,569 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.26%(4) | 0.54%(4) | 0.61%(4) | 0.60%(4) | 0.60%(4) | 0.60%(4) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.26% | 0.54% | 0.61% | 0.60% | 0.60% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00% | 0.20% | 2.68% | 4.82% | 4.31% | 2.36% |
Class J Shares
For a share outstanding during the two-month period ended | ||||||||||||||||||||||||||
December 31, 2009 (unaudited) | Janus Government Money Market Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
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 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | – | – | .02 | .05 | .04 | .02 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | (.02) | (.05) | (.04) | (.02) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | – | – | (.02) | (.05) | (.04) | (.02) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.00% | 0.08% | 2.46% | 4.79% | 4.31% | 2.34% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $224,254 | $228,531 | $312,248 | $188,133 | $176,188 | $186,361 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $226,842 | $273,901 | $225,293 | $177,655 | $176,580 | $198,231 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.24%(5) | 0.55%(5) | 0.62%(5) | 0.61%(5) | 0.61%(5) | 0.61%(5) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.24% | 0.55% | 0.62% | 0.61% | 0.61% | 0.61% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.08% | 0.10% | 2.33% | 4.69% | 4.22% | 2.29% |
* | See Note 5 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one year. | |
(1) | Period from November 1, 2009 to December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | See “Explanations of Charts, Tables and Financial Statements.” | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(4) | The ratio was 0.71% during the two-month period ended December 31, 2009, 0.73% in 2009, 0.71% in 2008, 0.70% in 2007, 0.70% in 2006 and 0.70% in 2005 before waiver of certain fees incurred by the Fund. | |
(5) | The ratio was 0.71% during the two-month period ended December 31, 2009, 0.73% in 2009, 0.72% in 2008, 0.71% in 2007, 0.71% in 2006 and 0.71% in 2005 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Bond & Money Market Funds | 61
Notes to Schedules of Investments (unaudited)
Barclays Capital 1-3 Year U.S. 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 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. | |
PIK | Pay-in-kind (PIK) bonds give the issuer an option to make the interest payment in cash or additional securities. | |
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. | |
T-DECS | Tangible Dividend Enhanced Common Stock | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
** | 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, swap agreements and/or securities with extended settlement dates. | |
‡ | Rate is subject to change. Rate shown reflects current rate. | |
ß | Security is illiquid. | |
ÇÇ | Security is a U.S. Treasury Inflation-Protected Security (TIPS). |
§ Schedule of Restricted and Illiquid Securities (as of December 31, 2009)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus High-Yield Fund | ||||||||||||
Dole Food Automatic Exchange, 7.0000% (144A) | 10/22/09 | 4,515,188 | 4,182,183 | 0.4% | ||||||||
Intelsat Subsidiary Holding Co., Ltd., 8.8750%, 1/15/15 (144A) | 1/29/09 – 8/13/09 | 1,443,135 | 1,645,940 | 0.1% | ||||||||
$ | 5,958,323 | $ | 5,828,123 | 0.5% | ||||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2009. The issuer incurs all registration costs.
62 | DECEMBER 31, 2009
The following is a summary of the inputs that were used to value the Funds’ investments in securities and other financial instruments as of December 31, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Janus Flexible Bond Fund | |||||||||||
Corporate Bonds | $ | – | $ | 1,617,658,146 | $ | – | |||||
Preferred Stock | – | 2,796,312 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 439,962,199 | – | ||||||||
Money Market | – | 56,885,575 | – | ||||||||
Total Investments in Securities | $ | – | $ | 2,117,302,232 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus High-Yield Fund | |||||||||||
Bank Loans | $ | – | $ | 13,564,412 | $ | – | |||||
Common Stock | – | 8,993,973 | – | ||||||||
Corporate Bonds | – | 1,098,603,636 | – | ||||||||
Preferred Stock | – | 5,770,215 | – | ||||||||
Money Market | – | 22,001,000 | – | ||||||||
Total Investments in Securities | $ | – | $ | 1,148,933,236 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus Short-Term Bond Fund | |||||||||||
Bank Loans | $ | – | $ | 7,726,016 | $ | – | |||||
Corporate Bonds | – | 1,075,215,051 | – | ||||||||
Mortgage-Backed Securities | – | 72,560,143 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 452,931,598 | – | ||||||||
Short-Term Taxable Variable Rate Demand Note | – | 1,142,425 | – | ||||||||
Money Market | – | 52,666,519 | – | ||||||||
Total Investments in Securities | $ | – | $ | 1,662,241,752 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus Government Money Market Fund | |||||||||||
Repurchase Agreements | $ | – | $ | 30,700,000 | $ | – | |||||
Taxable Variable Rate Demand Notes | – | 45,695,000 | – | ||||||||
U.S. Government Agency Notes | – | 111,632,376 | – | ||||||||
U.S. Government Agency Variable Notes | – | 11,727,526 | – | ||||||||
Total Investments in Securities | $ | – | $ | 199,754,902 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus Money Market Fund | |||||||||||
Certificates of Deposit | $ | – | $ | 389,000,488 | $ | – | |||||
Commercial Paper | – | 294,734,230 | – | ||||||||
Floating Rate Note | – | 30,000,000 | – | ||||||||
Taxable Variable Rate Demand Notes | – | 242,180,000 | – | ||||||||
U.S. Government Agency Notes | – | 250,975,126 | – | ||||||||
Total Investments in Securities | $ | – | $ | 1,206,889,844 | $ | – | |||||
Other Financial Instruments:(1) | |||||||||||
Janus Short-Term Bond Fund | $ | – | $ | 397,724 | $ | – | |||||
(1) | Other financial instruments include futures, forward currency, written option, and swap contracts. Forward currency contracts and swap 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 are reported at their market value at measurement date. |
Janus Bond & Money Market Funds | 63
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, swap agreements and/or securities with extended settlement dates as of December 31, 2009 is noted below.
Fund | Aggregate Value | ||||
Janus Flexible Bond Fund | $ | 17,877,654 | |||
Janus High-Yield Fund | 27,885,000 | ||||
Janus Short-Term Bond Fund | 52,559,167 | ||||
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 December 31, 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.
64 | DECEMBER 31, 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 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 thirty-eight funds which include multiple series of shares, with differing investment objectives and policies. The Bond Funds invest primarily in income-producing securities. The Money Market Funds invest primarily in short-term money market securities. Each Bond Fund in this report is classified as diversified, as defined in the 1940 Act.
Each Bond Fund in this report offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms. The maximum purchase in Class C Shares is $500,000 for any single purchase.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, and bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class J Shares are available to shareholders investing in the Funds either directly or through financial intermediaries.
Class R Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
The following accounting policies have been followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America within the investment management 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
Janus Bond & Money Market Funds | 65
Notes to Financial Statements (unaudited) (continued)
pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a non-significant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a non-valued security and a restricted or non-public security. 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. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
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.
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.
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.
66 | DECEMBER 31, 2009
In accordance with the Financial Accounting Standards Board (“FASB”) guidance, the Funds adopted the provisions of “Income Taxes.” These provisions require an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’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 Funds recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense on the Statements of Operations.
These provisions require management of the Funds to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the two-month period ended December 31, 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.
Valuation Inputs Summary
In accordance with FASB guidance, the Funds utilize the “Fair Value Measurements and Disclosures” to define fair value, establish a framework for measuring fair value, and expand disclosure requirements regarding fair value measurements. The Fair Value Measurement Standard does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of the Funds’ investments defined pursuant to this standard. 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 under 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 December 31, 2009 to value the Funds’ investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if applicable) in the Notes to Schedules of Investments.
In April 2009, FASB issued “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,” which provides additional guidance for estimating fair value in accordance with Fair Value Measurements 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. Additionally, it amends the Fair Value Measurement Standard by expanding disclosure requirements for reporting entities surrounding the major categories of assets and liabilities carried at fair value. The required disclosures have been incorporated into the “Valuation Inputs Summary” in the Notes to Schedules of Investments. Management believes applying this guidance does not have a material impact on the financial statements.
2. | Derivative Instruments |
The Bond Funds may invest in various types of derivatives which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Bond Funds may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives.
The Bond Funds may use derivative instruments for hedging (to offset risks associated with an investment,
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Notes to Financial Statements (unaudited) (continued)
currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the Bond Funds invest in a derivative for speculative purposes, the Bond Funds will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the cost of the derivative. A Fund may not use any derivative to gain exposure to an asset or class of assets prohibited by its investment restrictions from purchasing directly. A Fund’s ability to use derivatives instruments may also be limited by tax considerations.
Investments in derivatives are generally subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Bond Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including credit risk, currency risk, leverage risk, liquidity risk, and index risk.
Derivatives may generally be traded over-the-counter (“OTC”) or on an exchange. Exchange-traded derivatives, such as futures contracts, are regulated and the terms of the options are standardized. Derivatives traded OTC, such as swap contracts, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased counterparty credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Bond Funds may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, a Bond Fund may require the counterparty to post collateral if the Bond Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
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 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.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The Bond Funds may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Bond Funds may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Funds are subject to foreign currency risk in the normal course of pursuing their investment objectives through their investments in forward currency contracts.
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 on 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
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The 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 are subject to interest rate risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in futures contracts. The Funds may also use such derivative instruments to
68 | DECEMBER 31, 2009
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 held by the Bond Funds that are designated as collateral for market value on futures contracts are noted on the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian or with the counterparty broker.
With futures, there is minimal counterparty credit risk to the Funds since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation to buy (call option) or sell (put option) a financial instrument at an agreed upon price. 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 Funds are subject to interest rate risk, liquidity risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in options contracts. The Funds may use option contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. 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, 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 Bond 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 Bond 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.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded over-the-counter expose the Bond Funds to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Bond Funds and the counterparty and by having the counterparty post collateral to cover the Bond Funds’ exposure to the counterparty.
Holdings of the Bond Funds designated to cover outstanding written options are noted on the Schedules of Investments (if applicable). Options written are reported as
Janus Bond & Money Market Funds | 69
Notes to Financial Statements (unaudited) (continued)
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 Bond 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 Bond 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 Bond 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 Bond Funds may recognize due to written call options.
Other Options
In addition to the option strategies described above, a Bond Fund may purchase and sell a variety of options with non-standard payout structures or other features (“exotic options”). Exotic options are traded OTC and typically have price movements that can vary markedly from simple put or call options. The risks associated with exotic options are that they cannot be as easily priced and may be subject to liquidity risk. While some exotic options have fairly active markets others are mostly thinly traded instruments. Some options are pure two-party transactions and may have no liquidity. The Bond Funds may treat such instruments as illiquid and will limit its investments in such instruments to no more than 15% of each Fund’s net assets, when combined with all other illiquid investments of each Fund. A Bond Fund may use exotic options to the extent that they are consistent with the Fund’s investment objective and investment policies, and applicable regulations.
The Bond Funds may purchase and sell exotic options that have values which are determined by the correlation of two or more underlying assets. These types of options include but are not limited to outperformance options, yield curve options or other spread options.
Swaps
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. 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. The Bond Funds are subject to market risk and interest rate risk in the normal course of pursuing their investment objectives through investments in swap contracts. 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 Bond 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 of the Bond Funds are reported as an asset or liability on the Statements of Assets and Liabilities (if applicable). Realized gains and losses of the Bond 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. The Bond Funds are subject to credit risk in the normal course of pursuing their investment objectives through their investments in credit default swap contracts. The Bond Funds may enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which they are not otherwise exposed. With a credit default swap, 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. The Bond Funds’ maximum risk of loss from counterparty risk, either as protection sellers or as protection buyers (undiscounted), is the notional value of the contract. The risk is mitigated by having a netting arrangement between the Bond Funds and the counterparty and by posting of collateral by the counterparty to the Funds to cover the Funds’ exposure to the counterparty.
Funded (notional value of contract paid up front) or unfunded (notional value only paid in case of default) 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
70 | DECEMBER 31, 2009
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.
The Bond Funds’ maximum risk of loss for equity swaps, interest rate swaps and total return swaps from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Bond Funds and the counterparty and by the posting of collateral to the Funds to cover the Funds’ exposure to the counterparty.
In accordance with FASB guidance, the Funds adopted the provisions for “Derivatives and Hedging”, which require 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.
Fair Value of Derivative Instruments as of December 31, 2009
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Janus Short-Term Bond Fund | ||||||||||||
Futures Contracts(a) | Variation Margin | $ | 124,297 | $ | – | |||||||
Total | $ | 124,297 | $ | – | ||||||||
(a) | Includes cumulative appreciation/(depreciation) of futures contracts as reported on the Schedule of Investments. Only the current day’s variation margin is reported on the Statement of Assets and Liabilities. |
The effect of Derivative Instruments on the Statement of Operations for the two-months ended December 31, 2009
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Forward Currency | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Contracts | Total | |||||||||||||||
Janus Short-Term Bond Fund | ||||||||||||||||||||
Interest Rate Contracts | $ | 397,724 | $ | – | $ | – | $ | – | $ | 397,724 | ||||||||||
Total | $ | 397,724 | $ | – | $ | – | $ | – | $ | 397,724 | ||||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
The value of derivative instruments at period end and the effect of derivatives on the Statement of Operations are indicative of the Fund’s volume throughout the period.
3. | Other investments and strategies |
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.
Unforeseen events in the equity and fixed-income markets may at times result in an unusually high degree of volatility
Janus Bond & Money Market Funds | 71
Notes to Financial Statements (unaudited) (continued)
in the markets, both domestic and international. These events and the resulting market upheavals may have an adverse effect on the Funds such as a decline in the value and liquidity of many securities held by the Funds, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in net asset value, and an increase in Fund expenses. Such unforeseen events may make it unusually difficult to identify both investment risks and opportunities and could limit or preclude each Fund’s ability to achieve its investment objective. The market’s behavior may at times be unpredictable. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
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, a 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 the Fund invests generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year 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.
The Bond 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 Bond 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 Bond 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 two-month period ended December 31, 2009 are indicated in the table below:
Average Monthly | ||||||||
Fund | Value | Rates | ||||||
Bond | ||||||||
Janus High-Yield Fund | $ | 13,267,430 | 0% - 6.5000% | |||||
Janus Short-Term Bond Fund | 7,982,317 | 0.2844% - 8.0000% | ||||||
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 investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of a Fund’s exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded on the 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 types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. 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.
Exchange-Traded Funds
The Bond Funds may invest in exchange-traded funds, which generally 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.
72 | DECEMBER 31, 2009
Exchange-Traded Notes
The Bond Funds may invest directly in exchange-traded notes (“ETNs”), 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 periodic 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 is meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
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 LIBOR. 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.
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. The Fund may not experience similar performance as its assets grow.
Interfund Lending
As permitted by the Securities and Exchange Commission (“SEC”), or the 1940 Act and rules promulgated thereunder, 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.
Mortgage- and Asset-Backed Securities
The Funds may purchase fixed or variable rate mortgage-backed securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“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 the Funds’ yield and the Funds’ 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
Janus Bond & Money Market Funds | 73
Notes to Financial Statements (unaudited) (continued)
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 to decline.
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 predetermined 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.
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.
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 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 SEC. Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Deutsche Bank AG (the “Lending Agent”) may also invest the cash collateral in 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 on 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
74 | DECEMBER 31, 2009
any securities on loan. Management continues to review the program and may resume securities lending.
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.
Short Sales
The Bond 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 the 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 the Funds 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 on 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.
The Bond Funds may also enter into short positions through derivative instruments such as option contracts, futures contracts, and swap agreements, which may expose the Funds to similar risks. To the extent that the Funds enter into short derivative positions, the Funds may be exposed to risks similar to those associated with short sales, including the risk that the Funds’ losses are theoretically unlimited.
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.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
Each Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Funds’ contractual investment advisory fee rate (expressed as an annual rate).
Janus Bond & Money Market Funds | 75
Notes to Financial Statements (unaudited) (continued)
Contractual | ||||||||
Investment | ||||||||
Average | Advisory | |||||||
Daily Net Assets | Fee (%) | |||||||
Fund | of the Fund | (annual rate) | ||||||
Bond | ||||||||
Janus Flexible Bond Fund | First $ | 300 Million | 0.50 | |||||
Over $ | 300 Million | 0.40 | ||||||
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 | ||||||
Money Market | ||||||||
Janus Money Market Fund | All Asset Levels | 0.20 | ||||||
Janus Government Money Market Fund | All Asset Levels | 0.20 | ||||||
Janus Capital has agreed to waive one-half of each Money Market 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 administration 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.
The Bond Funds pay 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 Bond Fund’s total net assets sold directly and the proportion of each Bond Fund’s net assets sold through 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 for Class J Shares.
In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Funds. Certain intermediaries may charge administrative fees to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Funds to Janus Services, which uses such fees to reimburse intermediaries.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of Class R Shares and Class S Shares of the Funds as applicable for providing or arranging for the provision of, administrative services including but not limited to, recordkeeping, subaccounting, order processing for omnibus or networked accounts, or other shareholder services provided on behalf of investors in Class R Shares and Class S Shares of the Funds, as applicable. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, and other financial intermediaries for providing these services.
Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, is the distributor of the Funds. The Funds have adopted a Distribution and Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Bond Funds at an annual rate, as determined from time to time by the Board of Trustees, of up to 0.25% of the Class A Shares average daily net assets, of up to 1.00% of the Class C Shares average daily net assets, of up to 0.50% of the Class R Shares average daily net assets, and of up to 0.25% of the Class S Shares average daily net assets. Payments under the Plan are not tied exclusively to actual distribution and shareholder service expenses, and the payments may exceed distribution and shareholder service expenses actually incurred by the Funds. If any of a Fund’s actual distribution and shareholder service expenses incurred during a calendar year is less than the payments made during a calendar year, the Fund will be reimbursed for the difference.
Janus Capital has agreed until at least February 16, 2011 to reimburse the Bond Funds by the amount, if any, that such Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any class-specific distribution and shareholder servicing fees applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares, the administrative fees payable pursuant to the Transfer Agency Agreement applicable to Class J Shares, Class R Shares, and Class S Shares, brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses), exceed the annual rates noted below. If applicable, amounts reimbursed to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Expense | |||||
Fund | Limit (%) | ||||
Bond | |||||
Janus Flexible Bond Fund | 0.55 | ||||
Janus High-Yield Fund | 0.78 | ||||
Janus Short-Term Bond Fund | 0.55 | ||||
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
76 | DECEMBER 31, 2009
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 December 31, 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” 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 two-month period ended December 31, 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 two-month period ended December 31, 2009.
For the two-month period ended December 31, 2009, Janus Capital assumed $870 of legal, consulting and Trustee costs and fees incurred by the funds in the Trust and Janus Aspen Series together with the Trust (the “Portfolios”), in connection with the regulatory and civil litigation matters discussed in Note 10. 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. The Funds reimburse Janus Capital for a portion of the compensation paid to the Chief Compliance Officer and certain compliance staff of the Trust. Total compensation of $52,482 was paid by the Trust during the two-month period ended December 31, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
Class A Shares include a 4.75% upfront sales charge of the offering price for the Bond Funds. The sales charge is allocated between Janus Distributors and financial intermediaries. During the two-month period ended December 31, 2009, Janus Distributors retained the following upfront sales charge:
Upfront | |||||
Fund (Class A Shares) | Sales Charge | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 13,941 | |||
Janus High-Yield Fund | 6,887 | ||||
Janus Short-Term Bond Fund | 2,971 | ||||
Class C Shares include a 1.00% contingent deferred sales charge paid by the redeeming shareholder to Janus Distributors. The contingent deferred sales charge applies to shares redeemed within 12 months of purchase. The redemption price may differ from the net asset value per share. During the two-month period ended December 31, 2009, redeeming shareholders of Class C Shares paid the following contingent deferred sales charges:
Contingent Deferred | |||||
Fund (Class C Shares) | Sales Charge | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 3,549 | |||
Janus High-Yield Bond Fund | 3,847 | ||||
Janus Short-Term Bond Fund | 1,965 | ||||
A 2.00% redemption fee may be imposed on Class I Shares, Class J Shares, Class S Shares, and Class T 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 Fund for the two-month period ended December 31, 2009 is indicated in the table below:
Fund | Redemption Fee | ||||
Bond | |||||
Janus High-Yield Fund | $ | 31,397 | |||
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 Operations (if applicable). Custodian offsets received reduce “Custodian fees” on the
Janus Bond & Money Market Funds | 77
Notes to Financial Statements (unaudited) (continued)
Statements of Operations (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”). Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 2a-7 product. There are no restrictions on the Funds’ ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Funds to Janus Cash Liquidity Fund LLC. As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated cash management pooled investment vehicles and the Investing Funds.
During the two-month period ended December 31, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 12/31/09 | |||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 234,560,684 | $ | (213,974,000) | $ | 16,015 | $ | 56,885,575 | ||||||
Janus High-Yield Fund | 114,439,815 | (141,906,629) | 10,406 | 22,001,000 | ||||||||||
Janus Short-Term Bond Fund | 205,587,080 | (221,259,000) | 17,238 | 52,666,519 | ||||||||||
$ | 554,587,579 | $ | (577,139,629) | $ | 43,659 | $ | 131,553,094 | |||||||
Janus Capital or an affiliate invested and/or redeemed initial seed capital during the two-month period ended December 31, 2009, as indicated in the following table.
Seed | Seed | |||||||||||||||||||
Capital at | Date of | Date of | Capital at | |||||||||||||||||
Fund | 11/1/09 | Purchases | Purchases | Redemptions | Redemption | 12/31/09 | ||||||||||||||
Bond | ||||||||||||||||||||
Janus High-Yield Fund - Class R Shares | $ | 625,000(1) | $ | – | – | $ | – | – | $ | 625,000 | ||||||||||
Janus High-Yield Fund - Class S Shares | 129,337(1) | – | – | – | – | $ | 129,337 | |||||||||||||
Janus Short-Term Bond Fund - Class A Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Short-Term Bond Fund - Class C Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Short-Term Bond Fund - Class I Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Short-Term Bond Fund - Class S Shares | 1,000 | – | – | – | 1,000 | |||||||||||||||
(1) | Seed capital acquired pursuant to merger. See Note 9. |
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The 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 December 31, 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.
78 | DECEMBER 31, 2009
Federal Tax | Unrealized | Unrealized | Net Tax | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | Appreciation | ||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 2,029,438,508 | $ | 91,406,235 | $ | (3,542,511) | $ | 87,863,724 | ||||||
Janus High-Yield Fund | 1,057,725,309 | 94,199,707 | (2,991,780) | 91,207,927 | ||||||||||
Janus Short-Term Bond Fund | 1,630,748,375 | 32,831,667 | (1,338,290) | 31,493,377 | ||||||||||
Money Market | ||||||||||||||
Janus Money Market Fund | 1,206,889,844 | – | – | – | ||||||||||
Janus Government Money Market Fund | 199,754,902 | – | – | – | ||||||||||
Net capital loss carryovers as of October 31, 2009 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, 2009
Accumulated | |||||||||||||||||
Fund | June 30, 2010 | June 30, 2015 | June 30, 2016 | June 30, 2017 | Capital Losses | ||||||||||||
Bond | |||||||||||||||||
Janus Flexible Bond Fund | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||
Janus High-Yield Fund | (25,200,139) | (27,476) | (57,460,437) | (43,984,661) | (126,672,713) | ||||||||||||
Janus Short-Term Bond Fund | – | – | – | – | – | ||||||||||||
Money Market | |||||||||||||||||
Janus Money Market Fund | – | – | – | – | – | ||||||||||||
Janus Government Money Market Fund | – | – | – | – | – | ||||||||||||
During the two-month period ended October 31, 2009, the following capital loss carryovers were utilized by the Funds as indicated in the table.
Capital Loss | ||||||||
Fund | Carryover Utilized | |||||||
Bond | ||||||||
Janus Flexible Bond Fund | $ | 21,334,647 | ||||||
Janus Short-Term Bond Fund | 4,686,764 | |||||||
6. | Expense Ratios |
The expense ratios listed in the Financial Highlights reflect expenses prior to any expense offsets (gross expense ratio) and after expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursement). Listed below are the gross expense ratios for the Bond Funds that would have been in effect, absent the waiver of certain fees and offsets.
For the two-month period ended December 31, 2009 (unaudited)
and the fiscal years or period ended October 31
and the fiscal years or period ended October 31
Janus Flexible | Janus High-Yield | Janus Short-Term | ||||||||||
Bond Fund | Fund | Bond Fund | ||||||||||
Class A Shares | ||||||||||||
2009(1) | 0.73% | 0.90% | 0.85% | |||||||||
2009(2) | 0.80% | 0.96% | 0.88% | |||||||||
Class C Shares | ||||||||||||
2009(1) | 1.49% | 1.65% | 1.60% | |||||||||
2009(2) | 1.58% | 1.71% | 1.63% | |||||||||
Class I Shares | ||||||||||||
2009(1) | 0.46% | 0.63% | 0.60% | |||||||||
2009(2) | 0.48% | �� | 0.66% | 0.79% |
Janus Bond & Money Market Funds | 79
Notes to Financial Statements (unaudited) (continued)
Janus Flexible | Janus High-Yield | Janus Short-Term | ||||||||||
Bond Fund | Fund | Bond Fund | ||||||||||
Class J Shares | ||||||||||||
2009(1) | 0.64%(3) | 0.84%(3) | 0.83%(3) | |||||||||
2009(2) | 0.73%(3) | 0.89%(3) | 0.87%(3) | |||||||||
2008 | 0.78%(3) | 0.90%(3) | 0.98%(3) | |||||||||
2007 | 0.80%(3) | 0.87%(3) | 1.01%(3) | |||||||||
2006 | 0.83%(3) | 0.93%(3) | 1.06%(3) | |||||||||
2005 | 0.78%(3) | 0.88%(3) | 0.97%(3) | |||||||||
Class R Shares | ||||||||||||
2009(1) | 1.21% | 1.38% | N/A | |||||||||
2009(2) | 1.25% | 1.41% | N/A | |||||||||
Class S Shares | ||||||||||||
2009(1) | 0.96% | 1.13% | 1.11% | |||||||||
2009(2) | 0.99% | 1.18% | 1.13% | |||||||||
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of operating expenses to average net assets without waivers and/or expense reimbursements and was less than 0.01%. |
7. | Capital Share Transactions |
For the two-month period ended December 31, 2009 (unaudited) | ||||||||||||||||||||||||||
and the fiscal year ended October 31, 2009 | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||
(all numbers in thousands) | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||
Bond | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||||||||||||||||||
Shares sold | 2,955 | 9,736 | 1,197 | 4,029 | 8,120 | 14,712 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 18,622 | N/A | 7,575 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 251 | 213 | 126 | 249 | 56 | 25 | ||||||||||||||||||||
Shares repurchased | (1,550) | (6,380) | (697) | (1,599) | (906) | (489) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 1,656 | 22,191 | 626 | 10,254 | 7,270 | 14,248 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 22,191 | – | 10,254 | – | 14,248 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 23,847 | 22,191 | 10,880 | 10,254 | 21,518 | 14,248 | ||||||||||||||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||||||||||||||||||
Shares sold | 2,433 | 5,693 | 645 | 2,957 | 3,413 | 7,829 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 11,050 | N/A | 4,978 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 103 | 80 | 75 | 138 | 24 | 14 | ||||||||||||||||||||
Shares repurchased | (795) | (1,343) | (270) | (623) | (358) | (134) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 1,741 | 15,480 | 450 | 7,450 | 3,079 | 7,709 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 15,480 | – | 7,450 | – | 7,709 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 17,221 | 15,480 | 7,900 | 7,450 | 10,788 | 7,709 | ||||||||||||||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||||||||||||||||||
Shares sold | 6,785 | 29,763 | 719 | 1,894 | 6,999 | 23,311 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 14,545 | N/A | 1,551 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 528 | 275 | 27 | 55 | 8 | 5 | ||||||||||||||||||||
Shares repurchased | (1,171) | (1,083) | (268) | (838) | (1,233) | (503) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 6,142 | 43,500 | 478 | 2,662 | 5,774 | 22,813 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 43,500 | – | 2,662 | – | 22,813 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 49,642 | 43,500 | 3,140 | 2,662 | 28,587 | 22,813 | ||||||||||||||||||||
Transactions in Fund Shares – Class J Shares: | ||||||||||||||||||||||||||
Shares sold | 7,355 | 46,972 | 9,927 | 62,740 | 111,140 | 419,692 | ||||||||||||||||||||
Reinvested dividends and distributions | 1,318 | 3,739 | 1,470 | 8,890 | 2,210 | 6,288 | ||||||||||||||||||||
Shares repurchased | (4,579) | (27,903) | (4,111) | (20,129) | (23,786) | (111,230) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 4,094 | 22,808 | 7,286 | 51,501 | 89,564 | 314,750 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 104,319 | 81,511 | 106,423 | 54,922 | 395,626 | 80,876 | ||||||||||||||||||||
Shares Outstanding, End of Period | 108,413 | 104,319 | 113,709 | 106,423 | 485,190 | 395,626 |
80 | DECEMBER 31, 2009
For the two-month period ended December 31, 2009 (unaudited) | ||||||||||||||||||||||||||
and the fiscal year ended October 31, 2009 | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||
(all numbers in thousands) | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||
Bond | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||||||||||||||||||
Shares sold | 56 | 197 | 9 | 5 | N/A | N/A | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 136 | N/A | 107 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 3 | 3 | 1 | 4 | N/A | N/A | ||||||||||||||||||||
Shares repurchased | (13) | (36) | – | – | N/A | N/A | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 46 | 300 | 10 | 116 | N/A | N/A | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 300 | – | 116 | – | N/A | N/A | ||||||||||||||||||||
Shares Outstanding, End of Period | 346 | 300 | 126 | 116 | N/A | N/A | ||||||||||||||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||||||||||||||||||
Shares sold | 677 | 2,340 | 155 | 364 | 476 | 2,246 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 6,074 | N/A | 470 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 86 | 83 | 8 | 14 | 2 | 3 | ||||||||||||||||||||
Shares repurchased | (1,271) | (1,726) | (73) | (144) | (496) | (760) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (508) | 6,771 | 90 | 704 | (18) | 1,489 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 6,771 | – | 704 | – | 1,489 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 6,263 | 6,771 | 794 | 704 | 1,471 | 1,489 |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009 for Class A Shares, Class C Shares, Class I Shares, Class R Shares and Class S Shares and November 1, 2008 through October 31, 2009 for Class J Shares. |
Janus Bond & Money Market Funds | 81
Notes to Financial Statements (unaudited) (continued)
For the two-month period ended December 31, 2009 (unaudited) | ||||||||||||||||||
and the fiscal year ended October 31, 2009 | ||||||||||||||||||
(all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | ||||||||||||||||
Money Market | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Transactions in Fund Shares – Class J Shares: | ||||||||||||||||||
Shares sold | 84,824 | 697,726 | 9,969 | 102,392 | ||||||||||||||
Reinvested dividends and distributions | 12 | 3,100 | 2 | 242 | ||||||||||||||
Shares repurchased | (117,573) | (1,166,590) | (14,278) | (186,385) | ||||||||||||||
Net Increase/(Decrease) in Fund Shares | (32,737) | (465,764) | (4,307) | (83,751) | ||||||||||||||
Shares Outstanding, Beginning of Period | 1,517,736 | 1,983,500 | 228,517 | 312,268 | ||||||||||||||
Shares Outstanding, End of Period | 1,484,999 | 1,517,736 | 224,210 | 228,517 | ||||||||||||||
(1) Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | ||||||||||||||||||
(2) Period from November 1, 2008 through October 31, 2009. |
8. | Purchases and Sales of Investment Securities |
For the two-month period ended December 31, 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 | $ | 370,997,293 | $ | 196,282,525 | $ | 67,697,194 | $ | 127,090,566 | ||||||
Janus High-Yield Fund | 256,130,924 | 169,263,887 | – | – | ||||||||||
Janus Short-Term Bond Fund | 385,412,516 | 50,393,081 | 7,049,405 | 19,009,209 | ||||||||||
9. | Fund Acquisition |
On July 6, 2009, Janus Flexible Bond Fund and Janus High-Yield Fund acquired all of the net assets of Janus Adviser Flexible Bond Fund and Janus Adviser High-Yield Fund, respectively, pursuant to separate plans of reorganization approved by the Trustees of Janus Investment Fund. The reorganization involved certain funds that were a series of the Janus Adviser Series trust (“JAD Trust”) being merged into corresponding funds of the Trust. The reorganization was accomplished by a tax-fee exchange of the series of the JAD Trust for the series of the Trust. The table below reflects the merger activity.
Target Fund’s | ||||||||||||||||||||||||
Unrealized | ||||||||||||||||||||||||
Target Fund’s | Target Fund’s | Acquiring Fund’s | Acquiring Fund’s | Combined | Appreciation/ | |||||||||||||||||||
Shares Outstanding | Net Assets | Shares Issued | Net Assets | Net Assets | (Depreciation) | |||||||||||||||||||
Fund | Prior to Merger | Prior to Merger | in Merger | Prior to Merger | after Merger | Prior to Merger | ||||||||||||||||||
Bond | - | - | - | - | - | - | ||||||||||||||||||
Janus Flexible Bond Fund | 40,252,957 | $ | 502,967,658 | 50,427,335 | $ | 948,343,596 | $ | 1,451,311,254 | $ | (13,275,300 | ) | |||||||||||||
Janus High-Yield Fund | 14,642,660 | 111,693,397 | 14,681,438 | 653,584,506 | 765,277,903 | (3,617,428 | ) |
10. | 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
82 | DECEMBER 31, 2009
consolidated amended complaints were filed with the Court, one of which still remains, and which was brought by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders against JCGI and Janus Capital (First Derivative Traders et al. v. Janus Capital Group Inc. et al., U.S. District Court, District of Maryland, MDL 1586, formerly referred to as Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818).
In the Wiggins case, a Motion to Dismiss was previously 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 October 2009, Janus filed a petition for a writ of certiorari with the United States Supreme Court to review the judgment of the United States Court of Appeals for the Fourth Circuit. On January 11, 2010, the Supreme Court asked the United States Solicitor General to file a brief on the question of whether Janus’ petition should be granted. As a result of these developments at the Supreme Court, the Court has stayed all further proceedings until the Supreme Court rules on Janus’ petition for a writ of certiorari. In addition to the Wiggins case, on January 20, 2010, the Court entered orders dismissing the remaining claims asserted against Janus Capital and its affiliates by fund investors in Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518 (a derivative claim involving alleged frequent trading practices).
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. On July 31, 2009, Janus filed a “Notice that Matter is Deemed Concluded.” At this time, no further proceedings are scheduled in this matter.
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.
11. | Subsequent Events |
Effective February 16, 2010, Class J Shares will be renamed Class T Shares and will be available through certain financial intermediary platforms. In addition, Class J Shares held directly with Janus will be moved to a newly created Class D Shares, a share class dedicated to shareholders investing directly with Janus. Class D Shares will commence operations on or about February 16, 2010. The transfer agency (TA) fee structure for Class D Shares and Class T Shares will be different than that of Class J Shares. Class D Shares will pay a fixed annual TA fee rate of 0.12% of net assets. Class T Shares will pay a fixed annual TA fee rate of 0.25% of net assets. Currently, Class J Shares pay a blended annual fee rate of 0.12% of average net assets for the proportion of assets sold directly and 0.25% of average net assets sold through financial intermediaries. A Fund’s total expense ratio could be impacted by the change in TA fee structure.
Effective February 16, 2010, the Money Market Funds have agreed to compensate Janus Capital for certain administrative services at the annual rate of 0.46% of the value of the average daily net assets of the Class D Shares and 0.48% of the value of the average daily net assets of Class T Shares. Prior to February 16, 2010, the fee was 0.50% of the value of the average daily net assets of Class J Shares.
Effective February 16, 2010, the maximum initial sales charge applied to purchases of Class A Shares of Janus Short-Term Bond Fund changed from 4.75% to 2.50%.
In May 2009, in accordance with the FASB guidance, the Funds adopted the provision of “Subsequent Events,” which provides guidance to establish general standards of accounting for and disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or are available to be issued. The guidance also requires entities to disclose the date through which subsequent events were evaluated as well as the basis for that date. Management has evaluated whether any events or transactions occurred subsequent to December 31, 2009 through February 18, 2010, the date of issuance of the Funds’ financial statements, and determined that there were no other material events or transactions that would require recognition or disclosure in the Funds’ financial statements.
Janus Bond & Money Market Funds | 83
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 without charge: (i) upon request, by calling 1-800-525-0020 (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 1-800-525-0020 (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 seven 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 11, 2009, 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, 2010 through February 1, 2011, subject to earlier termination as provided for in each agreement,
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
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 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
84 | DECEMBER 31, 2009
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.
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 non-affiliated funds subadvised by Janus Capital (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, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, 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 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
Janus Bond & Money Market Funds | 85
Additional Information (unaudited) (continued)
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, the Trustees, each of whom is an Independent Trustee, concluded at their December 11, 2009 meeting 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.
86 | DECEMBER 31, 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 estimated for the fiscal year. The ratios also include expenses indirectly incurred by a 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.
If a Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports each 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 Funds’ 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
Janus Bond & Money Market Funds | 87
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
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.
3. | Statements of Assets and Liabilities |
These statements are often referred to as the “balance sheets.” 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 the 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. | Statements of Operations |
These statements detail 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 will 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 Statements 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 Funds 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 Funds. 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. The total
88 | DECEMBER 31, 2009
return may include adjustments in accordance with generally accepted accounting principles. As a result, the total return may differ from the total return reflected for shareholder transactions.
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 within the Trust 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 Statements of Operations reflect 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 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 asset size 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 | 89
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
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.
Fixed Income
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 capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
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.
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.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
Please consider the charges, risks, expenses and investment objectives carefully before investing or recommending to clients for investment. For a prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money.
This is for information purposes only. Janus Capital Group Inc., does not guarantee that the information supplied is accurate, complete or timely or make any warranties with regards to the results obtained from its use.
Janus Distributors LLC 151 Detroit Street, Denver, CO 80206 (1/10)
Investment products offered are: NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE
C-0110-041 | 2-28-10 125-24-71111 02-10 |
2009 SEMIANNUAL REPORT
Janus Risk-Managed Funds
Risk-Managed
INTECH Risk-Managed Core Fund
INTECH Risk-Managed Growth Fund
INTECH Risk-Managed International Fund
INTECH Risk-Managed Value Fund
HIGHLIGHTS
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Risk-Managed Funds
1 | ||
2 | ||
3 | ||
14 | ||
25 | ||
38 | ||
51 | ||
52 | ||
54 | ||
56 | ||
67 | ||
69 | ||
85 | ||
88 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital). Read it carefully before you invest or send money.
Lipper Rankings (unaudited)
Our funds have delivered strong long-term relative investment performance across all three asset managers, Janus, INTECH and Perkins Investment Management.
Lipper Rankings – Based on total returns as of 12/31/09 | ||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||
Growth & Core | ||||||||||||||||||||||||||
Janus Balanced Fund(1);(9/92) | Mixed-Asset Target Allocation-Moderate Funds | 43 | 219/509 | 1 | 1/412 | 1 | 1/311 | 19 | 28/148 | 4 | 1/27 | 1 | 1/338 | |||||||||||||
Janus Contrarian Fund;(2/00) | Multi-Cap Core Funds | 22 | 170/795 | 46 | 308/683 | 6 | 29/519 | – | – | 17 | 37/227 | 17 | 37/227 | |||||||||||||
Janus Enterprise Fund(1);(9/92) | Mid-Cap Growth Funds | 41 | 191/474 | 25 | 103/425 | 14 | 47/353 | 93 | 166/178 | 39 | 14/35 | 26 | 115/448 | |||||||||||||
Janus Fund;(2/70) | Large-Cap Growth Funds | 36 | 290/814 | 35 | 246/702 | 27 | 154/582 | 67 | 207/310 | 16 | 3/18 | 40 | 301/754 | |||||||||||||
Janus Growth and Income Fund(1);(5/91) | Large-Cap Core Funds | 7 | 60/906 | 40 | 304/773 | 37 | 240/653 | 68 | 252/374 | 8 | 6/78 | 48 | 388/820 | |||||||||||||
Janus Orion Fund;(6/00) | Multi-Cap Growth Funds | 8 | 36/459 | 16 | 57/378 | 3 | 9/310 | – | – | 19 | 35/192 | 57 | 238/418 | |||||||||||||
Janus Research Fund(1);(5/93) | Large-Cap Growth Funds | 16 | 124/814 | 17 | 117/702 | 14 | 78/582 | 76 | 235/310 | 4 | 3/79 | 12 | 77/652 | |||||||||||||
Janus Research Core Fund(1);(6/96) | Large-Cap Core Funds | 9 | 74/906 | 40 | 302/773 | 15 | 98/653 | 35 | 129/374 | 3 | 6/201 | 57 | 466/820 | |||||||||||||
Janus Triton Fund(1);(2/05) | Small-Cap Growth Funds | 10 | 53/540 | 2 | 9/472 | – | – | – | – | 1 | 4/399 | 1 | 4/450 | |||||||||||||
Janus Twenty Fund*;(4/85) | Large-Cap Growth Funds | 14 | 111/814 | 1 | 2/702 | 1 | 3/582 | 41 | 127/310 | 6 | 2/34 | 38 | 286/766 | |||||||||||||
Janus Venture Fund*;(4/85) | Small-Cap Growth Funds | 7 | 36/540 | 47 | 220/472 | 30 | 116/397 | 84 | 181/217 | 10 | 1/10 | 20 | 25/125 | |||||||||||||
Risk-Managed | ||||||||||||||||||||||||||
INTECH Risk-Managed Core Fund;(2/03) | Multi-Cap Core Funds | 83 | 656/795 | 68 | 464/683 | 60 | 312/519 | – | – | 48 | 182/386 | 48 | 182/386 | |||||||||||||
Value | ||||||||||||||||||||||||||
Perkins Mid Cap Value Fund(1);(8/98) | Mid-Cap Value Funds | 76 | 191/251 | 6 | 11/210 | 5 | 8/161 | 4 | 2/61 | 3 | 1/48 | 3 | 1/48 | |||||||||||||
Perkins Small Cap Value Fund;(10/87) | Small-Cap Core Funds | 27 | 198/756 | 1 | 6/631 | 4 | 18/522 | 12 | 32/269 | 4 | 5/128 | 4 | 5/128 | |||||||||||||
Global & International | ||||||||||||||||||||||||||
Janus Global Life Sciences Fund;(12/98) | Global Healthcare/Biotechnology Funds | 18 | 8/45 | 8 | 3/41 | 33 | 12/36 | 79 | 15/18 | 17 | 2/11 | 10 | 4/42 | |||||||||||||
Janus Global Opportunities Fund(1);(6/01) | Global Funds | 49 | 266/544 | 33 | 122/378 | 65 | 185/287 | – | – | 17 | 31/185 | 65 | 201/313 | |||||||||||||
Janus Global Research Fund(1);(2/05) | Global Funds | 12 | 65/544 | 10 | 36/378 | – | – | – | – | 4 | 11/292 | 4 | 11/292 | |||||||||||||
Janus Global Technology Fund;(12/98) | Global Science & Technology Funds | 65 | 50/77 | 33 | 21/64 | 26 | 15/58 | 90 | 18/19 | 36 | 6/16 | 43 | 27/63 | |||||||||||||
Janus Overseas Fund(1);(5/94) | International Funds | 1 | 2/1275 | 1 | 7/975 | 1 | 1/700 | 13 | 48/386 | 1 | 1/99 | 1 | 1/611 | |||||||||||||
Janus Worldwide Fund(1);(5/91) | Global Funds | 27 | 142/544 | 64 | 239/378 | 74 | 211/287 | 96 | 137/143 | 42 | 7/16 | 33 | 181/558 | |||||||||||||
Fixed Income | ||||||||||||||||||||||||||
Janus Flexible Bond Fund(1);(7/87) | Intermediate Investment Grade Debt Funds | 52 | 285/549 | 6 | 25/458 | 7 | 24/395 | 18 | 39/219 | 10 | 2/19 | 7 | 30/477 | |||||||||||||
Janus High-Yield Bond Fund(1);(12/95) | High Current Yield Funds | 76 | 347/459 | 25 | 98/391 | 17 | 56/341 | 16 | 33/207 | 7 | 6/90 | 23 | 70/313 | |||||||||||||
Janus Short-Term Bond Fund(1);(9/92) | Short Investment Grade Debt Funds | 59 | 144/246 | 2 | 4/223 | 2 | 3/176 | 13 | 12/94 | 20 | 5/24 | 3 | 6/231 | |||||||||||||
Asset Allocation | ||||||||||||||||||||||||||
Janus Smart Portfolio – Conservative;(12/05) | Mixed-Asset Target Allocation Conservative Funds | 22 | 97/441 | 4 | 13/361 | – | – | – | – | 2 | 5/304 | 2 | 5/304 | |||||||||||||
Janus Smart Portfolio – Moderate;(12/05) | Mixed-Asset Target Allocation Moderate Funds | 10 | 49/509 | 1 | 3/412 | – | – | – | – | 2 | 6/369 | 2 | 6/369 | |||||||||||||
Janus Smart Portfolio – Growth;(12/05) | Mixed-Asset Target Allocation Growth Funds | 7 | 43/649 | 6 | 32/549 | – | – | – | – | 3 | 13/497 | 3 | 13/497 | |||||||||||||
(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. |
*Closed to new investors.
Past performance is no guarantee of future results. For current month end performance, call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit Janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital).
Ranking is for Class J Shares only; other classes may have different performance characteristics.
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.
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 Risk-Managed Funds | 1
Useful Information About Your Fund Report (unaudited)
Management Commentaries
The Management Commentaries in this report include valuable insight from the Funds’ investment personnel 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’ investment personnel in the Management Commentaries are just that: opinions. They are a reflection of the investment personnel’s best judgment at the time this report was compiled, which was December 31, 2009. As the investing environment changes, so could the investment personnel’s opinions. These views are unique to the investment personnel and aren’t necessarily shared by 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 sales charges (loads) on purchase payments (applicable to Class A Shares only); redemption fees, where applicable (and any related exchange fees); and (2) ongoing costs, including management fees; distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only); administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class S Shares, and Class T Shares only); administrative fees (applicable to Class A Shares, Class C Shares, and Class I Shares only); 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 two-month period from November 1, 2009 to December 31, 2009 or the five-month period from August 1, 2009 to December 31, 2009 depending on the Fund.
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 each 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 each 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 Fund’s total annual fund operating expenses, excluding any performance adjustments to management fees, if applicable, class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only), administrative fees payable to the Transfer Agency Agreement (applicable to Class J Shares, Class S Shares, and Class T Shares only), brokerage commissions, interest, dividends, taxes, and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least February 16, 2011. 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) and any related exchange fees. These fees are fully described in the Funds’ prospectuses. 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.
2 | DECEMBER 31, 2009
INTECH Risk-Managed Core Fund (unaudited)
Fund Snapshot Analyst-driven, team-refined investment process attempts to capture the value of our research and manage investment risk. We believe a portfolio reflecting our team’s best ideas can deliver superior risk-adjusted results. | Managed by INTECH Investment Management LLC |
Performance Overview
For the two-month period ended December 31, 2009, INTECH Risk-Managed Core Fund’s Class J Shares returned 8.67%. This compares to the 8.05% 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.
INTECH’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 stock 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 benchmark, 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 22 years, we have experienced periods 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 the long term. 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.
Janus Risk-Managed Funds | 3
INTECH Risk-Managed Core Fund (unaudited)
INTECH Risk-Managed Core Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
Exxon Mobil Corp. Oil Companies – Integrated | 5.1% | |||
AT&T, Inc. Telephone – Integrated | 3.5% | |||
International Business Machines Corp. Computers | 2.0% | |||
Johnson & Johnson Medical Products | 1.7% | |||
Apple, Inc. Computers | 1.6% | |||
13.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Emerging markets comprised 0.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
4 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||
Two-Month | |||||||||||||
Period | |||||||||||||
Ended | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
12/31/09 | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
INTECH Risk-Managed Core Fund – Class A Shares | |||||||||||||
NAV | 8.69% | 22.50% | 0.21% | 6.69% | 1.04% | 1.03% | |||||||
MOP | 2.48% | 15.46% | –0.97% | 5.77% | |||||||||
INTECH Risk-Managed Core Fund – Class C Shares | |||||||||||||
NAV | 8.47% | 21.28% | –0.54% | 5.90% | 1.83% | 1.78% | |||||||
CDSC | 7.39% | 20.09% | –0.54% | 5.90% | |||||||||
INTECH Risk-Managed Core Fund – Class I Shares | 8.71% | 22.91% | 0.52% | 7.02% | 0.69% | 0.69% | |||||||
INTECH Risk-Managed Core Fund – Class J Shares | 8.67% | 22.91% | 0.52% | 7.02% | 0.97% | 0.97% | |||||||
INTECH Risk-Managed Core Fund – Class S Shares | 8.54% | 22.14% | 0.00% | 6.47% | 1.19% | 1.19% | |||||||
S&P 500® Index | 8.05% | 26.46% | 0.42% | 6.30% | |||||||||
Lipper Quartile – Class J Shares | – | 4th | 3rd | 2nd | |||||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 656/795 | 312/519 | 182/386 | |||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
Janus Risk-Managed Funds | 5
INTECH Risk-Managed Core Fund (unaudited)
For Class I Shares, Class J Shares, and Class S Shares, 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 annual fund operating expenses allocated to any class (excluding any performance adjustments to management fees, distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
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.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 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 proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) may not achieve the desired results. The rebalancing techniques used by the Fund 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, and derivatives. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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 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.
Effective July 6, 2009, INTECH Risk-Managed Core Fund designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser INTECH Risk-Managed Core Fund (the “JAD predecessor fund”) into corresponding shares of INTECH Risk-Managed Core Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009, after the reorganization of Class I Shares of the JAD predecessor fund into the corresponding share class of INTECH Risk-Managed Core Fund. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 Class J Shares only; other classes may have different performance characteristics.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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.”
* | The Fund’s inception date – February 28, 2003 |
6 | DECEMBER 31, 2009
(unaudited)
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 – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,086.90 | $ | 1.78 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.06 | $ | 5.19 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,084.70 | $ | 3.19 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,015.98 | $ | 9.30 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,088.10 | $ | 0.96 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.43 | $ | 2.80 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,087.70 | $ | 1.41 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,138.90 | $ | 4.32 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.68 | $ | 5.58 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.02% for Class A Shares, 1.83% for Class C Shares, 0.54% for Class I Shares, 0.81% for Class J Shares and 1.10% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Risk-Managed Funds | 7
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Common Stock – 99.8% | ||||||||||||
Advertising Agencies – 0.4% | ||||||||||||
25,300 | Interpublic Group of Companies, Inc.* | $ | 186,714 | |||||||||
26,100 | Omnicom Group, Inc. | 1,021,815 | ||||||||||
1,208,529 | ||||||||||||
Aerospace and Defense – 0.6% | ||||||||||||
2,600 | Boeing Co. | 140,738 | ||||||||||
200 | General Dynamics Corp. | 13,634 | ||||||||||
8,200 | Lockheed Martin Corp. | 617,870 | ||||||||||
4,100 | Northrop Grumman Corp. | 228,985 | ||||||||||
16,600 | Rockwell Collins, Inc. | 918,976 | ||||||||||
1,920,203 | ||||||||||||
Aerospace and Defense – Equipment – 0.9% | ||||||||||||
37,400 | B.F. Goodrich Co. | 2,402,950 | ||||||||||
5,400 | United Technologies Corp. | 374,814 | ||||||||||
2,777,764 | ||||||||||||
Agricultural Chemicals – 0.1% | ||||||||||||
1,500 | CF Industries Holdings, Inc. | 136,170 | ||||||||||
2,900 | Monsanto Co. | 237,075 | ||||||||||
373,245 | ||||||||||||
Agricultural Operations – 0.3% | ||||||||||||
26,300 | Archer-Daniels-Midland Co. | 823,453 | ||||||||||
Apparel Manufacturers – 0.5% | ||||||||||||
31,300 | Coach, Inc. | 1,143,389 | ||||||||||
5,200 | Polo Ralph Lauren Corp. | 421,096 | ||||||||||
400 | VF Corp. | 29,296 | ||||||||||
1,593,781 | ||||||||||||
Appliances – 0.1% | ||||||||||||
2,500 | Whirlpool Corp. | 201,650 | ||||||||||
Applications Software – 1.9% | ||||||||||||
13,200 | Citrix Systems, Inc.* | 549,252 | ||||||||||
16,500 | Intuit, Inc.* | 506,715 | ||||||||||
114,000 | Microsoft Corp. | 3,475,860 | ||||||||||
20,200 | Red Hat, Inc.* | 624,180 | ||||||||||
8,500 | Salesforce.com, Inc.* | 627,045 | ||||||||||
5,783,052 | ||||||||||||
Athletic Footwear – 0.1% | ||||||||||||
2,800 | NIKE, Inc. – Class B | 184,996 | ||||||||||
Audio and Video Products – 0% | ||||||||||||
1,800 | Harman International Industries, Inc.* | 63,504 | ||||||||||
Automotive – Cars and Light Trucks – 0.3% | ||||||||||||
97,100 | Ford Motor Co.* | 971,000 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.1% | ||||||||||||
5,050 | PACCAR, Inc. | 183,164 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.1% | ||||||||||||
7,300 | Johnson Controls, Inc. | 198,852 | ||||||||||
Beverages – Non-Alcoholic – 2.9% | ||||||||||||
55,700 | Coca-Cola Co. | 3,174,900 | ||||||||||
96,200 | Coca-Cola Enterprises, Inc. | 2,039,440 | ||||||||||
24,800 | Dr. Pepper Snapple Group, Inc. | 701,840 | ||||||||||
43,500 | Pepsi Bottling Group, Inc. | 1,631,250 | ||||||||||
25,900 | PepsiCo, Inc. | 1,574,720 | ||||||||||
9,122,150 | ||||||||||||
Broadcast Services and Programming – 0.3% | ||||||||||||
21,000 | Scripps Networks Interactive, Inc. – Class A | 871,500 | ||||||||||
Building – Residential and Commercial – 0% | ||||||||||||
3,800 | D.R. Horton, Inc. | 41,306 | ||||||||||
2,900 | Lennar Corp. – Class A | 37,033 | ||||||||||
78,339 | ||||||||||||
Building Products – Wood – 0% | ||||||||||||
800 | Masco Corp. | 11,048 | ||||||||||
Cable Television – 1.2% | ||||||||||||
90,900 | Comcast Corp. – Class A | 1,532,574 | ||||||||||
17,300 | DIRECTV Group, Inc.* | 576,955 | ||||||||||
38,000 | Time Warner Cable, Inc. – Class A* | 1,572,820 | ||||||||||
3,682,349 | ||||||||||||
Casino Hotels – 0% | ||||||||||||
1,100 | Wynn Resorts, Ltd. | 64,053 | ||||||||||
Casino Services – 0.2% | ||||||||||||
39,900 | International Game Technology | 748,923 | ||||||||||
Chemicals – Diversified – 0.4% | ||||||||||||
10,600 | Dow Chemical Co. | 292,878 | ||||||||||
24,400 | E.I. du Pont de Nemours & Co. | 821,548 | ||||||||||
1,200 | FMC Corp. | 66,912 | ||||||||||
2,200 | PPG Industries, Inc. | 128,788 | ||||||||||
1,310,126 | ||||||||||||
Chemicals – Specialty – 0.3% | ||||||||||||
12,700 | Eastman Chemical Co. | 765,048 | ||||||||||
1,000 | Ecolab, Inc. | 44,580 | ||||||||||
300 | International Flavors & Fragrances, Inc. | 12,342 | ||||||||||
821,970 | ||||||||||||
Coal – 0% | ||||||||||||
400 | Massey Energy Co. | 16,804 | ||||||||||
3,300 | Peabody Energy Corp. | 149,193 | ||||||||||
165,997 | ||||||||||||
Commercial Banks – 0.3% | ||||||||||||
6,000 | BB&T Corp. | 152,220 | ||||||||||
13,581 | First Horizon National Corp.* | 181,985 | ||||||||||
100 | M&T Bank Corp. | 6,689 | ||||||||||
35,700 | Marshall & Ilsley Corp. | 194,565 | ||||||||||
25,000 | Regions Financial Corp. | 132,250 | ||||||||||
13,600 | Zions Bancorporation | 174,488 | ||||||||||
842,197 | ||||||||||||
Commercial Services – 0.3% | ||||||||||||
36,100 | Iron Mountain, Inc.* | 821,636 | ||||||||||
2,600 | Quanta Services, Inc.* | 54,184 | ||||||||||
875,820 | ||||||||||||
Commercial Services – Finance – 1.9% | ||||||||||||
25,200 | Automatic Data Processing, Inc. | 1,079,064 | ||||||||||
5,200 | Equifax, Inc. | 160,628 | ||||||||||
5,400 | MasterCard, Inc. – Class A | 1,382,292 | ||||||||||
24,300 | Moody’s Corp. | 651,240 | ||||||||||
2,400 | Paychex, Inc. | 73,536 | ||||||||||
58,500 | Total System Services, Inc. | 1,010,295 | ||||||||||
14,000 | Visa, Inc. – Class A | 1,224,440 | ||||||||||
15,000 | Western Union Co. | 282,750 | ||||||||||
5,864,245 |
See Notes to Schedules of Investments and Financial Statements.
8 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Computer Services – 1.1% | ||||||||||||
7,800 | Affiliated Computer Services, Inc. – Class A* | $ | 465,582 | |||||||||
43,400 | Cognizant Technology Solutions Corp.* | 1,966,020 | ||||||||||
19,600 | Computer Sciences Corp.* | 1,127,588 | ||||||||||
3,559,190 | ||||||||||||
Computers – 4.7% | ||||||||||||
22,800 | Apple, Inc.* | 4,807,608 | ||||||||||
25,200 | Dell, Inc.* | 361,872 | ||||||||||
59,500 | Hewlett-Packard Co. | 3,064,845 | ||||||||||
47,200 | International Business Machines Corp. | 6,178,480 | ||||||||||
31,000 | Sun Microsystems, Inc.* | 290,470 | ||||||||||
14,703,275 | ||||||||||||
Computers – Integrated Systems – 0.4% | ||||||||||||
44,200 | Terdata Corp.* | 1,389,206 | ||||||||||
Computers – Memory Devices – 1.1% | ||||||||||||
42,600 | EMC Corp.* | 744,222 | ||||||||||
47,200 | NetApp, Inc.* | 1,623,208 | ||||||||||
3,400 | SanDisk Corp.* | 98,566 | ||||||||||
21,300 | Western Digital Corp.* | 940,395 | ||||||||||
3,406,391 | ||||||||||||
Consulting Services – 0% | ||||||||||||
8,100 | SAIC, Inc.* | 153,414 | ||||||||||
Consumer Products – Miscellaneous – 0% | ||||||||||||
500 | Kimberly-Clark Corp. | 31,855 | ||||||||||
Containers – Metal and Glass – 0.7% | ||||||||||||
27,600 | Ball Corp. | 1,426,920 | ||||||||||
21,800 | Owens-Illinois, Inc.* | 716,566 | ||||||||||
2,143,486 | ||||||||||||
Containers – Paper and Plastic – 0.3% | ||||||||||||
42,100 | Sealed Air Corp. | 920,306 | ||||||||||
Cosmetics and Toiletries – 2.0% | ||||||||||||
11,800 | Avon Products, Inc. | 371,700 | ||||||||||
12,200 | Colgate-Palmolive Co. | 1,002,230 | ||||||||||
1,600 | Estee Lauder Cos., Inc. – Class A | 77,376 | ||||||||||
75,575 | Procter & Gamble Co. | 4,582,112 | ||||||||||
6,033,418 | ||||||||||||
Cruise Lines – 0.1% | ||||||||||||
9,400 | Carnival Corp. (U.S. Shares)* | 297,886 | ||||||||||
Data Processing and Management – 0.9% | ||||||||||||
300 | Dun & Bradstreet Corp. | 25,311 | ||||||||||
48,600 | Fidelity National Information Services, Inc. | 1,139,184 | ||||||||||
32,600 | Fiserv, Inc.* | 1,580,448 | ||||||||||
2,744,943 | ||||||||||||
Dental Supplies and Equipment – 0.1% | ||||||||||||
11,900 | Patterson Companies, Inc.* | 332,962 | ||||||||||
Distribution/Wholesale – 0.2% | ||||||||||||
5,200 | W.W. Grainger, Inc. | 503,516 | ||||||||||
Diversified Banking Institutions – 2.9% | ||||||||||||
122,106 | Bank of America Corp. | 1,838,916 | ||||||||||
122,200 | Citigroup, Inc.* | 404,482 | ||||||||||
16,100 | Goldman Sachs Group, Inc. | 2,718,324 | ||||||||||
78,726 | JPMorgan Chase & Co. | 3,280,513 | ||||||||||
22,100 | Morgan Stanley | 654,160 | ||||||||||
8,896,395 | ||||||||||||
Diversified Operations – 2.4% | ||||||||||||
8,200 | 3M Co. | 677,894 | ||||||||||
1,500 | Dover Corp. | 62,415 | ||||||||||
7,600 | Eaton Corp. | 483,512 | ||||||||||
259,300 | General Electric Co. | 3,923,209 | ||||||||||
39,600 | Honeywell International, Inc. | 1,552,320 | ||||||||||
7,400 | Illinois Tool Works, Inc. | 355,126 | ||||||||||
1,000 | ITT Corp. | 49,740 | ||||||||||
7,800 | Parker Hannifin Corp. | 420,264 | ||||||||||
700 | Textron, Inc. | 13,167 | ||||||||||
7,537,647 | ||||||||||||
E-Commerce/Products – 0.4% | ||||||||||||
9,800 | Amazon.com, Inc.* | 1,318,296 | ||||||||||
E-Commerce/Services – 1.1% | ||||||||||||
62,400 | eBay, Inc.* | 1,468,896 | ||||||||||
43,200 | Expedia, Inc.* | 1,110,672 | ||||||||||
3,300 | Priceline.com, Inc.* | 721,050 | ||||||||||
3,300,618 | ||||||||||||
Electric – Generation – 0.4% | ||||||||||||
94,900 | AES Corp.* | 1,263,119 | ||||||||||
Electric – Integrated – 2.9% | ||||||||||||
2,100 | American Electric Power Company, Inc. | 73,059 | ||||||||||
65,200 | CMS Energy Corp. | 1,021,032 | ||||||||||
13,600 | Consolidated Edison, Inc. | 617,848 | ||||||||||
18,600 | Constellation Energy Group, Inc. | 654,162 | ||||||||||
3,400 | Duke Energy Corp. | 58,514 | ||||||||||
800 | Entergy Corp. | 65,472 | ||||||||||
58,300 | FPL Group, Inc. | 3,079,406 | ||||||||||
14,600 | Northeast Utilities | 376,534 | ||||||||||
15,300 | PG&E Corp. | 683,145 | ||||||||||
7,900 | PPL Corp. | 255,249 | ||||||||||
2,000 | Progress Energy, Inc. | 82,020 | ||||||||||
21,200 | Public Service Enterprise Group, Inc. | 704,900 | ||||||||||
1,100 | SCANA Corp. | 41,448 | ||||||||||
3,200 | Wisconsin Energy Corp. | 159,456 | ||||||||||
49,700 | Xcel Energy, Inc. | 1,054,634 | ||||||||||
8,926,879 | ||||||||||||
Electric Products – Miscellaneous – 0.1% | ||||||||||||
600 | Emerson Electric Co. | 25,560 | ||||||||||
7,100 | Molex, Inc. | 153,005 | ||||||||||
178,565 | ||||||||||||
Electronic Components – Semiconductors – 2.6% | ||||||||||||
34,500 | Advanced Micro Devices, Inc.* | 333,960 | ||||||||||
600 | Altera Corp. | 13,578 | ||||||||||
45,100 | Broadcom Corp. – Class A* | 1,418,395 | ||||||||||
90,100 | Intel Corp. | 1,838,040 | ||||||||||
11,100 | LSI Corp.* | 66,711 | ||||||||||
36,200 | Microchip Technology, Inc. | 1,051,972 | ||||||||||
35,100 | Micron Technology, Inc.* | 370,656 | ||||||||||
9,800 | National Semiconductor Corp. | 150,528 | ||||||||||
42,100 | Nvidia Corp.* | 786,428 | ||||||||||
52,400 | Texas Instruments, Inc. | 1,365,544 | ||||||||||
26,900 | Xilinx, Inc. | 674,114 | ||||||||||
8,069,926 | ||||||||||||
Electronic Connectors – 0.2% | ||||||||||||
11,800 | Amphenol Corp. – Class A | 544,924 | ||||||||||
Electronic Forms – 0.2% | ||||||||||||
12,700 | Adobe Systems, Inc.* | 467,106 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 9
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Electronic Measuring Instruments – 0.2% | ||||||||||||
17,200 | Agilent Technologies, Inc.* | $ | 534,404 | |||||||||
Energy – Alternate Sources – 0% | ||||||||||||
600 | First Solar, Inc.* | 81,240 | ||||||||||
Engineering – Research and Development Services – 0.2% | ||||||||||||
11,900 | Fluor Corp. | 535,976 | ||||||||||
3,800 | Jacobs Engineering Group, Inc.* | 142,918 | ||||||||||
678,894 | ||||||||||||
Engines – Internal Combustion – 0% | ||||||||||||
1,700 | Cummins, Inc. | 77,962 | ||||||||||
Enterprise Software/Services – 1.9% | ||||||||||||
58,100 | BMC Software, Inc.* | 2,329,810 | ||||||||||
7,700 | CA, Inc. | 172,942 | ||||||||||
138,877 | Oracle Corp. | 3,408,042 | ||||||||||
5,910,794 | ||||||||||||
Fiduciary Banks – 0.9% | ||||||||||||
47,200 | Bank of New York Mellon Corp. | 1,320,184 | ||||||||||
3,900 | Northern Trust Corp. | 204,360 | ||||||||||
26,900 | State Street Corp. | 1,171,226 | ||||||||||
2,695,770 | ||||||||||||
Finance – Consumer Loans – 0.1% | ||||||||||||
25,400 | SLM Corp.* | 286,258 | ||||||||||
Finance – Credit Card – 0.6% | ||||||||||||
37,900 | American Express Co. | 1,535,708 | ||||||||||
31,500 | Discover Financial Services | 463,365 | ||||||||||
1,999,073 | ||||||||||||
Finance – Investment Bankers/Brokers – 0% | ||||||||||||
6,000 | Charles Schwab Corp. | 112,920 | ||||||||||
Finance – Other Services – 0.9% | ||||||||||||
3,100 | CME Group, Inc. | 1,041,445 | ||||||||||
5,200 | IntercontinentalExchange, Inc.* | 583,960 | ||||||||||
42,200 | NYSE Euronext | 1,067,660 | ||||||||||
2,693,065 | ||||||||||||
Food – Confectionery – 0.1% | ||||||||||||
3,000 | Hershey Co. | 107,370 | ||||||||||
2,700 | J.M. Smucker Co. | 166,725 | ||||||||||
274,095 | ||||||||||||
Food – Dairy Products – 0% | ||||||||||||
2,400 | Dean Foods Co.* | 43,296 | ||||||||||
Food – Meat Products – 0.4% | ||||||||||||
22,200 | Hormel Foods Corp. | 853,590 | ||||||||||
43,500 | Tyson Foods, Inc. – Class A | 533,745 | ||||||||||
1,387,335 | ||||||||||||
Food – Miscellaneous/Diversified – 0.3% | ||||||||||||
9,500 | ConAgra Foods, Inc. | 218,975 | ||||||||||
3,000 | General Mills, Inc. | 212,430 | ||||||||||
19,100 | Kraft Foods, Inc. – Class A | 519,138 | ||||||||||
2,700 | Sara Lee Corp. | 32,886 | ||||||||||
983,429 | ||||||||||||
Food – Retail – 0.4% | ||||||||||||
16,600 | Supervalu, Inc. | 210,986 | ||||||||||
35,200 | Whole Foods Market, Inc.* | 966,240 | ||||||||||
1,177,226 | ||||||||||||
Food – Wholesale/Distribution – 0% | ||||||||||||
700 | Sysco Corp. | 19,558 | ||||||||||
Gas – Distribution – 0.5% | ||||||||||||
4,900 | NiSource, Inc. | 75,362 | ||||||||||
25,700 | Sempra Energy | 1,438,686 | ||||||||||
1,514,048 | ||||||||||||
Gold Mining – 0.2% | ||||||||||||
10,700 | Newmont Mining Corp. | 506,217 | ||||||||||
Home Decoration Products – 0% | ||||||||||||
10,300 | Newell Rubbermaid, Inc. | 154,603 | ||||||||||
Hotels and Motels – 0.5% | ||||||||||||
44,583 | Marriott International, Inc. – Class A | 1,214,887 | ||||||||||
5,600 | Starwood Hotels & Resorts Worldwide, Inc. | 204,792 | ||||||||||
7,500 | Wyndham Worldwide Corp. | 151,275 | ||||||||||
1,570,954 | ||||||||||||
Human Resources – 0.2% | ||||||||||||
19,800 | Monster Worldwide, Inc.* | 344,520 | ||||||||||
9,700 | Robert Half International, Inc. | 259,281 | ||||||||||
603,801 | ||||||||||||
Industrial Automation and Robotics – 0.4% | ||||||||||||
25,700 | Rockwell Automation, Inc. | 1,207,386 | ||||||||||
Industrial Gases – 0.9% | ||||||||||||
23,200 | Air Products & Chemicals, Inc. | 1,880,592 | ||||||||||
1,200 | Airgas, Inc. | 57,120 | ||||||||||
8,800 | Praxair, Inc. | 706,728 | ||||||||||
2,644,440 | ||||||||||||
Instruments – Scientific – 0.2% | ||||||||||||
13,000 | PerkinElmer, Inc. | 267,670 | ||||||||||
5,900 | Thermo Fisher Scientific, Inc.* | 281,371 | ||||||||||
2,700 | Waters Corp.* | 167,292 | ||||||||||
716,333 | ||||||||||||
Internet Infrastructure Software – 0% | ||||||||||||
1,100 | Akamai Technologies, Inc.* | 27,863 | ||||||||||
Internet Security – 0.2% | ||||||||||||
11,900 | McAfee, Inc.* | 482,783 | ||||||||||
11,700 | Symantec Corp.* | 209,313 | ||||||||||
500 | VeriSign, Inc.* | 12,120 | ||||||||||
704,216 | ||||||||||||
Investment Management and Advisory Services – 1.0% | ||||||||||||
19,700 | Ameriprise Financial, Inc. | 764,754 | ||||||||||
24,700 | Federated Investors, Inc. – Class B | 679,250 | ||||||||||
6,500 | Franklin Resources, Inc. | 684,775 | ||||||||||
30,900 | INVESCO, Ltd. | 725,841 | ||||||||||
1,900 | Legg Mason, Inc. | 57,304 | ||||||||||
2,500 | T. Rowe Price Group, Inc. | 133,125 | ||||||||||
3,045,049 | ||||||||||||
Life and Health Insurance – 0.6% | ||||||||||||
4,700 | AFLAC, Inc. | 217,375 | ||||||||||
12,500 | Lincoln National Corp. | 311,000 | ||||||||||
14,000 | Principal Financial Group, Inc. | 336,560 | ||||||||||
19,400 | Prudential Financial, Inc. | 965,344 | ||||||||||
800 | Torchmark Corp. | 35,160 | ||||||||||
1,865,439 | ||||||||||||
Linen Supply and Related Items – 0.1% | ||||||||||||
8,500 | Cintas Corp. | 221,425 |
See Notes to Schedules of Investments and Financial Statements.
10 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Machinery – Construction and Mining – 0.1% | ||||||||||||
6,300 | Caterpillar, Inc. | $ | 359,037 | |||||||||
Machinery – Farm – 0.4% | ||||||||||||
23,600 | Deere & Co. | 1,276,524 | ||||||||||
Machinery – General Industrial – 0% | ||||||||||||
2,600 | Roper Industries, Inc. | 136,162 | ||||||||||
Machinery – Pumps – 0.1% | ||||||||||||
2,800 | Flowserve Corp. | 264,684 | ||||||||||
Medical – Biomedical and Genetic – 0.9% | ||||||||||||
9,700 | Amgen, Inc.* | 548,729 | ||||||||||
400 | Biogen Idec, Inc.* | 21,400 | ||||||||||
1,600 | Gilead Sciences, Inc.* | 69,248 | ||||||||||
30,900 | Life Technologies Corp.* | 1,613,907 | ||||||||||
7,400 | Millipore Corp.* | 535,390 | ||||||||||
2,788,674 | ||||||||||||
Medical – Drugs – 3.3% | ||||||||||||
10,700 | Abbott Laboratories | 577,693 | ||||||||||
16,400 | Allergan, Inc. | 1,033,364 | ||||||||||
59,000 | Bristol-Myers Squibb Co. | 1,489,750 | ||||||||||
1,600 | Eli Lilly & Co. | 57,136 | ||||||||||
21,000 | Forest Laboratories, Inc.* | 674,310 | ||||||||||
3,000 | King Pharmaceuticals, Inc.* | 36,810 | ||||||||||
104,386 | Merck & Co., Inc. | 3,814,264 | ||||||||||
135,283 | Pfizer, Inc. | 2,460,798 | ||||||||||
10,144,125 | ||||||||||||
Medical – Generic Drugs – 0.7% | ||||||||||||
83,800 | Mylan, Inc.* | 1,544,434 | ||||||||||
16,500 | Watson Pharmaceuticals, Inc.* | 653,565 | ||||||||||
2,197,999 | ||||||||||||
Medical – HMO – 1.5% | ||||||||||||
4,800 | Aetna, Inc. | 152,160 | ||||||||||
22,700 | CIGNA Corp. | 800,629 | ||||||||||
31,100 | Coventry Health Care, Inc.* | 755,419 | ||||||||||
4,300 | Humana, Inc.* | 188,727 | ||||||||||
38,400 | UnitedHealth Group, Inc. | 1,170,432 | ||||||||||
28,600 | WellPoint, Inc.* | 1,667,094 | ||||||||||
4,734,461 | ||||||||||||
Medical – Hospitals – 0.2% | ||||||||||||
101,200 | Tenet Healthcare Corp.* | 545,468 | ||||||||||
Medical – Wholesale Drug Distributors – 0.4% | ||||||||||||
24,300 | AmerisourceBergen Corp. | 633,501 | ||||||||||
11,000 | McKesson Corp. | 687,500 | ||||||||||
1,321,001 | ||||||||||||
Medical Instruments – 0.7% | ||||||||||||
86,700 | Boston Scientific Corp.* | 780,300 | ||||||||||
2,200 | Intuitive Surgical, Inc.* | 667,304 | ||||||||||
4,800 | Medtronic, Inc. | 211,104 | ||||||||||
10,600 | St. Jude Medical, Inc.* | 389,868 | ||||||||||
2,048,576 | ||||||||||||
Medical Labs and Testing Services – 0.1% | ||||||||||||
900 | Laboratory Corp. of America Holdings* | 67,356 | ||||||||||
3,100 | Quest Diagnostics, Inc. | 187,178 | ||||||||||
254,534 | ||||||||||||
Medical Products – 2.3% | ||||||||||||
4,500 | Baxter International, Inc. | 264,060 | ||||||||||
16,200 | Hospira, Inc.* | 826,200 | ||||||||||
83,300 | Johnson & Johnson | 5,365,353 | ||||||||||
11,100 | Zimmer Holdings, Inc.* | 656,121 | ||||||||||
7,111,734 | ||||||||||||
Metal – Aluminum – 0% | ||||||||||||
10,100 | Alcoa, Inc. | 162,812 | ||||||||||
Metal – Copper – 0.1% | ||||||||||||
5,700 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 457,653 | ||||||||||
Metal – Iron – 0% | ||||||||||||
3,300 | Cliffs Natural Resources, Inc. | 152,097 | ||||||||||
Metal Processors and Fabricators – 0.2% | ||||||||||||
5,500 | Precision Castparts Corp. | 606,925 | ||||||||||
Multi-Line Insurance – 1.5% | ||||||||||||
18,900 | American International Group, Inc.* | 566,622 | ||||||||||
7,800 | Assurant, Inc. | 229,944 | ||||||||||
8,800 | Cincinnati Financial Corp. | 230,912 | ||||||||||
50,300 | Genworth Financial, Inc. – Class A* | 570,905 | ||||||||||
16,500 | Hartford Financial Services Group, Inc. | 383,790 | ||||||||||
23,200 | Loews Corp. | 843,320 | ||||||||||
15,900 | MetLife, Inc. | 562,065 | ||||||||||
65,400 | XL Capital, Ltd. – Class A | 1,198,782 | ||||||||||
4,586,340 | ||||||||||||
Multimedia – 2.6% | ||||||||||||
44,800 | McGraw-Hill Cos., Inc. | 1,501,248 | ||||||||||
8,700 | Meredith Corp. | 268,395 | ||||||||||
91,500 | News Corp. – Class A | 1,252,635 | ||||||||||
44,199 | Time Warner, Inc. | 1,287,959 | ||||||||||
89,900 | Viacom, Inc. – Class B* | 2,672,727 | ||||||||||
28,900 | Walt Disney Co. | 932,025 | ||||||||||
7,914,989 | ||||||||||||
Networking Products – 1.3% | ||||||||||||
156,000 | Cisco Systems, Inc.* | 3,734,640 | ||||||||||
5,500 | Juniper Networks, Inc.* | 146,685 | ||||||||||
3,881,325 | ||||||||||||
Non-Hazardous Waste Disposal – 0% | ||||||||||||
2,400 | Waste Management, Inc. | 81,144 | ||||||||||
Oil – Field Services – 0.9% | ||||||||||||
3,500 | Baker Hughes, Inc. | 141,680 | ||||||||||
25,000 | BJ Services Co. | 465,000 | ||||||||||
20,800 | Halliburton Co. | 625,872 | ||||||||||
22,900 | Schlumberger, Ltd. (U.S. Shares) | 1,490,561 | ||||||||||
2,723,113 | ||||||||||||
Oil and Gas Drilling – 0.2% | ||||||||||||
3,500 | Diamond Offshore Drilling, Inc. | 344,470 | ||||||||||
7,000 | Nabors Industries, Ltd. | 153,230 | ||||||||||
497,700 | ||||||||||||
Oil Companies – Exploration and Production – 2.6% | ||||||||||||
18,200 | Anadarko Petroleum Corp. | 1,136,044 | ||||||||||
700 | Apache Corp. | 72,219 | ||||||||||
8,700 | Cabot Oil & Gas Corp. | 379,233 | ||||||||||
7,500 | Chesapeake Energy Corp. | 194,100 | ||||||||||
3,200 | EOG Resources, Inc. | 311,360 | ||||||||||
39,500 | EQT Corp. | 1,734,840 | ||||||||||
12,400 | Noble Energy, Inc. | 883,128 | ||||||||||
19,400 | Occidental Petroleum Corp. | 1,578,190 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 11
INTECH Risk-Managed Core Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Oil Companies – Exploration and Production – (continued) | ||||||||||||
4,000 | Pioneer Natural Resources Co. | $ | 192,680 | |||||||||
5,200 | Questar Corp. | 216,164 | ||||||||||
11,300 | Range Resources Corp. | 563,305 | ||||||||||
6,800 | Southwestern Energy Co.* | 327,760 | ||||||||||
10,400 | XTO Energy, Inc. | 483,912 | ||||||||||
8,072,935 | ||||||||||||
Oil Companies – Integrated – 7.1% | ||||||||||||
59,930 | Chevron Corp. | 4,614,010 | ||||||||||
9,400 | ConocoPhillips | 480,058 | ||||||||||
231,800 | Exxon Mobil Corp. | 15,806,441 | ||||||||||
2,600 | Hess Corp. | 157,300 | ||||||||||
8,362 | Marathon Oil Corp. | 261,062 | ||||||||||
11,300 | Murphy Oil Corp. | 612,460 | ||||||||||
21,931,331 | ||||||||||||
Oil Field Machinery and Equipment – 0.4% | ||||||||||||
7,100 | Cameron International Corp.* | 296,780 | ||||||||||
10,400 | FMC Technologies, Inc.* | 601,536 | ||||||||||
7,500 | National Oilwell Varco, Inc. | 330,675 | ||||||||||
1,228,991 | ||||||||||||
Oil Refining and Marketing – 0.1% | ||||||||||||
5,900 | Tesoro Corp. | 79,945 | ||||||||||
5,700 | Valero Energy Corp. | 95,475 | ||||||||||
175,420 | ||||||||||||
Paper and Related Products – 0.4% | ||||||||||||
13,200 | International Paper Co. | 353,496 | ||||||||||
30,900 | MeadWestvaco Corp. | 884,667 | ||||||||||
1,238,163 | ||||||||||||
Pharmacy Services – 0.3% | ||||||||||||
2,400 | Express Scripts, Inc. – Class A* | 207,480 | ||||||||||
13,260 | Medco Health Solutions, Inc.* | 847,447 | ||||||||||
1,054,927 | ||||||||||||
Pipelines – 0.1% | ||||||||||||
31,800 | El Paso Corp. | 312,594 | ||||||||||
4,400 | Williams Companies, Inc. | 92,752 | ||||||||||
405,346 | ||||||||||||
Printing – Commercial – 0.2% | ||||||||||||
29,500 | R.R. Donnelley & Sons Co. | 656,965 | ||||||||||
Property and Casualty Insurance – 0.5% | ||||||||||||
31,400 | Progressive Corp. | 564,886 | ||||||||||
19,500 | Travelers Cos., Inc. | 972,270 | ||||||||||
1,537,156 | ||||||||||||
Real Estate Management/Services – 0.2% | ||||||||||||
36,700 | CB Richard Ellis Group, Inc. – Class A* | 498,019 | ||||||||||
REIT – Health Care – 0.1% | ||||||||||||
4,700 | HCP, Inc. | 143,538 | ||||||||||
6,000 | Ventas, Inc. | 262,440 | ||||||||||
405,978 | ||||||||||||
REIT – Hotels – 0.1% | ||||||||||||
23,940 | Host Hotels & Resorts, Inc.* | 279,380 | ||||||||||
REIT – Regional Malls – 0% | ||||||||||||
307 | Simon Property Group, Inc. | 24,499 | ||||||||||
REIT – Storage – 0.1% | ||||||||||||
3,100 | Public Storage | 252,495 | ||||||||||
Retail – Apparel and Shoe – 0.6% | ||||||||||||
8,300 | Abercrombie & Fitch Co. – Class A | 289,255 | ||||||||||
31,100 | Gap, Inc. | 651,545 | ||||||||||
19,000 | Limited Brands, Inc. | 365,560 | ||||||||||
8,200 | Nordstrom, Inc. | 308,156 | ||||||||||
8,700 | Ross Stores, Inc. | 371,577 | ||||||||||
1,986,093 | ||||||||||||
Retail – Auto Parts – 1.1% | ||||||||||||
9,600 | AutoZone, Inc.* | 1,517,472 | ||||||||||
45,900 | O’Reilly Automotive, Inc.* | 1,749,708 | ||||||||||
3,267,180 | ||||||||||||
Retail – Automobile – 0.1% | ||||||||||||
14,300 | Auto Nation, Inc.* | 273,845 | ||||||||||
Retail – Bedding – 0.3% | ||||||||||||
21,300 | Bed Bath & Beyond, Inc.* | 822,819 | ||||||||||
Retail – Building Products – 0.6% | ||||||||||||
60,500 | Home Depot, Inc. | 1,750,265 | ||||||||||
6,100 | Lowe’s Cos., Inc. | 142,679 | ||||||||||
1,892,944 | ||||||||||||
Retail – Consumer Electronics – 0.5% | ||||||||||||
34,500 | Best Buy Co., Inc. | 1,361,370 | ||||||||||
2,900 | RadioShack Corp. | 56,550 | ||||||||||
1,417,920 | ||||||||||||
Retail – Discount – 1.2% | ||||||||||||
6,100 | Big Lots, Inc.* | 176,778 | ||||||||||
1,900 | Family Dollar Stores, Inc. | 52,877 | ||||||||||
5,100 | Target Corp. | 246,687 | ||||||||||
59,500 | Wal-Mart Stores, Inc. | 3,180,275 | ||||||||||
3,656,617 | ||||||||||||
Retail – Drug Store – 0.5% | ||||||||||||
20,253 | CVS Caremark Corp. | 652,349 | ||||||||||
28,000 | Walgreen Co. | 1,028,160 | ||||||||||
1,680,509 | ||||||||||||
Retail – Jewelry – 0% | ||||||||||||
2,700 | Tiffany & Co. | 116,100 | ||||||||||
Retail – Major Department Stores – 0.6% | ||||||||||||
16,100 | JC Penney Co., Inc. | 428,421 | ||||||||||
2,800 | Sears Holdings Corp.* | 233,660 | ||||||||||
31,500 | TJX Cos., Inc. | 1,151,325 | ||||||||||
1,813,406 | ||||||||||||
Retail – Office Supplies – 0.2% | ||||||||||||
42,200 | Office Depot, Inc.* | 272,190 | ||||||||||
20,500 | Staples, Inc. | 504,095 | ||||||||||
776,285 | ||||||||||||
Retail – Regional Department Stores – 0.5% | ||||||||||||
25,600 | Kohl’s Corp.* | 1,380,608 | ||||||||||
10,800 | Macy’s, Inc. | 181,008 | ||||||||||
1,561,616 | ||||||||||||
Retail – Restaurants – 1.9% | ||||||||||||
35,000 | Darden Restaurants, Inc. | 1,227,450 | ||||||||||
32,600 | McDonald’s Corp. | 2,035,544 | ||||||||||
75,300 | Starbucks Corp.* | 1,736,418 | ||||||||||
21,500 | Yum! Brands, Inc. | 751,855 | ||||||||||
5,751,267 |
See Notes to Schedules of Investments and Financial Statements.
12 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Rubber – Tires – 0.1% | ||||||||||||
24,400 | Goodyear Tire & Rubber Co.* | $ | 344,040 | |||||||||
Savings/Loan/Thrifts – 0% | ||||||||||||
2,200 | People’s United Financial, Inc. | 36,740 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.4% | ||||||||||||
36,200 | Analog Devices, Inc. | 1,143,196 | ||||||||||
3,600 | Linear Technology Corp. | 109,944 | ||||||||||
1,253,140 | ||||||||||||
Semiconductor Equipment – 0.9% | ||||||||||||
22,800 | Applied Materials, Inc. | 317,832 | ||||||||||
40,700 | KLA-Tencor Corp. | 1,471,712 | ||||||||||
30,500 | Novellus Systems, Inc.* | 711,870 | ||||||||||
16,600 | Teradyne, Inc.* | 178,118 | ||||||||||
2,679,532 | ||||||||||||
Steel – Producers – 0.3% | ||||||||||||
19,800 | Nucor Corp. | 923,670 | ||||||||||
Steel – Specialty – 0% | ||||||||||||
700 | Allegheny Technologies, Inc. | 31,339 | ||||||||||
Super-Regional Banks – 2.0% | ||||||||||||
21,500 | Capital One Financial Corp. | 824,310 | ||||||||||
13,500 | Comerica, Inc. | 399,195 | ||||||||||
97,300 | Fifth Third Bancorp | 948,675 | ||||||||||
175,600 | Huntington Bancshares, Inc. | 640,940 | ||||||||||
21,400 | Keycorp | 118,770 | ||||||||||
14,600 | PNC Financial Services Group, Inc. | 770,734 | ||||||||||
4,300 | SunTrust Banks, Inc. | 87,247 | ||||||||||
7,600 | U.S. Bancorp | 171,076 | ||||||||||
76,480 | Wells Fargo & Co. | 2,064,195 | ||||||||||
6,025,142 | ||||||||||||
Telecommunication Equipment – 0.2% | ||||||||||||
106,000 | Tellabs, Inc.* | 602,080 | ||||||||||
Telecommunication Equipment – Fiber Optics – 0.4% | ||||||||||||
52,700 | Corning, Inc. | 1,017,637 | ||||||||||
12,700 | JDS Uniphase Corp.* | 104,775 | ||||||||||
1,122,412 | ||||||||||||
Telephone – Integrated – 4.6% | ||||||||||||
388,558 | AT&T, Inc. | 10,891,281 | ||||||||||
18,462 | CenturyTel, Inc. | 668,509 | ||||||||||
139,400 | Qwest Communications International, Inc. | 586,874 | ||||||||||
42,100 | Sprint Nextel Corp.* | 154,086 | ||||||||||
59,600 | Verizon Communications, Inc. | 1,974,548 | ||||||||||
14,275,298 | ||||||||||||
Television – 0% | ||||||||||||
3,300 | CBS Corp. – Class B | 46,365 | ||||||||||
Tobacco – 1.1% | ||||||||||||
42,800 | Altria Group, Inc. | 840,164 | ||||||||||
8,600 | Lorillard, Inc. | 689,978 | ||||||||||
34,600 | Philip Morris International, Inc. | 1,667,374 | ||||||||||
1,200 | Reynolds American, Inc. | 63,564 | ||||||||||
3,261,080 | ||||||||||||
Tools – Hand Held – 0% | ||||||||||||
1,000 | Stanley Works | 51,510 | ||||||||||
Toys – 0.1% | ||||||||||||
8,600 | Mattel, Inc. | 171,828 | ||||||||||
Transportation – Railroad – 0.2% | ||||||||||||
3,300 | Burlington Northern Santa Fe Corp. | 325,446 | ||||||||||
4,600 | CSX Corp. | 223,054 | ||||||||||
1,700 | Union Pacific Corp. | 108,630 | ||||||||||
657,130 | ||||||||||||
Transportation – Services – 0.1% | ||||||||||||
3,300 | C.H. Robinson Worldwide, Inc. | 193,809 | ||||||||||
1,500 | United Parcel Service, Inc. – Class B | 86,055 | ||||||||||
279,864 | ||||||||||||
Vitamins and Nutrition Products – 0.1% | ||||||||||||
6,100 | Mead Johnson Nutrition Co. – Class A | 266,570 | ||||||||||
Web Portals/Internet Service Providers – 1.4% | ||||||||||||
5,000 | Google, Inc. – Class A* | 3,099,900 | ||||||||||
66,800 | Yahoo!, Inc.* | 1,120,904 | ||||||||||
4,220,804 | ||||||||||||
Wireless Equipment – 1.3% | ||||||||||||
161,100 | Motorola, Inc.* | 1,250,136 | ||||||||||
57,500 | QUALCOMM, Inc. | 2,659,950 | ||||||||||
3,910,086 | ||||||||||||
Total Investments (total cost $266,069,105) – 99.8% | 308,386,239 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 545,975 | |||||||||||
Net Assets – 100% | $ | 308,932,214 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 879,071 | 0.3% | |||||
Cayman Islands | 1,198,782 | 0.4% | ||||||
Netherlands Antilles | 1,490,561 | 0.5% | ||||||
Panama | 297,886 | 0.1% | ||||||
United States | 304,519,939 | 98.7% | ||||||
Total | $ | 308,386,239 | 100.0% |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 13
INTECH Risk-Managed Growth Fund (unaudited)
Fund Snapshot This fund uses a mathematically-based investment process that seeks to capitalize on the natural volatility of stock prices. The primary aim of this strategy is to outperform the benchmark index without increasing risk. | Managed by INTECH Investment Management LLC |
Performance Overview
For the five-month period ended December 31, 2009, INTECH Risk-Managed Growth Fund returned 13.81% for its Class S Shares. This compares to the 14.87% return posted by the Russell 1000® Growth 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.
INTECH’s mathematical investment process seeks to build a more efficient portfolio than its benchmark, the Russell 1000® Growth 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 stock 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 benchmark, 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 22 years, we have experienced periods 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 Russell 1000® Growth 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 the long term. 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 Growth Fund.
14 | DECEMBER 31, 2009
(unaudited)
INTECH Risk-Managed Growth Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
International Business Machines Corp. Computers | 5.1% | |||
Microsoft Corp. Applications Software | 4.7% | |||
Apple, Inc. Computers | 3.2% | |||
Cisco Systems, Inc. Networking Products | 3.0% | |||
Coca-Cola Co. Beverages – Non-Alcoholic | 2.6% | |||
18.6% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
Janus Risk-Managed Funds | 15
INTECH Risk-Managed Growth Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||
Five-Month | |||||||||||||
Period | |||||||||||||
Ended | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
12/31/09 | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
INTECH Risk-Managed Growth Fund – Class A Shares | |||||||||||||
NAV | 13.93% | 33.24% | –0.59% | 4.35% | 0.82% | 0.82% | |||||||
MOP | 7.35% | 25.63% | –1.76% | 3.67% | |||||||||
INTECH Risk-Managed Growth Fund – Class C Shares | |||||||||||||
NAV | 13.48% | 32.08% | –1.38% | 3.80% | 1.67% | 1.67% | |||||||
CDSC | 12.35% | 30.76% | –1.38% | 3.80% | |||||||||
INTECH Risk-Managed Growth Fund – Class I Shares | 14.09% | 33.63% | –0.83% | 4.35% | 0.55% | 0.55% | |||||||
INTECH Risk-Managed Growth Fund – Class S Shares | 13.81% | 32.84% | –0.83% | 4.35% | 1.04% | 1.04% | |||||||
INTECH Risk-Managed Growth Fund – Class T Shares | 13.88% | 32.84% | –0.83% | 4.35% | 0.79% | 0.79% | |||||||
Russell 1000® Growth Index | 14.87% | 37.21% | 1.63% | 5.42% | |||||||||
Lipper Quartile – Class S Shares | – | 3rd | 4th | 4th | |||||||||
Lipper Ranking – Class S Shares based on total returns for Multi-Cap Growth Funds | – | 283/459 | 252/310 | 227/279 | |||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
See important disclosures on the next page.
16 | DECEMBER 31, 2009
(unaudited)
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
For Class I Shares, Class S Shares, and Class T Shares, 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 annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) may not achieve the desired results. The rebalancing techniques used by the Fund 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 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, initial public offerings, and derivatives. Please see a Janus prospectus or 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, and interest rate risks, a 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 of 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.
Effective July 6, 2009, Janus Adviser INTECH Risk-Managed Growth Fund merged into INTECH Risk-Managed Growth Fund.
Class A Shares of the Fund commenced operations on July 6, 2009, after the reorganization of Class A Shares of Janus Adviser INTECH Risk-Managed Growth Fund (the “JAD predecessor fund”) into Class A Shares of the Fund. Performance shown for Class A Shares reflects the performance of the JAD predecessor fund’s Class A Shares from September 30, 2004 to July 6, 2009, calculated using the fees and expenses of the JAD predecessor fund’s Class A Shares, net of any fee and expense limitations or waivers, and the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares) from January 2, 2003 to September 30, 2004 (prior to the reorganization). Performance shown for certain periods prior to September 30, 2004 for Class A Shares was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers. If Class A Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
Class C Shares of the Fund commenced operations on July 6, 2009, after the reorganization of Class C Shares of the JAD predecessor fund into Class C Shares of the Fund. Performance shown for Class C Shares reflects the performance of the JAD predecessor fund’s Class C Shares from January 2, 2003 to July 6, 2009 (prior to the reorganization), calculated using the fees and expenses of the JAD predecessor fund’s Class C Shares, net of any fee and expense limitations or waivers. If Class C Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
Class I Shares of the Fund commenced operations on July 6, 2009, after the reorganization of Class I Shares of the JAD predecessor fund into Class I Shares of the Fund. Performance shown for Class I Shares reflects the performance of the JAD predecessor fund’s Class I Shares from November 28, 2005 to July 6, 2009 (prior to the reorganization), calculated using the fees and expenses of the JAD predecessor fund’s Class I Shares, net of any fee and expense limitations or waivers. For the periods January 2, 2003 to November 28, 2005, the performance shown for Class I Shares reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly Class I Shares). The performance shown for certain periods prior to November 28, 2005, was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
Class S Shares of the Fund commenced operations on July 6, 2009, after the reorganization of Class S Shares of the JAD predecessor fund into Class S Shares of the Fund. Performance shown for Class S Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class S Shares prior to the reorganization, calculated using the fees and expenses of the JAD predecessor fund’s Class S Shares, net of any fee and expense limitations or waivers. If Class S Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
Class T Shares of the Fund commenced operations on July 6, 2009, after the reorganization of the JAD predecessor fund into the Fund. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class S Shares prior to the reorganization, calculated using the fees and expenses of Class S Shares, without the effect of any fee and expense limitations or waivers. If Class T Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
Janus Risk-Managed Funds | 17
INTECH Risk-Managed Growth Fund (unaudited)
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 and do not include the effect of loads.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper ranking is for the Class S Shares only; other classes may have different performance characteristics.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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.”
* | The Fund’s inception date — January 2, 2003 |
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 – Class A Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,138.20 | $ | 4.30 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,130.60 | $ | 12.24 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,013.72 | $ | 11.56 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,140.90 | $ | 2.60 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.28 | $ | 2.96 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,137.00 | $ | 4.88 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.71 | $ | 5.55 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class T Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,237.77 | $ | 3.98 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.93 | $ | 4.32 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.96% for Class A Shares, 2.74% for Class C Shares, 0.58% for Class I Shares, 1.09% for Class S Shares and 0.85% for Class T Shares, multiplied by the average account value over the period, multiplied by 153/365 (to reflect a five-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a five-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
18 | DECEMBER 31, 2009
INTECH Risk-Managed Growth Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Common Stock – 99.8% | ||||||||||||
Advertising Agencies – 0.4% | ||||||||||||
77,900 | Omnicom Group, Inc. | $ | 3,049,785 | |||||||||
Aerospace and Defense – 0.5% | ||||||||||||
1,600 | Lockheed Martin Corp. | 120,560 | ||||||||||
4,100 | Northrop Grumman Corp. | 228,985 | ||||||||||
54,700 | Rockwell Collins, Inc. | 3,028,192 | ||||||||||
27,600 | Spirit Aerosystems Holdings, Inc.* | 548,136 | ||||||||||
9,100 | TransDigm Group, Inc.* | 432,159 | ||||||||||
4,358,032 | ||||||||||||
Aerospace and Defense – Equipment – 1.4% | ||||||||||||
174,100 | B.F. Goodrich Co. | 11,185,925 | ||||||||||
13,700 | United Technologies Corp. | 950,917 | ||||||||||
12,136,842 | ||||||||||||
Agricultural Chemicals – 0.4% | ||||||||||||
38,100 | Monsanto Co. | 3,114,675 | ||||||||||
4,600 | Terra Industries, Inc. | 148,074 | ||||||||||
3,262,749 | ||||||||||||
Agricultural Operations – 0.8% | ||||||||||||
204,600 | Archer-Daniels-Midland Co. | 6,406,026 | ||||||||||
Airlines – 0.2% | ||||||||||||
33,700 | Copa Holdings S.A. | 1,835,639 | ||||||||||
Apparel Manufacturers – 0.3% | ||||||||||||
54,000 | Coach, Inc. | 1,972,620 | ||||||||||
9,900 | Polo Ralph Lauren Corp. | 801,702 | ||||||||||
2,774,322 | ||||||||||||
Applications Software – 5.3% | ||||||||||||
8,600 | Citrix Systems, Inc.* | 357,846 | ||||||||||
62,200 | Intuit, Inc.* | 1,910,162 | ||||||||||
1,313,700 | Microsoft Corp. | 40,054,713 | ||||||||||
2,200 | Nuance Communications, Inc.* | 34,188 | ||||||||||
46,400 | Red Hat, Inc.* | 1,433,760 | ||||||||||
24,800 | Salesforce.com, Inc.* | 1,829,496 | ||||||||||
45,620,165 | ||||||||||||
Athletic Footwear – 0% | ||||||||||||
4,400 | NIKE, Inc. – Class B | 290,708 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0% | ||||||||||||
6,500 | PACCAR, Inc. | 235,755 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.4% | ||||||||||||
55,800 | BorgWarner, Inc* | 1,853,676 | ||||||||||
28,300 | Johnson Controls, Inc. | 770,892 | ||||||||||
29,700 | WABCO Holdings, Inc.* | 765,963 | ||||||||||
3,390,531 | ||||||||||||
Beverages – Non-Alcoholic – 5.6% | ||||||||||||
393,500 | Coca-Cola Co. | 22,429,500 | ||||||||||
406,000 | Coca-Cola Enterprises, Inc. | 8,607,200 | ||||||||||
17,600 | Hansen Natural Corp.* | 675,840 | ||||||||||
124,300 | Pepsi Bottling Group, Inc. | 4,661,250 | ||||||||||
187,200 | PepsiCo, Inc. | 11,381,760 | ||||||||||
47,755,550 | ||||||||||||
Broadcast Services and Programming – 0.9% | ||||||||||||
204,000 | Discovery Communications* | 5,410,080 | ||||||||||
49,700 | Scripps Networks Interactive, Inc. – Class A | 2,062,550 | ||||||||||
7,472,630 | ||||||||||||
Building – Residential and Commercial – 0% | ||||||||||||
300 | NVR, Inc.* | 213,213 | ||||||||||
Building Products – Air and Heating – 0% | ||||||||||||
4,600 | Lennox International, Inc. | 179,584 | ||||||||||
Building Products – Cement and Aggregate – 0.1% | ||||||||||||
27,700 | Eagle Materials, Inc. | 721,585 | ||||||||||
Cable Television – 0.2% | ||||||||||||
17,800 | Comcast Corp. – Class A | 300,108 | ||||||||||
37,800 | DIRECTV Group, Inc.* | 1,260,630 | ||||||||||
1,560,738 | ||||||||||||
Casino Hotels – 0.2% | ||||||||||||
9,500 | Las Vegas Sands Corp.* | 141,930 | ||||||||||
147,200 | MGM Mirage* | 1,342,464 | ||||||||||
1,484,394 | ||||||||||||
Casino Services – 0.5% | ||||||||||||
229,400 | International Game Technology | 4,305,838 | ||||||||||
Cellular Telecommunications – 0% | ||||||||||||
32,300 | MetroPCS Communications, Inc.* | 246,449 | ||||||||||
Chemicals – Diversified – 0.2% | ||||||||||||
60,000 | E.I. du Pont de Nemours & Co. | 2,020,200 | ||||||||||
Chemicals – Specialty – 0.3% | ||||||||||||
7,000 | Albemarle Corp. | 254,590 | ||||||||||
5,000 | Ashland, Inc. | 198,100 | ||||||||||
22,700 | Lubrizol Corp. | 1,655,965 | ||||||||||
2,108,655 | ||||||||||||
Coal – 0% | ||||||||||||
5,300 | Alpha Natural Resources, Inc.* | 229,914 | ||||||||||
Coatings and Paint Products – 0.2% | ||||||||||||
81,400 | RPM International, Inc. | 1,654,862 | ||||||||||
Coffee – 0.3% | ||||||||||||
32,600 | Green Mountain Coffee Roasters, Inc.* | 2,655,922 | ||||||||||
Commercial Services – 0.5% | ||||||||||||
203,800 | Iron Mountain, Inc.* | 4,638,488 | ||||||||||
Commercial Services – Finance – 2.3% | ||||||||||||
113,300 | Automatic Data Processing, Inc. | 4,851,506 | ||||||||||
29,900 | Lender Processing Services, Inc. | 1,215,734 | ||||||||||
20,600 | MasterCard, Inc. – Class A | 5,273,188 | ||||||||||
48,000 | Moody’s Corp. | 1,286,400 | ||||||||||
3,300 | Paychex, Inc. | 101,112 | ||||||||||
171,600 | Total System Services, Inc. | 2,963,532 | ||||||||||
31,100 | Visa, Inc. – Class A | 2,720,006 | ||||||||||
69,900 | Western Union Co. | 1,317,615 | ||||||||||
19,729,093 | ||||||||||||
Computer Services – 0.6% | ||||||||||||
10,600 | Affiliated Computer Services, Inc. – Class A* | 632,714 | ||||||||||
98,200 | Cognizant Technology Solutions Corp.* | 4,448,460 | ||||||||||
3,500 | IHS, Inc. – Class A* | 191,835 | ||||||||||
5,273,009 | ||||||||||||
Computers – 10.4% | ||||||||||||
128,300 | Apple, Inc.* | 27,053,338 | ||||||||||
106,700 | Dell, Inc.* | 1,532,212 | ||||||||||
320,700 | Hewlett-Packard Co. | 16,519,257 | ||||||||||
335,800 | International Business Machines Corp. | 43,956,220 | ||||||||||
89,061,027 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 19
INTECH Risk-Managed Growth Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Computers – Integrated Systems – 1.1% | ||||||||||||
6,300 | Diebold, Inc. | $ | 179,235 | |||||||||
117,700 | Micros Systems, Inc.* | 3,652,231 | ||||||||||
15,300 | NCR Corp.* | 170,289 | ||||||||||
180,200 | Terdata Corp.* | 5,663,686 | ||||||||||
9,665,441 | ||||||||||||
Computers – Memory Devices – 0.6% | ||||||||||||
8,900 | EMC Corp.* | 155,483 | ||||||||||
115,100 | NetApp, Inc.* | 3,958,289 | ||||||||||
21,600 | Seagate Technology | 392,904 | ||||||||||
16,200 | Western Digital Corp.* | 715,230 | ||||||||||
5,221,906 | ||||||||||||
Consulting Services – 0.1% | ||||||||||||
10,100 | FTI Consulting, Inc.* | 476,316 | ||||||||||
11,400 | Verisk Analytics, Inc.* | 345,192 | ||||||||||
821,508 | ||||||||||||
Consumer Products – Miscellaneous – 0% | ||||||||||||
1,000 | Kimberly-Clark Corp. | 63,710 | ||||||||||
1,900 | Scotts Miracle-Gro Co. – Class A | 74,689 | ||||||||||
138,399 | ||||||||||||
Containers – Metal and Glass – 1.4% | ||||||||||||
80,800 | Ball Corp. | 4,177,360 | ||||||||||
256,600 | Crown Holdings, Inc.* | 6,563,828 | ||||||||||
23,600 | Owens-Illinois, Inc.* | 775,732 | ||||||||||
11,516,920 | ||||||||||||
Cosmetics and Toiletries – 1.2% | ||||||||||||
29,100 | Avon Products, Inc. | 916,650 | ||||||||||
80,100 | Colgate-Palmolive Co. | 6,580,215 | ||||||||||
14,500 | Estee Lauder Cos., Inc. – Class A | 701,220 | ||||||||||
34,234 | Procter & Gamble Co. | 2,075,607 | ||||||||||
10,273,692 | ||||||||||||
Data Processing and Management – 1.5% | ||||||||||||
138,400 | Broadridge Financial Solutions, Inc. | 3,122,304 | ||||||||||
1,200 | Dun & Bradstreet Corp. | 101,244 | ||||||||||
219,255 | Fidelity National Information Services, Inc. | 5,139,337 | ||||||||||
83,200 | Fiserv, Inc.* | 4,033,536 | ||||||||||
12,396,421 | ||||||||||||
Decision Support Software – 0.1% | ||||||||||||
23,500 | MSCI, Inc.* | 747,300 | ||||||||||
Dental Supplies and Equipment – 0.1% | ||||||||||||
37,800 | Patterson Companies, Inc.* | 1,057,644 | ||||||||||
Diagnostic Kits – 0.3% | ||||||||||||
8,500 | Idexx Laboratories, Inc.* | 454,240 | ||||||||||
45,400 | Inverness Medical Innovations, Inc.* | 1,884,554 | ||||||||||
2,338,794 | ||||||||||||
Distribution/Wholesale – 0.2% | ||||||||||||
14,900 | W.W. Grainger, Inc. | 1,442,767 | ||||||||||
8,000 | Wesco International, Inc.* | 216,080 | ||||||||||
1,658,847 | ||||||||||||
Diversified Banking Inst – 0.1% | ||||||||||||
6,600 | Goldman Sachs Group, Inc. | 1,114,344 | ||||||||||
Diversified Operations – 1.5% | ||||||||||||
22,900 | 3M Co. | 1,893,143 | ||||||||||
49,900 | Brink’s Co. | 1,214,566 | ||||||||||
6,800 | Carlisle Cos., Inc. | 232,968 | ||||||||||
21,700 | Crane Co. | 664,454 | ||||||||||
3,900 | Dover Corp. | 162,279 | ||||||||||
69,900 | Harsco Corp. | 2,252,877 | ||||||||||
148,200 | Honeywell International, Inc. | 5,809,440 | ||||||||||
7,400 | Leucadia National Corp.* | 176,046 | ||||||||||
12,405,773 | ||||||||||||
E-Commerce/Products – 0.3% | ||||||||||||
20,300 | Amazon.com, Inc.* | 2,730,756 | ||||||||||
E-Commerce/Services – 0.8% | ||||||||||||
123,100 | eBay, Inc.* | 2,897,774 | ||||||||||
24,700 | Expedia, Inc.* | 635,037 | ||||||||||
8,900 | IAC/InterActiveCorp* | 182,272 | ||||||||||
4,600 | Netflix, Inc.* | 253,644 | ||||||||||
13,500 | Priceline.com, Inc.* | 2,949,750 | ||||||||||
6,918,477 | ||||||||||||
Electric – Generation – 0.3% | ||||||||||||
177,500 | AES Corp.* | 2,362,525 | ||||||||||
Electric – Integrated – 0.9% | ||||||||||||
58,400 | Constellation Energy Group, Inc. | 2,053,928 | ||||||||||
80,100 | FPL Group, Inc. | 4,230,882 | ||||||||||
91,900 | Sierra Pacific Resources | 1,137,722 | ||||||||||
7,422,532 | ||||||||||||
Electric – Transmission – 0.1% | ||||||||||||
11,000 | ITC Holdings Corp. | 572,990 | ||||||||||
Electric Products – Miscellaneous – 0% | ||||||||||||
1,500 | Emerson Electric Co. | 63,900 | ||||||||||
Electronic Components – Miscellaneous – 0.1% | ||||||||||||
23,800 | Gentex Corp. | 424,830 | ||||||||||
Electronic Components – Semiconductors – 3.4% | ||||||||||||
55,600 | Broadcom Corp. – Class A* | 1,748,620 | ||||||||||
14,200 | Cree, Inc.* | 800,454 | ||||||||||
430,800 | Intel Corp. | 8,788,320 | ||||||||||
44,600 | Intersil Corp. – Class A | 684,164 | ||||||||||
118,200 | Microchip Technology, Inc. | 3,434,892 | ||||||||||
3,400 | Micron Technology, Inc.* | 35,904 | ||||||||||
56,200 | National Semiconductor Corp. | 863,232 | ||||||||||
184,100 | Nvidia Corp.* | 3,438,988 | ||||||||||
84,400 | Rovi Corp.* | 2,689,828 | ||||||||||
5,500 | Silicon Laboratories, Inc.* | 265,870 | ||||||||||
199,100 | Texas Instruments, Inc. | 5,188,546 | ||||||||||
58,300 | Xilinx, Inc. | 1,460,998 | ||||||||||
29,399,816 | ||||||||||||
Electronic Connectors – 0.2% | ||||||||||||
37,200 | Amphenol Corp. – Class A | 1,717,896 | ||||||||||
Electronic Design Automation – 0.3% | ||||||||||||
46,100 | Cadence Design Systems, Inc.* | 276,139 | ||||||||||
107,100 | Synopsys, Inc.* | 2,386,188 | ||||||||||
2,662,327 | ||||||||||||
Electronic Forms – 0.1% | ||||||||||||
33,200 | Adobe Systems, Inc.* | 1,221,096 | ||||||||||
Electronic Measuring Instruments – 0.2% | ||||||||||||
58,100 | Agilent Technologies, Inc.* | 1,805,167 |
See Notes to Schedules of Investments and Financial Statements.
20 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Electronic Parts Distributors – 0.5% | ||||||||||||
66,000 | Arrow Electronics, Inc.* | $ | 1,954,260 | |||||||||
81,900 | Avnet, Inc.* | 2,470,104 | ||||||||||
4,424,364 | ||||||||||||
Energy – Alternate Sources – 0% | ||||||||||||
2,700 | First Solar, Inc.* | 365,580 | ||||||||||
Engineering – Research and Development Services – 0.1% | ||||||||||||
27,900 | Aecom Technology Corp.* | 767,250 | ||||||||||
1,000 | Fluor Corp. | 45,040 | ||||||||||
4,200 | Shaw Group, Inc.* | 120,750 | ||||||||||
933,040 | ||||||||||||
Enterprise Software/Services – 4.0% | ||||||||||||
280,000 | BMC Software, Inc.* | 11,228,000 | ||||||||||
10,200 | CA, Inc. | 229,092 | ||||||||||
52,300 | Novell, Inc.* | 217,045 | ||||||||||
770,744 | Oracle Corp. | 18,914,058 | ||||||||||
64,800 | Sybase, Inc. | 2,812,320 | ||||||||||
33,400,515 | ||||||||||||
Entertainment Software – 0.2% | ||||||||||||
76,800 | Activision Blizzard, Inc.* | 853,248 | ||||||||||
55,000 | Electronic Arts, Inc.* | 976,250 | ||||||||||
1,829,498 | ||||||||||||
Fiduciary Banks – 0.4% | ||||||||||||
47,100 | Bank of New York Mellon Corp. | 1,317,387 | ||||||||||
3,100 | Northern Trust Corp. | 162,440 | ||||||||||
52,500 | State Street Corp. | 2,285,850 | ||||||||||
3,765,677 | ||||||||||||
Finance – Consumer Loans – 0.1% | ||||||||||||
104,300 | SLM Corp.* | 1,175,461 | ||||||||||
Finance – Credit Card – 0.1% | ||||||||||||
11,400 | American Express Co. | 461,928 | ||||||||||
Finance – Investment Bankers/Brokers – 0% | ||||||||||||
1,900 | Greenhill & Co., Ltd. | 152,456 | ||||||||||
Finance – Other Services – 0.3% | ||||||||||||
2,100 | CME Group, Inc. | 705,495 | ||||||||||
9,000 | IntercontinentalExchange, Inc.* | 1,010,700 | ||||||||||
47,800 | NYSE Euronext | 1,209,340 | ||||||||||
2,925,535 | ||||||||||||
Food – Dairy Products – 0.1% | ||||||||||||
42,600 | Dean Foods Co. | 768,504 | ||||||||||
Food – Meat Products – 0.1% | ||||||||||||
10,200 | Hormel Foods Corp. | 392,190 | ||||||||||
10,300 | Smithfield Foods, Inc.* | 156,457 | ||||||||||
548,647 | ||||||||||||
Food – Retail – 0.3% | ||||||||||||
76,500 | Whole Foods Market, Inc.* | 2,099,925 | ||||||||||
Food – Wholesale/Distribution – 0.1% | ||||||||||||
14,800 | Sysco Corp. | 413,512 | ||||||||||
Gold Mining – 0.5% | ||||||||||||
91,400 | Newmont Mining Corp. | 4,324,134 | ||||||||||
Hospital Beds and Equipment – 0.2% | ||||||||||||
8,700 | Hill-Rom Holdings, Inc. | 208,713 | ||||||||||
28,000 | Kinetic Concepts, Inc.* | 1,054,200 | ||||||||||
1,262,913 | ||||||||||||
Hotels and Motels – 0.3% | ||||||||||||
87,498 | Marriott International, Inc. – Class A | 2,384,321 | ||||||||||
8,600 | Starwood Hotels & Resorts Worldwide, Inc. | 314,502 | ||||||||||
2,698,823 | ||||||||||||
Human Resources – 0.1% | ||||||||||||
30,700 | Monster Worldwide, Inc.* | 534,180 | ||||||||||
Independent Power Producer – 0% | ||||||||||||
1,500 | Calpine Corp.* | 16,500 | ||||||||||
Industrial Audio and Video Products – 0.2% | ||||||||||||
42,400 | Dolby Laboratories, Inc.* | 2,023,752 | ||||||||||
Industrial Automation and Robotics – 0.1% | ||||||||||||
14,100 | Rockwell Automation, Inc. | 662,418 | ||||||||||
Industrial Gases – 0.8% | ||||||||||||
67,700 | Air Products & Chemicals, Inc. | 5,487,762 | ||||||||||
21,200 | Praxair, Inc. | 1,702,572 | ||||||||||
7,190,334 | ||||||||||||
Instruments – Controls – 0% | ||||||||||||
1,800 | Mettler-Toledo International, Inc.* | 188,982 | ||||||||||
Instruments – Scientific – 0.2% | ||||||||||||
20,300 | PerkinElmer, Inc. | 417,977 | ||||||||||
16,700 | Thermo Fisher Scientific, Inc.* | 796,423 | ||||||||||
6,300 | Waters Corp.* | 390,348 | ||||||||||
1,604,748 | ||||||||||||
Internet Content – Information/News – 0.1% | ||||||||||||
16,988 | WebMD Health Corp* | 653,868 | ||||||||||
Internet Infrastructure Software – 0.1% | ||||||||||||
8,000 | Akamai Technologies, Inc.* | 202,640 | ||||||||||
8,000 | F5 Networks, Inc.* | 423,840 | ||||||||||
626,480 | ||||||||||||
Internet Security – 0.1% | ||||||||||||
5,600 | McAfee, Inc.* | 227,192 | ||||||||||
32,000 | VeriSign, Inc.* | 775,680 | ||||||||||
1,002,872 | ||||||||||||
Investment Management and Advisory Services – 0.2% | ||||||||||||
38,700 | Federated Investors, Inc. – Class B | 1,064,250 | ||||||||||
1,800 | Franklin Resources, Inc. | 189,630 | ||||||||||
12,000 | Waddell & Reed Financial, Inc. – Class A | 366,480 | ||||||||||
1,620,360 | ||||||||||||
Leisure and Recreation Products – 0.1% | ||||||||||||
27,700 | WMS Industries, Inc.* | 1,108,000 | ||||||||||
Life and Health Insurance – 0.2% | ||||||||||||
9,500 | AFLAC, Inc. | 439,375 | ||||||||||
14,200 | Lincoln National Corp. | 353,296 | ||||||||||
34,800 | Principal Financial Group, Inc. | 836,592 | ||||||||||
6,900 | Prudential Financial, Inc. | 343,344 | ||||||||||
1,972,607 | ||||||||||||
Machinery – Construction and Mining – 0.1% | ||||||||||||
16,400 | Caterpillar, Inc. | 934,636 | ||||||||||
Machinery – Farm – 0.4% | ||||||||||||
62,100 | Deere & Co. | 3,358,989 | ||||||||||
Machinery – Print Trade – 0.2% | ||||||||||||
74,100 | Zebra Technologies Corp.* | 2,101,476 | ||||||||||
Machinery – Pumps – 0% | ||||||||||||
3,800 | Flowserve Corp. | 359,214 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 21
INTECH Risk-Managed Growth Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Medical – Biomedical and Genetic – 1.7% | ||||||||||||
3,100 | Amgen, Inc.* | $ | 175,367 | |||||||||
12,400 | Amylin Pharmaceuticals, Inc.* | 175,956 | ||||||||||
20,200 | Biogen Idec, Inc.* | 1,080,700 | ||||||||||
6,000 | Celgene Corp.* | 334,080 | ||||||||||
53,300 | Charles River Laboratories International, Inc.* | 1,795,677 | ||||||||||
62,300 | Dendreon Corp.* | 1,637,244 | ||||||||||
78,200 | Gilead Sciences, Inc.* | 3,384,496 | ||||||||||
90,600 | Life Technologies Corp.* | 4,732,038 | ||||||||||
13,100 | Millipore Corp.* | 947,785 | ||||||||||
14,263,343 | ||||||||||||
Medical – Drugs – 3.4% | ||||||||||||
170,400 | Abbott Laboratories | 9,199,896 | ||||||||||
50,200 | Allergan, Inc. | 3,163,102 | ||||||||||
310,800 | Bristol-Myers Squibb Co. | 7,847,700 | ||||||||||
251,820 | Merck & Co., Inc. | 9,201,503 | ||||||||||
29,412,201 | ||||||||||||
Medical – Generic Drugs – 0.7% | ||||||||||||
320,500 | Mylan, Inc.* | 5,906,815 | ||||||||||
Medical – HMO – 0.4% | ||||||||||||
700 | Aetna, Inc. | 22,190 | ||||||||||
6,600 | CIGNA Corp. | 232,782 | ||||||||||
48,300 | Coventry Health Care, Inc.* | 1,173,207 | ||||||||||
3,400 | Humana, Inc.* | 149,226 | ||||||||||
25,900 | WellPoint, Inc.* | 1,509,711 | ||||||||||
3,087,116 | ||||||||||||
Medical – Hospitals – 0.2% | ||||||||||||
11,000 | Community Health Systems, Inc.* | 391,600 | ||||||||||
129,600 | Tenet Healthcare Corp.* | 698,544 | ||||||||||
6,000 | Universal Health Services, Inc. – Class B | 183,000 | ||||||||||
1,273,144 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.5% | ||||||||||||
115,700 | AmerisourceBergen Corp. | 3,016,299 | ||||||||||
18,800 | McKesson Corp. | 1,175,000 | ||||||||||
4,191,299 | ||||||||||||
Medical Information Systems – 0.3% | ||||||||||||
13,100 | Allscripts Healthcare Solutions, Inc.* | 265,013 | ||||||||||
32,400 | Cerner Corp.* | 2,671,056 | ||||||||||
2,936,069 | ||||||||||||
Medical Instruments – 0.7% | ||||||||||||
16,500 | Beckman Coulter, Inc. | 1,079,760 | ||||||||||
139,900 | Boston Scientific Corp.* | 1,259,100 | ||||||||||
6,300 | Edwards Lifesciences Corp.* | 547,155 | ||||||||||
2,200 | Intuitive Surgical, Inc.* | 667,304 | ||||||||||
31,200 | Medtronic, Inc. | 1,372,176 | ||||||||||
31,000 | St. Jude Medical, Inc.* | 1,140,180 | ||||||||||
6,065,675 | ||||||||||||
Medical Labs and Testing Services – 0.2% | ||||||||||||
20,100 | Covance, Inc.* | 1,096,857 | ||||||||||
7,500 | Laboratory Corp. of America Holdings* | 561,300 | ||||||||||
1,658,157 | ||||||||||||
Medical Products – 1.5% | ||||||||||||
27,100 | Baxter International, Inc. | 1,590,228 | ||||||||||
11,400 | Becton, Dickinson and Co. | 899,004 | ||||||||||
13,300 | Henry Schein, Inc.* | 699,580 | ||||||||||
43,700 | Hospira, Inc.* | 2,228,700 | ||||||||||
102,700 | Johnson & Johnson | 6,614,907 | ||||||||||
8,700 | Stryker Corp. | 438,219 | ||||||||||
12,470,638 | ||||||||||||
Metal – Aluminum – 0% | ||||||||||||
17,000 | Alcoa, Inc. | 274,040 | ||||||||||
Metal – Copper – 0.1% | ||||||||||||
15,600 | Southern Copper Corp. | 513,396 | ||||||||||
Metal Processors and Fabricators – 0.2% | ||||||||||||
18,300 | Precision Castparts Corp. | 2,019,405 | ||||||||||
Multi-Line Insurance – 0.3% | ||||||||||||
61,600 | American International Group, Inc.* | 1,846,768 | ||||||||||
42,500 | Genworth Financial, Inc. – Class A* | 482,375 | ||||||||||
2,329,143 | ||||||||||||
Multimedia – 0.7% | ||||||||||||
33,400 | FactSet Research Systems, Inc. | 2,200,058 | ||||||||||
121,700 | McGraw-Hill Cos., Inc. | 4,078,167 | ||||||||||
6,278,225 | ||||||||||||
Networking Products – 3.0% | ||||||||||||
1,073,700 | Cisco Systems, Inc.* | 25,704,378 | ||||||||||
Oil – Field Services – 0.6% | ||||||||||||
10,900 | Exterran Holdings, Inc.* | 233,805 | ||||||||||
11,300 | Oceaneering International, Inc.* | 661,276 | ||||||||||
67,900 | Schlumberger, Ltd. (U.S. Shares) | 4,419,611 | ||||||||||
5,314,692 | ||||||||||||
Oil and Gas Drilling – 0.2% | ||||||||||||
5,700 | Atwood Oceanics, Inc.* | 204,345 | ||||||||||
6,000 | Diamond Offshore Drilling, Inc. | 590,520 | ||||||||||
8,500 | Helmerich & Payne, Inc. | 338,980 | ||||||||||
6,000 | Pride International, Inc.* | 191,460 | ||||||||||
1,325,305 | ||||||||||||
Oil Companies – Exploration and Production – 1.5% | ||||||||||||
219,700 | EQT Corp. | 9,649,224 | ||||||||||
7,000 | Plains Exploration & Production Co.* | 193,620 | ||||||||||
22,400 | Range Resources Corp. | 1,116,640 | ||||||||||
35,600 | Southwestern Energy Co.* | 1,715,920 | ||||||||||
12,675,404 | ||||||||||||
Oil Companies – Integrated – 1.7% | ||||||||||||
213,300 | Exxon Mobil Corp. | 14,544,927 | ||||||||||
Oil Field Machinery and Equipment – 0.2% | ||||||||||||
11,700 | Cameron International Corp.* | 489,060 | ||||||||||
30,500 | Dresser-Rand Group, Inc.* | 964,105 | ||||||||||
4,500 | FMC Technologies, Inc.* | 260,280 | ||||||||||
1,713,445 | ||||||||||||
Oil Refining and Marketing – 0.1% | ||||||||||||
9,600 | Frontier Oil Corp. | 115,584 | ||||||||||
20,000 | Tesoro Corp. | 271,000 | ||||||||||
386,584 | ||||||||||||
Pharmacy Services – 0.5% | ||||||||||||
2,000 | Express Scripts, Inc. – Class A* | 172,900 | ||||||||||
60,666 | Medco Health Solutions, Inc.* | 3,877,164 | ||||||||||
4,050,064 | ||||||||||||
Physical Practice Management – 0.1% | ||||||||||||
20,200 | Mednax, Inc.* | 1,214,222 |
See Notes to Schedules of Investments and Financial Statements.
22 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Pipelines – 0.1% | ||||||||||||
49,000 | El Paso Corp. | $ | 481,670 | |||||||||
Printing – Commercial – 0.1% | ||||||||||||
51,500 | R.R. Donnelley & Sons Co. | 1,146,905 | ||||||||||
Private Corrections – 0% | ||||||||||||
7,900 | Corrections Corporation of America* | 193,945 | ||||||||||
Property and Casualty Insurance – 0.1% | ||||||||||||
28,800 | Fidelity National Financial, Inc. – Class A | 387,648 | ||||||||||
Protection – Safety – 0.3% | ||||||||||||
73,500 | Brinks Co.* | 2,399,040 | ||||||||||
Quarrying – 0.1% | ||||||||||||
6,100 | Compass Minerals International, Inc. | 409,859 | ||||||||||
Real Estate Management/Services – 0% | ||||||||||||
16,300 | CB Richard Ellis Group, Inc. – Class A* | 221,191 | ||||||||||
Real Estate Operating/Development – 0.1% | ||||||||||||
14,400 | St. Joe Co.* | 416,016 | ||||||||||
REIT – Storage – 0% | ||||||||||||
1,400 | Public Storage | 114,030 | ||||||||||
Respiratory Products – 0.2% | ||||||||||||
34,000 | ResMed, Inc.* | 1,777,180 | ||||||||||
Retail – Apparel and Shoe – 1.5% | ||||||||||||
26,600 | Abercrombie & Fitch Co. – Class A | 927,010 | ||||||||||
15,600 | Aeropostale, Inc.* | 531,180 | ||||||||||
160,100 | American Eagle Outfitters, Inc. | 2,718,498 | ||||||||||
2,600 | Chico’s FAS, Inc.* | 36,530 | ||||||||||
44,500 | Foot Locker, Inc. | 495,730 | ||||||||||
7,700 | Gap, Inc. | 161,315 | ||||||||||
20,600 | Limited Brands, Inc. | 396,344 | ||||||||||
9,600 | Nordstrom, Inc. | 360,768 | ||||||||||
11,600 | Phillips-Van Heusen Corp. | 471,888 | ||||||||||
125,200 | Ross Stores, Inc. | 5,347,292 | ||||||||||
38,200 | Urban Outfitters, Inc.* | 1,336,618 | ||||||||||
12,783,173 | ||||||||||||
Retail – Auto Parts – 2.4% | ||||||||||||
119,600 | Advance Auto Parts, Inc. | 4,841,408 | ||||||||||
42,600 | AutoZone, Inc.* | 6,733,782 | ||||||||||
204,300 | O’Reilly Automotive, Inc.* | 7,787,916 | ||||||||||
19,363,106 | ||||||||||||
Retail – Automobile – 0.4% | ||||||||||||
127,100 | Carmax, Inc.* | 3,082,175 | ||||||||||
Retail – Bedding – 0.3% | ||||||||||||
56,700 | Bed Bath & Beyond, Inc.* | 2,190,321 | ||||||||||
Retail – Building Products – 0.1% | ||||||||||||
41,800 | Home Depot, Inc. | 1,209,274 | ||||||||||
Retail – Catalog Shopping – 0% | ||||||||||||
4,100 | MSC Industrial Direct Co. – Class A | 192,700 | ||||||||||
Retail – Consumer Electronics – 0.7% | ||||||||||||
154,900 | Best Buy Co., Inc. | 6,112,354 | ||||||||||
Retail – Discount – 2.5% | ||||||||||||
12,700 | Dollar Tree, Inc.* | 613,410 | ||||||||||
5,800 | Family Dollar Stores, Inc. | 161,414 | ||||||||||
21,700 | Target Corp. | 1,049,629 | ||||||||||
348,600 | Wal-Mart Stores, Inc. | 18,632,670 | ||||||||||
20,457,123 | ||||||||||||
Retail – Drug Store – 0.5% | ||||||||||||
28,346 | CVS Caremark Corp. | 913,025 | ||||||||||
92,800 | Walgreen Co. | 3,407,616 | ||||||||||
4,320,641 | ||||||||||||
Retail – Jewelry – 0% | ||||||||||||
4,600 | Tiffany & Co. | 197,800 | ||||||||||
Retail – Mail Order – 0% | ||||||||||||
12,300 | Williams-Sonoma, Inc. | 255,594 | ||||||||||
Retail – Major Department Stores – 0.3% | ||||||||||||
73,900 | TJX Cos., Inc. | 2,701,045 | ||||||||||
Retail – Office Supplies – 0% | ||||||||||||
10,900 | Staples, Inc. | 268,031 | ||||||||||
Retail – Regional Department Stores – 0.7% | ||||||||||||
108,400 | Kohl’s Corp.* | 5,846,012 | ||||||||||
Retail – Restaurants – 3.2% | ||||||||||||
11,100 | Brinker International, Inc. | 165,612 | ||||||||||
41,900 | Chipotle Mexican Grill, Inc. – Class A* | 3,693,904 | ||||||||||
110,300 | Darden Restaurants, Inc. | 3,868,221 | ||||||||||
167,100 | McDonald’s Corp. | 10,433,724 | ||||||||||
185,000 | Starbucks Corp.* | 4,266,100 | ||||||||||
97,200 | Wendy’s/Arby’s Group, Inc. | 455,868 | ||||||||||
133,200 | Yum! Brands, Inc. | 4,658,004 | ||||||||||
27,541,433 | ||||||||||||
Retail – Sporting Goods – 0.1% | ||||||||||||
25,700 | Dick’s Sporting Goods, Inc.* | 639,159 | ||||||||||
Schools – 0% | ||||||||||||
10,300 | Career Education Corp.* | 240,093 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.6% | ||||||||||||
114,400 | Analog Devices, Inc. | 3,612,752 | ||||||||||
17,900 | Linear Technology Corp. | 546,666 | ||||||||||
24,700 | Marvell Technology Group, Ltd.* | 512,525 | ||||||||||
40,600 | Maxim Integrated Products | 824,180 | ||||||||||
5,496,123 | ||||||||||||
Semiconductor Equipment – 0.3% | ||||||||||||
87,700 | Novellus Systems, Inc.* | 2,046,918 | ||||||||||
58,300 | Teradyne, Inc.* | 625,559 | ||||||||||
2,672,477 | ||||||||||||
Software Tools – 0.1% | ||||||||||||
11,100 | VMware, Inc. – Class A* | 470,418 | ||||||||||
Super-Regional Banks – 0.1% | ||||||||||||
16,500 | Capital One Financial Corp. | 632,610 | ||||||||||
9,500 | Wells Fargo & Co. | 256,405 | ||||||||||
889,015 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 0.4% | ||||||||||||
182,000 | Corning, Inc. | 3,514,420 | ||||||||||
Telecommunication Services – 0.1% | ||||||||||||
9,300 | NeuStar, Inc. – Class A* | 214,272 | ||||||||||
20,100 | tw telecom, inc. – Class A* | 344,514 | ||||||||||
558,786 | ||||||||||||
Tobacco – 3.1% | ||||||||||||
373,400 | Altria Group, Inc. | 7,329,842 | ||||||||||
44,200 | Lorillard, Inc. | 3,546,166 | ||||||||||
323,700 | Philip Morris International, Inc. | 15,599,103 | ||||||||||
26,475,111 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 23
INTECH Risk-Managed Growth Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Toys – 0.1% | ||||||||||||
4,200 | Marvel Entertainment, Inc.* | $ | 227,136 | |||||||||
21,900 | Mattel, Inc. | 437,562 | ||||||||||
664,698 | ||||||||||||
Transportation – Marine – 0% | ||||||||||||
6,600 | Kirby Corp.* | 229,878 | ||||||||||
Transportation – Railroad – 0% | ||||||||||||
5,900 | Kansas City Southern* | 196,411 | ||||||||||
2,000 | Union Pacific Corp. | 127,800 | ||||||||||
324,211 | ||||||||||||
Transportation – Services – 0% | ||||||||||||
1,000 | Expeditors International of Washington, Inc. | 34,730 | ||||||||||
Transportation – Truck – 0.1% | ||||||||||||
6,300 | Con-way, Inc. | 219,933 | ||||||||||
10,800 | J.B. Hunt Transport Services, Inc. | 348,516 | ||||||||||
568,449 | ||||||||||||
Veterinary Diagnostics – 0.1% | ||||||||||||
20,900 | VCA Antech, Inc.* | 520,828 | ||||||||||
Vitamins and Nutrition Products – 0.2% | ||||||||||||
15,000 | Herbalife, Ltd. | 608,550 | ||||||||||
29,100 | NBTY, Inc.* | 1,267,014 | ||||||||||
1,875,564 | ||||||||||||
Water Treatment Systems – 0.1% | ||||||||||||
24,200 | Nalco Holding Co. | 617,342 | ||||||||||
Web Portals/Internet Service Providers – 3.1% | ||||||||||||
33,600 | Google, Inc. – Class A* | 20,831,328 | ||||||||||
316,200 | Yahoo!, Inc.* | 5,305,836 | ||||||||||
26,137,164 | ||||||||||||
Wireless Equipment – 2.0% | ||||||||||||
44,100 | Crown Castle International Corp.* | 1,721,664 | ||||||||||
101,400 | Motorola, Inc.* | 786,864 | ||||||||||
300,900 | QUALCOMM, Inc. | 13,919,634 | ||||||||||
25,300 | SBA Communications Corp. – Class A* | 864,248 | ||||||||||
17,292,410 | ||||||||||||
X-Ray Equipment – 0% | ||||||||||||
16,900 | Hologic, Inc.* | 245,050 | ||||||||||
Total Investments (total cost $737,998,745) – 99.8% | 851,982,813 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 1,940,547 | |||||||||||
Net Assets – 100% | $ | 853,923,360 | ||||||||||
Summary of Investments by Country – Long Positions
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 512,525 | 0.1% | |||||
Cayman Islands | 1,001,454 | 0.1% | ||||||
Netherlands Antilles | 4,419,611 | 0.5% | ||||||
United States | 846,049,223 | 99.3% | ||||||
Total | $ | 851,982,813 | 100.0% |
See Notes to Schedules of Investments and Financial Statements.
24 | DECEMBER 31, 2009
INTECH Risk-Managed International Fund (unaudited)
Fund Snapshot This fund uses a mathematically-based investment process that seeks to capitalize on the natural volatility of stock prices. The primary aim of this strategy is to outperform the benchmark index without increasing risk. | Managed by INTECH Investment Management LLC |
Performance Overview
For the five-month period ended December 31, 2009, INTECH Risk-Managed International Fund returned 9.29% for its Class I Shares. This compares to the 11.86% return posted by the MSCI EAFE® 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.
INTECH’s mathematical investment process seeks to build a more efficient portfolio than its benchmark, the MSCI EAFE® 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 stock 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 benchmark, 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 22 years, we have experienced periods 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 MSCI EAFE® 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 the long term. 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 International Fund.
Janus Risk-Managed Funds | 25
INTECH Risk-Managed International Fund (unaudited)
INTECH Risk-Managed International Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
BP PLC Oil Companies – Integrated | 1.4% | |||
Banco Santander Central Hispano S.A. Commercial Banks | 1.2% | |||
HSBC Holdings PLC Diversified Banking Institutions | 0.9% | |||
GlaxoSmithKline PLC Medical – Drugs | 0.9% | |||
Banco Bilbao Vizcaya Argentaria S.A. Commercial Banks | 0.9% | |||
5.3% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
* Includes Cash and Cash Equivalents of (0.2)%.
Emerging markets comprised 0.3% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
26 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Five-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
INTECH Risk-Managed International Fund – Class A Shares | |||||||||||
NAV | 9.13% | 25.54% | –9.80% | 6.45% | 1.25% | ||||||
MOP | 2.86% | 18.39% | –11.79% | ||||||||
INTECH Risk-Managed International Fund – Class C Shares | |||||||||||
NAV | 9.12% | 25.72% | –10.17% | 7.20% | 2.00% | ||||||
CDSC | 8.03% | 24.50% | –10.17% | ||||||||
INTECH Risk-Managed International Fund – Class I Shares | 9.29% | 25.53% | –9.67% | 6.34% | 1.00% | ||||||
INTECH Risk-Managed International Fund – Class S Shares | 9.28% | 25.72% | –9.89% | 6.66% | 1.50% | ||||||
INTECH Risk-Managed International Fund – Class T Shares | 9.14% | 23.04% | –12.21% | 6.45% | 1.25% | ||||||
Morgan Stanley Capital International EAFE® Index | 11.86% | 31.78% | –9.66% | ||||||||
Lipper Quartile – Class I Shares | – | 4th | 3rd | ||||||||
Lipper Ranking – Class I Shares based on total returns for International Funds | – | 1,019/1,275 | 551/1,025 | ||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
Janus Risk-Managed Funds | 27
INTECH Risk-Managed International Fund (unaudited)
For Class I Shares, Class S Shares, and Class T Shares, 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 annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 fee waiver exceeded the investment advisory fee for the period presented so the Fund did not pay Janus Capital any investment advisory fees (net of waivers).
The proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) may not achieve the desired results. The rebalancing techniques used by the Fund 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 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, initial public offerings, and derivatives. Please see a Janus prospectus or janus.com/advisor/mutual-funds 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 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.
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 prices of foreign securities held by the Fund, and therefore the Fund’s performance, may decline in response to such risks.
Returns include reinvestment of dividends from net investment income and distributions of 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.
Effective July 6, 2009, Janus Adviser INTECH Risk-Managed International Fund merged into INTECH Risk-Managed International Fund.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser INTECH Risk-Managed International Fund (the “JAD predecessor fund”) into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the JAD predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, net of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class T Shares of the Fund commenced operations on July 6, 2009, after the reorganization of the JAD predecessor fund into the Fund. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class I Shares prior to the reorganization, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers. If Class T Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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.
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 and do not include the effect of loads.
Lipper ranking is for the Class I Shares only; other classes may have different performance characteristics.
There is no assurance that the investment process will consistently lead to successful investing.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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.
28 | DECEMBER 31, 2009
(unaudited)
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date — May 2, 2007 |
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 – Class A Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,091.30 | $ | 4.91 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.56 | $ | 5.70 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,091.20 | $ | 5.00 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.46 | $ | 5.80 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,092.90 | $ | 4.74 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.76 | $ | 5.50 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,092.80 | $ | 4.91 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.56 | $ | 5.70 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class T Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,091.40 | $ | 3.11 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.63 | $ | 3.62 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.12% for Class A Shares, 1.14% for Class C Shares, 1.08% for Class I Shares, 1.12% for Class S Shares and 0.71% for Class T Shares, multiplied by the average account value over the period, multiplied by 153/365 (to reflect a five-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a five-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Risk-Managed Funds | 29
INTECH Risk-Managed International Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Common Stock – 99.4% | ||||||||||||
Advertising Services – 0.7% | ||||||||||||
1,100 | Dentsu, Inc. | $ | 25,330 | |||||||||
40 | Hakuhodo DY Holdings, Inc. | 1,933 | ||||||||||
69 | JC Decaux S.A.* | 1,674 | ||||||||||
813 | Publicis Groupe | 33,005 | ||||||||||
61,942 | ||||||||||||
Aerospace and Defense – 0.5% | ||||||||||||
4,947 | Rolls-Royce Group PLC* | 38,591 | ||||||||||
Aerospace and Defense – Equipment – 0.1% | ||||||||||||
1,298 | Cobham PLC | 5,230 | ||||||||||
Agricultural Chemicals – 0% | ||||||||||||
3 | Syngenta A.G. | 841 | ||||||||||
Agricultural Operations – 0.5% | ||||||||||||
9,000 | Wilmar International, Ltd. | 40,881 | ||||||||||
Airlines – 0.2% | ||||||||||||
1,220 | British Airways PLC* | 3,638 | ||||||||||
1,000 | Cathay Pacific Airways, Ltd.* | 1,853 | ||||||||||
148 | Groupe Air France* | 2,309 | ||||||||||
2,944 | Qantas Airways, Ltd. | 7,832 | ||||||||||
340 | Singapore Airlines, Ltd. | 3,593 | ||||||||||
19,225 | ||||||||||||
Airport Development – Maintenance – 0% | ||||||||||||
38 | Aeroports de Paris | 3,059 | ||||||||||
Apparel Manufacturers – 0.7% | ||||||||||||
1,164 | Billabong International, Ltd. | 11,327 | ||||||||||
2,974 | Burberry Group PLC | 28,503 | ||||||||||
194 | Christian Dior | 19,954 | ||||||||||
9 | Hermes International | 1,198 | ||||||||||
60,982 | ||||||||||||
Appliances – 0.5% | ||||||||||||
1,936 | Electrolux A.B.* | 45,544 | ||||||||||
Applications Software – 0.2% | ||||||||||||
3,538 | Sage Group PLC | 12,556 | ||||||||||
Athletic Footwear – 0.3% | ||||||||||||
123 | Adidas A.G. | 6,646 | ||||||||||
36 | Puma A.G. Rudolf Dassler Sport | 11,931 | ||||||||||
2,000 | Yue Yuen Industrial Holdings, Ltd. | 5,776 | ||||||||||
24,353 | ||||||||||||
Automotive – Cars and Light Trucks – 1.5% | ||||||||||||
369 | Bayerische Motoren Werke A.G. | 16,788 | ||||||||||
49 | Daimler A.G. | 2,620 | ||||||||||
901 | Fiat S.P.A.* | 13,123 | ||||||||||
200 | Honda Motor Co., Ltd. | 6,766 | ||||||||||
1,000 | Isuzu Motors, Ltd. | 1,869 | ||||||||||
3,400 | Nissan Motor Co., Ltd.* | 29,733 | ||||||||||
61 | PSA Peugeot Citroen* | 2,045 | ||||||||||
800 | Suzuki Motor Corp. | 19,656 | ||||||||||
700 | Toyota Motor Corp. | 29,428 | ||||||||||
261 | Volvo A.B. – Class A | 2,214 | ||||||||||
439 | Volvo A.B. – Class B | 3,749 | ||||||||||
127,991 | ||||||||||||
Automotive – Truck Parts and Equipment – Original – 1.1% | ||||||||||||
100 | Aisin Seiki Co., Ltd. | 2,860 | ||||||||||
400 | Denso Corp. | 11,995 | ||||||||||
200 | JTEKT Corp. | 2,557 | ||||||||||
1,000 | NHK Spring Co., Ltd. | 9,279 | ||||||||||
400 | NOK Corporation | 5,523 | ||||||||||
1,000 | Stanley Electric Co., Ltd. | 20,121 | ||||||||||
1,300 | Sumitomo Electric Industries, Ltd. | 16,123 | ||||||||||
500 | Toyoda Gosei Company, Ltd. | 15,056 | ||||||||||
500 | Toyota Boshoku, Corp. | 11,115 | ||||||||||
94,629 | ||||||||||||
Batteries and Battery Systems – 0.1% | ||||||||||||
1,000 | GS Yuasa Corp. | 7,343 | ||||||||||
Beverages – Non-Alcoholic – 0.5% | ||||||||||||
2,967 | Coca-Cola Amatil, Ltd. | 30,603 | ||||||||||
323 | Coca-Cola Hellenic Bottling Company S.A. | 7,364 | ||||||||||
300 | Ito En, Ltd. | 4,502 | ||||||||||
42,469 | ||||||||||||
Beverages – Wine and Spirits – 0.2% | ||||||||||||
768 | Diageo PLC | 13,388 | ||||||||||
59 | Pernod-Ricard S.A. | 5,068 | ||||||||||
18,456 | ||||||||||||
Brewery – 2.3% | ||||||||||||
524 | Anheuser-Busch InBev N.V. | 27,092 | ||||||||||
700 | Asahi Breweries, Ltd. | 12,845 | ||||||||||
285 | Carlsberg A/S – Class B | 21,053 | ||||||||||
2,485 | Foster’s Group, Ltd. | 12,240 | ||||||||||
2,000 | Fraser and Neave, Ltd. | 5,949 | ||||||||||
355 | Heineken Holding NV | 14,884 | ||||||||||
404 | Heineken N.V. | 19,157 | ||||||||||
1,000 | Kirin Holdings Co., Ltd. | 15,952 | ||||||||||
2,035 | SABMiller PLC | 59,652 | ||||||||||
188,824 | ||||||||||||
Building – Heavy Construction – 0.8% | ||||||||||||
305 | ACS Actividades de Construccion y Servicios S.A. | 15,175 | ||||||||||
61 | Fomento de Construcciones y Contratas S.A. | 2,560 | ||||||||||
730 | Sacyr Vallehermoso S.A. | 8,328 | ||||||||||
1,408 | Skanska A.B. – Class B | 24,015 | ||||||||||
308 | Vinci S.A. | 17,264 | ||||||||||
67,342 | ||||||||||||
Building – Residential and Commercial – 0.1% | ||||||||||||
1,000 | Daiwa House Industry Co., Ltd. | 10,706 | ||||||||||
Building and Construction – Miscellaneous – 0.7% | ||||||||||||
1,397 | Cintra Concesiones de Infraestructuras de Transporte S.A. | 16,327 | ||||||||||
78 | Eiffage SA | 4,410 | ||||||||||
211 | Hochtief A.G. | 16,136 | ||||||||||
178 | Koninklijke Boskalis Westminster N.V. | 6,860 | ||||||||||
454 | Leighton Holdings, Ltd. | 15,355 | ||||||||||
59,088 | ||||||||||||
Building and Construction Products – Miscellaneous – 1.3% | ||||||||||||
104 | Cie de Saint-Gobain | 5,587 | ||||||||||
4,780 | Fletcher Building, Ltd. | 27,638 | ||||||||||
226 | Geberit A.G. | 40,069 | ||||||||||
900 | JS Group Corp. | 15,494 | ||||||||||
2,000 | Panasonic Electric Works Co., Ltd. | 24,058 | ||||||||||
112,846 | ||||||||||||
Building Products – Air and Heating – 0.1% | ||||||||||||
200 | Rinnai Corp. | 9,625 |
See Notes to Schedules of Investments and Financial Statements.
30 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Building Products – Cement and Aggregate – 1.3% | ||||||||||||
2,270 | Boral, Ltd. | $ | 12,007 | |||||||||
1,176 | Cimpor-Cimentos de Portugal | 10,844 | ||||||||||
59 | CRH PLC | 1,599 | ||||||||||
213 | HeidelbergCement A.G. | 14,662 | ||||||||||
295 | Holcim, Ltd.* | 22,889 | ||||||||||
2,647 | James Hardie Industries N.V.* | 19,977 | ||||||||||
127 | Lafarge S.A. | 10,452 | ||||||||||
480 | Titan Cement Co. S.A. | 13,914 | ||||||||||
106,344 | ||||||||||||
Building Products – Doors and Windows – 0.2% | ||||||||||||
2,000 | Asahi Glass Co., Ltd. | 18,747 | ||||||||||
Cable Television – 0.2% | ||||||||||||
1,368 | British Sky Broadcasting Group PLC | 12,318 | ||||||||||
5 | Jupiter Telecommunications Co., Ltd. | 4,957 | ||||||||||
17,275 | ||||||||||||
Capacitors – 0% | ||||||||||||
200 | Mitsumi Electric Co., Ltd. | 3,521 | ||||||||||
Casino Hotels – 0.2% | ||||||||||||
1,778 | Crown, Ltd. | 12,742 | ||||||||||
1,700 | Sands China, Ltd.* | 2,074 | ||||||||||
14,816 | ||||||||||||
Casino Services – 0.1% | ||||||||||||
986 | Aristocrat Leisure, Ltd. | 3,523 | ||||||||||
100 | Sankyo Co., Ltd. | 4,984 | ||||||||||
8,507 | ||||||||||||
Cellular Telecommunications – 0.5% | ||||||||||||
19,634 | Vodafone Group PLC | 45,449 | ||||||||||
Chemicals – Diversified – 2.5% | ||||||||||||
199 | Akzo Nobel N.V. | 13,126 | ||||||||||
1,000 | Asahi Kasei Corp. | 5,000 | ||||||||||
803 | BASF S.E. | 49,845 | ||||||||||
235 | Bayer A.G. | 18,796 | ||||||||||
4,000 | Denki Kagaku Kogyo Kabushiki Kaisha | 17,898 | ||||||||||
900 | Hitachi Chemical Co., Ltd. | 18,127 | ||||||||||
38 | Johnson Matthey PLC | 938 | ||||||||||
1,000 | Kaneka Corp. | 6,348 | ||||||||||
319 | Koninklijke DSM N.V. | 15,652 | ||||||||||
1,000 | Nissan Chemical Industries, Ltd. | 14,249 | ||||||||||
700 | Nitto Denko Corp. | 24,960 | ||||||||||
100 | Shin-Etsu Chemical Co., Ltd. | 5,640 | ||||||||||
2,000 | Showa Denko K.K. | 3,991 | ||||||||||
47 | Solvay S.A. | 5,071 | ||||||||||
34 | Wacker Chemie A.G. | 5,934 | ||||||||||
205,575 | ||||||||||||
Chemicals – Specialty – 0.1% | ||||||||||||
2,000 | Daicel Chemical Industries, Ltd. | 11,685 | ||||||||||
Circuit Boards – 0.1% | ||||||||||||
200 | Ibiden Co., Ltd. | 7,127 | ||||||||||
Coatings and Paint Products – 0.2% | ||||||||||||
2,000 | Kansai Paint Co., Ltd. | 16,616 | ||||||||||
Commercial Banks – 11.0% | ||||||||||||
1,000 | 77 Bank, Ltd. | 5,295 | ||||||||||
1,172 | Alpha Bank A.E.* | 13,569 | ||||||||||
2,214 | Australia and New Zealand Banking Group, Ltd. | 45,088 | ||||||||||
1,254 | Banca Monte dei Paschi di Siena S.P.A. | 2,197 | ||||||||||
790 | Banca Popolare di Milano Scarl | 5,608 | ||||||||||
4,159 | Banco Bilbao Vizcaya Argentaria S.A. | 75,393 | ||||||||||
9,087 | Banco Comercial Portugues S.A.* | 10,914 | ||||||||||
1,044 | Banco Espirito Santo S.A. | 6,791 | ||||||||||
1,194 | Banco Popular Espanol S.A. | 8,724 | ||||||||||
6,147 | Banco Santander Central Hispano S.A. | 101,067 | ||||||||||
3,902 | Bank of Cyprus Public Co., Ltd. | 27,219 | ||||||||||
3,600 | Bank of East Asia, Ltd. | 14,134 | ||||||||||
1,189 | Bankinter S.A. | 12,094 | ||||||||||
823 | Bendigo and Adelaide Bank, Ltd. | 7,222 | ||||||||||
14,500 | BOC Hong Kong Holdings, Ltd. | 32,610 | ||||||||||
1,000 | Chiba Bank, Ltd | 5,971 | ||||||||||
412 | Commerzbank A.G.* | 3,457 | ||||||||||
1,429 | Commonwealth Bank of Australia | 69,747 | ||||||||||
1,222 | Danske Bank A/S* | 27,852 | ||||||||||
1,000 | DBS Group Holdings, Ltd. | 10,883 | ||||||||||
2,800 | Den Norske Bank A.S.A.* | 30,476 | ||||||||||
474 | Deutsche Postbank AG* | 15,500 | ||||||||||
1,002 | Dexia S.A.* | 6,308 | ||||||||||
1,131 | EFG Eurobank Ergasias* | 12,552 | ||||||||||
298 | Erste Group Bank A.G. | 11,054 | ||||||||||
4,202 | Fortis* | 15,579 | ||||||||||
1,000 | Fukuoka Financial Group, Inc. | 3,472 | ||||||||||
1,000 | Hokuhoku Financial Group, Inc. | 2,036 | ||||||||||
1,249 | Intesa Sanpaolo RNC | 4,174 | ||||||||||
1,578 | Intesa Sanpaolo S.P.A.* | 7,076 | ||||||||||
47 | KBC Groep N.V.* | 2,037 | ||||||||||
1,572 | Lloyds Banking Group PLC | 1,262 | ||||||||||
2,365 | National Australia Bank, Ltd. | 57,603 | ||||||||||
426 | National Bank of Greece S.A.* | 10,871 | ||||||||||
1,000 | Nishin-Nippon City Bank, Ltd. | 2,444 | ||||||||||
2,520 | Nordea Bank A.B. | 25,587 | ||||||||||
5,000 | Oversea-Chinese Banking Corp., Ltd. | 32,214 | ||||||||||
1,685 | Piraeus Bank S.A.* | 19,240 | ||||||||||
103 | Raiffeisen International Bank-Holding A.G. | 5,834 | ||||||||||
3,600 | Senshu Ikeda Holdings, Inc.* | 13,101 | ||||||||||
264 | Skandinaviska Enskilda Banken A.B.* | 1,627 | ||||||||||
1,018 | Sparbanken Sverige A.B. – Class A* | 10,150 | ||||||||||
992 | Standard Chartered PLC | 24,833 | ||||||||||
1,913 | Suncorp-Metway, Ltd. | 14,786 | ||||||||||
942 | Svenska Handelsbanken A.B. – Class A | 27,002 | ||||||||||
1,000 | United Overseas Bank, Ltd. | 13,929 | ||||||||||
2,448 | Westpac Banking Corp. | 55,155 | ||||||||||
500 | Wing Hang Bank, Ltd. | 4,646 | ||||||||||
916,383 | ||||||||||||
Commercial Services – 0% | ||||||||||||
1 | SGS S.A. | 1,303 | ||||||||||
Commercial Services – Finance – 0.4% | ||||||||||||
3,658 | Experian PLC | 36,148 | ||||||||||
Computer Aided Design – 0.1% | ||||||||||||
75 | Dassault Systemes S.A. | 4,272 | ||||||||||
Computer Services – 0.6% | ||||||||||||
270 | Atos Origin S.A.* | 12,302 | ||||||||||
44 | Cap Gemini S.A. | 1,994 | ||||||||||
3,456 | Computershare, Ltd. | 35,274 | ||||||||||
49,570 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 31
INTECH Risk-Managed International Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Computers – Integrated Systems – 0.1% | ||||||||||||
1,000 | Fujitsu, Ltd. | $ | 6,435 | |||||||||
10 | Obic Co Ltd. | 1,632 | ||||||||||
8,067 | ||||||||||||
Computers – Memory Devices – 0.2% | ||||||||||||
300 | TDK Corp. | 18,304 | ||||||||||
Consulting Services – 0.1% | ||||||||||||
1,143 | Serco Group PLC | 9,714 | ||||||||||
Consumer Products – Miscellaneous – 0% | ||||||||||||
276 | Husqvarna A.B.* | 2,042 | ||||||||||
Containers – Metal and Glass – 0.1% | ||||||||||||
300 | Toyo Seikan Kaisha, Ltd. | 4,542 | ||||||||||
Containers – Paper and Plastic – 0.4% | ||||||||||||
5,185 | Amcor, Ltd. | 28,913 | ||||||||||
Cosmetics and Toiletries – 0.5% | ||||||||||||
97 | Beiersdorf A.G. | 6,380 | ||||||||||
100 | Kao Corp. | 2,336 | ||||||||||
125 | L’Oreal S.A. | 13,888 | ||||||||||
200 | Shiseido Company, Ltd. | 3,836 | ||||||||||
200 | Unicharm Corp. | 18,734 | ||||||||||
45,174 | ||||||||||||
Cruise Lines – 0.2% | ||||||||||||
548 | Carnival PLC* | 18,706 | ||||||||||
Diagnostic Kits – 0.1% | ||||||||||||
188 | QIAGEN N.V.* | 4,203 | ||||||||||
Dialysis Centers – 0% | ||||||||||||
66 | Fresenius Medical Care A.G. & Co. KGaA | 3,497 | ||||||||||
Distribution/Wholesale – 0.3% | ||||||||||||
1,000 | Jardine Cycle & Carriage, Ltd. | 19,099 | ||||||||||
2,000 | Li & Fung, Ltd. | 8,231 | ||||||||||
27,330 | ||||||||||||
Diversified Banking Institutions – 3.5% | ||||||||||||
2,948 | Barclays PLC | 12,986 | ||||||||||
354 | BNP Paribas | 27,956 | ||||||||||
1,455 | Credit Agricole S.A. | 25,384 | ||||||||||
1,040 | Credit Suisse Group A.G. | 51,269 | ||||||||||
409 | Deutsche Bank A.G. | 28,849 | ||||||||||
6,898 | HSBC Holdings PLC | 78,694 | ||||||||||
88 | Julius Baer Group, Ltd. | 3,076 | ||||||||||
2,988 | Natixis* | 14,885 | ||||||||||
6,466 | Royal Bank of Scotland Group PLC* | 3,032 | ||||||||||
248 | Societe Generale – Class A | 17,172 | ||||||||||
654 | UBS A.G.* | 10,056 | ||||||||||
5,232 | UniCredit S.P.A.* | 17,416 | ||||||||||
290,775 | ||||||||||||
Diversified Financial Services – 0.3% | ||||||||||||
1,502 | Criteria Caixacorp S.A. | 7,103 | ||||||||||
2,759 | Investec PLC | 18,906 | ||||||||||
26,009 | ||||||||||||
Diversified Minerals – 1.4% | ||||||||||||
182 | Angiodynamics, Inc.* | 7,874 | ||||||||||
300 | BHP Billiton PLC | 9,579 | ||||||||||
969 | BHP Billiton, Ltd. | 37,143 | ||||||||||
1,000 | Dowa Holdings Co., Ltd. | 5,553 | ||||||||||
21,749 | Oxiana, Ltd.* | 22,763 | ||||||||||
2,000 | Sumitomo Metal Mining Co., Ltd. | 29,500 | ||||||||||
102 | Xstrata PLC* | 1,796 | ||||||||||
114,208 | ||||||||||||
Diversified Operations – 1.7% | ||||||||||||
2,312 | CSR Limited | 3,722 | ||||||||||
102 | Exor S.P.A. | 1,974 | ||||||||||
3,392 | Invensys PLC | 16,245 | ||||||||||
2,000 | Keppel Corp., Ltd. | 11,648 | ||||||||||
236 | LVMH Moet Hennessy Louis Vuitton S.A. | 26,518 | ||||||||||
266 | Siemens A.G. | 24,416 | ||||||||||
277 | Smiths Group PLC | 4,531 | ||||||||||
2,000 | Swire Pacific, Ltd. – Class A | 24,109 | ||||||||||
978 | Tomkins PLC | 3,018 | ||||||||||
5,000 | Wharf Holdings, Ltd. | 28,590 | ||||||||||
144,771 | ||||||||||||
Diversified Operations – Commercial Services – 0.1% | ||||||||||||
1,133 | Brambles, Ltd. | 6,870 | ||||||||||
466 | Bunzl PLC | 5,050 | ||||||||||
11,920 | ||||||||||||
E-Commerce/Services – 0.1% | ||||||||||||
12 | Rakuten, Inc. | 9,127 | ||||||||||
Electric – Distribution – 0.1% | ||||||||||||
507 | AGL Energy, Ltd. | 6,384 | ||||||||||
Electric – Integrated – 0.6% | ||||||||||||
389 | E.ON A.G. | 16,251 | ||||||||||
2,251 | Enel S.P.A. | 13,081 | ||||||||||
409 | Energias de Portugal S.A. | 1,812 | ||||||||||
81 | GDF Suez | 3,517 | ||||||||||
372 | Iberdrola S.A. | 3,544 | ||||||||||
143 | RWE A.G. | 13,906 | ||||||||||
52,111 | ||||||||||||
Electric – Transmission – 0.2% | ||||||||||||
262 | National Grid PLC | 2,863 | ||||||||||
23 | Red Electrica Corp. S.A. | 1,276 | ||||||||||
1,927 | Terna Rete Elettrica Nazionale S.P.A. | 8,297 | ||||||||||
12,436 | ||||||||||||
Electric Products – Miscellaneous – 0.3% | ||||||||||||
700 | Brother Industries, Ltd. | 8,002 | ||||||||||
347 | Legrand S.A. | 9,682 | ||||||||||
4,000 | SANYO Electric Co., Ltd.* | 7,348 | ||||||||||
25,032 | ||||||||||||
Electronic Components – Miscellaneous – 1.7% | ||||||||||||
400 | Hoya Corp. | 10,611 | ||||||||||
210 | Koninklijke Philips Electronics N.V. | 6,223 | ||||||||||
100 | Kyocera Corp. | 8,825 | ||||||||||
100 | Murata Manufacturing Co., Ltd. | 4,941 | ||||||||||
2,000 | NGK Insulators, Ltd. | 43,543 | ||||||||||
300 | Nidec Corp. | 27,601 | ||||||||||
1,000 | Nippon Electric Glass Co, Ltd. | 13,650 | ||||||||||
1,000 | Toshiba Corp. | 5,518 | ||||||||||
2,000 | Yaskawa Electirc Corp. | 16,666 | ||||||||||
137,578 | ||||||||||||
Electronic Components – Semiconductors – 0.9% | ||||||||||||
200 | Elpida Memory, Inc.* | 3,264 | ||||||||||
2,490 | Infineon Technologies A.G.* | 13,756 | ||||||||||
500 | Rohm Co., Ltd. | 32,489 | ||||||||||
200 | Shinko Electric Industries | 2,884 |
See Notes to Schedules of Investments and Financial Statements.
32 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Electronic Components – Semiconductors – (continued) | ||||||||||||
1,558 | STMicroelectronics N.V. | $ | 14,137 | |||||||||
400 | Sumco Corp. | 7,040 | ||||||||||
73,570 | ||||||||||||
Electronic Measuring Instruments – 0.3% | ||||||||||||
300 | Advantest Corp. | 7,799 | ||||||||||
1,700 | Yokogawa Electric Corp. | 14,884 | ||||||||||
22,683 | ||||||||||||
Energy – Alternate Sources – 0.1% | ||||||||||||
896 | EDP Renovaveis S.A.* | 8,476 | ||||||||||
Engineering – Research and Development Services – 0.3% | ||||||||||||
257 | ABB, Ltd.* | 4,920 | ||||||||||
1,000 | Singapore Technologies Engineering, Ltd. | 2,301 | ||||||||||
834 | WorleyParsons, Ltd. | 21,624 | ||||||||||
28,845 | ||||||||||||
Enterprise Software/Services – 0.5% | ||||||||||||
535 | Autonomy Corp. PLC* | 13,040 | ||||||||||
400 | Nomura Research Institute, Ltd. | 7,839 | ||||||||||
100 | Oracle Corp. Japan | 4,145 | ||||||||||
345 | SAP A.G. | 16,284 | ||||||||||
41,308 | ||||||||||||
Finance – Investment Bankers/Brokers – 0.8% | ||||||||||||
1,068 | ICAP PLC | 7,399 | ||||||||||
510 | Macquarie Bank, Ltd. | 21,855 | ||||||||||
1,698 | Mediobanca S.P.A.* | 20,161 | ||||||||||
5,000 | Shinko Securities Co., Ltd. | 14,975 | ||||||||||
64,390 | ||||||||||||
Finance – Leasing Companies – 0.1% | ||||||||||||
90 | Orix Corp. | 6,124 | ||||||||||
Finance – Other Services – 1.1% | ||||||||||||
228 | ASX, Ltd. | 7,108 | ||||||||||
29 | Deutsche Boerse A.G. | 2,413 | ||||||||||
2,600 | Hong Kong Exchanges & Clearing, Ltd. | 46,284 | ||||||||||
575 | London Stock Exchange Group PLC | 6,650 | ||||||||||
5,000 | Singapore Exchange, Ltd. | 29,500 | ||||||||||
91,955 | ||||||||||||
Food – Baking – 0.1% | ||||||||||||
111 | ARYZTA AG | 4,144 | ||||||||||
Food – Catering – 0.1% | ||||||||||||
982 | Compass Group PLC | 7,011 | ||||||||||
Food – Confectionery – 0.1% | ||||||||||||
3 | Lindt & Spruengli A.G. | 6,450 | ||||||||||
Food – Dairy Products – 0.7% | ||||||||||||
14,058 | Parmalat S.P.A. | 39,420 | ||||||||||
500 | Yakult Honsha Co., Ltd. | 15,063 | ||||||||||
54,483 | ||||||||||||
Food – Flour and Grain – 0.1% | ||||||||||||
500 | Nisshin Seifun Group, Inc. | 6,720 | ||||||||||
Food – Miscellaneous/Diversified – 2.5% | ||||||||||||
1,108 | Associated British Foods PLC | 14,698 | ||||||||||
1,785 | Cadbury PLC | 22,961 | ||||||||||
52 | Groupe Danone | 3,169 | ||||||||||
557 | Kerry Group PLC | 16,430 | ||||||||||
200 | MEIJI Holdings Co., Ltd. | 7,528 | ||||||||||
1,535 | Nestle S.A. | 74,644 | ||||||||||
100 | Nissin Foods Holdings Co., Ltd. | 3,260 | ||||||||||
1,185 | Unilever N.V. | 38,643 | ||||||||||
911 | Unilever PLC | 29,149 | ||||||||||
210,482 | ||||||||||||
Food – Retail – 1.5% | ||||||||||||
175 | Carrefour S.A. | 8,420 | ||||||||||
66 | Delhaize Group | 5,059 | ||||||||||
1,766 | Jeronimo Martins SGPS S.A. | 17,579 | ||||||||||
163 | Metro A.G. | 9,943 | ||||||||||
5,608 | Tesco PLC | 38,517 | ||||||||||
1,688 | Woolworths, Ltd. | 42,321 | ||||||||||
121,839 | ||||||||||||
Food – Wholesale/Distribution – 0.5% | ||||||||||||
555 | Kesko, Ltd. | 18,319 | ||||||||||
6,452 | Metcash, Ltd. | 25,849 | ||||||||||
44,168 | ||||||||||||
Gambling – Non-Hotel – 0% | ||||||||||||
434 | TABCORP Holdings, Ltd. | 2,694 | ||||||||||
Gas – Distribution – 0.2% | ||||||||||||
5,600 | Hong Kong & China Gas Co., Ltd. | 13,966 | ||||||||||
Gold Mining – 0.2% | ||||||||||||
42 | Newcrest Mining, Ltd. | 1,318 | ||||||||||
156 | Randgold Resources, Ltd. | 12,390 | ||||||||||
13,708 | ||||||||||||
Hotels and Motels – 0.4% | ||||||||||||
1,000 | City Developments, Ltd. | 8,165 | ||||||||||
1,612 | Intercontinental Hotels Group PLC | 23,059 | ||||||||||
31,224 | ||||||||||||
Human Resources – 0.9% | ||||||||||||
642 | Adecco S.A. | 35,477 | ||||||||||
797 | Randstad Holding N.V.* | 39,435 | ||||||||||
74,912 | ||||||||||||
Import/Export – 0.3% | ||||||||||||
1,000 | Itochu Corp. | 7,358 | ||||||||||
200 | Mitsubishi Corp. | 4,976 | ||||||||||
600 | Toyota Tsusho Corp. | 8,852 | ||||||||||
21,186 | ||||||||||||
Industrial Gases – 0.4% | ||||||||||||
43 | Air Liquide S.A. | 5,080 | ||||||||||
66 | Linde A.G. | 7,950 | ||||||||||
2,000 | Taiyo Nippon Sanso Corp. | 21,224 | ||||||||||
34,254 | ||||||||||||
Internet Financial Services – 0.1% | ||||||||||||
60 | SBI Holdings, Inc. | 10,670 | ||||||||||
Investment Companies – 0.3% | ||||||||||||
150 | Eurazeo | 10,475 | ||||||||||
195 | Investor A.B. – Class B | 3,613 | ||||||||||
1,287 | Man Group PLC | 6,328 | ||||||||||
4,383 | Resolution, Ltd. | 6,326 | ||||||||||
26,742 | ||||||||||||
Investment Management and Advisory Services – 0.1% | ||||||||||||
200 | GAM Holding, Ltd. | 2,436 | ||||||||||
377 | Schroders PLC | 8,044 | ||||||||||
10,480 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 33
INTECH Risk-Managed International Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Leisure and Recreation Products – 0.1% | ||||||||||||
1,000 | Sega Sammy Holdings, Inc. | $ | 11,925 | |||||||||
Life and Health Insurance – 1.0% | ||||||||||||
1,551 | AMP, Ltd. | 9,350 | ||||||||||
538 | Aviva PLC | 3,406 | ||||||||||
2,416 | Legal & General Group PLC | 3,108 | ||||||||||
1,969 | Mediolanum S.P.A. | 12,235 | ||||||||||
13,248 | Old Mutual PLC* | 23,125 | ||||||||||
1,545 | Prudential PLC | 15,733 | ||||||||||
151 | Swiss Life Holdings* | 19,145 | ||||||||||
86,102 | ||||||||||||
Lottery Services – 0.1% | ||||||||||||
1,816 | Tatts Group, Ltd. | 3,965 | ||||||||||
Machinery – Construction and Mining – 0.2% | ||||||||||||
298 | Atlas Copco AB – Class A | 4,365 | ||||||||||
156 | Atlas Copco AB – Class B | 2,028 | ||||||||||
300 | Hitachi Construction Machinery Co., Ltd. | 7,825 | ||||||||||
300 | Komatsu, Ltd. | 6,258 | ||||||||||
20,476 | ||||||||||||
Machinery – Electrical – 0.2% | ||||||||||||
120 | Schindler Holding A.G. | 9,106 | ||||||||||
125 | Schindler Holding A.G. | 9,598 | ||||||||||
18,704 | ||||||||||||
Machinery – Farm – 0.1% | ||||||||||||
1,000 | Kubota Corp. | 9,201 | ||||||||||
Machinery – General Industrial – 1.1% | ||||||||||||
7,000 | Ishikawajima-Harima Heavy Industries Company, Ltd.* | 11,102 | ||||||||||
912 | Kone Oyj – Class B | 39,008 | ||||||||||
101 | MAN A.G. | 7,872 | ||||||||||
764 | Metso Corp.* | 26,881 | ||||||||||
241 | Zardoya Otis S.A. | 4,701 | ||||||||||
89,564 | ||||||||||||
Medical – Drugs – 5.0% | ||||||||||||
100 | Astellas Pharma, Inc. | 3,727 | ||||||||||
1,576 | AstraZeneca PLC | 74,024 | ||||||||||
600 | Chugai Pharmaceutical Co., Ltd. | 11,185 | ||||||||||
1,300 | Dainippon Sumitomo Pharma Co., Ltd. | 13,584 | ||||||||||
100 | Eisai Company, Ltd. | 3,668 | ||||||||||
3,565 | GlaxoSmithKline PLC | 75,490 | ||||||||||
170 | Ipsen | 9,450 | ||||||||||
1,000 | Kyowa Hakko Kogyo Co., Ltd. | 10,526 | ||||||||||
860 | Novartis A.G. | 46,898 | ||||||||||
339 | Novo Nordisk A/S | 21,712 | ||||||||||
272 | Roche Holding A.G. | 46,314 | ||||||||||
648 | Sanofi-Aventis S.A. | 50,832 | ||||||||||
300 | Santen Pharmaceutical Co., Ltd. | 9,598 | ||||||||||
400 | Shionogi & Co., Ltd. | 8,656 | ||||||||||
454 | Shire PLC | 8,875 | ||||||||||
200 | Tsumura & Co. | 6,445 | ||||||||||
378 | UCB S.A. | 15,841 | ||||||||||
416,825 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.1% | ||||||||||||
600 | Mediceo Paltac Holdings Company, Ltd. | 7,412 | ||||||||||
100 | Suzuken Co., Ltd. | 3,277 | ||||||||||
10,689 | ||||||||||||
Medical Instruments – 0.2% | ||||||||||||
728 | Getinge A.B. | 13,848 | ||||||||||
100 | Sysmex Corp. | 5,222 | ||||||||||
19,070 | ||||||||||||
Medical Labs and Testing Services – 0.1% | ||||||||||||
66 | BioMerieux | 7,682 | ||||||||||
Medical Products – 1.4% | ||||||||||||
292 | Cochlear, Ltd. | 18,048 | ||||||||||
642 | Nobel Biocare Holding A.G. | 21,506 | ||||||||||
456 | Smith & Nephew PLC | 4,681 | ||||||||||
363 | Sonova Holding A.G. | 43,934 | ||||||||||
41 | Straumann Holding A.G. | 11,567 | ||||||||||
100 | Terumo Corp. | 5,988 | ||||||||||
187 | William Demant Holding* | 14,106 | ||||||||||
119,830 | ||||||||||||
Metal – Aluminum – 0% | ||||||||||||
400 | Norsk Hydro A.S.A.* | 3,334 | ||||||||||
Metal – Copper – 0.7% | ||||||||||||
1,646 | Antofagasta PLC | 26,089 | ||||||||||
1,372 | Kazakhmys PLC* | 28,696 | ||||||||||
54,785 | ||||||||||||
Metal – Diversified – 0.7% | ||||||||||||
817 | Eurasian Natural Resources Corporation | 12,046 | ||||||||||
2,000 | Mitsui Mining & Smelting Co., Ltd.* | 5,179 | ||||||||||
124 | Rio Tinto, Ltd. | 8,212 | ||||||||||
121 | Rio Tinto PLC* | 6,519 | ||||||||||
571 | Vedanta Resources PLC | 23,591 | ||||||||||
55,547 | ||||||||||||
Metal – Iron – 0.1% | ||||||||||||
2,677 | Fortescue Metals Group, Ltd.* | 10,553 | ||||||||||
Metal Processors and Fabricators – 0.5% | ||||||||||||
1,291 | Assa Abloy AB – Class B | 24,778 | ||||||||||
225 | Sims Metal Management, Ltd. | 4,409 | ||||||||||
826 | SKF A.B. | 14,220 | ||||||||||
43,407 | ||||||||||||
Mining Services – 0.3% | ||||||||||||
1,062 | Orica, Ltd. | 24,639 | ||||||||||
MRI and Medical Diagnostic Imaging Center – 0.2% | ||||||||||||
1,408 | Sonic Healthcare, Ltd. | 19,410 | ||||||||||
Multi-Line Insurance – 1.3% | ||||||||||||
63 | Allianz S.E. | 7,848 | ||||||||||
411 | Assicurazioni Generali S.P.A. | 11,027 | ||||||||||
233 | AXA S.A. | 5,515 | ||||||||||
133 | Baloise Holding A.G. | 11,089 | ||||||||||
109 | CNP Assurances | 10,561 | ||||||||||
2,694 | Mapfre S.A. | 11,265 | ||||||||||
1,225 | Sampo Oyj – Class A | 29,751 | ||||||||||
283 | Vienna Insurance Group | 14,542 | ||||||||||
27 | Zurich Financial Services A.G. | 5,876 | ||||||||||
107,474 | ||||||||||||
Multimedia – 0.9% | ||||||||||||
251 | Lagardere S.C.A. | 10,135 | ||||||||||
660 | Nikon, Corp. | 14,822 | ||||||||||
2,393 | Pearson PLC | 34,389 | ||||||||||
1,293 | WPP PLC | 12,621 | ||||||||||
71,967 |
See Notes to Schedules of Investments and Financial Statements.
34 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Non-Ferrous Metals – 0.1% | ||||||||||||
188 | Energy Resources of Australia, Ltd. | $ | 4,025 | |||||||||
609 | Paladin Resources, Ltd.* | 2,262 | ||||||||||
6,287 | ||||||||||||
Office Automation and Equipment – 0.1% | ||||||||||||
200 | Canon, Inc. | 8,460 | ||||||||||
Office Supplies and Forms – 0.1% | ||||||||||||
74 | Societe BIC S.A. | 5,125 | ||||||||||
Oil – Field Services – 1.0% | ||||||||||||
535 | AMEC PLC | 6,789 | ||||||||||
292 | Fugro N.V. | 16,687 | ||||||||||
1,619 | Petrofac, Ltd. | 26,950 | ||||||||||
210 | Saipem S.P.A. | 7,219 | ||||||||||
132 | SBM Offshore N.V. | 2,585 | ||||||||||
315 | Technip S.A. | 22,089 | ||||||||||
82,319 | ||||||||||||
Oil and Gas Drilling – 0.2% | ||||||||||||
600 | Seadrill, Ltd. | 15,238 | ||||||||||
Oil Companies – Exploration and Production – 1.0% | ||||||||||||
2,293 | Arrow Energy, Ltd.* | 8,496 | ||||||||||
278 | Lundin Petroleum A.B.* | 2,192 | ||||||||||
730 | Origin Energy, Ltd. | 10,970 | ||||||||||
2,209 | Tullow Oil PLC | 46,049 | ||||||||||
284 | Woodside Petroleum, Ltd. | 11,948 | ||||||||||
79,655 | ||||||||||||
Oil Companies – Integrated – 3.7% | ||||||||||||
325 | BG Group PLC | 5,818 | ||||||||||
11,675 | BP PLC | 112,869 | ||||||||||
818 | ENI S.P.A. | 20,841 | ||||||||||
752 | Repsol YPF S.A. | 20,092 | ||||||||||
1,729 | Royal Dutch Shell PLC – Class A | 52,184 | ||||||||||
1,178 | Royal Dutch Shell PLC – Class B | 34,314 | ||||||||||
58 | StatoilHydro A.S.A. | 1,451 | ||||||||||
927 | Total S.A. | 59,447 | ||||||||||
307,016 | ||||||||||||
Oil Refining and Marketing – 0.2% | ||||||||||||
464 | Caltex Australia, Ltd.* | 3,854 | ||||||||||
500 | Nippon Mining Holdings, Inc. | 2,142 | ||||||||||
1,000 | Nippon Oil Corp. | 4,633 | ||||||||||
400 | Showa Shell Sekiyu K.K. | 3,256 | ||||||||||
13,885 | ||||||||||||
Optical Supplies – 0.3% | ||||||||||||
288 | Cie Generale d’Optique Essilor International S.A. | 17,158 | ||||||||||
432 | Luxottica Group S.P.A. | 11,199 | ||||||||||
28,357 | ||||||||||||
Paper and Related Products – 0.6% | ||||||||||||
1,142 | Stora Enso Oyj – Class R* | 8,011 | ||||||||||
2,929 | Svenska Cellulosa | 39,214 | ||||||||||
540 | UPM-Kymmene Oyj | 6,427 | ||||||||||
53,652 | ||||||||||||
Photo Equipment and Supplies – 0.3% | ||||||||||||
300 | Fuji Photo Film Company, Ltd. | 8,968 | ||||||||||
100 | Nikon Corp. | 1,973 | ||||||||||
400 | Olympus Corp. | 12,860 | ||||||||||
23,801 | ||||||||||||
Power Converters and Power Supply Equipment – 0.2% | ||||||||||||
167 | Schneider Electric S.A. | 19,361 | ||||||||||
Printing – Commercial – 0.5% | ||||||||||||
2,000 | Dai Nippon Printing Co., Ltd. | 25,232 | ||||||||||
2,000 | Toppan Printing Co., Ltd. | 16,190 | ||||||||||
41,422 | ||||||||||||
Property and Casualty Insurance – 0.2% | ||||||||||||
491 | Admiral Group PLC | 9,363 | ||||||||||
332 | QBE Insurance Group, Ltd. | 7,585 | ||||||||||
16,948 | ||||||||||||
Public Thoroughfares – 0.8% | ||||||||||||
1,279 | Abertis Infraestucturas S.A. | 28,882 | ||||||||||
580 | Atlantia S.P.A. | 15,088 | ||||||||||
1,039 | Brisa | 10,624 | ||||||||||
1,610 | Transurban Group | 7,983 | ||||||||||
62,577 | ||||||||||||
Publishing – Newspapers – 0.3% | ||||||||||||
9,603 | John Fairfax Holdings, Ltd. | 14,826 | ||||||||||
4,000 | Singapore Press Holdings, Ltd. | 10,405 | ||||||||||
25,231 | ||||||||||||
Publishing – Periodicals – 0.1% | ||||||||||||
605 | PagesJaunes S.A. | 6,740 | ||||||||||
Real Estate Management/Services – 0.4% | ||||||||||||
1,391 | IMMOEAST Immobilien Anlagen A.G.* | 7,631 | ||||||||||
2,997 | Lend Lease Corp., Ltd. | 27,336 | ||||||||||
34,967 | ||||||||||||
Real Estate Operating/Development – 2.2% | ||||||||||||
3,000 | CapitaLand, Ltd. | 8,894 | ||||||||||
1,200 | CapitaMalls Asia, Ltd.* | 2,172 | ||||||||||
1,000 | Cheng Kong Holdings, Ltd. | 12,823 | ||||||||||
4,000 | Chinese Estates Holdings, Ltd. | 6,811 | ||||||||||
3,000 | Hang Lung Group, Ltd. | 14,841 | ||||||||||
4,000 | Hang Lung Properties, Ltd. | 15,627 | ||||||||||
4,000 | Henderson Land Development Co., Ltd. | 29,802 | ||||||||||
5,000 | Hysan Development Co., Ltd. | 14,157 | ||||||||||
5,000 | Kerry Properties, Ltd. | 25,245 | ||||||||||
13,000 | New World Development, Ltd. | 26,531 | ||||||||||
2,000 | Sun Hung Kai Properties, Ltd. | 29,675 | ||||||||||
186,578 | ||||||||||||
Reinsurance – 0.4% | ||||||||||||
155 | Hannover Rueckversicherung A.G.* | 7,281 | ||||||||||
91 | Muenchener Rueckversicherungs A.G. | 14,196 | ||||||||||
284 | SCOR S.E. | 7,099 | ||||||||||
142 | Swiss Reinsurance | 6,810 | ||||||||||
35,386 | ||||||||||||
REIT – Diversified – 1.4% | ||||||||||||
261 | Corio N.V. | 17,839 | ||||||||||
203 | Fonciere Des Regions | 20,776 | ||||||||||
71 | Gecina S.A. | 7,690 | ||||||||||
4,472 | GPT Group | 2,404 | ||||||||||
839 | Hammerson PLC | 5,695 | ||||||||||
594 | Klepierre | 24,182 | ||||||||||
411 | Land Securities Group PLC | 4,503 | ||||||||||
663 | Segro PLC | 3,658 | ||||||||||
1,531 | Stockland | 5,385 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 35
INTECH Risk-Managed International Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
REIT – Diversified – (continued) | ||||||||||||
97 | Unibail-Rodamco | $ | 21,369 | |||||||||
113,501 | ||||||||||||
REIT – Shopping Centers – 0.3% | ||||||||||||
5,958 | CFS Retail Property Trust | 10,100 | ||||||||||
1 | Japan Retail Fund Investment Corp. | 4,479 | ||||||||||
616 | Westfield Group | 6,876 | ||||||||||
21,455 | ||||||||||||
Retail – Apparel and Shoe – 1.6% | ||||||||||||
585 | Hennes & Mauritz A.B. – Class B | 32,447 | ||||||||||
524 | Inditex S.A. | 32,493 | ||||||||||
1,485 | Next PLC | 49,491 | ||||||||||
200 | Shimamura Co., Ltd. | 19,037 | ||||||||||
133,468 | ||||||||||||
Retail – Automobile – 0.1% | ||||||||||||
110 | USS Co., Ltd. | 6,684 | ||||||||||
Retail – Building Products – 0.6% | ||||||||||||
13,576 | Kingfisher PLC | 49,747 | ||||||||||
Retail – Consumer Electronics – 0.1% | ||||||||||||
80 | Yamada Denki Co., Ltd. | 5,379 | ||||||||||
Retail – Discount – 0.2% | ||||||||||||
3,825 | Harvey Norman Holdings, Ltd. | 14,376 | ||||||||||
Retail – Home Furnishings – 0.2% | ||||||||||||
200 | Nitori Company, Ltd. | 14,890 | ||||||||||
Retail – Jewelry – 0.7% | ||||||||||||
300 | Citizen Holding Co., Ltd. | 1,708 | ||||||||||
452 | Compagnie Financiere Richemont S.A. | 15,138 | ||||||||||
92 | Swatch Group A.G. | 23,178 | ||||||||||
327 | Swatch Group A.G. | 15,650 | ||||||||||
55,674 | ||||||||||||
Retail – Major Department Stores – 1.0% | ||||||||||||
2,521 | Home Retail Group PLC | 11,487 | ||||||||||
700 | Isetan Mitsukoshi Holdings, Ltd. | 6,312 | ||||||||||
2,000 | J. Front Retailing Co., Ltd. | 8,817 | ||||||||||
5,301 | Marks & Spencer Group PLC | 34,377 | ||||||||||
200 | Marui Group Co., Ltd. | 1,227 | ||||||||||
192 | PPR | 23,024 | ||||||||||
85,244 | ||||||||||||
Retail – Miscellaneous/Diversified – 0.6% | ||||||||||||
963 | Wesfarmers, Ltd. | 26,799 | ||||||||||
964 | Wesfarmers, Ltd. | 26,828 | ||||||||||
53,627 | ||||||||||||
Retail – Restaurants – 0.4% | ||||||||||||
776 | Autogrill S.P.A.* | 9,767 | ||||||||||
877 | Whitbread PLC | 19,716 | ||||||||||
29,483 | ||||||||||||
Rubber – Tires – 0.3% | ||||||||||||
176 | Compagnie Generale des Etablissements Michelin – Class B | 13,510 | ||||||||||
325 | Nokian Renkaat Oyj | 7,891 | ||||||||||
200 | Sumitomo Rubber Industries, Inc. | 1,723 | ||||||||||
23,124 | ||||||||||||
Rubber and Vinyl – 0.3% | ||||||||||||
1,100 | JSR Corp. | 22,311 | ||||||||||
Satellite Telecommunications – 0.1% | ||||||||||||
242 | Eutelsat Communications | 7,770 | ||||||||||
357 | Inmarsat PLC. | 3,967 | ||||||||||
11,737 | ||||||||||||
Security Services – 0.1% | ||||||||||||
970 | G4S PLC | 4,052 | ||||||||||
100 | Secom Co., Ltd. | 4,733 | ||||||||||
8,785 | ||||||||||||
Semiconductor Equipment – 0.7% | ||||||||||||
1,400 | ASM Pacific Technology, Ltd. | 13,159 | ||||||||||
1,265 | ASML Holding N.V. | 43,057 | ||||||||||
100 | Tokyo Electron, Ltd. | 6,398 | ||||||||||
62,614 | ||||||||||||
Shipbuilding – 0.2% | ||||||||||||
4,000 | Mitsui Engineering & Shipbuilding Co., Ltd. | 9,572 | ||||||||||
5,000 | Yangzijiang Shipbuilding Holdings, Ltd. | 4,278 | ||||||||||
13,850 | ||||||||||||
Silver Mining – 0.2% | ||||||||||||
1,213 | Fresnillo PLC | 15,286 | ||||||||||
Soap and Cleaning Preparations – 0.5% | ||||||||||||
341 | Henkel KGaA | 15,240 | ||||||||||
555 | Reckitt Benckiser Group PLC | 30,057 | ||||||||||
45,297 | ||||||||||||
Steel – Producers – 0.3% | ||||||||||||
1,087 | Acerinox S.A. | 22,502 | ||||||||||
147 | Voestapine A.G. | 5,364 | ||||||||||
27,866 | ||||||||||||
Steel – Specialty – 0.1% | ||||||||||||
225 | Outokumpu OYJ | 4,234 | ||||||||||
Steel Pipe and Tube – 0.1% | ||||||||||||
228 | TENARIS SA | 4,879 | ||||||||||
14 | Vallourec S.A. | 2,548 | ||||||||||
7,427 | ||||||||||||
Telecommunication Equipment – 0.1% | ||||||||||||
2,983 | Aclatel-Lucent* | 9,998 | ||||||||||
Telecommunication Services – 0.9% | ||||||||||||
1,000 | Singapore Telecommunications, Ltd. | 2,204 | ||||||||||
725 | Tele2 A.B. – Class B | 11,132 | ||||||||||
8,132 | Telecom Corporation of New Zealand, Ltd. | 14,749 | ||||||||||
2,600 | Telenor A.S.A.* | 36,566 | ||||||||||
1,080 | TeliaSonera A.B. | 7,815 | ||||||||||
72,466 | ||||||||||||
Telephone – Integrated – 2.5% | ||||||||||||
11,175 | BT Group PLC | 24,187 | ||||||||||
193 | Deutsche Telekom A.G. | 2,852 | ||||||||||
212 | Elisa Oyj* | 4,847 | ||||||||||
93 | France Telecom S.A. | 2,324 | ||||||||||
1,559 | Koninklijke KPN N.V. | 26,463 | ||||||||||
1,686 | Portugal Telecom SGPS S.A. | 20,511 | ||||||||||
500 | Softbank Corp. | 11,693 | ||||||||||
85 | Swisscom A.G. | 32,444 | ||||||||||
2,900 | Telecom Italia S.P.A. | 4,501 | ||||||||||
2,691 | Telefonica S.A. | 75,058 | ||||||||||
634 | Telstra Corp., Ltd. | 1,945 | ||||||||||
206,825 |
See Notes to Schedules of Investments and Financial Statements.
36 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Television – 0.7% | ||||||||||||
340 | Gestevision Telecinco S.A. | $ | 4,966 | |||||||||
545 | M6-Metropole Television | 13,954 | ||||||||||
3,218 | Mediaset S.P.A. | 26,314 | ||||||||||
639 | Societe Television Francaise 1 | 11,809 | ||||||||||
1,000 | Television Broadcasts, Ltd. | 4,798 | ||||||||||
61,841 | ||||||||||||
Textile – Products – 0.3% | ||||||||||||
1,000 | Kuraray Co., Ltd. | 11,712 | ||||||||||
2,000 | Mitsubishi Rayon Co., Ltd. | 8,007 | ||||||||||
1,000 | Teijin, Ltd. | 3,216 | ||||||||||
22,935 | ||||||||||||
Tobacco – 1.0% | ||||||||||||
1,793 | British American Tobacco PLC | 58,145 | ||||||||||
94 | Imperial Tobacco Group PLC | 2,961 | ||||||||||
1 | Japan Tobacco, Inc. | 3,376 | ||||||||||
709 | Swedish Match A.B. | 15,534 | ||||||||||
80,016 | ||||||||||||
Tools – Hand Held – 0% | ||||||||||||
100 | Makita Corp. | 3,405 | ||||||||||
Transportation – Marine – 0% | ||||||||||||
500 | Orient Overseas International, Ltd. | 2,321 | ||||||||||
Transportation – Railroad – 0.8% | ||||||||||||
100 | East Japan Railway Co. | 6,314 | ||||||||||
3,000 | Keio Corp. | 18,084 | ||||||||||
2,000 | Keisei Electric Railway Co., Ltd. | 10,936 | ||||||||||
5,000 | MTR Corp. | 17,175 | ||||||||||
1,000 | Odakyu Electric Railway Co., Ltd. | 7,668 | ||||||||||
1,000 | Tobu Railway Co., Ltd. | 5,216 | ||||||||||
65,393 | ||||||||||||
Transportation – Services – 0.9% | ||||||||||||
8,309 | Asciano Group* | 13,427 | ||||||||||
174 | Deutsche Post A.G. | 3,350 | ||||||||||
500 | Firstgroup PLC | 3,410 | ||||||||||
88 | Koninklijke Vopak N.V.* | 6,958 | ||||||||||
185 | Kuehne + Nagel International A.G. | 17,912 | ||||||||||
362 | TNT N.V. | 11,088 | ||||||||||
2,638 | Toll Holdings, Ltd. | 20,578 | ||||||||||
76,723 | ||||||||||||
Transportation – Truck – 0.4% | ||||||||||||
411 | DSV A/S* | 7,381 | ||||||||||
2,000 | Yamato Holdings Co., Ltd. | 27,670 | ||||||||||
35,051 | ||||||||||||
Venture Capital – 0% | ||||||||||||
385 | 3I Group PLC | 1,740 | ||||||||||
Water – 0.1% | ||||||||||||
261 | Suez Environment S.A. | 6,034 | ||||||||||
152 | Veolia Environnement | 5,002 | ||||||||||
11,036 | ||||||||||||
Web Portals/Internet Service Providers – 0.1% | ||||||||||||
29 | Iliad S.A. | 3,457 | ||||||||||
436 | United Internet A.G. Reg Shares* | 5,770 | ||||||||||
9,227 | ||||||||||||
Wireless Equipment – 0% | ||||||||||||
282 | Telefonaktiebolaget L.M. Ericsson – Class B | 2,600 | ||||||||||
Total Common Stock (cost $7,108,381) | 8,294,978 | |||||||||||
Preferred Stock – 0.8% | ||||||||||||
Automotive – Cars and Light Trucks – 0.3% | ||||||||||||
388 | Bayerische Motoren Werke A.G. | 12,771 | ||||||||||
115 | Volkswagen A.G. | 10,818 | ||||||||||
23,589 | ||||||||||||
Electric – Integrated – 0.2% | ||||||||||||
139 | RWE A.G. | 12,411 | ||||||||||
Soap and Cleaning Preparations – 0.3% | ||||||||||||
532 | Henkel A.G. & Co., KGaA* | 27,718 | ||||||||||
Total Preferred Stock (cost $59,431) | 63,718 | |||||||||||
Warrant – 0% | ||||||||||||
203 | Fonciere Des Regions (cost $0) | 172 | ||||||||||
Money Market – 0.4% | ||||||||||||
34,000 | Janus Cash Liquidity Fund LLC, 0% (cost $34,000) | 34,000 | ||||||||||
Total Investments (total cost $7,201,812) – 100.6% | 8,392,868 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.6)% | (50,637) | |||||||||||
Net Assets – 100% | $ | 8,342,231 | ||||||||||
Summary of Investments by Country – Long Positions
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 945,655 | 11.3% | |||||
Austria | 44,426 | 0.5% | ||||||
Belgium | 76,986 | 0.9% | ||||||
Bermuda | 63,622 | 0.8% | ||||||
Cayman Islands | 15,233 | 0.2% | ||||||
Cyprus | 27,219 | 0.3% | ||||||
Denmark | 92,104 | 1.1% | ||||||
Finland | 160,191 | 1.9% | ||||||
France | 695,554 | 8.3% | ||||||
Germany | 434,086 | 5.2% | ||||||
Greece | 77,510 | 0.9% | ||||||
Guernsey | 6,326 | 0.1% | ||||||
Hong Kong | 331,622 | 3.9% | ||||||
Ireland | 18,029 | 0.2% | ||||||
Italy | 250,719 | 3.0% | ||||||
Japan | 1,394,899 | 16.6% | ||||||
Jersey | 96,984 | 1.1% | ||||||
Luxembourg | 4,878 | 0.1% | ||||||
Netherlands | 316,975 | 3.8% | ||||||
New Zealand | 42,387 | 0.5% | ||||||
Norway | 71,826 | 0.8% | ||||||
Portugal | 79,074 | 0.9% | ||||||
Singapore | 206,113 | 2.5% | ||||||
Spain | 460,025 | 5.5% | ||||||
Sweden | 315,716 | 3.8% | ||||||
Switzerland | 593,738 | 7.1% | ||||||
United Kingdom | 1,536,971 | 18.3% | ||||||
United States†† | 34,000 | 0.4% | ||||||
Total | $ | 8,392,868 | 100.0% |
†† | Includes Cash Equivalents (0.0% excluding Cash Equivalents). |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 37
INTECH Risk-Managed Value Fund (unaudited)
Fund Snapshot This fund uses a mathematically-based investment process that seeks to capitalize on the natural volatility of stock prices. The primary aim of this strategy is to outperform the benchmark index without increasing risk. | Managed by INTECH Investment Management LLC |
Performance Overview
For the five-month period ended December 31, 2009, INTECH Risk-Managed Value Fund returned 13.21% for its Class I Shares. This compares to the 13.90% return posted by the Russell 1000® Value 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.
INTECH’s mathematical investment process seeks to build a more efficient portfolio than its benchmark, the Russell 1000® Value 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 stock 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 benchmark, 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 22 years, we have experienced periods 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 Russell 1000® Value 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 the long term. 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 Value Fund.
38 | DECEMBER 31, 2009
(unaudited)
INTECH Risk-Managed Value Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
Exxon Mobil Corp. Oil Companies – Integrated | 6.0% | |||
AT&T, Inc. Telephone – Integrated | 4.1% | |||
General Electric Co. Diversified Operations | 2.8% | |||
Pfizer, Inc. Medical – Drugs | 2.7% | |||
Chevron Corp. Oil Companies – Integrated | 2.6% | |||
18.2% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Emerging markets comprised 0.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
Janus Risk-Managed Funds | 39
INTECH Risk-Managed Value Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Five-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
INTECH Risk-Managed Value Fund – Class A Shares | |||||||||||
NAV | 13.08% | 17.86% | –2.29% | 1.33% | 1.00% | ||||||
MOP | 6.56% | 11.06% | –3.72% | ||||||||
INTECH Risk-Managed Value Fund – Class C Shares | |||||||||||
NAV | 12.80% | 16.97% | –3.02% | 1.99% | 1.75% | ||||||
CDSC | 11.68% | 15.82% | –3.02% | ||||||||
INTECH Risk-Managed Value Fund – Class I Shares | 13.21% | 17.99% | –2.09% | 0.96% | 0.75% | ||||||
INTECH Risk-Managed Value Fund – Class S Shares | 12.86% | 17.46% | –2.54% | 1.44% | 1.25% | ||||||
INTECH Risk-Managed Value Fund – Class T Shares | 13.04% | 17.39% | –2.59% | 1.21% | 1.00% | ||||||
Russell 1000® Value Index | 13.90% | 19.69% | –2.00% | ||||||||
Lipper Quartile – Class I Shares | – | 4th | 3rd | ||||||||
Lipper Ranking – Class I Shares based on total returns for Multi-Cap Value Funds | – | 292/351 | 133/249 | ||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
40 | DECEMBER 31, 2009
(unaudited)
For Class I Shares, Class S Shares, and Class T Shares, 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 annual fund operating expenses allocated to any class (excluding any distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) may not achieve the desired results. The rebalancing techniques used by the Fund 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 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, initial public offerings, and derivatives. Please see a Janus prospectus or janus.com/advisor/mutual-funds 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 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 of 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.
Effective July 6, 2009, Janus Adviser INTECH Risk-Managed Value Fund merged into INTECH Risk-Managed Value Fund.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser INTECH Risk-Managed Value Fund (the “JAD predecessor fund”) into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the JAD predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, net of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class T Shares of the Fund commenced operations on July 6, 2009, after the reorganization of the JAD predecessor fund into the Fund. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class I Shares prior to the reorganization, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers. If Class T Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 and do not include the effect of loads.
Lipper ranking is for the Class I Shares only; other classes may have different performance characteristics.
There is no assurance that the investment process will consistently lead to successful investing.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
December 31, 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 or the first Thursday after fund inception.
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.”
* | The Fund’s inception date — December 30, 2005 |
Janus Risk-Managed Funds | 41
INTECH Risk-Managed Value Fund (unaudited)
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 – Class A Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,130.80 | $ | 4.15 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.52 | $ | 4.74 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,126.50 | $ | 7.49 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,016.74 | $ | 8.54 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,132.10 | $ | 3.40 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.37 | $ | 3.87 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,128.60 | $ | 5.26 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.26 | $ | 6.01 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class T Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,130.36 | $ | 4.16 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.51 | $ | 4.75 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.93% for Class A Shares, 1.68% for Class C Shares, 0.76% for Class I Shares, 1.18% for Class S Shares and 0.93% for Class T Shares, multiplied by the average account value over the period, multiplied by 153/365 (to reflect a five-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a five-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
42 | DECEMBER 31, 2009
INTECH Risk-Managed Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Common Stock – 99.2% | ||||||||||||
Advertising Agencies – 0.1% | ||||||||||||
6,600 | Interpublic Group of Companies, Inc.* | $ | 48,708 | |||||||||
Advertising Sales – 0.1% | ||||||||||||
1,700 | Lamar Advertising Co. – Class A* | 52,853 | ||||||||||
Aerospace and Defense – 0.8% | ||||||||||||
7,500 | Boeing Co. | 405,975 | ||||||||||
600 | General Dynamics Corp. | 40,902 | ||||||||||
1,100 | Northrop Grumman Corp. | 61,435 | ||||||||||
3,600 | Spirit Aerosystems Holdings, Inc.* | 71,496 | ||||||||||
579,808 | ||||||||||||
Aerospace and Defense – Equipment – 0% | ||||||||||||
300 | BE Aerospace, Inc.* | 7,050 | ||||||||||
300 | United Technologies Corp. | 20,823 | ||||||||||
27,873 | ||||||||||||
Agricultural Operations – 0.2% | ||||||||||||
2,700 | Archer-Daniels-Midland Co. | 84,537 | ||||||||||
1,400 | Bunge, Ltd. | 89,362 | ||||||||||
173,899 | ||||||||||||
Apparel Manufacturers – 0.1% | ||||||||||||
200 | Polo Ralph Lauren Corp. | 16,196 | ||||||||||
700 | VF Corp. | 51,268 | ||||||||||
67,464 | ||||||||||||
Appliances – 0.1% | ||||||||||||
800 | Whirlpool Corp. | 64,528 | ||||||||||
Applications Software – 0% | ||||||||||||
1,100 | Nuance Communications, Inc.* | 17,094 | ||||||||||
Audio and Video Products – 0.1% | ||||||||||||
1,400 | Harman International Industries, Inc.* | 49,392 | ||||||||||
Automotive – Cars and Light Trucks – 0.2% | ||||||||||||
15,900 | Ford Motor Co.* | 159,000 | ||||||||||
Automotive – Medium and Heavy Duty Trucks – 0.1% | ||||||||||||
300 | Oshkosh Truck Corp.* | 11,109 | ||||||||||
1,200 | PACCAR, Inc. | 43,524 | ||||||||||
54,633 | ||||||||||||
Automotive – Truck Parts and Equipment – Original – 0.6% | ||||||||||||
7,900 | Autoliv, Inc.* | 342,544 | ||||||||||
800 | BorgWarner, Inc* | 26,576 | ||||||||||
2,800 | Johnson Controls, Inc. | 76,272 | ||||||||||
445,392 | ||||||||||||
Batteries and Battery Systems – 0% | ||||||||||||
200 | Energizer Holdings, Inc.* | 12,256 | ||||||||||
Beverages – Non-Alcoholic – 0.6% | ||||||||||||
2,900 | Coca-Cola Co. | 165,300 | ||||||||||
5,300 | Coca-Cola Enterprises, Inc. | 112,360 | ||||||||||
1,900 | Dr. Pepper Snapple Group, Inc. | 53,770 | ||||||||||
3,200 | Pepsi Bottling Group, Inc. | 120,000 | ||||||||||
1,100 | PepsiAmericas, Inc. | 32,186 | ||||||||||
483,616 | ||||||||||||
Beverages – Wine and Spirits – 0.1% | ||||||||||||
1,700 | Central Euro Distribution* | 48,297 | ||||||||||
Broadcast Services and Programming – 0.5% | ||||||||||||
1,900 | Discovery Communications* | 50,388 | ||||||||||
3,500 | Liberty Global, Inc. – Class A* | 76,685 | ||||||||||
1,600 | Liberty Media Corp. – Capital – Class A* | 38,208 | ||||||||||
1,900 | Liberty Media Corp. – Starz* | 87,685 | ||||||||||
2,500 | Scripps Networks Interactive, Inc. – Class A | 103,750 | ||||||||||
356,716 | ||||||||||||
Building – Residential and Commercial – 0.6% | ||||||||||||
1,700 | D.R. Horton, Inc. | 18,479 | ||||||||||
6,300 | KB Home | 86,184 | ||||||||||
12,300 | Lennar Corp. – Class A | 157,071 | ||||||||||
1,900 | M.D.C. Holdings, Inc. | 58,976 | ||||||||||
100 | NVR, Inc.* | 71,071 | ||||||||||
3,390 | Pulte Homes, Inc.* | 33,900 | ||||||||||
100 | Toll Brothers, Inc.* | 1,881 | ||||||||||
427,562 | ||||||||||||
Building Products – Wood – 0% | ||||||||||||
2,300 | Masco Corp. | 31,763 | ||||||||||
Cable Television – 2.2% | ||||||||||||
7,300 | Cablevision Systems New York Group – Class A | 188,486 | ||||||||||
44,850 | Comcast Corp. – Class A | 756,171 | ||||||||||
8,001 | DIRECTV Group, Inc.* | 266,833 | ||||||||||
8,700 | DISH Network Corp. – Class A* | 180,699 | ||||||||||
6,151 | Time Warner Cable, Inc. – Class A* | 254,590 | ||||||||||
1,646,779 | ||||||||||||
Casino Hotels – 0.3% | ||||||||||||
500 | Las Vegas Sands Corp.* | 7,470 | ||||||||||
14,500 | MGM Mirage* | 132,240 | ||||||||||
900 | Wynn Resorts, Ltd. | 52,407 | ||||||||||
192,117 | ||||||||||||
Casino Services – 0.1% | ||||||||||||
2,700 | International Game Technology | 50,679 | ||||||||||
Cellular Telecommunications – 0.1% | ||||||||||||
1,300 | N.I.I. Holdings, Inc.* | 43,654 | ||||||||||
Chemicals – Diversified – 0.8% | ||||||||||||
3,400 | Dow Chemical Co. | 93,942 | ||||||||||
4,800 | E.I. du Pont de Nemours & Co. | 161,616 | ||||||||||
15,100 | Huntsman Corp. | 170,479 | ||||||||||
3,300 | PPG Industries, Inc. | 193,182 | ||||||||||
619,219 | ||||||||||||
Chemicals – Specialty – 0.8% | ||||||||||||
6,500 | Albemarle Corp. | 236,405 | ||||||||||
1,100 | Ashland, Inc. | 43,582 | ||||||||||
1,700 | Cytec Industries, Inc. | 61,914 | ||||||||||
3,200 | Eastman Chemical Co. | 192,768 | ||||||||||
1,000 | Lubrizol Corp. | 72,950 | ||||||||||
607,619 | ||||||||||||
Coal – 0.1% | ||||||||||||
1,700 | Arch Coal, Inc. | 37,825 | ||||||||||
300 | Massey Energy Co. | 12,603 | ||||||||||
50,428 | ||||||||||||
Coatings and Paint Products – 0.2% | ||||||||||||
6,400 | RPM International, Inc. | 130,112 | ||||||||||
2,100 | Valspar Corp. | 56,994 | ||||||||||
187,106 | ||||||||||||
Commercial Banks – 1.7% | ||||||||||||
10,300 | Associated Banc-Corp. | 113,403 | ||||||||||
1,500 | BancorpSouth, Inc. | 35,190 | ||||||||||
5,400 | BB&T Corp. | 136,998 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 43
INTECH Risk-Managed Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Commercial Banks – (continued) | ||||||||||||
600 | City National Corp. | $ | 27,360 | |||||||||
26 | Commerce Bancshares, Inc. | 1,007 | ||||||||||
1,700 | Cullen/Frost Bankers, Inc. | 85,000 | ||||||||||
6,743 | First Horizon National Corp.* | 90,356 | ||||||||||
2,000 | M&T Bank Corp. | 133,780 | ||||||||||
36,800 | Marshall & Ilsley Corp. | 200,560 | ||||||||||
27,497 | Regions Financial Corp. | 145,459 | ||||||||||
9,400 | TCF Financial Corp. | 128,028 | ||||||||||
17,200 | Zions Bancorporation | 220,676 | ||||||||||
1,317,817 | ||||||||||||
Commercial Services – 0.1% | ||||||||||||
1,900 | Quanta Services, Inc.* | 39,596 | ||||||||||
Commercial Services – Finance – 0.1% | ||||||||||||
800 | Equifax, Inc. | 24,712 | ||||||||||
5,100 | Total System Services, Inc. | 88,077 | ||||||||||
112,789 | ||||||||||||
Computer Aided Design – 0% | ||||||||||||
300 | Autodesk, Inc.* | 7,623 | ||||||||||
Computer Services – 0.3% | ||||||||||||
2,200 | Affiliated Computer Services, Inc. – Class A* | 131,318 | ||||||||||
2,100 | Computer Sciences Corp.* | 120,813 | ||||||||||
252,131 | ||||||||||||
Computers – 0.3% | ||||||||||||
3,600 | Hewlett-Packard Co. | 185,436 | ||||||||||
4,900 | Sun Microsystems, Inc.* | 45,913 | ||||||||||
231,349 | ||||||||||||
Computers – Integrated Systems – 0.2% | ||||||||||||
4,900 | Brocade Communications Systems, Inc.* | 37,387 | ||||||||||
3,500 | Terdata Corp.* | 110,005 | ||||||||||
147,392 | ||||||||||||
Computers – Memory Devices – 0.2% | ||||||||||||
5,600 | EMC Corp.* | 97,832 | ||||||||||
500 | SanDisk Corp.* | 14,495 | ||||||||||
1,900 | Seagate Technology | 34,561 | ||||||||||
600 | Western Digital Corp.* | 26,490 | ||||||||||
173,378 | ||||||||||||
Consumer Products – Miscellaneous – 0.1% | ||||||||||||
2,600 | Jarden Corp. | 80,366 | ||||||||||
Containers – Metal and Glass – 0.7% | ||||||||||||
3,600 | Ball Corp. | 186,120 | ||||||||||
3,800 | Greif, Inc. | 205,124 | ||||||||||
3,700 | Owens-Illinois, Inc.* | 121,619 | ||||||||||
512,863 | ||||||||||||
Containers – Paper and Plastic – 0.6% | ||||||||||||
2,200 | Bemis Co., Inc. | 65,230 | ||||||||||
200 | Packaging Corp. of America | 4,602 | ||||||||||
9,500 | Sealed Air Corp. | 207,670 | ||||||||||
3,300 | Sonoco Products Co. | 96,525 | ||||||||||
3,500 | Temple-Inland, Inc. | 73,885 | ||||||||||
447,912 | ||||||||||||
Cosmetics and Toiletries – 1.4% | ||||||||||||
17,800 | Procter & Gamble Co. | 1,079,214 | ||||||||||
Cruise Lines – 0.2% | ||||||||||||
2,900 | Carnival Corp. (U.S. Shares)* | 91,901 | ||||||||||
3,700 | Royal Caribbean Cruises, Ltd. (U.S. Shares) | 93,536 | ||||||||||
185,437 | ||||||||||||
Data Processing and Management – 0.3% | ||||||||||||
4,200 | Broadridge Financial Solutions, Inc. | 94,752 | ||||||||||
5,600 | Fidelity National Information Services, Inc. | 131,264 | ||||||||||
226,016 | ||||||||||||
Diagnostic Kits – 0% | ||||||||||||
900 | Inverness Medical Innovations, Inc.* | 37,359 | ||||||||||
Distribution/Wholesale – 0.3% | ||||||||||||
1,100 | Ingram Micro, Inc. – Class A* | 19,195 | ||||||||||
4,900 | Tech Data Corp.* | 228,634 | ||||||||||
600 | Wesco International, Inc.* | 16,206 | ||||||||||
264,035 | ||||||||||||
Diversified Banking Institutions – 4.2% | ||||||||||||
46,805 | Bank of America Corp. | 704,883 | ||||||||||
91,200 | Citigroup, Inc.* | 301,872 | ||||||||||
4,600 | Goldman Sachs Group, Inc. | 776,664 | ||||||||||
29,200 | JPMorgan Chase & Co. | 1,216,764 | ||||||||||
7,800 | Morgan Stanley | 230,880 | ||||||||||
3,231,063 | ||||||||||||
Diversified Operations – 3.7% | ||||||||||||
500 | Carlisle Cos., Inc. | 17,130 | ||||||||||
1,900 | Crane Co. | 58,178 | ||||||||||
1,500 | Eaton Corp. | 95,430 | ||||||||||
138,700 | General Electric Co. | 2,098,531 | ||||||||||
2,400 | Harsco Corp. | 77,352 | ||||||||||
2,800 | Illinois Tool Works, Inc. | 134,372 | ||||||||||
200 | ITT Corp. | 9,948 | ||||||||||
1,000 | Leucadia National Corp.* | 23,790 | ||||||||||
2,900 | Parker Hannifin Corp. | 156,252 | ||||||||||
900 | SPX Corp. | 49,230 | ||||||||||
5,300 | Textron, Inc. | 99,693 | ||||||||||
1,000 | Trinity Industries, Inc. | 17,440 | ||||||||||
2,837,346 | ||||||||||||
E-Commerce/Services – 0.8% | ||||||||||||
19,900 | eBay, Inc.* | 468,446 | ||||||||||
500 | Expedia, Inc.* | 12,855 | ||||||||||
3,800 | IAC/InterActiveCorp* | 77,824 | ||||||||||
7,800 | Liberty Media Corp. – Interactive – Class A* | 84,552 | ||||||||||
643,677 | ||||||||||||
Electric – Generation – 0.3% | ||||||||||||
14,500 | AES Corp.* | 192,995 | ||||||||||
Electric – Integrated – 3.7% | ||||||||||||
900 | Allegheny Energy, Inc. | 21,132 | ||||||||||
500 | American Electric Power Company, Inc. | 17,395 | ||||||||||
23,100 | CMS Energy Corp. | 361,746 | ||||||||||
1,100 | Consolidated Edison, Inc. | 49,973 | ||||||||||
2,100 | Constellation Energy Group, Inc. | 73,857 | ||||||||||
400 | Dominion Resources, Inc. | 15,568 | ||||||||||
6,500 | DPL, Inc. | 179,400 | ||||||||||
800 | DTE Energy Co. | 34,872 | ||||||||||
924 | Duke Energy Corp. | 15,902 | ||||||||||
200 | Entergy Corp. | 16,368 | ||||||||||
500 | Exelon Corp. | 24,435 | ||||||||||
300 | FirstEnergy Corp. | 13,935 |
See Notes to Schedules of Investments and Financial Statements.
44 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Electric – Integrated – (continued) | ||||||||||||
10,700 | FPL Group, Inc. | $ | 565,174 | |||||||||
3,900 | MDU Resources Group, Inc. | 92,040 | ||||||||||
2,100 | Northeast Utilities | 54,159 | ||||||||||
800 | NSTAR | 29,440 | ||||||||||
1,900 | OGE Energy Corp. | 70,091 | ||||||||||
5,300 | PG&E Corp. | 236,645 | ||||||||||
4,400 | Pinnacle West Capital Corp. | 160,952 | ||||||||||
300 | Progress Energy, Inc. | 12,303 | ||||||||||
11,800 | Public Service Enterprise Group, Inc. | 392,350 | ||||||||||
700 | SCANA Corp. | 26,376 | ||||||||||
13,600 | Sierra Pacific Resources | 168,368 | ||||||||||
800 | Southern Co. | 26,656 | ||||||||||
2,100 | TECO Energy, Inc. | 34,062 | ||||||||||
800 | Westar Energy, Inc. | 17,384 | ||||||||||
300 | Wisconsin Energy Corp. | 14,949 | ||||||||||
5,700 | Xcel Energy, Inc. | 120,954 | ||||||||||
2,846,486 | ||||||||||||
Electric Products – Miscellaneous – 0.1% | ||||||||||||
4,100 | Molex, Inc. | 88,355 | ||||||||||
Electronic Components – Miscellaneous – 0.1% | ||||||||||||
700 | Jabil Circuit, Inc. | 12,159 | ||||||||||
6,100 | Vishay Intertechnology, Inc.* | 50,935 | ||||||||||
63,094 | ||||||||||||
Electronic Components – Semiconductors – 0.6% | ||||||||||||
4,400 | Advanced Micro Devices, Inc.* | 42,592 | ||||||||||
5,300 | Intel Corp. | 108,120 | ||||||||||
5,000 | Intersil Corp. – Class A | 76,700 | ||||||||||
4,800 | LSI Corp.* | 28,848 | ||||||||||
1,500 | Microchip Technology, Inc. | 43,590 | ||||||||||
2,900 | Micron Technology, Inc.* | 30,624 | ||||||||||
4,200 | PMC-Sierra, Inc.* | 36,372 | ||||||||||
2,100 | Rovi Corp.* | 66,927 | ||||||||||
433,773 | ||||||||||||
Electronic Connectors – 0.1% | ||||||||||||
2,600 | Thomas & Betts Corp.* | 93,054 | ||||||||||
Electronic Design Automation – 0.1% | ||||||||||||
4,900 | Synopsys, Inc.* | 109,172 | ||||||||||
Electronic Parts Distributors – 0.5% | ||||||||||||
6,400 | Arrow Electronics, Inc.* | 189,504 | ||||||||||
7,600 | Avnet, Inc.* | 229,216 | ||||||||||
418,720 | ||||||||||||
Engineering – Research and Development Services – 0.5% | ||||||||||||
12,400 | KBR, Inc. | 235,600 | ||||||||||
200 | Shaw Group, Inc.* | 5,750 | ||||||||||
2,800 | URS Corp.* | 124,656 | ||||||||||
366,006 | ||||||||||||
Engines – Internal Combustion – 0% | ||||||||||||
400 | Cummins, Inc. | 18,344 | ||||||||||
Enterprise Software/Services – 0.1% | ||||||||||||
1,800 | CA, Inc. | 40,428 | ||||||||||
4,200 | Novell, Inc.* | 17,430 | ||||||||||
57,858 | ||||||||||||
Entertainment Software – 0% | ||||||||||||
1,500 | Activision Blizzard, Inc.* | 16,665 | ||||||||||
Fiduciary Banks – 1.3% | ||||||||||||
20,924 | Bank of New York Mellon Corp. | 585,244 | ||||||||||
9,400 | State Street Corp. | 409,276 | ||||||||||
994,520 | ||||||||||||
Finance – Auto Loans – 0.1% | ||||||||||||
6,000 | AmeriCredit Corp.* | 114,240 | ||||||||||
Finance – Consumer Loans – 0.2% | ||||||||||||
12,200 | SLM Corp.* | 137,494 | ||||||||||
Finance – Credit Card – 0.8% | ||||||||||||
9,000 | American Express Co. | 364,680 | ||||||||||
15,300 | Discover Financial Services | 225,063 | ||||||||||
589,743 | ||||||||||||
Finance – Investment Bankers/Brokers – 0.3% | ||||||||||||
1,300 | Investment Technology Group* | 25,610 | ||||||||||
2,200 | Jefferies Group, Inc.* | 52,206 | ||||||||||
5,500 | Raymond James Financial, Inc. | 130,735 | ||||||||||
208,551 | ||||||||||||
Finance – Other Services – 0.8% | ||||||||||||
700 | CME Group, Inc. | 235,165 | ||||||||||
2,400 | Nasdaq Stock Market, Inc.* | 47,568 | ||||||||||
13,900 | NYSE Euronext | 351,670 | ||||||||||
634,403 | ||||||||||||
Food – Canned – 0.2% | ||||||||||||
14,100 | Del Monte Foods Co. | 159,894 | ||||||||||
Food – Confectionery – 0.2% | ||||||||||||
2,800 | Hershey Co. | 100,212 | ||||||||||
800 | J.M. Smucker Co. | 49,400 | ||||||||||
149,612 | ||||||||||||
Food – Meat Products – 0.5% | ||||||||||||
2,200 | Hormel Foods Corp. | 84,590 | ||||||||||
8,900 | Smithfield Foods, Inc.* | 135,191 | ||||||||||
11,700 | Tyson Foods, Inc. – Class A | 143,559 | ||||||||||
363,340 | ||||||||||||
Food – Miscellaneous/Diversified – 0.5% | ||||||||||||
800 | ConAgra Foods, Inc. | 18,440 | ||||||||||
400 | Corn Products International, Inc. | 11,692 | ||||||||||
1,200 | General Mills, Inc. | 84,972 | ||||||||||
300 | H.J. Heinz Co. | 12,828 | ||||||||||
9,852 | Kraft Foods, Inc. – Class A | 267,777 | ||||||||||
600 | Sara Lee Corp. | 7,308 | ||||||||||
403,017 | ||||||||||||
Food – Retail – 0.1% | ||||||||||||
100 | Kroger Co. | 2,053 | ||||||||||
4,500 | Supervalu, Inc. | 57,195 | ||||||||||
600 | Whole Foods Market, Inc.* | 16,470 | ||||||||||
75,718 | ||||||||||||
Forestry – 0.1% | ||||||||||||
2,000 | Weyerhaeuser Co. | 86,280 | ||||||||||
Funeral Services and Related Items – 0.1% | ||||||||||||
7,400 | Service Corporation International | 60,606 | ||||||||||
Gas – Distribution – 1.7% | ||||||||||||
1,900 | AGL Resources, Inc. | 69,293 | ||||||||||
3,100 | Atmos Energy Corp. | 91,140 | ||||||||||
1,500 | CenterPoint Energy, Inc. | 21,765 | ||||||||||
7,800 | Energen Corp. | 365,040 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 45
INTECH Risk-Managed Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Gas – Distribution – (continued) | ||||||||||||
2,800 | National Fuel Gas Co. | $ | 140,000 | |||||||||
3,000 | NiSource, Inc. | 46,140 | ||||||||||
5,900 | Sempra Energy | 330,282 | ||||||||||
7,500 | Southern Union Co. | 170,250 | ||||||||||
1,100 | UGI Corp. | 26,609 | ||||||||||
1,260,519 | ||||||||||||
Home Decoration Products – 0.1% | ||||||||||||
4,200 | Newell Rubbermaid, Inc. | 63,042 | ||||||||||
Hospital Beds and Equipment – 0.1% | ||||||||||||
1,100 | Hill-Rom Holdings, Inc. | 26,389 | ||||||||||
1,400 | Kinetic Concepts, Inc.* | 52,710 | ||||||||||
79,099 | ||||||||||||
Hotels and Motels – 0.6% | ||||||||||||
11,744 | Marriott International, Inc. – Class A | 320,024 | ||||||||||
2,700 | Starwood Hotels & Resorts Worldwide, Inc. | 98,739 | ||||||||||
1,600 | Wyndham Worldwide Corp. | 32,272 | ||||||||||
�� | 451,035 | |||||||||||
Human Resources – 0.7% | ||||||||||||
7,400 | Manpower, Inc. | 403,892 | ||||||||||
5,600 | Monster Worldwide, Inc.* | 97,440 | ||||||||||
501,332 | ||||||||||||
Independent Power Producer – 0.4% | ||||||||||||
5,200 | Calpine Corp.* | 57,200 | ||||||||||
8,700 | Mirant Corp.* | 132,849 | ||||||||||
3,300 | NRG Energy, Inc.* | 77,913 | ||||||||||
267,962 | ||||||||||||
Industrial Automation and Robotics – 0.4% | ||||||||||||
5,800 | Rockwell Automation, Inc. | 272,484 | ||||||||||
Industrial Gases – 0.5% | ||||||||||||
4,900 | Air Products & Chemicals, Inc. | 397,194 | ||||||||||
Instruments – Scientific – 0.1% | ||||||||||||
1,600 | PerkinElmer, Inc. | 32,944 | ||||||||||
700 | Thermo Fisher Scientific, Inc.* | 33,383 | ||||||||||
66,327 | ||||||||||||
Insurance Brokers – 0.1% | ||||||||||||
3,000 | Aspen Insurance Holdings, Ltd. | 76,350 | ||||||||||
Investment Management and Advisory Services – 1.0% | ||||||||||||
6,200 | Ameriprise Financial, Inc. | 240,684 | ||||||||||
600 | BlackRock, Inc. | 139,320 | ||||||||||
500 | Federated Investors, Inc. – Class B | 13,750 | ||||||||||
1,100 | Franklin Resources, Inc. | 115,885 | ||||||||||
8,600 | INVESCO, Ltd. | 202,014 | ||||||||||
2,700 | Legg Mason, Inc. | 81,432 | ||||||||||
793,085 | ||||||||||||
Life and Health Insurance – 1.1% | ||||||||||||
6,479 | Lincoln National Corp. | 161,198 | ||||||||||
10,400 | Protective Life Corp. | 172,120 | ||||||||||
5,800 | Prudential Financial, Inc. | 288,608 | ||||||||||
300 | StanCorp Financial Group, Inc. | 12,006 | ||||||||||
1,100 | Torchmark Corp. | 48,345 | ||||||||||
6,200 | Unum Group | 121,024 | ||||||||||
803,301 | ||||||||||||
Linen Supply and Related Items – 0% | ||||||||||||
400 | Cintas Corp. | 10,420 | ||||||||||
Machinery – Construction and Mining – 0.1% | ||||||||||||
300 | Bucyrus International, Inc. | 16,911 | ||||||||||
400 | Caterpillar, Inc. | 22,796 | ||||||||||
400 | Joy Global, Inc. | 20,636 | ||||||||||
2,500 | Terex Corp.* | 49,525 | ||||||||||
109,868 | ||||||||||||
Machinery – Farm – 0.6% | ||||||||||||
1,800 | AGCO Corp.* | 58,212 | ||||||||||
7,800 | Deere & Co. | 421,902 | ||||||||||
480,114 | ||||||||||||
Machinery – General Industrial – 0.2% | ||||||||||||
1,900 | Gardner Denver, Inc. | 80,845 | ||||||||||
4,900 | Manitowoc Company, Inc. | 48,853 | ||||||||||
129,698 | ||||||||||||
Machinery – Print Trade – 0% | ||||||||||||
500 | Zebra Technologies Corp.* | 14,180 | ||||||||||
Medical – Biomedical and Genetic – 0.2% | ||||||||||||
2,000 | Charles River Laboratories International, Inc.* | 67,380 | ||||||||||
1,300 | Life Technologies Corp.* | 67,899 | ||||||||||
135,279 | ||||||||||||
Medical – Drugs – 4.5% | ||||||||||||
5,700 | Bristol-Myers Squibb Co. | 143,925 | ||||||||||
7,000 | Eli Lilly & Co. | 249,970 | ||||||||||
5,000 | Forest Laboratories, Inc.* | 160,550 | ||||||||||
9,100 | King Pharmaceuticals, Inc.* | 111,657 | ||||||||||
18,675 | Merck & Co., Inc. | 682,385 | ||||||||||
113,571 | Pfizer, Inc. | 2,065,856 | ||||||||||
3,414,343 | ||||||||||||
Medical – Generic Drugs – 0.3% | ||||||||||||
8,800 | Mylan, Inc.* | 162,184 | ||||||||||
2,100 | Watson Pharmaceuticals, Inc.* | 83,181 | ||||||||||
245,365 | ||||||||||||
Medical – HMO – 1.9% | ||||||||||||
3,200 | Aetna, Inc. | 101,440 | ||||||||||
6,000 | CIGNA Corp. | 211,620 | ||||||||||
8,200 | Coventry Health Care, Inc.* | 199,178 | ||||||||||
8,000 | Health Net, Inc.* | 186,320 | ||||||||||
1,600 | Humana, Inc.* | 70,224 | ||||||||||
10,500 | UnitedHealth Group, Inc. | 320,040 | ||||||||||
6,500 | WellPoint, Inc.* | 378,885 | ||||||||||
1,467,707 | ||||||||||||
Medical – Hospitals – 0.3% | ||||||||||||
1,500 | Community Health Systems, Inc.* | 53,400 | ||||||||||
500 | LifePoint Hospitals, Inc.* | 16,255 | ||||||||||
3,300 | Tenet Healthcare Corp.* | 17,787 | ||||||||||
4,900 | Universal Health Services, Inc. – Class B | 149,450 | ||||||||||
236,892 | ||||||||||||
Medical – Wholesale Drug Distributors – 0.1% | ||||||||||||
1,300 | AmerisourceBergen Corp. | 33,891 | ||||||||||
500 | Cardinal Health, Inc. | 16,120 | ||||||||||
600 | McKesson Corp. | 37,500 | ||||||||||
87,511 | ||||||||||||
Medical Information Systems – 0.1% | ||||||||||||
2,300 | IMS Health, Inc. | 48,438 |
See Notes to Schedules of Investments and Financial Statements.
46 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Medical Instruments – 0.2% | ||||||||||||
18,000 | Boston Scientific Corp.* | $ | 162,000 | |||||||||
Medical Products – 1.6% | ||||||||||||
1,000 | Cooper Companies, Inc. | 38,120 | ||||||||||
17,100 | Johnson & Johnson | 1,101,411 | ||||||||||
1,500 | Zimmer Holdings, Inc.* | 88,665 | ||||||||||
1,228,196 | ||||||||||||
Metal – Aluminum – 0.1% | ||||||||||||
3,200 | Alcoa, Inc. | 51,584 | ||||||||||
Metal – Copper – 0.2% | ||||||||||||
705 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 56,604 | ||||||||||
2,100 | Southern Copper Corp. | 69,111 | ||||||||||
125,715 | ||||||||||||
Metal – Iron – 0% | ||||||||||||
500 | Cliffs Natural Resources, Inc. | 23,045 | ||||||||||
Metal Processors and Fabricators – 0% | ||||||||||||
800 | Commercial Metals Co. | 12,520 | ||||||||||
Miscellaneous Manufacturing – 0% | ||||||||||||
500 | Aptargroup, Inc. | 17,870 | ||||||||||
Motorcycle and Motor Scooter Manufacturing – 0.1% | ||||||||||||
2,500 | Harley-Davidson, Inc. | 63,000 | ||||||||||
Multi-Line Insurance – 2.3% | ||||||||||||
2,100 | Allstate Corp. | 63,084 | ||||||||||
2,600 | American Financial Group, Inc. | 64,870 | ||||||||||
6,100 | American International Group, Inc.* | 182,878 | ||||||||||
4,900 | Assurant, Inc. | 144,452 | ||||||||||
4,200 | Cincinnati Financial Corp. | 110,208 | ||||||||||
9,500 | Genworth Financial, Inc. – Class A* | 107,825 | ||||||||||
6,000 | Hartford Financial Services Group, Inc. | 139,560 | ||||||||||
11,200 | Loews Corp. | 407,120 | ||||||||||
8,800 | MetLife, Inc. | 311,080 | ||||||||||
6,300 | Old Republic International Corp. | 63,252 | ||||||||||
8,900 | XL Capital, Ltd. – Class A | 163,137 | ||||||||||
1,757,466 | ||||||||||||
Multimedia – 2.5% | ||||||||||||
29,600 | News Corp. – Class A | 405,224 | ||||||||||
10,100 | Time Warner, Inc. | 294,314 | ||||||||||
18,500 | Viacom, Inc. – Class B* | 550,005 | ||||||||||
20,100 | Walt Disney Co. | 648,225 | ||||||||||
1,897,768 | ||||||||||||
Oil – Field Services – 1.6% | ||||||||||||
2,700 | Baker Hughes, Inc. | 109,296 | ||||||||||
8,300 | BJ Services Co. | 154,380 | ||||||||||
800 | Exterran Holdings, Inc.* | 17,160 | ||||||||||
10,000 | Halliburton Co. | 300,900 | ||||||||||
2,500 | Helix Energy Solutions Group, Inc.* | 29,375 | ||||||||||
6,700 | Schlumberger, Ltd. (U.S. Shares) | 436,103 | ||||||||||
1,300 | SEACOR Holdings, Inc.* | 99,125 | ||||||||||
1,200 | Smith International, Inc. | 32,604 | ||||||||||
300 | Superior Energy Services, Inc.* | 7,287 | ||||||||||
1,186,230 | ||||||||||||
Oil and Gas Drilling – 0.5% | ||||||||||||
400 | Atwood Oceanics, Inc.* | 14,340 | ||||||||||
2,200 | Ensco International PLC | 87,868 | ||||||||||
500 | Helmerich & Payne, Inc. | 19,940 | ||||||||||
2,400 | Nabors Industries, Ltd. | 52,536 | ||||||||||
4,400 | Patterson-UTI Energy, Inc. | 67,540 | ||||||||||
600 | Pride International, Inc.* | 19,146 | ||||||||||
1,500 | Rowan Cos., Inc.* | 33,960 | ||||||||||
2,200 | Unit Corp.* | 93,500 | ||||||||||
388,830 | ||||||||||||
Oil Companies – Exploration and Production – 5.0% | ||||||||||||
6,000 | Anadarko Petroleum Corp. | 374,520 | ||||||||||
1,400 | Apache Corp. | 144,438 | ||||||||||
5,100 | Cabot Oil & Gas Corp. | 222,309 | ||||||||||
5,800 | Chesapeake Energy Corp. | 150,104 | ||||||||||
2,200 | Cimarex Energy Co. | 116,534 | ||||||||||
1,600 | Concho Resources, Inc.* | 71,840 | ||||||||||
700 | Denbury Resources, Inc.* | 10,360 | ||||||||||
2,600 | Devon Energy Corp. | 191,100 | ||||||||||
2,400 | Encore Acquisition Co.* | 115,248 | ||||||||||
1,800 | EOG Resources, Inc. | 175,140 | ||||||||||
2,700 | Forest Oil Corp.* | 60,075 | ||||||||||
800 | Mariner Energy, Inc.* | 9,288 | ||||||||||
1,200 | Newfield Exploration Co.* | 57,876 | ||||||||||
4,200 | Noble Energy, Inc. | 299,124 | ||||||||||
9,500 | Occidental Petroleum Corp. | 772,825 | ||||||||||
1,600 | Pioneer Natural Resources Co. | 77,072 | ||||||||||
2,900 | Plains Exploration & Production Co.* | 80,214 | ||||||||||
5,100 | Questar Corp. | 212,007 | ||||||||||
4,700 | Range Resources Corp. | 234,295 | ||||||||||
6,700 | SandRidge Energy, Inc.* | 63,181 | ||||||||||
1,400 | St. Mary Land & Exploration Co. | 47,936 | ||||||||||
6,700 | XTO Energy, Inc. | 311,751 | ||||||||||
3,797,237 | ||||||||||||
Oil Companies – Integrated – 10.7% | ||||||||||||
25,800 | Chevron Corp. | 1,986,342 | ||||||||||
14,893 | ConocoPhillips | 760,586 | ||||||||||
67,500 | Exxon Mobil Corp. | 4,602,826 | ||||||||||
4,100 | Hess Corp. | 248,050 | ||||||||||
9,000 | Marathon Oil Corp. | 280,980 | ||||||||||
5,100 | Murphy Oil Corp. | 276,420 | ||||||||||
8,155,204 | ||||||||||||
Oil Field Machinery and Equipment – 0.3% | ||||||||||||
800 | Cameron International Corp.* | 33,440 | ||||||||||
4,800 | National Oilwell Varco, Inc. | 211,632 | ||||||||||
245,072 | ||||||||||||
Oil Refining and Marketing – 0.2% | ||||||||||||
600 | Sunoco, Inc. | 15,660 | ||||||||||
600 | Tesoro Corp. | 8,130 | ||||||||||
6,400 | Valero Energy Corp. | 107,200 | ||||||||||
130,990 | ||||||||||||
Paper and Related Products – 0.5% | ||||||||||||
3,400 | International Paper Co. | 91,052 | ||||||||||
9,600 | MeadWestvaco Corp. | 274,848 | ||||||||||
1,200 | Rayonier, Inc. | 50,592 | ||||||||||
416,492 | ||||||||||||
Physical Practice Management – 0.2% | ||||||||||||
2,000 | Mednax, Inc.* | 120,220 | ||||||||||
Pipelines – 0.5% | ||||||||||||
12,400 | El Paso Corp. | 121,892 | ||||||||||
900 | Oneok, Inc. | 40,113 | ||||||||||
1,700 | Spectra Energy Corp. | 34,867 |
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 47
INTECH Risk-Managed Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Pipelines – (continued) | ||||||||||||
9,900 | Williams Companies, Inc. | $ | 208,692 | |||||||||
405,564 | ||||||||||||
Printing – Commercial – 0.1% | ||||||||||||
4,800 | R.R. Donnelley & Sons Co. | 106,896 | ||||||||||
Private Corrections – 0.1% | ||||||||||||
1,800 | Corrections Corporation of America* | 44,190 | ||||||||||
Property and Casualty Insurance – 1.3% | ||||||||||||
200 | Chubb Corp. | 9,836 | ||||||||||
4,500 | Fidelity National Financial, Inc. – Class A | 60,570 | ||||||||||
3,500 | First American Corp. | 115,885 | ||||||||||
4,400 | HCC Insurance Holdings, Inc. | 123,068 | ||||||||||
12,700 | Progressive Corp. | 228,473 | ||||||||||
7,500 | Travelers Cos., Inc. | 373,950 | ||||||||||
2,500 | W. R. Berkley Corp. | 61,600 | ||||||||||
973,382 | ||||||||||||
Publishing – Newspapers – 0.1% | ||||||||||||
5,800 | Gannett Company, Inc. | 86,130 | ||||||||||
Quarrying – 0% | ||||||||||||
200 | Compass Minerals International, Inc. | 13,438 | ||||||||||
400 | Vulcan Materials Co. | 21,068 | ||||||||||
34,506 | ||||||||||||
Racetracks – 0.1% | ||||||||||||
4,100 | Penn National Gaming, Inc.* | 111,438 | ||||||||||
Real Estate Management/Services – 0.1% | ||||||||||||
1,500 | Jones Lang LaSalle, Inc. | 90,600 | ||||||||||
Real Estate Operating/Development – 0% | ||||||||||||
1,600 | Forest City Enterprises, Inc. – Class A* | 18,848 | ||||||||||
Reinsurance – 0.8% | ||||||||||||
4,100 | Allied World Assurance Co. Holdings, Ltd. | 188,887 | ||||||||||
600 | Axis Capital Holdings, Ltd. | 17,046 | ||||||||||
2,300 | Endurance Specialty Holdings, Ltd. | 85,629 | ||||||||||
700 | Everest Re Group, Ltd. | 59,976 | ||||||||||
1,700 | PartnerRe, Ltd. | 126,922 | ||||||||||
100 | RenaissanceRe Holdings, Ltd. | 5,315 | ||||||||||
1,400 | Transatlantic Holdings, Inc. | 72,954 | ||||||||||
2,000 | Validus Holdings, Ltd. | 53,880 | ||||||||||
610,609 | ||||||||||||
REIT – Apartments – 0.1% | ||||||||||||
1,100 | Apartment Investment & Management Co. – Class A | 17,512 | ||||||||||
112 | Avalonbay Communities, Inc. | 9,196 | ||||||||||
1,200 | Camden Property Trust | 50,844 | ||||||||||
1,000 | UDR, Inc. | 16,440 | ||||||||||
93,992 | ||||||||||||
REIT – Diversified – 0.2% | ||||||||||||
2,800 | Duke Realty Corp. | 34,076 | ||||||||||
4,700 | Liberty Property Trust | 150,447 | ||||||||||
184,523 | ||||||||||||
REIT – Health Care – 0.3% | ||||||||||||
2,000 | HCP, Inc. | 61,080 | ||||||||||
1,000 | Nationwide Health Properties, Inc. | 35,180 | ||||||||||
4,800 | Senior Housing Property Trust | 104,976 | ||||||||||
800 | Ventas, Inc. | 34,992 | ||||||||||
236,228 | ||||||||||||
REIT – Hotels – 0.3% | ||||||||||||
4,000 | Hospitality Properties Trust | 94,840 | ||||||||||
14,057 | Host Hotels & Resorts, Inc.* | 164,045 | ||||||||||
258,885 | ||||||||||||
REIT – Mortgage – 0.2% | ||||||||||||
6,100 | Annaly Mortgage Management, Inc. | 105,835 | ||||||||||
12,000 | Chimera Investment Corp. | 46,560 | ||||||||||
152,395 | ||||||||||||
REIT – Office Property – 0.4% | ||||||||||||
500 | Boston Properties, Inc. | 33,535 | ||||||||||
2,700 | Brandywine Realty Trust, Inc. | 30,780 | ||||||||||
11,300 | HRPT Properties Trust | 73,111 | ||||||||||
500 | Mack-Cali Realty Corp. | 17,285 | ||||||||||
2,500 | SL Green Realty Corp. | 125,600 | ||||||||||
280,311 | ||||||||||||
REIT – Regional Malls – 0.3% | ||||||||||||
838 | Macerich Co. | 30,126 | ||||||||||
1,723 | Simon Property Group, Inc. | 137,496 | ||||||||||
1,500 | Taubman Centers, Inc. | 53,865 | ||||||||||
221,487 | ||||||||||||
REIT – Shopping Centers – 0.1% | ||||||||||||
300 | Federal Realty Investment Trust | 20,316 | ||||||||||
1,300 | Regency Centers Corp. | 45,578 | ||||||||||
65,894 | ||||||||||||
REIT – Warehouse/Industrial – 0.1% | ||||||||||||
3,700 | AMB Property Corp. | 94,535 | ||||||||||
Rental Auto/Equipment – 0.1% | ||||||||||||
5,200 | Hertz Global Holdings, Inc.* | 61,984 | ||||||||||
Retail – Apparel and Shoe – 0.5% | ||||||||||||
2,200 | Abercrombie & Fitch Co. – Class A | 76,670 | ||||||||||
2,400 | Foot Locker, Inc. | 26,736 | ||||||||||
4,600 | Gap, Inc. | 96,370 | ||||||||||
6,800 | Limited Brands, Inc. | 130,832 | ||||||||||
500 | Phillips-Van Heusen Corp. | 20,340 | ||||||||||
350,948 | ||||||||||||
Retail – Automobile – 0.2% | ||||||||||||
600 | Auto Nation, Inc.* | 11,490 | ||||||||||
5,200 | Carmax, Inc.* | 126,100 | ||||||||||
137,590 | ||||||||||||
Retail – Building Products – 1.3% | ||||||||||||
25,900 | Home Depot, Inc. | 749,287 | ||||||||||
10,800 | Lowe’s Cos., Inc. | 252,612 | ||||||||||
1,001,899 | ||||||||||||
Retail – Consumer Electronics – 0% | ||||||||||||
1,100 | RadioShack Corp. | 21,450 | ||||||||||
Retail – Discount – 0% | ||||||||||||
700 | Big Lots, Inc.* | 20,286 | ||||||||||
Retail – Drug Store – 0.1% | ||||||||||||
1,300 | CVS Caremark Corp. | 41,873 | ||||||||||
Retail – Jewelry – 0% | ||||||||||||
400 | Tiffany & Co. | 17,200 | ||||||||||
Retail – Mail Order – 0.1% | ||||||||||||
2,300 | Williams-Sonoma, Inc. | 47,794 |
See Notes to Schedules of Investments and Financial Statements.
48 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Retail – Major Department Stores – 0.3% | ||||||||||||
6,300 | JC Penney Co., Inc. | $ | 167,643 | |||||||||
600 | Sears Holdings Corp.* | 50,070 | ||||||||||
217,713 | ||||||||||||
Retail – Office Supplies – 0.1% | ||||||||||||
8,100 | Office Depot, Inc.* | 52,245 | ||||||||||
Retail – Regional Department Stores – 0.3% | ||||||||||||
2,100 | Kohl’s Corp.* | 113,253 | ||||||||||
7,400 | Macy’s, Inc. | 124,024 | ||||||||||
237,277 | ||||||||||||
Retail – Restaurants – 0.2% | ||||||||||||
24,700 | Wendy’s/Arby’s Group, Inc. | 115,843 | ||||||||||
Savings/Loan/Thrifts – 0% | ||||||||||||
1,000 | People’s United Financial, Inc. | 16,700 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.1% | ||||||||||||
1,600 | Marvell Technology Group, Ltd. | 33,200 | ||||||||||
2,900 | Maxim Integrated Products | 58,870 | ||||||||||
92,070 | ||||||||||||
Semiconductor Equipment – 0.9% | ||||||||||||
22,600 | Applied Materials, Inc. | 315,044 | ||||||||||
7,400 | KLA-Tencor Corp. | 267,584 | ||||||||||
4,400 | Novellus Systems, Inc.* | 102,696 | ||||||||||
685,324 | ||||||||||||
Steel – Producers – 0.4% | ||||||||||||
6,100 | Nucor Corp. | 284,565 | ||||||||||
400 | Reliance Steel & Aluminum Co. | 17,288 | ||||||||||
200 | Steel Dynamics, Inc. | 3,544 | ||||||||||
600 | United States Steel Corp. | 33,072 | ||||||||||
338,469 | ||||||||||||
Steel – Specialty – 0.1% | ||||||||||||
1,000 | Allegheny Technologies, Inc. | 44,770 | ||||||||||
Super-Regional Banks – 3.8% | ||||||||||||
5,100 | Capital One Financial Corp. | 195,534 | ||||||||||
9,300 | Comerica, Inc. | 275,001 | ||||||||||
20,500 | Fifth Third Bancorp | 199,875 | ||||||||||
56,000 | Huntington Bancshares, Inc. | 204,400 | ||||||||||
43,400 | Keycorp | 240,870 | ||||||||||
7,883 | PNC Financial Services Group, Inc. | 416,144 | ||||||||||
6,800 | SunTrust Banks, Inc. | 137,972 | ||||||||||
16,500 | U.S. Bancorp | 371,415 | ||||||||||
31,661 | Wells Fargo & Co. | 854,530 | ||||||||||
2,895,741 | ||||||||||||
Telecommunication Equipment – 0.1% | ||||||||||||
1,300 | CommScope, Inc.* | 34,489 | ||||||||||
10,600 | Tellabs Inc.* | 60,208 | ||||||||||
94,697 | ||||||||||||
Telecommunication Equipment – Fiber Optics – 0.3% | ||||||||||||
9,700 | Corning, Inc. | 187,307 | ||||||||||
4,000 | JDS Uniphase Corp.* | 33,000 | ||||||||||
220,307 | ||||||||||||
Telecommunication Services – 0.1% | ||||||||||||
6,000 | Virgin Media, Inc. | 100,980 | ||||||||||
Telephone – Integrated – 6.3% | ||||||||||||
110,410 | AT&T, Inc. | 3,094,792 | ||||||||||
7,732 | CenturyTel, Inc. | 279,976 | ||||||||||
21,700 | Qwest Communications International, Inc. | 91,357 | ||||||||||
10,800 | Sprint Nextel Corp.* | 39,528 | ||||||||||
700 | Telephone & Data Systems, Inc. | 23,744 | ||||||||||
38,344 | Verizon Communications, Inc. | 1,270,337 | ||||||||||
4,799,734 | ||||||||||||
Television – 0.1% | ||||||||||||
7,300 | CBS Corp. – Class B | 102,565 | ||||||||||
500 | Central European Media Enterprises, Ltd. | 11,805 | ||||||||||
114,370 | ||||||||||||
Textile – Home Furnishings – 0% | ||||||||||||
500 | Mohawk Industries, Inc.* | 23,800 | ||||||||||
Tobacco – 0% | ||||||||||||
200 | Lorillard, Inc. | 16,046 | ||||||||||
Tools – Hand Held – 0.1% | ||||||||||||
800 | Stanley Works | 41,208 | ||||||||||
Toys – 0% | ||||||||||||
1,000 | Mattel, Inc. | 19,980 | ||||||||||
Transportation – Marine – 0.5% | ||||||||||||
500 | Alexander & Baldwin, Inc. | 17,115 | ||||||||||
3,600 | Kirby Corp.* | 125,388 | ||||||||||
4,200 | Tidewater, Inc. | 201,390 | ||||||||||
343,893 | ||||||||||||
Transportation – Railroad – 0.5% | ||||||||||||
2,300 | Burlington Northern Santa Fe Corp. | 226,826 | ||||||||||
1,200 | CSX Corp. | 58,188 | ||||||||||
800 | Kansas City Southern* | 26,632 | ||||||||||
500 | Norfolk Southern Corp. | 26,210 | ||||||||||
400 | Union Pacific Corp. | 25,560 | ||||||||||
363,416 | ||||||||||||
Transportation – Services – 0% | ||||||||||||
100 | FedEx Corp. | 8,345 | ||||||||||
Transportation – Truck – 0.1% | ||||||||||||
2,100 | Con-way, Inc. | 73,311 | ||||||||||
Vitamins and Nutrition Products – 0.1% | ||||||||||||
1,200 | NBTY, Inc.* | 52,248 | ||||||||||
Water – 0.1% | ||||||||||||
1,800 | American Water Works Co., Inc. | 40,338 | ||||||||||
Web Portals/Internet Service Providers – 0.2% | ||||||||||||
772 | AOL, Inc.* | 17,972 | ||||||||||
8,800 | Yahoo!, Inc.* | 147,664 | ||||||||||
165,636 | ||||||||||||
Wire and Cable Products – 0% | ||||||||||||
500 | General Cable Corp.* | 14,710 | ||||||||||
Wireless Equipment – 0.5% | ||||||||||||
6,300 | Crown Castle International Corp.* | 245,952 | ||||||||||
15,400 | Motorola, Inc.* | 119,504 | ||||||||||
365,456 | ||||||||||||
X-Ray Equipment – 0.2% | ||||||||||||
8,100 | Hologic, Inc.* | 117,450 | ||||||||||
Total Common Stock (cost $66,007,728) | 75,642,256 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Risk-Managed Funds | 49
INTECH Risk-Managed Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Money Market – 0.9% | ||||||||||||
695,713 | Janus Cash Liquidity Fund LLC, 0% (cost $695,713) | $ | 695,713 | |||||||||
Total Investments (total cost $66,703,441) – 100.1% | 76,337,969 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (90,251) | |||||||||||
Net Assets – 100% | $ | 76,247,718 | ||||||||||
Summary of Investments by Country – Long Positions
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 926,572 | 1.2% | |||||
Cayman Islands | 197,698 | 0.3% | ||||||
Liberia | 93,536 | 0.1% | ||||||
Netherlands Antilles | 436,103 | 0.6% | ||||||
Panama | 91,901 | 0.1% | ||||||
United Kingdom | 87,868 | 0.1% | ||||||
United States†† | 74,504,291 | 97.6% | ||||||
Total | $ | 76,337,969 | 100.0% |
†† | Includes Cash Equivalents (96.7% excluding Cash Equivalents). |
See Notes to Schedules of Investments and Financial Statements.
50 | DECEMBER 31, 2009
Statements of Assets and Liabilities
INTECH | INTECH | INTECH | INTECH | |||||||||||||||
As of December 31, 2009 (unaudited) | Risk-Managed | Risk-Managed | Risk-Managed | Risk-Managed | ||||||||||||||
(all numbers in thousands except net asset value per share) | Core Fund | Growth Fund | International Fund | Value Fund | ||||||||||||||
Assets: | ||||||||||||||||||
Investments at cost | $ | 266,069 | $ | 737,999 | $ | 7,202 | $ | 66,703 | ||||||||||
Unaffiliated investments at value | $ | 308,386 | $ | 851,983 | $ | 8,359 | $ | 75,642 | ||||||||||
Affiliated money market investments | – | – | 34 | 696 | ||||||||||||||
Cash | – | – | 11 | – | ||||||||||||||
Investments sold | 14,700 | 11,619 | 679 | – | ||||||||||||||
Fund shares sold | 225 | 961 | – | 1,082 | ||||||||||||||
Dividends | 343 | 1,086 | 12 | 91 | ||||||||||||||
Non-interested Trustees’ deferred compensation | 8 | 21 | – | 2 | ||||||||||||||
Due from Adviser | – | – | 7 | – | ||||||||||||||
Other assets | 3 | 15 | – | 1 | ||||||||||||||
Total Assets | 323,665 | 865,685 | 9,102 | 77,514 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Payables: | ||||||||||||||||||
Due to Custodian | 602 | 254 | – | 8 | ||||||||||||||
Investments purchased | 13,193 | 9,652 | 661 | – | ||||||||||||||
Fund shares repurchased | 560 | 1,419 | – | 1,010 | ||||||||||||||
Dividends and distributions | 2 | 1 | – | – | ||||||||||||||
Advisory fees | 118 | 365 | 4 | 157 | ||||||||||||||
Transfer agent fees and expenses | 32 | 14 | 1 | – | ||||||||||||||
Administrative services fees – Class J Shares | 43 | N/A | N/A | N/A | ||||||||||||||
Administrative services fees – Class S Shares | 1 | 4 | – | – | ||||||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | 3 | 4 | – | 1 | ||||||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 7 | 4 | 2 | – | ||||||||||||||
Distribution fees and shareholder servicing fees – Class S Shares | 1 | 4 | – | – | ||||||||||||||
Networking fees – Class A Shares | 7 | 6 | – | – | ||||||||||||||
Networking fees – Class C Shares | 7 | – | 1 | – | ||||||||||||||
Non-interested Trustees’ fees and expenses | 3 | 14 | – | – | ||||||||||||||
Non-interested Trustees’ deferred compensation fees | 8 | 21 | – | 2 | ||||||||||||||
Accrued expenses and other payables | 146 | – | 91 | 88 | ||||||||||||||
Total Liabilities | 14,733 | 11,762 | 760 | 1,266 | ||||||||||||||
Net Assets | $ | 308,932 | $ | 853,923 | $ | 8,342 | $ | 76,248 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||
Capital (par value and paid-in surplus)* | $ | 381,636 | $ | 1,124,865 | $ | 11,237 | $ | 90,538 | ||||||||||
Undistributed net investment income/(loss)* | (23) | (264) | (3) | 296 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (114,997) | (384,660) | (4,081) | (24,221) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 42,316 | 113,982 | 1,189 | 9,635 | ||||||||||||||
Total Net Assets | $ | 308,932 | $ | 853,923 | $ | 8,342 | $ | 76,248 | ||||||||||
Net Assets – Class A Shares | $ | 13,217 | $ | 18,616 | $ | 1,947 | $ | 3,811 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,158 | 1,679 | 274 | 460 | ||||||||||||||
Net Asset Value Per Share | $ | 11.41 | $ | 11.09 | $ | 7.10 | $ | 8.28 | ||||||||||
Maximum Offering Price Per Share A(1)** | $ | 12.11 | $ | 11.77 | $ | 7.53 | $ | 8.79 | ||||||||||
Net Assets – Class C Shares | $ | 8,078 | $ | 4,709 | $ | 1,887 | $ | 336 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 708 | 439 | 265 | 41 | ||||||||||||||
Net Asset Value Per Share | $ | 11.41 | $ | 10.72 | $ | 7.11 | $ | 8.26 | ||||||||||
Net Assets – Class I Shares | $ | 49,067 | $ | 812,367 | $ | 2,604 | $ | 71,850 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,302 | 73,787 | 367 | 8,657 | ||||||||||||||
Net Asset Value Per Share | $ | 11.41 | $ | 11.01 | $ | 7.10 | $ | 8.30 | ||||||||||
Net Assets – Class J Shares | $ | 234,035 | N/A | N/A | N/A | |||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 20,514 | N/A | N/A | N/A | ||||||||||||||
Net Asset Value Per Share | $ | 11.41 | N/A | N/A | N/A | |||||||||||||
Net Assets – Class S Shares | $ | 4,535 | $ | 18,219 | $ | 1,893 | $ | 226 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 398 | 1,647 | 266 | 27 | ||||||||||||||
Net Asset Value Per Share | $ | 11.41 | $ | 11.06 | $ | 7.11 | $ | 8.28 | ||||||||||
Net Assets – Class T Shares | N/A | $ | 12 | $ | 11 | $ | 25 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | N/A | 1 | 2 | 3 | ||||||||||||||
Net Asset Value Per Share | N/A | $ | 11.04 | $ | 7.09 | $ | 8.29 |
* | See Note 5 in Notes to Financial Statements. | |
** | Maximum offering price is computed at 100/94.25 of net asset value. | |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 51
Statements of Operations
For the two- or five-month period ended December 31, | INTECH | INTECH | INTECH | INTECH | ||||||||||||||
2009 (unaudited) | Risk-Managed | Risk-Managed | Risk-Managed | Risk-Managed | ||||||||||||||
(all numbers in thousands) | Core Fund(1) | Growth Fund(2) | International Fund(2) | Value Fund(2) | ||||||||||||||
Investment Income: | ||||||||||||||||||
Interest | $ | 1 | $ | – | $ | – | $ | – | ||||||||||
Dividends | 1,153 | 6,823 | 71 | 764 | ||||||||||||||
Dividends from affiliates | – | 2 | – | 1 | ||||||||||||||
Foreign tax withheld | – | – | (4) | – | ||||||||||||||
Total Investment Income | 1,154 | 6,825 | 67 | 765 | ||||||||||||||
Expenses: | ||||||||||||||||||
Advisory fees | 208 | 1,811 | 19 | 149 | ||||||||||||||
Transfer agent fees and expenses | 18 | 96 | 3 | 3 | ||||||||||||||
Registration fees | 18 | 50 | 32 | 29 | ||||||||||||||
Custodian fees | – | 13 | 69 | 20 | ||||||||||||||
Audit fees | 1 | 18 | 20 | 18 | ||||||||||||||
Accounting fees | – | 24 | 24 | 51 | ||||||||||||||
Postage fees | 32 | 5 | 5 | 5 | ||||||||||||||
Printing fees | 26 | 27 | 4 | 27 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 1 | 15 | – | – | ||||||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | 5 | 19 | 2 | 4 | ||||||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 13 | 20 | 8 | 1 | ||||||||||||||
Distribution fees and shareholder servicing fees – Class S Shares | 2 | 20 | 2 | – | ||||||||||||||
Administrative fees – Class J Shares | 84 | N/A | N/A | N/A | ||||||||||||||
Administrative fees – Class S Shares | 2 | 20 | 2 | – | ||||||||||||||
Networking fees – Class A Shares | 4 | 9 | – | 1 | ||||||||||||||
Networking fees – Class C Shares | 4 | 22 | 1 | – | ||||||||||||||
Networking fees – Class I Shares | – | 5 | – | – | ||||||||||||||
Other expenses | – | 24 | 6 | 12 | ||||||||||||||
Non-recurring costs (Note 2) | – | N/A | N/A | N/A | ||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | N/A | N/A | N/A | ||||||||||||||
Total Expenses | 418 | 2,198 | 197 | 320 | ||||||||||||||
Expense and Fee Offset | (2) | – | – | – | ||||||||||||||
Net Expenses | 416 | 2,198 | 197 | 320 | ||||||||||||||
Less: Excess Expense Reimbursement | (1) | – | (159) | (89) | ||||||||||||||
Net Expenses after Expense Reimbursement | 415 | 2,198 | 38 | 231 | ||||||||||||||
Net Investment Income/(Loss) | 739 | 4,627 | 29 | 534 | ||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 8,773 | 72,434 | 27 | 2,010 | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 15,891 | 36,219 | 648 | 6,009 | ||||||||||||||
Net Gain/(Loss) on Investments | 24,664 | 108,653 | 675 | 8,019 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 25,403 | $ | 113,280 | $ | 704 | $ | 8,553 |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. |
See Notes to Financial Statements.
52 | DECEMBER 31, 2009
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Janus Risk-Managed Funds | 53
Statements of Changes in Net Assets
For the two- or five-month period ended December 31, 2009 | INTECH | INTECH | ||||||||||||||||
(unaudited) and the fiscal years ended October 31, 2009 | Risk-Managed | Risk-Managed | ||||||||||||||||
or July 31, 2009 | Core Fund | Growth Fund | ||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(3) | 2009(4) | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 739 | $ | 4,162 | $ | 4,627 | $ | 11,631 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 8,773 | (65,969) | 72,434 | (387,878) | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 15,891 | 81,333 | 36,219 | 59,718 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 25,403 | 19,526 | 113,280 | (316,529) | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | ||||||||||||||||||
Class A Shares | (77) | – | (105) | (227) | ||||||||||||||
Class C Shares | (16) | – | (9) | (10) | ||||||||||||||
Class I Shares | (382) | – | (5,810) | (15,766) | ||||||||||||||
Class J Shares | (1,549) | (6,726) | N/A | N/A | ||||||||||||||
Class S Shares | (28) | – | (78) | (293) | ||||||||||||||
Class T Shares | N/A | N/A | – | – | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Class J Shares | – | – | N/A | N/A | ||||||||||||||
Net (Decrease) from Dividends and Distributions | (2,052) | (6,726) | (6,002) | (16,296) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Class A Shares | 280 | 578 | 1,037 | 4,008 | ||||||||||||||
Class C Shares | 117 | 264 | 178 | 626 | ||||||||||||||
Class I Shares | 1,709 | 4,786 | 37,413 | 182,131 | ||||||||||||||
Class J Shares | 2,304 | 22,565 | N/A | N/A | ||||||||||||||
Class R Shares | N/A | N/A | N/A | 17 | ||||||||||||||
Class S Shares | 450 | 217 | 760 | 7,801 | ||||||||||||||
Class T Shares | N/A | N/A | 10 | 1 | ||||||||||||||
Shares issued in connection with acquisition (see Note 9) | ||||||||||||||||||
Class A Shares | N/A | 16,855 | N/A | N/A | ||||||||||||||
Class C Shares | N/A | 8,098 | N/A | N/A | ||||||||||||||
Class I Shares | N/A | 47,224 | N/A | N/A | ||||||||||||||
Class S Shares | N/A | 4,376 | N/A | N/A | ||||||||||||||
Redemption fees | ||||||||||||||||||
Class I Shares | – | – | 2 | 5 | ||||||||||||||
Class J Shares | 2 | 11 | N/A | N/A | ||||||||||||||
Class S Shares | – | – | 2 | 4 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Class A Shares | 73 | – | 98 | 200 | ||||||||||||||
Class C Shares | 7 | – | 5 | 5 | ||||||||||||||
Class I Shares | 268 | – | 5,514 | 14,966 | ||||||||||||||
Class J Shares | 1,532 | 6,625 | N/A | N/A | ||||||||||||||
Class R Shares | N/A | N/A | N/A | N/A | ||||||||||||||
Class S Shares | 27 | – | 78 | 292 | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Class A Shares | (1,161) | (3,738) | (2,944) | (12,484) | ||||||||||||||
Class C Shares | (629) | (1,465) | (956) | (2,295) | ||||||||||||||
Class I Shares | (2,301) | (11,908) | (140,078) | (309,349) | ||||||||||||||
Class J Shares | (10,437) | (58,072) | N/A | N/A | ||||||||||||||
Class R Shares | N/A | N/A | N/A | (208)(7)(8) | ||||||||||||||
Class S Shares | (891) | (1,920) | (5,009) | (40,543) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (8,650) | 34,496 | (103,890) | (154,823) | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 14,701 | 47,296 | 3,388 | (487,648) | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 294,231 | 246,935 | 850,535 | 1,338,183 | ||||||||||||||
End of period | $ | 308,932 | $ | 294,231 | $ | 853,923 | $ | 850,535 | ||||||||||
Undistributed net investment income/(loss)* | $ | (23) | $ | 1,290 | $ | (264) | $ | 1,111 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from November 1, 2008 through October 31, 2009. | |
(3) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(4) | Period from August 1, 2008 through July 31, 2009. | |
(5) | Period from August 1, 2008 through March 25, 2009 for Class R Shares. | |
(6) | A liquidation of Class R Shares occurred at the close of business on March 25, 2009. | |
(7) | Period from August 1, 2008 through March 31, 2009 for Class R Shares. | |
(8) | A liquidation of Class R Shares occurred at the close of business on March 31, 2009. |
See Notes to Financial Statements.
54 | DECEMBER 31, 2009
INTECH | INTECH | |||||||||||||||
Risk-Managed | Risk-Managed | |||||||||||||||
International Fund | Value Fund | |||||||||||||||
2009(3) | 2009(4) | 2009(3) | 2009(4) | |||||||||||||
$ | 29 | $ | 174 | $ | 534 | $ | 1,546 | |||||||||
27 | (3,164) | 2,010 | (22,217) | |||||||||||||
648 | 817 | 6,009 | 7,995 | |||||||||||||
704 | (2,173) | 8,553 | (12,676) | |||||||||||||
(16) | (71) | (19) | (77) | |||||||||||||
(15) | (57) | (1) | (8) | |||||||||||||
(21) | (89) | (373) | (2,447) | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
(16) | (63) | (1) | (8) | |||||||||||||
– | – | – | – | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
(68) | (280) | (394) | (2,540) | |||||||||||||
6 | 81 | 224 | 2,561 | |||||||||||||
3 | 2 | 20 | 45 | |||||||||||||
157 | 463 | 5,095 | 19,227 | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | N/A | 20(5)(6) | |||||||||||||
– | – | – | – | |||||||||||||
10 | 1 | 23 | 1 | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
– | – | – | – | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
– | – | – | – | |||||||||||||
16 | 70 | 19 | 72 | |||||||||||||
15 | 56 | 1 | 8 | |||||||||||||
21 | 89 | 373 | 2,356 | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | N/A | 6(5)(6) | |||||||||||||
15 | 63 | 1 | 7 | |||||||||||||
(64) | (29) | (297) | (605) | |||||||||||||
(10) | (1) | (2) | (29) | |||||||||||||
(97) | (147) | (937) | (9,925) | |||||||||||||
N/A | N/A | N/A | N/A | |||||||||||||
N/A | N/A | – | (433)(5)(6) | |||||||||||||
– | – | – | – | |||||||||||||
72 | 648 | 4,520 | 13,311 | |||||||||||||
708 | (1,805) | 12,679 | (1,905) | |||||||||||||
7,634 | 9,439 | 63,569 | 65,474 | |||||||||||||
$ | 8,342 | $ | 7,634 | $ | 76,248 | $ | 63,569 | |||||||||
$ | (3) | $ | 36 | $ | 296 | $ | 156 |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 55
Financial Highlights
Class A Shares
For a share outstanding during the two-month | INTECH | |||||||||
period ended December 31, 2009 (unaudited) | Risk-Managed Core Fund | |||||||||
and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $10.56 | $9.26 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | .05 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .89 | 1.25 | ||||||||
Total from Investment Operations | .92 | 1.30 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.07) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.07) | – | ||||||||
Net Asset Value, End of Period | $11.41 | $10.56 | ||||||||
Total Return** | 8.69% | 14.04% | ||||||||
Net Assets, End of Period (in thousands) | $13,217 | $13,008 | ||||||||
Average Net Assets for the Period (in thousands) | $13,278 | $14,686 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.02% | 1.10% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.02% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.23% | 1.20% | ||||||||
Portfolio Turnover Rate*** | 115% | 111% |
Class A Shares
For a share outstanding during the five-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Growth Fund | |||||||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(4) | 2009 | 2008 | 2007 | 2006 | 2005(5)(6) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.80 | $12.88 | $14.45 | $12.81 | $13.32 | $12.56 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .14 | .09 | .06 | .06 | – | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.30 | (3.11) | (.94) | 1.62 | .08 | 1.64 | ||||||||||||||||||||
Total from Investment Operations | 1.35 | (2.97) | (.85) | 1.68 | .14 | 1.64 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.11) | (.08) | (.04) | (.02) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | (.64) | – | (.63) | (.88) | ||||||||||||||||||||
Total Distributions | (.06) | (.11) | (.72) | (.04) | (.65) | (.88) | ||||||||||||||||||||
Net Asset Value, End of Period | $11.09 | $9.80 | $12.88 | $14.45 | $12.81 | $13.32 | ||||||||||||||||||||
Total Return** | 13.82% | (22.92)% | (6.54)% | 13.10% | 0.84% | 13.36% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $18,616 | $18,215 | $34,231 | $50,000 | $30,875 | $12,887 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $17,999 | $20,041 | $47,093 | $39,807 | $22,793 | $2,766 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.96% | 0.82% | 0.78% | 0.81% | 0.85% | 0.86% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.96% | 0.82% | 0.78% | 0.81% | 0.85% | 0.85% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.93% | 1.01% | 0.57% | 0.54% | 0.61% | 0.17% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 135% | 119% | 125% | 113% | 100% | 106% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Period from September 30, 2004 (inception date) through July 31, 2005. | |
(6) | Certain prior year amounts have been reclassified to conform with current year presentation. |
See Notes to Financial Statements.
56 | DECEMBER 31, 2009
Class A Shares
For a share outstanding during the five-month | ||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed International Fund | |||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $6.56 | $8.97 | $9.93 | $10.00 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .03 | .16 | .20 | .08 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .57 | (2.31) | (1.01) | (.15) | ||||||||||||||
Total from Investment Operations | .60 | (2.15) | (.81) | (.07) | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.26) | (.15) | – | ||||||||||||||
Distributions (from capital gains)* | – | – | – | – | ||||||||||||||
Total Distributions | (.06) | (.26) | (.15) | – | ||||||||||||||
Net Asset Value, End of Period | $7.10 | $6.56 | $8.97 | $9.93 | ||||||||||||||
Total Return** | 9.13% | (23.53)% | (8.35)% | (0.70)% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,947 | $1,836 | $2,326 | $2,481 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $1,943 | $1,632 | $2,507 | $2,490 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.12% | 0.64%(4) | 0.91% | 0.91% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.12% | 0.64%(4) | 0.90% | 0.90% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.84% | 2.62% | 1.92% | 3.20% | ||||||||||||||
Portfolio Turnover Rate*** | 119% | 115% | 105% | 140% |
Class A Shares
For a share outstanding during the five-month | ||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Value Fund | |||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(5) | |||||||||||||||||
Net Asset Value, Beginning of Period | $7.36 | $9.88 | $11.68 | $10.64 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .05 | .15 | .14 | .16 | .09 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .91 | (2.35) | (1.58) | 1.05 | .55 | |||||||||||||||||
Total from Investment Operations | .96 | (2.20) | (1.44) | 1.21 | .64 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.04) | (.32) | (.13) | (.15) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.23) | (.02) | – | |||||||||||||||||
Total Distributions | (.04) | (.32) | (.36) | (.17) | – | |||||||||||||||||
Net Asset Value, End of Period | $8.28 | $7.36 | $9.88 | $11.68 | $10.64 | |||||||||||||||||
Total Return** | 13.08% | (22.01)% | (12.78)% | 11.38% | 6.40% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,811 | $3,440 | $1,032 | $538 | $266 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,668 | $1,762 | $680 | $414 | $256 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.93% | 0.74% | 0.85% | 0.85% | 0.85% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.93% | 0.74% | 0.85% | 0.85% | 0.85% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.63% | 2.28% | 2.08% | 1.64% | 1.48% | |||||||||||||||||
Portfolio Turnover Rate*** | 96% | 100% | 78% | 71% | 98% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from May 2, 2007 (inception date) through July 31, 2007. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets would be 0.93% and 0.93%, respectively, without the waiver of these fees and expenses. | |
(5) | Period from December 30, 2005 (inception date) through July 31, 2006. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 57
Financial Highlights (continued)
Class C Shares
INTECH | ||||||||||
For a share outstanding during the two-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | Core Fund | |||||||||
and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $10.54 | $9.26 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | .02 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .88 | 1.26 | ||||||||
Total from Investment Operations | .89 | 1.28 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.02) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.02) | – | ||||||||
Net Asset Value, End of Period | $11.41 | $10.54 | ||||||||
Total Return** | 8.47% | 13.82% | ||||||||
Net Assets, End of Period (in thousands) | $8,078 | $7,938 | ||||||||
Average Net Assets for the Period (in thousands) | $8,096 | $8,527 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.83% | 1.85% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.83% | 1.83% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.42% | 0.44% | ||||||||
Portfolio Turnover Rate*** | 115% | 111% |
Class C Shares
For a share outstanding during the five-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Growth Fund | |||||||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(4) | 2009 | 2008 | 2007(5) | 2006 | 2005(6) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.50 | $12.45 | $14.03 | $12.51 | $13.10 | $12.14 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.09) | (.05) | (.11) | (.01) | – | .02 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.33 | (2.88) | (.83) | 1.53 | .04 | 1.82 | ||||||||||||||||||||
Total from Investment Operations | 1.24 | (2.93) | (.94) | 1.52 | .04 | 1.84 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02) | (.02) | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | (.64) | – | (.63) | (.88) | ||||||||||||||||||||
Total Distributions | (.02) | (.02) | (.64) | – | (.63) | (.88) | ||||||||||||||||||||
Net Asset Value, End of Period | $10.72 | $9.50 | $12.45 | $14.03 | $12.51 | $13.10 | ||||||||||||||||||||
Total Return** | 13.06% | (23.53)% | (7.31)% | 12.15% | 0.11% | 15.44% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,709 | $4,921 | $8,767 | $15,250 | $12,131 | $10,170 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,667 | $5,469 | $12,982 | $14,549 | $10,135 | $6,173 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 2.74% | 1.62% | 1.60% | 1.59% | 1.60% | 1.60% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 2.74% | 1.62% | 1.60% | 1.59% | 1.60% | 1.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.86)% | 0.21% | (0.25)% | (0.22)% | (0.16)% | (0.39)% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 135% | 119% | 125% | 113% | 100% | 106% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Certain prior year amounts have been reclassified to conform with current year presentation. | |
(6) | Period from September 30, 2004 (inception date) through July 31, 2005. |
See Notes to Financial Statements.
58 | DECEMBER 31, 2009
Class C Shares
For a share outstanding during the five-month | ||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed International Fund | |||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $6.57 | $8.93 | $9.91 | $10.00 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .02 | .16 | .13 | .06 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .58 | (2.30) | (1.01) | (.15) | ||||||||||||||
Total from Investment Operations | .60 | (2.14) | (.88) | (.09) | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.22) | (.10) | – | ||||||||||||||
Distributions (from capital gains)* | – | – | – | – | ||||||||||||||
Total Distributions | (.06) | (.22) | (.10) | – | ||||||||||||||
Net Asset Value, End of Period | $7.11 | $6.57 | $8.93 | $9.91 | ||||||||||||||
Total Return** | 9.12% | (23.61)% | (9.03)% | (0.90)% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,887 | $1,737 | $2,274 | $2,477 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $1,842 | $1,552 | $2,485 | $2,487 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.14% | 0.70%(4) | 1.66% | 1.66% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.14% | 0.69%(4) | 1.65% | 1.65% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.82% | 2.56% | 1.17% | 2.45% | ||||||||||||||
Portfolio Turnover Rate*** | 119% | 115% | 105% | 140% |
Class C Shares
For a share outstanding during the five-month | ||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Value Fund | |||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(5) | |||||||||||||||||
Net Asset Value, Beginning of Period | $7.35 | $9.78 | $11.61 | $10.60 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .02 | .12 | .23 | .07 | .04 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .91 | (2.34) | (1.75) | 1.05 | .56 | |||||||||||||||||
Total from Investment Operations | .93 | (2.22) | (1.52) | 1.12 | .60 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.02) | (.21) | (.08) | (.09) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.23) | (.02) | – | |||||||||||||||||
Total Distributions | (.02) | (.21) | (.31) | (.11) | – | |||||||||||||||||
Net Asset Value, End of Period | $8.26 | $7.35 | $9.78 | $11.61 | $10.60 | |||||||||||||||||
Total Return** | 12.65% | (22.52)% | (13.49)% | 10.52% | 6.00% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $336 | $281 | $342 | $1,510 | $267 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $307 | $266 | $860 | $577 | $256 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.68% | 1.47% | 1.60% | 1.61% | 1.60% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.68% | 1.47% | 1.60% | 1.60% | 1.60% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.88% | 1.94% | 1.36% | 0.80% | 0.73% | |||||||||||||||||
Portfolio Turnover Rate*** | 96% | 100% | 78% | 71% | 98% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from May 2, 2007 (inception date) through July 31, 2007. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets would be 1.68% and 1.68%, respectively, without the waiver of these fees and expenses. | |
(5) | Period from December 30, 2005 (inception date) through July 31, 2006. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 59
Financial Highlights (continued)
Class I Shares
INTECH | ||||||||||
For a share outstanding during the two-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | Core Fund | |||||||||
and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $10.57 | $9.26 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | .05 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .90 | 1.26 | ||||||||
Total from Investment Operations | .93 | 1.31 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.09) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.09) | – | ||||||||
Net Asset Value, End of Period | $11.41 | $10.57 | ||||||||
Total Return** | 8.81% | 14.15% | ||||||||
Net Assets, End of Period (in thousands) | $49,067 | $45,795 | ||||||||
Average Net Assets for the Period (in thousands) | $47,883 | $49,319 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.55% | 0.80% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.54% | 0.78% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.70% | 1.49% | ||||||||
Portfolio Turnover Rate*** | 115% | 111% |
Class I Shares
For a share outstanding during the five-month | ||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Growth Fund | |||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(4) | 2009 | 2008 | 2007 | 2006(5) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.72 | $12.84 | $14.40 | $12.76 | $13.52 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .06 | .12 | .11 | .08 | .05 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.31 | (3.07) | (.93) | 1.63 | (.16) | |||||||||||||||||
Total from Investment Operations | 1.37 | (2.95) | (.82) | 1.71 | (.11) | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.17) | (.10) | (.07) | (.02) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.64) | – | (.63) | |||||||||||||||||
Redemption fees | –(6) | –(6) | – | –(6) | – | |||||||||||||||||
Total Distributions and Other | (.08) | (.17) | (.74) | (.07) | (.65) | |||||||||||||||||
Net Asset Value, End of Period | $11.01 | $9.72 | $12.84 | $14.40 | $12.76 | |||||||||||||||||
Total Return** | 14.09% | (22.76)% | (6.33)% | 13.39% | (0.99)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $812,367 | $807,347 | $1,224,054 | $1,223,851 | $245,807 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $822,262 | $857,115 | $1,288,020 | $981,873 | $99,407 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.58% | 0.55% | 0.53% | 0.56% | 0.60% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.58% | 0.55% | 0.53% | 0.56% | 0.60% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.31% | 1.30% | 0.79% | 0.77% | 0.83% | |||||||||||||||||
Portfolio Turnover Rate*** | 135% | 119% | 125% | 113% | 100% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Period from December 30, 2005 (inception date) through July 31, 2006. | |
(6) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. |
See Notes to Financial Statements.
60 | DECEMBER 31, 2009
Class I Shares
For a share outstanding during the five-month | ||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed International Fund | |||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $6.55 | $8.98 | $9.93 | $10.00 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .03 | .15 | .22 | .09 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .58 | (2.30) | (1.01) | (.16) | ||||||||||||||
Total from Investment Operations | .61 | (2.15) | (.79) | (.07) | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.28) | (.16) | – | ||||||||||||||
Distributions (from capital gains)* | – | – | – | – | ||||||||||||||
Redemption fees | – | – | – | – | ||||||||||||||
Total Distributions and Other | (.06) | (.28) | (.16) | – | ||||||||||||||
Net Asset Value, End of Period | $7.10 | $6.55 | $8.98 | $9.93 | ||||||||||||||
Total Return** | 9.29% | (23.56)% | (8.09)% | (0.70)% | ||||||||||||||
Net Assets, End of Period (in thousands) | $2,604 | $2,327 | $2,571 | $2,484 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,542 | $1,935 | $2,694 | $2,491 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.09% | 0.68% | 0.66% | 0.66% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.08% | 0.68% | 0.65% | 0.65% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.87% | 2.65% | 2.18% | 3.45% | ||||||||||||||
Portfolio Turnover Rate*** | 119% | 115% | 105% | 140% |
Class I Shares
For a share outstanding during the five-month | ||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Value Fund | |||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(4) | |||||||||||||||||
Net Asset Value, Beginning of Period | $7.37 | $9.91 | $11.70 | $10.66 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .06 | .18 | .22 | .20 | .08 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .91 | (2.38) | (1.64) | 1.04 | .58 | |||||||||||||||||
Total from Investment Operations | .97 | (2.20) | (1.42) | 1.24 | .66 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.04) | (.34) | (.14) | (.18) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.23) | (.02) | – | |||||||||||||||||
Redemption fees | – | –(5) | –(5) | – | – | |||||||||||||||||
Total Distributions and Other | (.04) | (.34) | (.37) | (.20) | – | |||||||||||||||||
Net Asset Value, End of Period | $8.30 | $7.37 | $9.91 | $11.70 | $10.66 | |||||||||||||||||
Total Return** | 13.21% | (21.96)% | (12.54)% | 11.58% | 6.60% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $71,850 | $59,647 | $63,472 | $47,593 | $18,723 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $66,972 | $53,614 | $57,513 | $31,496 | $14,266 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.76% | 0.61% | 0.60% | 0.60% | 0.61% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.76% | 0.61% | 0.60% | 0.60% | 0.60% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.80% | 2.79% | 2.34% | 1.87% | 1.70% | |||||||||||||||||
Portfolio Turnover Rate*** | 96% | 100% | 78% | 71% | 98% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from May 2, 2007 (inception date) through July 31, 2007. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from December 30, 2005 (inception date) through July 31, 2006. | |
(5) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 61
Financial Highlights (continued)
Class J Shares
For a share outstanding during the two-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Core Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.56 | $10.21 | $17.38 | $16.46 | $15.28 | $13.98 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .03 | .18 | .24 | .20 | .12 | .12 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .90 | .46 | (5.75) | 1.71 | 1.96 | 1.89 | ||||||||||||||||||||
Total from Investment Operations | .93 | .64 | (5.51) | 1.91 | 2.08 | 2.01 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.29) | (.24) | (.12) | (.13) | (.08) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | (1.42) | (.87) | (.77) | (.63) | ||||||||||||||||||||
Redemption Fees | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Total Distributions and Other | (.08) | (.29) | (1.66) | (.99) | (.90) | (.71) | ||||||||||||||||||||
Net Asset Value, End of Period | $11.41 | $10.56 | $10.21 | $17.38 | $16.46 | $15.28 | ||||||||||||||||||||
Total Return** | 8.77% | 6.70% | (34.82)% | 12.11% | 14.10% | 14.79% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $234,035 | $222,932 | $246,935 | $512,837 | $498,582 | $379,214 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $233,012 | $215,954 | $386,247 | $543,933 | $433,127 | $308,431 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.81% | 0.91% | 0.75% | 0.77% | 0.91% | 0.89% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.81% | 0.91% | 0.75% | 0.77% | 0.90% | 0.88% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.44% | 1.78% | 1.55% | 1.08% | 0.81% | 0.92% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 115% | 111% | 74% | 109% | 108% | 81% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
62 | DECEMBER 31, 2009
Class S Shares
INTECH | ||||||||||
For a share outstanding during the two-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | Core Fund | |||||||||
and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $10.55 | $9.26 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .04 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .90 | 1.25 | ||||||||
Total from Investment Operations | .92 | 1.29 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.06) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.06) | – | ||||||||
Net Asset Value, End of Period | $11.41 | $10.55 | ||||||||
Total Return** | 8.74% | 13.93% | ||||||||
Net Assets, End of Period (in thousands) | $4,535 | $4,558 | ||||||||
Average Net Assets for the Period (in thousands) | $5,050 | $5,179 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.10% | 1.27% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.10% | 1.25% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.16% | 1.02% | ||||||||
Portfolio Turnover Rate*** | 115% | 111% |
Class S Shares
For a share outstanding during the five-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Growth Fund | |||||||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(4) | 2009 | 2008 | 2007 | 2006 | 2005(5) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.77 | $12.81 | $14.36 | $12.75 | $13.28 | $12.24 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .14 | .33 | .11 | .04 | .03 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.20 | (3.30) | (.98) | 1.58 | .07 | 1.91 | ||||||||||||||||||||
Total from Investment Operations | 1.34 | (2.97) | (.87) | 1.62 | .10 | 1.92 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.07) | (.04) | (.01) | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | (.64) | – | (.63) | (.88) | ||||||||||||||||||||
Redemption fees | –(6) | –(6) | –(6) | –(6) | –(6) | –(6) | ||||||||||||||||||||
Total Distributions and Other | (.05) | (.07) | (.68) | (.01) | (.63) | (.88) | ||||||||||||||||||||
Net Asset Value, End of Period | $11.06 | $9.77 | $12.81 | $14.36 | $12.75 | $13.28 | ||||||||||||||||||||
Total Return** | 13.70% | (23.09)% | (6.68)% | 12.72% | 0.59% | 15.98% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $18,219 | $20,051 | $70,963 | $154,057 | $121,473 | $74,744 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $19,059 | $40,058 | $117,236 | $151,536 | $97,158 | $56,612 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.09% | 1.04% | 1.02% | 1.05% | 1.10% | 1.10% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.09% | 1.04% | 1.02% | 1.05% | 1.10% | 1.10% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.80% | 0.77% | 0.36% | 0.31% | 0.35% | 0.12% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 135% | 119% | 125% | 113% | 100% | 106% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Period from September 30, 2004 (inception date) through July 31, 2005. | |
(6) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 63
Financial Highlights (continued)
Class S Shares
For a share outstanding during the five-month | ||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed International Fund | |||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $6.56 | $8.95 | $9.92 | $10.00 | ||||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | .02 | .16 | .18 | .07 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .59 | (2.30) | (1.02) | (.15) | ||||||||||||||
Total from Investment Operations | .61 | (2.14) | (.84) | (.08) | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.25) | (.13) | – | ||||||||||||||
Distributions (from capital gains)* | – | – | – | – | ||||||||||||||
Redemption fees | – | – | – | – | ||||||||||||||
Total Distributions and Other | (.06) | (.25) | (.13) | – | ||||||||||||||
Net Asset Value, End of Period | $7.11 | $6.56 | $8.95 | $9.92 | ||||||||||||||
Total Return** | 9.28% | (23.54)% | (8.61)% | (0.80)% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,893 | $1,733 | $2,268 | $2,480 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $1,849 | $1,551 | $2,477 | $2,489 | ||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.13% | 0.65%(4) | 1.16% | 1.16% | ||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.12% | 0.65%(4) | 1.15% | 1.15% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.84% | 2.60% | 1.67% | 2.95% | ||||||||||||||
Portfolio Turnover Rate*** | 119% | 115% | 105% | 140% |
Class S Shares
For a share outstanding during the five-month | ||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | INTECH Risk-Managed Value Fund | |||||||||||||||||||||
and each fiscal year or period ended July 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(5) | |||||||||||||||||
Net Asset Value, Beginning of Period | $7.37 | $9.86 | $11.66 | $10.63 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .05 | .17 | .20 | .17 | .07 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | .90 | (2.38) | (1.67) | 1.00 | .56 | |||||||||||||||||
Total from Investment Operations | .95 | (2.21) | (1.47) | 1.17 | .63 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.04) | (.28) | (.10) | (.12) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.23) | (.02) | – | |||||||||||||||||
Total Distributions | (.04) | (.28) | (.33) | (.14) | – | |||||||||||||||||
Net Asset Value, End of Period | $8.28 | $7.37 | $9.86 | $11.66 | $10.63 | |||||||||||||||||
Total Return** | 12.86% | (22.15)% | (12.98)% | 11.00% | 6.30% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $226 | $200 | $257 | $295 | $266 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $216 | $192 | $284 | $294 | $256 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.18% | 0.97% | 1.10% | 1.10% | 1.10% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.18% | 0.97% | 1.10% | 1.10% | 1.10% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.38% | 2.43% | 1.84% | 1.43% | 1.23% | |||||||||||||||||
Portfolio Turnover Rate*** | 96% | 100% | 78% | 71% | 98% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from May 2, 2007 (inception date) through July 31, 2007. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Gross Expenses to Average Net Assets and Ratio of Net Assets to Average Net Assets would be 1.18% and 1.18%, respectively, without the waiver of these fees and expenses. | |
(5) | Period from December 30, 2005 (inception date) through July 31, 2006. |
See Notes to Financial Statements.
64 | DECEMBER 31, 2009
Class T Shares
INTECH | ||||||||||
For a share outstanding during the five-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | Growth Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $9.76 | $8.98 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .01 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.33 | .77 | ||||||||
Total from Investment Operations | 1.35 | .78 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.07) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.07) | – | ||||||||
Net Asset Value, End of Period | $11.04 | $9.76 | ||||||||
Total Return** | 13.88% | 8.69% | ||||||||
Net Assets, End of Period (in thousands) | $12 | $1 | ||||||||
Average Net Assets for the Period (in thousands) | $5 | $1 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.85% | 0.86% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.85% | 0.85% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.08% | 0.72% | ||||||||
Portfolio Turnover Rate*** | 135% | 119% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Risk-Managed Funds | 65
Financial Highlights (continued)
Class T Shares
INTECH | ||||||||||
For a share outstanding during the five-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | International Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $6.55 | $5.93 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | – | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .59 | .62 | ||||||||
Total from Investment Operations | .60 | .62 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.06) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.06) | – | ||||||||
Net Asset Value, End of Period | $7.09 | $6.55 | ||||||||
Total Return** | 9.14% | 10.46% | ||||||||
Net Assets, End of Period (in thousands) | $11 | $1 | ||||||||
Average Net Assets for the Period (in thousands) | $5 | $1 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.73% | 1.25% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.71% | 1.26% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.09% | (0.35)% | ||||||||
Portfolio Turnover Rate*** | 119% | 115% |
Class T Shares
INTECH | ||||||||||
For a share outstanding during the five-month | Risk-Managed | |||||||||
period ended December 31, 2009 (unaudited) | Value Fund | |||||||||
and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $7.37 | $6.63 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .01 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | .94 | .73 | ||||||||
Total from Investment Operations | .96 | .74 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.04) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.04) | – | ||||||||
Net Asset Value, End of Period | $8.29 | $7.37 | ||||||||
Total Return** | 13.04% | 11.16% | ||||||||
Net Assets, End of Period (in thousands) | $25 | $1 | ||||||||
Average Net Assets for the Period (in thousands) | $10 | $1 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.93% | 1.00% | ||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.93% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.82% | 2.08% | ||||||||
Portfolio Turnover Rate*** | 96% | 100% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
66 | DECEMBER 31, 2009
Notes to Schedules of Investments (unaudited)
Lipper International Funds | Funds that invest their assets in securities with primary trading markets outside of the United States. | |
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 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 Multi-Cap Value Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 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 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 SuperComposite 1500 Index. | |
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. | |
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 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower 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. | |
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. |
Janus Risk-Managed Funds | 67
Notes to Schedules of Investments (unaudited) (continued)
The following is a summary of the inputs that were used to value the Funds’ investments in securities and other financial instruments as of December 31, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs(a) | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
INTECH Risk-Managed Core Fund | |||||||||||
Common Stock | $ | 308,386,239 | $ | – | $ | – | |||||
Total Investments in Securities | $ | 308,386,239 | $ | – | $ | – | |||||
Investments in Securities: | |||||||||||
INTECH Risk-Managed Growth Fund | |||||||||||
Common Stock | $ | 851,982,813 | $ | – | $ | – | |||||
Total Investments in Securities | $ | 851,982,813 | $ | – | $ | – | |||||
Investments in Securities: | |||||||||||
INTECH Risk-Managed International Fund | |||||||||||
Common Stock | $ | – | $ | 8,294,978 | $ | – | |||||
Preferred Stock | – | 63,718 | – | ||||||||
Warrant | – | 172 | – | ||||||||
Money Market | – | 34,000 | – | ||||||||
Total Investments in Securities | $ | – | $ | 8,392,868 | $ | – | |||||
Investments in Securities: | |||||||||||
INTECH Risk-Managed Value Fund | |||||||||||
Common Stock | |||||||||||
Oil and Gas Drilling | $ | 300,962 | $ | 87,868 | $ | – | |||||
All Other | 75,253,426 | – | – | ||||||||
Money Market | – | 695,713 | – | ||||||||
Total Investments in Securities | $ | 75,554,388 | $ | 783,581 | $ | – | |||||
68 | DECEMBER 31, 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 |
INTECH Risk-Managed Core Fund, INTECH Risk-Managed Growth Fund, INTECH Risk-Managed International Fund and INTECH Risk-Managed Value Fund (individually, a “Fund” and collectively, the “Funds”) 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 thirty-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.
Each Fund in this report offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms. The maximum purchase in Class C Shares is $500,000 for any single purchase.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, and bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class J Shares are available to shareholders investing in the Funds either directly or through financial intermediaries.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, and certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Certain prior year amounts in the Financial Highlights have been reclassified to conform with current year presentation.
The following accounting policies have been followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America within the investment management 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-
Janus Risk-Managed Funds | 69
Notes to Financial Statements (unaudited) (continued)
specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a non-significant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a non-valued security and a restricted or non-public security. 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. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
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.
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 may 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.
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.
In accordance with the Financial Accounting Standards Board (“FASB”) guidance, the Funds adopted the provisions of “Income Taxes.” These provisions require an
70 | DECEMBER 31, 2009
evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’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 Funds recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense on the Statements of Operations.
These provisions require management of the Funds to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the two-month or five-month period ended December 31, 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.
Valuation Inputs Summary
In accordance with FASB guidance, the Funds utilize the “Fair Value Measurements and Disclosures” to define fair value, establish a framework for measuring fair value, and expand disclosure requirements regarding fair value measurements. The Fair Value Measurement Standard does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of the Funds’ investments defined pursuant to this standard. 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 under 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 December 31, 2009 to value the Funds’ investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if applicable) in the Notes to Schedules of Investments.
In April 2009, FASB issued “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,” which provides additional guidance for estimating fair value in accordance with Fair Value Measurements 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. Additionally, it amends the Fair Value Measurement Standard by expanding disclosure requirements for reporting entities surrounding the major categories of assets and liabilities carried at fair value. The required disclosures have been incorporated into the “Valuation Inputs Summary” in the Notes to Schedules of Investments. Management believes applying this guidance does not have a material impact on the financial statements.
2. | Derivative Instruments |
The Funds may invest in various types of derivatives. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Funds may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, and other equity-linked derivatives.
The Funds may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the Funds invest in a derivative for speculative purposes, the Funds will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the cost of the derivative. A
Janus Risk-Managed Funds | 71
Notes to Financial Statements (unaudited) (continued)
Fund may not use any derivative to gain exposure to an asset or class of assets prohibited by its investment restrictions from purchasing directly. A Fund’s ability to use derivatives instruments may also be limited by tax considerations.
Investments in derivatives are generally subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including credit risk, currency risk, leverage risk, liquidity risk, and index risk.
Derivatives may generally be traded over-the-counter (“OTC”) or on an exchange. Exchange-traded derivatives, such as futures contracts, are regulated and the terms of the options are standardized. Derivatives traded OTC, such as swap contracts, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased counterparty credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Funds may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, a Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The 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 are subject to interest rate risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in futures contracts. 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 held by the Funds that are designated as collateral for market value on futures contracts are noted on the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian or with the counterparty broker.
With futures, there is minimal counterparty credit risk to the Funds since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation to buy (call option) or sell (put option) a financial instrument at an agreed upon price. 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 are subject to interest rate risk, liquidity risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in options contracts. The Funds may use option contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. 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 invest in long-term equity anticipation securities, 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
72 | DECEMBER 31, 2009
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 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.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded over-the-counter expose the Funds to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Funds and the counterparty and by having the counterparty post collateral to cover the Funds’ exposure to the counterparty.
Holdings of the Funds designated to cover outstanding written options are noted on 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.
In accordance with FASB guidance, the Funds adopted the provisions for “Derivatives and Hedging”, which require 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. There were no derivatives held by the Funds during the two-month or five-month period ended December 31, 2009.
3. | Other investments and strategies |
Additional Investment Risk
Unforeseen events in the equity and fixed-income markets may at times result in an unusually high degree of volatility in the markets, both domestic and international. These events and the resulting market upheavals may have an adverse effect on the Funds such as a decline in the value and liquidity of many securities held by the Funds, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in net asset value, and an increase in Fund expenses. Such unforeseen events may make it unusually difficult to identify both investment risks and opportunities and could limit or preclude each Fund’s ability to achieve its investment objective. The market’s behavior may at times be unpredictable. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
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
Janus Risk-Managed Funds | 73
Notes to Financial Statements (unaudited) (continued)
to fulfill its obligation may result in significant financial loss to a Fund. A Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of a Fund’s exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded on the 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 types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. 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.
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. The Fund may not experience similar performance as its assets grow.
Interfund Lending
As permitted by the Securities and Exchange Commission (“SEC”), or the 1940 Act and rules promulgated thereunder, 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.
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.
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 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 SEC. Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Deutsche Bank AG (the “Lending Agent”) may also invest the cash collateral in 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 on 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
74 | DECEMBER 31, 2009
any securities on loan. Management continues to review the program and may resume securities lending.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
Each Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects INTECH Risk-Managed Core Fund’s “base” fee rate prior to any performance adjustment and certain Funds’ contractual investment advisory fee rate (expressed as an annual rate).
Contractual | ||||||||
Investment | ||||||||
Advisory Fee/ | ||||||||
Average Daily Net | Base Fee (%) | |||||||
Fund | Assets of the Fund | (annual rate) | ||||||
INTECH Risk-Managed Core Fund | N/A | 0.50 | ||||||
INTECH Risk-Managed Growth Fund | All Asset Levels | 0.50 | ||||||
INTECH Risk-Managed International Fund | All Asset Levels | 0.55 | ||||||
INTECH Risk-Managed Value Fund | All Asset Levels | 0.50 | ||||||
For INTECH Risk-Managed Core Fund, the investment advisory fee rate is determined by calculating a base fee 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 depending on how well the Fund has performed relative to its benchmark index, as shown below:
Fund | Benchmark Index | ||||
INTECH Risk-Managed Core Fund | S&P 500® Index | ||||
Only the base fee rate applied until January 2007 for INTECH Risk-Managed Core 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 rate paid to Janus Capital by INTECH Risk-Managed Core 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 is made until a Fund’s performance-based fee structure has been in effect for at least 12 months. When a 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 Adjustments began January 2007 for the 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 relative performance compared 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 a Fund is calculated net of expenses, whereas a Fund’s benchmark index does not have any fees or expenses. Reinvestment of dividends and distributions is included in calculating both the performance of a Fund and the Fund’s benchmark index. 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. Under extreme circumstances involving underperformance by a rapidly shrinking Fund, the dollar amount of the Performance Adjustment could be more than the dollar amount of the Base Fee Rate. In such circumstances, Janus Capital would reimburse the Fund.
The investment performance of the Fund’s Class A Shares (waiving the upfront sales load) for the performance measurement period is used to calculate the Performance Adjustment. For performance measurement periods prior to July 6, 2009, INTECH Risk-Managed Core Fund calculated its Performance Adjustment by comparing the performance of Class J Shares (the initial share class) against the investment record of its benchmark index. For periods beginning July 6, 2009, the investment performance of the Fund’s load-waived Class A Shares for the performance measurement period is used to calculate the Performance Adjustment. Because the Performance Adjustment is based on a rolling 36-month performance measurement period, calculations based solely on the
Janus Risk-Managed Funds | 75
Notes to Financial Statements (unaudited) (continued)
performance of the Fund’s load-waived Class A Shares will not be fully implemented for 36 months after July 6, 2009. Until that time, the Fund’s performance will be compared to a blended investment performance record that includes the Fund’s Class J Shares performance for the portion of the performance measurement period prior to July 6, 2009, and the Fund’s load-waived Class A Shares for the remainder of the period.
After Janus Capital determines whether the Fund’s performance was above or below its benchmark index by comparing the investment performance of the Fund’s load-waived Class A Shares, or Class J Shares as the case may be, against the cumulative investment record of the Fund’s benchmark index, Janus Capital applies the same Performance Adjustment (positive or negative) across each other class of shares of the Fund, as applicable.
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 INTECH Risk-Managed Core Fund relative to the record of the Fund’s benchmark index and future changes to the size of INTECH Risk-Managed Core Fund.
INTECH Risk-Managed Core 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 two-month period ended December 31, 2009, INTECH Risk-Managed Core Fund recorded a Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
INTECH Risk-Managed Core Fund | $ | (48,402) | |||
INTECH Investment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC) serves as subadviser to each Fund. Janus Capital owns approximately 92% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to INTECH on behalf of INTECH Risk-Managed Core Fund adjusts up or down based on the Fund’s performance relative to its benchmark index over the performance measurement period.
As the Funds’ administrator, Janus Capital receives an administrative services fee at an annual rate of up to 0.05% of the average daily net assets of the INTECH Risk-Managed Core Fund for providing certain administrative services including, but not limited to, recordkeeping and registration functions.
INTECH Risk-Managed Core Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Fund’s transfer agent, an asset-weighted averaged annual fee based on the proportion of INTECH Risk-Managed Core Fund’s total net assets sold directly and the proportion of INTECH Risk-Managed Core Fund’s net assets sold through 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 for Class J Shares.
In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Funds. Certain intermediaries may charge administrative fees to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Funds to Janus Services, which uses such fees to reimburse intermediaries.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of Class S Shares of the Funds for providing or arranging for the provision of, administrative services including but not limited to, recordkeeping, subaccounting, order processing for omnibus or networked accounts, or other shareholder services provided on behalf of investors in Class S Shares of the Funds. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, and other financial intermediaries for providing these services.
The Funds that hold Class T Shares pay an annual administrative fee of 0.25% of net assets of Class T Shares for administrative services, including recordkeeping, subaccounting, or other shareholder services provided by intermediaries on behalf of the shareholders of these Funds. These administrative fees are paid by Class T Shares of these Funds to Janus Services, which uses such fees to reimburse intermediaries. Janus Services or its affiliates may also pay administrative fees to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to these Funds.
Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, is the distributor of the Funds. The Funds have adopted a Distribution and
76 | DECEMBER 31, 2009
Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Funds at an annual rate, as determined from time to time by the Board of Trustees, of up to 0.25% of the Class A Shares average daily net assets, of up to 1.00% of the Class C Shares average daily net assets, and of up to 0.25% of the Class S Shares average daily net assets. Payments under the Plan are not tied exclusively to actual distribution and shareholder service expenses, and the payments may exceed distribution and shareholder service expenses actually incurred by the Funds. If any of a Fund’s actual distribution and shareholder service expenses incurred during a calendar year is less than the payments made during a calendar year, the Fund will be reimbursed for the difference.
Janus Capital has agreed until at least February 16, 2011 to reimburse the Funds by the amount, if any, that such Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, if applicable, class-specific distribution and shareholder servicing fees applicable to Class A Shares, Class C Shares, and Class S Shares, the administrative fees payable pursuant to the Transfer Agency Agreement applicable to Class J Shares, Class S Shares, and Class T Shares, brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses), exceed the annual rates noted below. If applicable, amounts reimbursed to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Expense | |||||
Fund | Limit (%) | ||||
INTECH Risk-Managed Core Fund | 0.89 | ||||
INTECH Risk-Managed Growth Fund | 0.90 | ||||
INTECH Risk-Managed International Fund | 1.00 | ||||
INTECH Risk-Managed Value Fund | 0.75 | ||||
Janus Capital was entitled to recoup such reimbursement or fee reduction from INTECH Risk-Managed International Fund for a three-year period commencing with the operations of the Fund, provided that at no time during such period the normal operating expenses allocated to any class of the Fund, with the exceptions noted in the expense limit table, exceed the percentages stated.
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 December 31, 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 two-month or five-month period ended December 31, 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 two-month or five-month period ended December 31, 2009.
For the five-month period ended December 31, 2009, Janus Capital assumed $9,091 of legal, consulting and Trustee costs and fees incurred by the funds in the Trust and Janus Aspen Series together with the Trust (the “Portfolios”), in connection with the regulatory and civil litigation matters discussed in Note 10. 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. The Funds reimburse Janus Capital for a portion of the compensation paid to the Chief Compliance Officer and certain compliance staff of the Trust. Total compensation of $128,761 was paid by the Trust during the five-month period ended December 31, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
Class A Shares include a 5.75% upfront sales charge of the offering price for the Funds. The sales charge is allocated between Janus Distributors and financial intermediaries. During the two-month or five-month period
Janus Risk-Managed Funds | 77
Notes to Financial Statements (unaudited) (continued)
ended December 31, 2009, Janus Distributors retained the following upfront sales charge:
Upfront | |||||
Fund (Class A Shares) | Sales Charge | ||||
INTECH Risk-Managed Core Fund | $ | 8 | |||
INTECH Risk-Managed Growth Fund | 434 | ||||
INTECH Risk-Managed International Fund | 21 | ||||
INTECH Risk-Managed Value Fund | 128 | ||||
Class C Shares include a 1.00% contingent deferred sales charge paid by the redeeming shareholder to Janus Distributors. The contingent deferred sales charge applies to shares redeemed within 12 months of purchase. The redemption price may differ from the net asset value per share. The Funds did not collect any contingent deferred sales charges during the two-month or five-month period ended December 31, 2009.
A 2.00% redemption fee may be imposed on Class I Shares, Class J Shares, Class S Shares, and Class T Shares of the Funds, as applicable, 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 two-month or five-month period ended December 31, 2009 is indicated in the table below:
Fund | Redemption Fee | ||||
INTECH Risk-Managed Core Fund | $ | 1,672 | |||
INTECH Risk-Managed Growth Fund | 4,435 | ||||
INTECH Risk-Managed International Fund | 4 | ||||
INTECH Risk-Managed Value Fund | 354 | ||||
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 Operations (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Operations (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”). Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 2a-7 product. There are no restrictions on the Funds’ ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Funds to Janus Cash Liquidity Fund LLC. As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated cash management pooled investment vehicles and the Investing Funds.
During the two-month or five-month period ended December 31, 2009, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 12/31/09 | |||||||||||
Janus Cash Liquidity Fund LLC | ||||||||||||||
INTECH Risk-Managed Core Fund | $ | 5,468,000 | $ | (5,468,000) | $ | 107 | $ | – | ||||||
INTECH Risk-Managed Growth Fund | 51,945,534 | (51,945,534) | 1,792 | – | ||||||||||
INTECH Risk-Managed International Fund | 693,047 | (661,076) | 47 | 34,000 | ||||||||||
INTECH Risk-Managed Value Fund | 4,845,581 | (4,734,000) | 553 | 695,713 | ||||||||||
$ | 62,952,162 | $ | (62,808,610) | $ | 2,499 | $ | 729,713 | |||||||
78 | DECEMBER 31, 2009
Janus Capital or an affiliate invested and/or redeemed initial seed capital during the five-month period ended December 31, 2009, as indicated in the following table.
Seed Capital | Date of | Date of | Seed Capital | |||||||||||||||||
Fund | at 8/1/09 | Purchases | Purchases | Redemptions | Redemption | at 12/31/09 | ||||||||||||||
INTECH Risk-Managed Growth Fund - Class T Shares | $ | – | $ | 11,000 | 10/29/2009 | $ | – | – | $ | 11,000 | ||||||||||
INTECH Risk-Managed International Fund - Class A Shares | 2,500,000 | – | – | – | – | 2,500,000 | ||||||||||||||
INTECH Risk-Managed International Fund - Class C Shares | 2,500,000 | – | – | – | – | 2,500,000 | ||||||||||||||
INTECH Risk-Managed International Fund - Class I Shares | 2,500,000 | – | – | – | – | 2,500,000 | ||||||||||||||
INTECH Risk-Managed International Fund - Class S Shares | 2,500,000 | – | – | – | – | 2,500,000 | ||||||||||||||
INTECH Risk-Managed International Fund - Class T Shares | 1,000 | 10,000 | 10/29/2009 | – | – | 11,000 | ||||||||||||||
INTECH Risk-Managed Value Fund - Class C Shares | 250,000 | – | – | – | – | 250,000 | ||||||||||||||
INTECH Risk-Managed Value Fund - Class S Shares | 250,000 | – | – | – | – | 250,000 | ||||||||||||||
INTECH Risk-Managed Value Fund - Class T Shares | 1,000 | 10,000 | 10/29/2009 | – | – | 11,000 | ||||||||||||||
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 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.
Federal Tax | Unrealized | Unrealized | Net Tax | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | Appreciation | ||||||||||
INTECH Risk-Managed Core Fund | $ | 268,676,727 | $ | 43,589,417 | $ | (3,879,905) | $ | 39,709,512 | ||||||
INTECH Risk-Managed Growth Fund | 742,992,470 | 114,896,710 | (5,906,367) | 108,990,343 | ||||||||||
INTECH Risk-Managed International Fund | 7,287,364 | 1,278,177 | (172,673) | 1,105,504 | ||||||||||
INTECH Risk-Managed Value Fund | 69,253,958 | 9,316,350 | (2,232,339) | 7,084,011 | ||||||||||
Net capital loss carryovers as of July 31 and October 31, 2009 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.
Janus Risk-Managed Funds | 79
Notes to Financial Statements (unaudited) (continued)
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2009 or July 31, 2009
Accumulated | |||||||||||
Fund | June 30, 2016 | June 30, 2017 | Capital Losses | ||||||||
INTECH Risk-Managed Core Fund(1)(2) | $ | (49,724,127) | $ | (70,465,390) | $ | (120,189,517) | |||||
INTECH Risk-Managed Growth Fund(3) | – | (118,461,846) | (118,461,846) | ||||||||
INTECH Risk-Managed International Fund(3) | (175,182) | (1,513,408) | (1,688,590) | ||||||||
INTECH Risk-Managed Value Fund(3) | (301,746) | (2,445,926) | (2,747,672) | ||||||||
(1) | Capital loss carryovers subject to annual limitations. | |
(2) | For the year ended October 31, 2009. | |
(3) | For the year ended July 31, 2009. |
The capital loss carryforward of INTECH Risk-Managed Core Fund is subject to annual limitations under applicable tax laws and may expire unused as a result of the Janus Adviser INTECH Risk-Managed Core Fund acquisition during the current year. Due to these limitations, the carryforward amount in the table below will not be available for use. As a result, this amount has been reclassified to paid-in capital.
Fund | Capital Loss Carryover Unavailable Due to Merger | |||||||||||||
INTECH Risk-Managed Core Fund | $ | 7,993,650 | ||||||||||||
6. | Expense Ratios |
The expense ratios listed in the Financial Highlights reflect expenses prior to any expense offsets (gross expense ratio) and after expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursement). Listed below are the gross expense ratios for the Funds that would have been in effect, absent the waiver of certain fees and offsets.
For the two- or five-month periods ended
December 31, 2009 (unaudited) and the fiscal
years or periods ended October 31 or July 31
December 31, 2009 (unaudited) and the fiscal
years or periods ended October 31 or July 31
INTECH Risk- | ||||||||||||||||
INTECH Risk- | INTECH Risk- | Managed | INTECH Risk- | |||||||||||||
Managed Core | Managed Growth | International | Managed Value | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
Class A Shares | ||||||||||||||||
2009(1) | N/A | 0.96% | 5.64% | 1.34% | ||||||||||||
2009(2) | 1.02% | N/A | N/A | N/A | ||||||||||||
2009 | N/A | 0.82% | 6.45% | 1.33% | ||||||||||||
2009(3) | 1.08% | N/A | N/A | N/A | ||||||||||||
2008 | N/A | 0.78% | 4.18% | 1.17% | ||||||||||||
2007 | N/A | 0.81% | 6.11%(4) | 1.35% | ||||||||||||
2006 | N/A | 0.91% | N/A | 3.67%(5) | ||||||||||||
2005 | N/A | 0.93%(6) | N/A | N/A | ||||||||||||
Class C Shares | ||||||||||||||||
2009(1) | N/A | 2.74% | 6.41% | 2.02% | ||||||||||||
2009(2) | 1.89% | N/A | N/A | N/A | ||||||||||||
2009 | N/A | 1.67% | 7.20% | 1.99% | ||||||||||||
2009(3) | 1.83% | N/A | N/A | N/A | ||||||||||||
2008 | N/A | 1.60% | 4.93% | 1.96% | ||||||||||||
2007 | N/A | 1.59% | 6.86%(4) | 2.05% | ||||||||||||
2006 | N/A | 1.64% | N/A | 4.42%(5) | ||||||||||||
2005 | N/A | 1.84%(6) | N/A | N/A | ||||||||||||
Class I Shares | ||||||||||||||||
2009(1) | N/A | 0.58% | 5.34% | 1.05% | ||||||||||||
2009(2) | 0.55% | N/A | N/A | N/A | ||||||||||||
2009 | N/A | 0.55% | 6.34% | 0.96% | ||||||||||||
2009(3) | 0.80% | N/A | N/A | N/A | ||||||||||||
2008 | N/A | 0.53% | 3.92% | 0.90% | ||||||||||||
2007 | N/A | 0.56% | 5.86%(4) | 1.09% | ||||||||||||
2006 | N/A | 0.61%(7) | N/A | 2.91%(5) |
80 | DECEMBER 31, 2009
INTECH Risk- | ||||||||||||||||
INTECH Risk- | INTECH Risk- | Managed | INTECH Risk- | |||||||||||||
Managed Core | Managed Growth | International | Managed Value | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
Class J Shares | ||||||||||||||||
2009(2) | 0.81%(8) | N/A | N/A | N/A | ||||||||||||
2009 | 0.91%(8) | N/A | N/A | N/A | ||||||||||||
2008 | 0.82%(8) | N/A | N/A | N/A | ||||||||||||
2007 | 0.74%(8) | N/A | N/A | N/A | ||||||||||||
2006 | 0.90%(8) | N/A | N/A | N/A | ||||||||||||
2005 | 0.89%(8) | N/A | N/A | N/A | ||||||||||||
Class S Shares | ||||||||||||||||
2009(1) | N/A | 1.09% | 5.84% | 1.55% | ||||||||||||
2009(2) | 1.10% | N/A | N/A | N/A | ||||||||||||
2009 | N/A | 1.04% | 6.66% | 1.44% | ||||||||||||
2009(3) | 1.25% | N/A | N/A | N/A | ||||||||||||
2008 | N/A | 1.02% | 4.43% | 1.41% | ||||||||||||
2007 | N/A | 1.05% | 6.36%(4) | 1.62% | ||||||||||||
2006 | N/A | 1.15% | N/A | 3.92%(5) | ||||||||||||
2005 | N/A | 1.27% | N/A | N/A | ||||||||||||
Class T Shares | ||||||||||||||||
2009(1) | N/A | 1.85% | 3.79% | 1.21% | ||||||||||||
2009(9) | N/A | 0.75% | 14.17% | 1.66% | ||||||||||||
(1) | For the period from August 1, 2009 to December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | For the period from November 1, 2009 to December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(3) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(4) | Period from May 2, 2007 (inception date) through July 31, 2007. | |
(5) | Period from December 30, 2005 (inception date) through July 31, 2006. | |
(6) | Period from September 30, 2004 (inception date) through July 31, 2005. | |
(7) | Period from November 28, 2005 (inception date) through July 31, 2006. | |
(8) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of operating expenses to average net assets without waivers and/or expense reimbursements and was less than 0.01%. | |
(9) | Period from July 6, 2009 (inception date) through July 31, 2009. |
Janus Risk-Managed Funds | 81
Notes to Financial Statements (unaudited) (continued)
7. | Capital Share Transactions |
INTECH | INTECH | INTECH | INTECH | |||||||||||||||||||||||||||||||
For the two- or five-month periods ended December 31, | Risk-Managed | Risk-Managed | Risk-Managed | Risk-Managed | ||||||||||||||||||||||||||||||
2009 (unaudited) and the fiscal years ended October 31, | Core | Growth | International | Value | ||||||||||||||||||||||||||||||
2009 or July 31, 2009 | Fund | Fund | Fund | Fund | ||||||||||||||||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | 25 | 53 | 99 | 449 | 1 | 14 | 28 | 443 | ||||||||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 1,534 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Reinvested dividends and distributions | 7 | – | 9 | 23 | 2 | 12 | 2 | 11 | ||||||||||||||||||||||||||
Shares repurchased | (106) | (355) | (289) | (1,270) | (9) | (5) | (37) | (91) | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (74) | 1,232 | (181) | (798) | (6) | 21 | (7) | 363 | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 1,232 | – | 1,860 | 2,658 | 280 | 259 | 467 | 104 | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | 1,158 | 1,232 | 1,679 | 1,860 | 274 | 280 | 460 | 467 | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | 11 | 23 | 17 | 74 | – | – | 3 | 6 | ||||||||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 869 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Reinvested dividends and distributions | 1 | – | – | 1 | 2 | 9 | – | 1 | ||||||||||||||||||||||||||
Shares repurchased | (57) | (139) | (96) | (261) | (1) | – | – | (4) | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (45) | 753 | (79) | (186) | 1 | 9 | 3 | 3 | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 753 | – | 518 | 704 | 264 | 255 | 38 | 35 | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | 708 | 753 | 439 | 518 | 265 | 264 | 41 | 38 | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | 151 | 445 | 3,642 | 20,377 | 22 | 80 | 636 | 2,775 | ||||||||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 5,008 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Reinvested dividends and distributions | 24 | – | 509 | 1,759 | 3 | 15 | 46 | 340 | ||||||||||||||||||||||||||
Shares repurchased | (205) | (1,121) | (13,390) | (34,409) | (13) | (26) | (115) | (1,430) | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (30) | 4,332 | (9,239) | (12,273) | 12 | 69 | 567 | 1,685 | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 4,332 | – | 83,026 | 95,299 | 355 | 286 | 8,090 | 6,405 | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | 4,302 | 4,332 | 73,787 | 83,026 | 367 | 355 | 8,657 | 8,090 | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class J Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | 207 | 2,437 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Reinvested dividends and distributions | 136 | 718 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Shares repurchased | (931) | (6,233) | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (588) | (3,078) | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 21,102 | 24,180 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | 20,514 | 21,102 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | N/A | N/A | N/A | 2 | N/A | N/A | N/A | 2 | ||||||||||||||||||||||||||
Reinvested dividends and distributions | N/A | N/A | N/A | – | N/A | N/A | N/A | 1 | ||||||||||||||||||||||||||
Shares repurchased | N/A | N/A | N/A | (15) | N/A | N/A | N/A | (41) | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | N/A | N/A | (13) | N/A | N/A | N/A | (38) | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | N/A | 13 | N/A | N/A | N/A | 38 | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | N/A | N/A | N/A | –(5) | N/A | N/A | N/A | –(6) | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | 42 | 20 | 73 | 881 | – | – | – | 1 | ||||||||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | 597 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Reinvested dividends and distributions | 3 | – | 7 | 34 | 2 | 11 | – | – | ||||||||||||||||||||||||||
Shares repurchased | (79) | (185) | (486) | (4,402) | – | – | – | – | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (34) | 432 | (406) | (3,487) | 2 | 11 | – | 1 | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 432 | – | 2,053 | 5,540 | 264 | 253 | 27 | 26 | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | 398 | 432 | 1,647 | 2,053 | 266 | 264 | 27 | 27 |
82 | DECEMBER 31, 2009
INTECH | INTECH | INTECH | INTECH | |||||||||||||||||||||||||||||||
For the two- or five-month periods ended December 31, | Risk-Managed | Risk-Managed | Risk-Managed | Risk-Managed | ||||||||||||||||||||||||||||||
2009 (unaudited) and the fiscal years ended October 31, | Core | Growth | International | Value | ||||||||||||||||||||||||||||||
2009 or July 31, 2009 | Fund | Fund | Fund | Fund | ||||||||||||||||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | ||||||||||||||||||||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||||||||||||||||||||||||||
Shares sold | N/A | N/A | 1 | – | 2 | – | 3 | – | ||||||||||||||||||||||||||
Reinvested dividends and distributions | N/A | N/A | – | – | – | – | – | – | ||||||||||||||||||||||||||
Shares repurchased | N/A | N/A | – | – | – | – | – | – | ||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | N/A | 1 | – | 2 | – | 3 | – | ||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | – | – | – | – | – | – | ||||||||||||||||||||||||||
Shares Outstanding, End of Period | N/A | N/A | 1 | – | 2 | – | 3 | – |
(1) | Period from November 1, 2009 to December 31, 2009. The Fund changed its fiscal year from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) for Class A Shares, Class C Shares, Class I Shares and Class S Shares, and November 1, 2008 for Class J Shares through October 31, 2009. | |
(3) | Period from August 1, 2009 to December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(4) | Period from August 1, 2008 for Class A Shares, Class C Shares, Class I Shares and Class S Shares, and July 6, 2009 (inception date) for Class T Shares through July 31, 2009. | |
(5) | A liquidation of Class R Shares occurred at the close of business on March 31, 2009. | |
(6) | A liquidation of Class R Shares occurred at the close of business on March 25, 2009. |
8. | Purchases and Sales of Investment Securities |
For the two-month or five-month period ended December 31, 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 | ||||||||||
INTECH Risk-Managed Core Fund | $ | 58,221,756 | $ | 67,435,293 | $ | – | $ | – | ||||||
INTECH Risk-Managed Growth Fund | 482,165,339 | 585,468,561 | – | – | ||||||||||
INTECH Risk-Managed International Fund | 4,130,773 | 4,036,735 | – | – | ||||||||||
INTECH Risk-Managed Value Fund | 32,782,741 | 28,166,780 | – | – | ||||||||||
9. | Fund Acquisition |
On July 6, 2009, INTECH Risk-Managed Core Fund acquired all of the net assets of Janus Adviser INTECH Risk-Managed Core Fund pursuant to a plan of reorganization approved by the Trustees of Janus Investment Fund. The reorganization was accomplished by a tax-free exchange of shares of Janus Adviser INTECH Risk-Managed Core Fund in the amount of 8,208,584 shares (valued at $74,176,255) for the 8,007,695 shares of INTECH Risk-Managed Core Fund, including $2,376,861 of unrealized appreciation. The aggregate net assets of INTECH Risk-Managed Core Fund and Janus Adviser INTECH Risk-Managed Core Fund immediately before the reorganization were $209,095,390 and $74,176,255, respectively. The aggregate net assets immediately after the reorganization were $283,271,645.
10. | 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
Janus Risk-Managed Funds | 83
Notes to Financial Statements (unaudited) (continued)
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, one of which still remains, and which was brought by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders against JCGI and Janus Capital (First Derivative Traders et al. v. Janus Capital Group Inc. et al., U.S. District Court, District of Maryland, MDL 1586, formerly referred to as Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818).
In the Wiggins case, a Motion to Dismiss was previously 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 October 2009, Janus filed a petition for a writ of certiorari with the United States Supreme Court to review the judgment of the United States Court of Appeals for the Fourth Circuit. On January 11, 2010, the Supreme Court asked the United States Solicitor General to file a brief on the question of whether Janus’ petition should be granted. As a result of these developments at the Supreme Court, the Court has stayed all further proceedings until the Supreme Court rules on Janus’ petition for a writ of certiorari. In addition to the Wiggins case, on January 20, 2010, the Court entered orders dismissing the remaining claims asserted against Janus Capital and its affiliates by fund investors in Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518 (a derivative claim involving alleged frequent trading practices).
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. On July 31, 2009, Janus filed a “Notice that Matter is Deemed Concluded.” At this time, no further proceedings are scheduled in this matter.
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.
11. | Subsequent Events |
Effective February 16, 2010, Class J Shares will be renamed Class T Shares and will be available through certain financial intermediary platforms. In addition, Class J Shares held directly with Janus will be moved to a newly created Class D Shares, a share class dedicated to shareholders investing directly with Janus. Class D Shares will commence operations on or about February 16, 2010. The transfer agency (TA) fee structure for Class D Shares and Class T Shares will be different than that of Class J Shares. Class D Shares will pay a fixed annual TA fee rate of 0.12% of net assets. Class T Shares will pay a fixed annual TA fee rate of 0.25% of net assets. Currently, Class J Shares pay a blended annual fee rate of 0.12% of average net assets for the proportion of assets sold directly and 0.25% of average net assets sold through financial intermediaries. A Fund’s total expense ratio could be impacted by the change in TA fee structure.
In May 2009, in accordance with the FASB guidance, the Funds adopted the provision of “Subsequent Events,” which provides guidance to establish general standards of accounting for and disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or are available to be issued. The guidance also requires entities to disclose the date through which subsequent events were evaluated as well as the basis for that date. Management has evaluated whether any events or transactions occurred subsequent to December 31, 2009 through February 18, 2010, the date of issuance of the Funds’ financial statements, and determined that there were no other material events or transactions that would require recognition or disclosure in the Funds’ financial statements.
84 | DECEMBER 31, 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 without charge: (i) upon request, by calling 1-800-525-0020 (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 1-800-525-0020 (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 seven 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 11, 2009, 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, 2010 through February 1, 2011, subject to earlier termination as provided for in each agreement,
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
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 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
Janus Risk-Managed Funds | 85
Additional Information (unaudited) (continued)
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.
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 non-affiliated funds subadvised by Janus Capital (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, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, 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 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
86 | DECEMBER 31, 2009
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, the Trustees, each of whom is an Independent Trustee, concluded at their December 11, 2009 meeting 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.
Janus Risk-Managed Funds | 87
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 estimated for the fiscal year. The ratios also include expenses indirectly incurred by a 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.
If a Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports each 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 Funds’ 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
88 | DECEMBER 31, 2009
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.
3. | Statements of Assets and Liabilities |
These statements are often referred to as the “balance sheets.” 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 the 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. | Statements of Operations |
These statements detail 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 will 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 Statements 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 Funds 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 Funds. 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. The total
Janus Risk-Managed Funds | 89
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
return may include adjustments in accordance with generally accepted accounting principles. As a result, the total return may differ from the total return reflected for shareholder transactions.
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 within the Trust 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 Statements of Operations reflect 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 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 asset size 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.
90 | DECEMBER 31, 2009
Notes
Janus Risk-Managed Funds | 91
Notes
92 | DECEMBER 31, 2009
Notes
Janus Risk-Managed Funds | 93
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
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.
Fixed Income
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 capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
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.
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.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
Please consider the charges, risks, expenses and investment objectives carefully before investing or recommending to clients for investment. For a prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money.
This is for information purposes only. Janus Capital Group Inc., does not guarantee that the information supplied is accurate, complete or timely or make any warranties with regards to the results obtained from its use.
Janus Distributors LLC 151 Detroit Street, Denver, CO 80206 (1/10)
Investment products offered are: NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE
C-0110-041 | 2-28-10 125-24-71114 02-10 |
2009 SEMIANNUAL REPORT
Janus Smart Portfolios
Janus Smart Portfolio-Growth
Janus Smart Portfolio-Moderate
Janus Smart Portfolio-Conservative
HIGHLIGHTS
• | Portfolio management perspective |
• | Investment strategy behind your portfolio |
• | Portfolio performance, characteristics and holdings |
Table of Contents
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61 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital). Read it carefully before you invest or send money.
Co-Chief Investment Officers’ Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholder,
We would like to take this opportunity to thank you for your investment with Janus. Over the past twelve months, we’ve seen one of the strongest market rebounds on record from lows reached in March driven by evidence that the U.S. and economies around the globe were beginning to improve. Throughout the market downturn and subsequent rebound, we have remained committed to our 40-year, research-driven approach and long-term investment view. As a result, we have continued to deliver strong results relative to many of our peers.
For the one-year period ended December 31, 2009, 77% of Janus retail funds, Class J Shares, ranked within Lipper’s top two quartiles based on total returns. Looking longer-term, 92% 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 December 31, 2009. (Lipper rankings are based on total returns. See complete rankings on page 4.)
Current Outlook
Improving economic conditions, positive earnings surprises and healthier capital markets have helped overall market sentiment grow more bullish as 2009 came to an end. We are encouraged by the turnaround since the unprecedented downturn that began in September 2008, but think the sustainability of the current recovery is uncertain. As we have stated in the past, we believe the U.S. Federal Reserve’s (Fed) liquidity injections and other governmental support for the financial system were necessary and that these responses have helped the U.S. and global economies avert a more severe recession. With the financial system in a much healthier position than it was a year ago and with the economy improving, focus has turned towards the Fed’s exit strategy and whether the economy can stand on its own as stimulus and other emergency measures wind down. Other concerns include reduced consumption by consumers brought on by the recession, limited private lending and ongoing weakness in housing market and its impact on consumers.
In the U.S., the S&P 500® Index gained more than 26% during the 12-month period, but still remained more than 28% below its record closing high set in October 2007. Non-U.S. equity markets delivered even stronger performance gaining more than 32% (MSCI All Country World ex-U.S. IndexSM) with emerging equity markets (MSCI EMF Index) rising nearly 63% in local currency terms.
In addition to the strong recovery by equity markets, credit markets posted impressive results. Credit spreads, or the difference between the yields on corporate bonds versus the yields on equivalent Treasury bonds, narrowed sharply after reaching historically wide levels in December 2008 amidst heightened risk aversion. The U.S. High Yield market (Barclays Capital U.S. Corporate High Yield Index) posted the strongest returns, gaining over 58%. The U.S. investment grade credit market (Barclays Capital U.S. Credit Index) rose roughly 16% during the period.
Commodity prices were strong for the year, while the U.S. dollar finished lower versus most major currencies amid a move into higher yielding currencies and concern over a rising U.S. Government deficit. Gold closed near a record high, helping to keep inflation worries in the forefront. Despite the continuation of the strong equity market rally, high unemployment and the U.S. dollar remained key concerns for investors.
Looking Ahead
During the broad market rally, markets worldwide moved higher as investors felt more comfortable moving money back into riskier assets. Individual stocks and bonds performed similarly amid a rising tide that lifted all boats. In this environment, there was little difference between the returns of low quality companies and high quality companies. We think investors should be prepared for a more discriminate environment going forward as markets normalize. Therefore, we believe individual security selection will play a greater role in determining investors’ success. As bottom-up researchers throughout our 40-year history, our goal remains to identify those companies going through positive fundamental transition, which we believe results in the best opportunities for our investors.
Janus Smart Portfolios | 1
Continued
Increased savings and greater diversification, with an emphasis on fixed income and dividends, is likely to be a big theme for investors over the next few years. We continue to believe a balanced strategy may provide the best opportunity for the long-term success of our investors, and we remain committed to delivering strong long-term performance on your behalf.
We thank you for your business and your continued confidence in Janus.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.335.2687 or download the file from janus.com/info. Read it carefully before investing or sending money.
There is no assurance that the investment process will consistently lead to successful investing.
The 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 MSCI 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.
The MSCI EMF Index is a market capitalization weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America and the Pacific Basin.
Barclays Capital U.S. Corporate High-Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt.
The Barclays Capital U.S. Credit Index is comprised of the Barclays Capital U.S. Corporate Index and the non-native currency subcomponent of the Barclays Capital U.S. Government-Related Index. It includes publicly issued U.S. corporates, specified foreign debentures and secured notes denominated in U.S. dollars. It is a subset of the Barclays Capital U.S. Government/Credit Index and the Barclays Capital U.S. Aggregate Bond Index.
Rankings may be based, in part, on the performance of a predecessor fund or share class and are calculated by Lipper using a performance calculation methodology that differs from that used by Janus. Differences in the methodologies may lead to variances in calculating total performance returns, in some cases this variance may be significant, thereby potentially
2 | DECEMBER 31, 2009
Co-Chief Investment Officers’ Letter to the Shareholders
affecting the ranking of the Fund[s]. The rankings are displayed for informational purposes only and should not be relied upon when making investment decisions.
Lipper, a wholly-owned subsidiary of Thomson 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 and do not include the effect of loads.
Rankings are for the share class shown only; other classes may have different performance characteristics.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the rankings for the period.
In preparing this document, Janus has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Statements in this piece that reflect projections or expectations of future financial or economic performance of a mutual fund or strategy and of the markets in general and statements of a Fund’s plans and objectives for future operations are forward-looking statements. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted with such forward-looking statements, include general economic conditions such as inflation, recession and interest rates.
Funds distributed by Janus Distributors LLC (01/10)
Janus Smart Portfolios | 3
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 12/31/09 | ||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||
Growth & Core | ||||||||||||||||||||||||||
Janus Balanced Fund(1);(9/92) | Mixed-Asset Target Allocation-Moderate Funds | 43 | 219/509 | 1 | 1/412 | 1 | 1/311 | 19 | 28/148 | 4 | 1/27 | 1 | 1/338 | |||||||||||||
Janus Contrarian Fund;(2/00) | Multi-Cap Core Funds | 22 | 170/795 | 46 | 308/683 | 6 | 29/519 | – | – | 17 | 37/227 | 17 | 37/227 | |||||||||||||
Janus Enterprise Fund(1);(9/92) | Mid-Cap Growth Funds | 41 | 191/474 | 25 | 103/425 | 14 | 47/353 | 93 | 166/178 | 39 | 14/35 | 26 | 115/448 | |||||||||||||
Janus Fund;(2/70) | Large-Cap Growth Funds | 36 | 290/814 | 35 | 246/702 | 27 | 154/582 | 67 | 207/310 | 16 | 3/18 | 40 | 301/754 | |||||||||||||
Janus Growth and Income Fund(1);(5/91) | Large-Cap Core Funds | 7 | 60/906 | 40 | 304/773 | 37 | 240/653 | 68 | 252/374 | 8 | 6/78 | 48 | 388/820 | |||||||||||||
Janus Orion Fund;(6/00) | Multi-Cap Growth Funds | 8 | 36/459 | 16 | 57/378 | 3 | 9/310 | – | – | 19 | 35/192 | 57 | 238/418 | |||||||||||||
Janus Research Fund(1);(5/93) | Large-Cap Growth Funds | 16 | 124/814 | 17 | 117/702 | 14 | 78/582 | 76 | 235/310 | 4 | 3/79 | 12 | 77/652 | |||||||||||||
Janus Research Core Fund(1);(6/96) | Large-Cap Core Funds | 9 | 74/906 | 40 | 302/773 | 15 | 98/653 | 35 | 129/374 | 3 | 6/201 | 57 | 466/820 | |||||||||||||
Janus Triton Fund(1);(2/05) | Small-Cap Growth Funds | 10 | 53/540 | 2 | 9/472 | – | – | – | – | 1 | 4/399 | 1 | 4/450 | |||||||||||||
Janus Twenty Fund*;(4/85) | Large-Cap Growth Funds | 14 | 111/814 | 1 | 2/702 | 1 | 3/582 | 41 | 127/310 | 6 | 2/34 | 38 | 286/766 | |||||||||||||
Janus Venture Fund*;(4/85) | Small-Cap Growth Funds | 7 | 36/540 | 47 | 220/472 | 30 | 116/397 | 84 | 181/217 | 10 | 1/10 | 20 | 25/125 | |||||||||||||
Risk-Managed | ||||||||||||||||||||||||||
INTECH Risk-Managed Core Fund;(2/03) | Multi-Cap Core Funds | 83 | 656/795 | 68 | 464/683 | 60 | 312/519 | – | – | 48 | 182/386 | 48 | 182/386 | |||||||||||||
Value | ||||||||||||||||||||||||||
Perkins Mid Cap Value Fund(1);(8/98) | Mid-Cap Value Funds | 76 | 191/251 | 6 | 11/210 | 5 | 8/161 | 4 | 2/61 | 3 | 1/48 | 3 | 1/48 | |||||||||||||
Perkins Small Cap Value Fund;(10/87) | Small-Cap Core Funds | 27 | 198/756 | 1 | 6/631 | 4 | 18/522 | 12 | 32/269 | 4 | 5/128 | 4 | 5/128 | |||||||||||||
Global & International | ||||||||||||||||||||||||||
Janus Global Life Sciences Fund;(12/98) | Global Healthcare/Biotechnology Funds | 18 | 8/45 | 8 | 3/41 | 33 | 12/36 | 79 | 15/18 | 17 | 2/11 | 10 | 4/42 | |||||||||||||
Janus Global Opportunities Fund(1);(6/01) | Global Funds | 49 | 266/544 | 33 | 122/378 | 65 | 185/287 | – | – | 17 | 31/185 | 65 | 201/313 | |||||||||||||
Janus Global Research Fund(1);(2/05) | Global Funds | 12 | 65/544 | 10 | 36/378 | – | – | – | – | 4 | 11/292 | 4 | 11/292 | |||||||||||||
Janus Global Technology Fund;(12/98) | Global Science & Technology Funds | 65 | 50/77 | 33 | 21/64 | 26 | 15/58 | 90 | 18/19 | 36 | 6/16 | 43 | 27/63 | |||||||||||||
Janus Overseas Fund(1);(5/94) | International Funds | 1 | 2/1275 | 1 | 7/975 | 1 | 1/700 | 13 | 48/386 | 1 | 1/99 | 1 | 1/611 | |||||||||||||
Janus Worldwide Fund(1);(5/91) | Global Funds | 27 | 142/544 | 64 | 239/378 | 74 | 211/287 | 96 | 137/143 | 42 | 7/16 | 33 | 181/558 | |||||||||||||
Fixed Income | ||||||||||||||||||||||||||
Janus Flexible Bond Fund(1);(7/87) | Intermediate Investment Grade Debt Funds | 52 | 285/549 | 6 | 25/458 | 7 | 24/395 | 18 | 39/219 | 10 | 2/19 | 7 | 30/477 | |||||||||||||
Janus High-Yield Bond Fund(1);(12/95) | High Current Yield Funds | 76 | 347/459 | 25 | 98/391 | 17 | 56/341 | 16 | 33/207 | 7 | 6/90 | 23 | 70/313 | |||||||||||||
Janus Short-Term Bond Fund(1);(9/92) | Short Investment Grade Debt Funds | 59 | 144/246 | 2 | 4/223 | 2 | 3/176 | 13 | 12/94 | 20 | 5/24 | 3 | 6/231 | |||||||||||||
Asset Allocation | ||||||||||||||||||||||||||
Janus Smart Portfolio – Conservative;(12/05) | Mixed-Asset Target Allocation Conservative Funds | 22 | 97/441 | 4 | 13/361 | – | – | – | – | 2 | 5/304 | 2 | 5/304 | |||||||||||||
Janus Smart Portfolio – Moderate;(12/05) | Mixed-Asset Target Allocation Moderate Funds | 10 | 49/509 | 1 | 3/412 | – | – | – | – | 2 | 6/369 | 2 | 6/369 | |||||||||||||
Janus Smart Portfolio – Growth;(12/05) | Mixed-Asset Target Allocation Growth Funds | 7 | 43/649 | 6 | 32/549 | – | – | – | – | 3 | 13/497 | 3 | 13/497 | |||||||||||||
(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. |
*Closed to new investors.
Past performance is no guarantee of future results. For current month end performance, call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit Janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital).
Ranking is for Class J Shares only; other classes may have different performance characteristics.
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.
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.
4 | DECEMBER 31, 2009
Useful Information About Your Portfolio Report (unaudited)
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 the manager’s best judgment at the time this report was compiled, which was December 31, 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 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, including sales charges (loads) on purchase payments (applicable to Class A Shares only); redemption fees, where applicable (and any related exchange fees); and (2) ongoing costs, including management fees; distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only); administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares only); administrative fees (applicable to Class A Shares, Class C Shares, and Class I Shares only); and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the 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 two-month period from November 1, 2009 to December 31, 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 each 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 each 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 annual fund operating expenses, excluding any expenses of an underlying fund (acquired fund fees and expenses), class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares only), brokerage commissions, interest, dividends, taxes, and extraordinary expenses, to certain limits until at least February 16, 2011. Expenses in the examples reflect application of these waivers.
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) and any related exchange fees. These fees are fully described in certain underlying funds’ prospectuses. 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.
Janus Smart Portfolios | 5
Janus Smart Portfolio - Growth (unaudited)
Portfolio Snapshot We believe that we can deliver growth of income for investors by allocating investments across Janus, Perkins and INTECH mutual funds that represent a variety of asset classes and investment styles. Allocations to underlying funds are based on quantitative and qualitative analysis. | Dan Scherman portfolio manager |
Performance Overview
Janus Smart Portfolio – Growth’s Class J Shares returned 7.08% during the two-month period ended December 31, 2009. This compares to a return of 8.05% for the S&P 500® Index, the Portfolio’s primary benchmark, and a return of 5.58% by its secondary benchmark, the Growth Allocation Index, which is a hypothetical combination of unmanaged indices and includes stocks and bonds in roughly the same proportion as the portfolio (80% equity and 20% fixed income).
Market Review
Global equity indices moved higher in November and closed near the year’s highs in December. Stronger-than-expected corporate earnings and evidence that the global economy continues to recover from the financial crisis helped propel markets higher in November. Improving industrial data from China and Japan offset concerns over Dubai’s credit problems that briefly sent tremors through the credit markets. Markets remained relatively range-bound in December until strong performance by several bellwether technology companies and a wave of corporate deals helped equities to move higher. In terms of sectors, materials and information technology were the strongest performing, while financials and energy were relative underperformers. Emerging market indices outperformed developed markets led by strong gains in Latin America as well as India and Russia. In developed markets, North America outperformed Europe and Asia. Commodities finished the period higher led by gains in industrial metals and natural gas. Gold futures set a record in early December before easing off its highs near year-end. The Dollar Index finished higher, as the U.S. currency outperformed most major currencies except the Japanese yen.
The trend of corporate bond spreads tightening relative to Treasuries continued with the largest moves in the high-yield segment (prices move inversely to yield) during the two-month period ended December 31, 2009. Commercial mortgage-backed securities (CMBS) and investment grade corporates also posted gains. However, broad investment grade aggregate indices finished the period slightly lower due to losses in Treasuries, as the Treasury yield curve widened at all maturities with the largest moves in the long end (10 and 30 year maturities). Long-term government bond indices were easily the worst performing followed by long government-credit indices. Evidence of an improving economy encouraged investors to sell Treasuries and buy riskier assets. During December, the Treasury yield curve widened to record spreads between the two-year and 10-year notes.
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 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. The Janus Asset Allocation Committee also provides input on the overall allocation. Finally, we select the appropriate Janus, Perkins and INTECH funds that replicate our desired exposure. The allocations assigned to each selected underlying fund are 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
6 | DECEMBER 31, 2009
(unaudited)
not be confused with nor does it imply low risk or the ability to control risk.
Contributors and Detractors
Detractors included Perkins Mid Cap Value Fund, Janus High-Yield Fund and Perkins Small Cap Value Fund. Contributing to relative performance were Janus Overseas Fund, Janus International Equity Fund and INTECH Risk-Managed Value Fund.
Outlook
After last year’s strong performance across most asset classes, we are expecting more muted returns in 2010, driven less by emphasis on market exposure and more on security selection in both equity and fixed income. We believe the re-emergence of stock and bond picking should play into the strength of the investment teams at Janus, Perkins and INTECH.
Thank you for investing in Janus Smart Portfolio – Growth.
Janus Smart Portfolios | 7
Janus Smart Portfolio - Growth (unaudited)
Janus Smart Portfolio – Growth (% of Net Assets)
Janus International Equity Fund – Class I Shares | 15.0% | |||
Janus Flexible Bond Fund – Class I Shares | 14.7% | |||
INTECH Risk-Managed Value Fund – Class I Shares | 11.9% | |||
Janus Overseas Fund – Class I Shares | 10.2% | |||
INTECH Risk-Managed Growth Fund – Class I Shares | 7.2% | |||
Janus Research Fund – Class J Shares | 6.6% | |||
Janus Growth and Income Fund – Class J Shares | 6.4% | |||
Janus Twenty Fund – Class J Shares | 5.8% | |||
Perkins Large Cap Value Fund – Class I Shares | 5.5% | |||
Janus High-Yield Fund – Class J Shares | 3.2% | |||
Janus Fund – Class I Shares | 3.1% | |||
Janus Contrarian Fund – Class I Shares | 2.9% | |||
Perkins Mid Cap Value Fund – Class J Shares | 2.0% | |||
Janus Orion Fund – Class J Shares | 1.9% | |||
Janus Global Real Estate Fund – Class I Shares | 1.8% | |||
Perkins Small Cap Value Fund – Class I Shares | 1.8% |
Janus Smart Portfolio - Growth At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2009
8 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Two-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Growth – Class A Shares | |||||||||||
NAV | 6.98% | 35.51% | 4.73% | 1.28% | 1.28% | ||||||
MOP | 0.85% | 27.71% | 3.19% | ||||||||
Janus Smart Portfolio – Growth – Class C Shares | |||||||||||
NAV | 6.94% | 34.45% | 3.96% | 2.03% | 2.03% | ||||||
CDSC | 5.89% | 33.12% | 3.96% | ||||||||
Janus Smart Portfolio – Growth – Class I Shares | 7.05% | 35.79% | 4.92% | 1.03% | 1.03% | ||||||
Janus Smart Portfolio – Growth – Class J Shares | 7.08% | 35.79% | 4.92% | 1.20% | 1.20% | ||||||
Janus Smart Portfolio – Growth – Class S Shares | 6.96% | 35.14% | 4.47% | 1.53% | 1.53% | ||||||
S&P 500® Index | 8.05% | 26.46% | –0.67% | ||||||||
Growth Allocation Index | 5.58% | 27.53% | 2.27% | ||||||||
Lipper Quartile – Class J Shares | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Growth Funds | – | 43/649 | 13/497 | ||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Portfolio’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
Janus Smart Portfolios | 9
Janus Smart Portfolio - Growth (unaudited)
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 annual fund operating expenses allocated to any class (excluding any expenses of an underlying fund (acquired fund fees and expenses), distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes for the Portfolio expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Portfolio’s total operating expenses at period end did not exceed the expense limit so no waivers were in effect for the most recent period presented.
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, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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, which 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.
The underlying funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the underlying fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of the underlying 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 underlying funds and selling of bonds within the underlying funds by the portfolio managers.
The underlying funds that invest in 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 Portfolio distributions or the redemption of Portfolio shares.
Effective July 6, 2009, Janus Smart Portfolio-Growth designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Portfolio’s Class J Shares, calculated using the fees and expenses of each class, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Portfolio had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Portfolio’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Portfolio had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 |
10 | DECEMBER 31, 2009
(unaudited)
Portfolio Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Portfolio and allow 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 these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,070.90 | $ | 0.76 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.99 | $ | 2.24 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,069.40 | $ | 2.06 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.21 | $ | 6.06 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,070.50 | $ | 0.36 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,024.15 | $ | 1.07 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,070.80 | $ | 0.55 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.59 | $ | 1.63 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,069.60 | $ | 1.28 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.48 | $ | 3.77 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.44% for Class A Shares, 1.19% for Class C Shares, 0.21% for Class I Shares, 0.32% for Class J Shares and 0.74% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Portfolio’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Smart Portfolios | 11
Janus Smart Portfolio - Growth
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 100.0% | ||||||||||||
Equity Funds – 82.1% | ||||||||||||
1,340,384 | INTECH Risk-Managed Growth Fund – Class I Shares | $ | 14,757,624 | |||||||||
2,951,120 | INTECH Risk-Managed Value Fund – Class I Shares | 24,494,297 | ||||||||||
461,930 | Janus Contrarian Fund – Class I Shares | 6,092,861 | ||||||||||
240,950 | Janus Fund – Class I Shares | 6,329,751 | ||||||||||
458,517 | Janus Global Real Estate Fund – Class I Shares | 3,654,383 | ||||||||||
464,493 | Janus Growth and Income Fund – Class J Shares | 13,214,833 | ||||||||||
3,082,156 | Janus International Equity Fund – Class I Shares | 30,975,669 | ||||||||||
398,545 | Janus Orion Fund – Class J Shares | 3,981,468 | ||||||||||
493,888 | Janus Overseas Fund – Class I Shares | 21,000,109 | ||||||||||
559,513 | Janus Research Fund – Class J Shares | 13,668,896 | ||||||||||
195,015 | Janus Twenty Fund – Class J Shares | 12,010,970 | ||||||||||
913,333 | Perkins Large Cap Value Fund – Class I Shares | 11,334,463 | ||||||||||
207,386 | Perkins Mid Cap Value Fund – Class J Shares | 4,106,236 | ||||||||||
172,807 | Perkins Small Cap Value Fund – Class I Shares | 3,622,033 | ||||||||||
169,243,593 | ||||||||||||
Fixed-Income Funds – 17.9% | ||||||||||||
2,931,411 | Janus Flexible Bond Fund – Class I Shares | 30,457,355 | ||||||||||
770,922 | Janus High-Yield Fund – Class J Shares | 6,545,128 | ||||||||||
37,002,483 | ||||||||||||
Total Investments (total cost $200,885,057) – 100.0% | 206,246,076 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (21,802) | |||||||||||
Net Assets – 100% | $ | 206,224,274 | ||||||||||
(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. |
See Notes to Schedules of Investments and Financial Statements.
12 | DECEMBER 31, 2009
Janus Smart Portfolio - Moderate (unaudited)
Portfolio Snapshot We believe that we can deliver growth of income for investors by allocating investments across Janus, Perkins and INTECH mutual funds that represent a variety of asset classes and investment styles. Allocations to underlying funds are based on quantitative and qualitative analysis. | Dan Scherman portfolio manager |
Performance Overview
Janus Smart Portfolio – Moderate Class J Shares returned 5.70% during the two-month period ended December 31, 2009. This compares to a return of 8.05% for the S&P 500® Index, the Portfolio’s primary benchmark, and a return of 4.14% by its secondary benchmark, the Moderate Allocation Index, which is a hypothetical combination of unmanaged indices and includes stocks and bonds in roughly the same proportion as the portfolio (60% equity and 40% fixed income).
Market Review
Global equity indices moved higher in November and closed near the year’s highs in December. Stronger-than-expected corporate earnings and evidence that the global economy continues to recover from the financial crisis helped propel markets higher in November. Improving industrial data from China and Japan offset concerns over Dubai’s credit problems that briefly sent tremors through the credit markets. Markets remained relatively range-bound in December until strong performance by several bellwether technology companies and a wave of corporate deals helped equities to move higher. In terms of sectors, materials and information technology were the strongest performing, while financials and energy were relative underperformers. Emerging market indices outperformed developed markets led by strong gains in Latin America as well as India and Russia. In developed markets, North America outperformed Europe and Asia. Commodities finished the period higher led by gains in industrial metals and natural gas. Gold futures set a record in early December before easing off its highs near year-end. The Dollar Index finished higher, as the U.S. currency outperformed most major currencies except the Japanese yen.
The trend of corporate bond spreads tightening relative to Treasuries continued with the largest moves in the high-yield segment (prices move inversely to yield) during the two-month period ended December 31, 2009. Commercial mortgage-backed securities (CMBS) and investment grade corporates also posted gains. However, broad investment grade aggregate indices finished the period slightly lower due to losses in Treasuries, as the Treasury yield curve widened at all maturities with the largest moves in the long end (10 and 30 year maturities). Long-term government bond indices were easily the worst performing followed by long government-credit indices. Evidence of an improving economy encouraged investors to sell Treasuries and buy riskier assets. During December, the Treasury yield curve widened to record spreads between the two-year and 10-year notes.
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 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 – Moderate. The Janus Asset Allocation Committee also provides input on the overall allocation. Finally, we select the appropriate Janus, Perkins and INTECH funds that replicate our desired exposure. The allocations assigned to each selected underlying fund are 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
Janus Smart Portfolios | 13
Janus Smart Portfolio - Moderate (unaudited)
not be confused with nor does it imply low risk or the ability to control risk.
Contributors and Detractors
Detractors included Janus Short-Term Bond Fund, Janus High-Yield Fund and Perkins Small Cap Value Fund. Top contributors were Janus Overseas Fund, INTECH Risk-Managed Value Fund and Janus International Equity Fund.
Outlook
After last year’s strong performance across most asset classes, we are expecting more muted returns in 2010, driven less by emphasis on market exposure and more on security selection in both equity and fixed income. We believe the re-emergence of stock and bond picking should play into the strength of the investment teams at Janus, Perkins and INTECH.
Thank you for investing in Janus Smart Portfolio – Moderate.
14 | DECEMBER 31, 2009
(unaudited)
Janus Smart Portfolio – Moderate (% of Net Assets)
Janus Flexible Bond Fund – Class I Shares | 29.8% | |||
INTECH Risk-Managed Value Fund – Class I Shares | 10.0% | |||
Janus International Equity Fund – Class I Shares | 9.3% | |||
Janus Overseas Fund – Class I Shares | 9.0% | |||
Janus Growth and Income Fund – Class J Shares | 6.5% | |||
INTECH Risk-Managed Growth Fund – Class I Shares | 6.2% | |||
Perkins Large Cap Value Fund – Class I Shares | 4.8% | |||
Janus Research Fund – Class J Shares | 4.6% | |||
Janus Short-Term Bond Fund – Class J Shares | 3.7% | |||
Janus Orion Fund – Class J Shares | 3.2% | |||
Janus High-Yield Fund – Class J Shares | 3.2% | |||
Janus Fund – Class I Shares | 3.1% | |||
Perkins Small Cap Value Fund – Class I Shares | 2.8% | |||
Janus Twenty Fund – Class J Shares | 2.4% | |||
Janus Global Real Estate Fund – Class I Shares | 1.3% |
Janus Smart Portfolio - Moderate At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Janus Smart Portfolios | 15
Janus Smart Portfolio - Moderate (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Two-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Moderate – Class A Shares | |||||||||||
NAV | 5.70% | 30.30% | 5.65% | 1.18% | 1.18% | ||||||
MOP | –0.39% | 22.81% | 4.09% | ||||||||
Janus Smart Portfolio – Moderate – Class C Shares | |||||||||||
NAV | 5.51% | 29.14% | 4.84% | 1.93% | 1.93% | ||||||
CDSC | 4.48% | 27.88% | 4.84% | ||||||||
Janus Smart Portfolio – Moderate – Class I Shares | 5.67% | 30.34% | 5.82% | 0.93% | 0.93% | ||||||
Janus Smart Portfolio – Moderate – Class J Shares | 5.70% | 30.34% | 5.82% | 1.06% | 1.06% | ||||||
Janus Smart Portfolio – Moderate – Class S Shares | 5.57% | 29.70% | 5.33% | 1.43% | 1.43% | ||||||
S&P 500® Index | 8.05% | 26.46% | –0.67% | ||||||||
Moderate Allocation Index | 4.14% | 21.35% | 3.08% | ||||||||
Lipper Quartile – Class J Shares | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 49/509 | 6/369 | ||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Portfolio’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
16 | DECEMBER 31, 2009
(unaudited)
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 annual fund operating expenses allocated to any class (excluding any expenses of an underlying fund (acquired fund fees and expenses), distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes for the Portfolio expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Portfolio’s total operating expenses at period end did not exceed the expense limit so no waivers were in effect for the most recent period presented.
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, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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, which 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.
The underlying funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the underlying fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of the underlying 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 underlying funds and selling of bonds within the underlying funds by the portfolio managers.
The underlying funds that invest in 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 Portfolio distributions or the redemption of Portfolio shares.
Effective July 6, 2009, Janus Smart Portfolio-Moderate designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Portfolio’s Class J Shares, calculated using the fees and expenses of each class, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Portfolio had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Portfolio’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Portfolio had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 |
Janus Smart Portfolios | 17
Janus Smart Portfolio - Moderate (unaudited)
Portfolio Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Portfolio and allow 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 these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,056.10 | $ | 0.70 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.14 | $ | 2.09 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,055.10 | $ | 1.99 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.36 | $ | 5.90 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,056.70 | $ | 0.29 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,024.35 | $ | 0.87 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,057.00 | $ | 0.50 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.74 | $ | 1.48 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,055.70 | $ | 1.15 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.83 | $ | 3.41 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.41% for Class A Shares, 1.16% for Class C Shares, 0.17% for Class I Shares, 0.29% for Class J Shares and 0.67% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Portfolio’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
18 | DECEMBER 31, 2009
Janus Smart Portfolio - Moderate
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 99.9% | ||||||||||||
Equity Funds – 63.2% | ||||||||||||
1,008,757 | INTECH Risk-Managed Growth Fund – Class I Shares | $ | 11,106,419 | |||||||||
2,157,778 | INTECH Risk-Managed Value Fund – Class I Shares | 17,909,554 | ||||||||||
213,198 | Janus Fund – Class I Shares | 5,600,721 | ||||||||||
292,729 | Janus Global Real Estate Fund – Class I Shares | 2,333,051 | ||||||||||
409,990 | Janus Growth and Income Fund – Class J Shares | 11,664,227 | ||||||||||
1,667,026 | Janus International Equity Fund – Class I Shares | 16,753,616 | ||||||||||
586,025 | Janus Orion Fund – Class J Shares | 5,854,388 | ||||||||||
380,803 | Janus Overseas Fund – Class I Shares | 16,191,762 | ||||||||||
339,160 | Janus Research Fund – Class J Shares | 8,285,687 | ||||||||||
69,113 | Janus Twenty Fund – Class J Shares | 4,256,640 | ||||||||||
698,274 | Perkins Large Cap Value Fund – Class I Shares | 8,665,577 | ||||||||||
238,251 | Perkins Small Cap Value Fund – Class I Shares | 4,993,746 | ||||||||||
113,615,388 | �� | |||||||||||
Fixed-Income Funds – 36.7% | ||||||||||||
5,157,820 | Janus Flexible Bond Fund – Class I Shares | 53,589,751 | ||||||||||
675,749 | Janus High-Yield Fund – Class J Shares | 5,737,106 | ||||||||||
2,201,427 | Janus Short-Term Bond Fund – Class J Shares | 6,758,382 | ||||||||||
66,085,239 | ||||||||||||
Total Investments (total cost $169,316,186) – 99.9% | 179,700,627 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 154,253 | |||||||||||
Net Assets – 100% | $ | 179,854,880 | ||||||||||
(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. |
See Notes to Schedules of Investments and Financial Statements.
Janus Smart Portfolios | 19
Janus Smart Portfolio - Conservative (unaudited)
Portfolio Snapshot We believe that we can deliver growth of income for investors by allocating investments across Janus, Perkins and INTECH mutual funds that represent a variety of asset classes and investment styles. Allocations to underlying funds are based on quantitative and qualitative analysis. | Dan Scherman portfolio manager |
Performance Overview
Janus Smart Portfolio – Conservative’s Class J Shares returned 4.23% during the two-month period ended December 31, 2009. This compares to a return of 8.05% for the S&P 500® Index, the Portfolio’s primary benchmark, and a 2.66% return by its secondary benchmark, the Conservative Allocation Index, which is a hypothetical combination of unmanaged indices and includes stocks and bonds in roughly the same proportion as the portfolio (40% equity and 60% fixed income).
Market Review
Global equity indices moved higher in November and closed near the year’s highs in December. Stronger-than-expected corporate earnings and evidence that the global economy continues to recover from the financial crisis helped propel markets higher in November. Improving industrial data from China and Japan offset concerns over Dubai’s credit problems that briefly sent tremors through the credit markets. Markets remained relatively range-bound in December until strong performance by several bellwether technology companies and a wave of corporate deals helped equities to move higher. In terms of sectors, materials and information technology were the strongest performing, while financials and energy were relative underperformers. Emerging market indices outperformed developed markets led by strong gains in Latin America as well as India and Russia. In developed markets, North America outperformed Europe and Asia. Commodities finished the period higher led by gains in industrial metals and natural gas. Gold futures set a record in early December before easing off its highs near year-end. The Dollar Index finished higher, as the U.S. currency outperformed most major currencies except the Japanese yen.
The trend of corporate bond spreads tightening relative to Treasuries continued with the largest moves in the high-yield segment (prices move inversely to yield) during the two-month period ended December 31, 2009. Commercial mortgage-backed securities (CMBS) and investment grade corporates also posted gains. However, broad investment grade aggregate indices finished the period slightly lower due to losses in Treasuries, as the Treasury yield curve widened at all maturities with the largest moves in the long end (10 and 30 year maturities). Long-term government bond indices were easily the worst performing followed by long government-credit indices. Evidence of an improving economy encouraged investors to sell Treasuries and buy riskier assets. During December, the Treasury yield curve widened to record spreads between the two-year and 10-year notes.
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. The Janus Asset Allocation Committee also provides input on the overall allocation. Finally, we select the appropriate Janus, Perkins and INTECH funds that replicate our desired exposure. The allocations assigned to each selected underlying fund are 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
20 | DECEMBER 31, 2009
(unaudited)
should not be confused with nor does it imply low risk or the ability to control risk.
Contributors and Detractors
Detractors included Janus Short-Term Bond Fund, Janus Global Real Estate Fund and Janus High-Yield Fund. Janus Flexible Bond Fund, the largest holding within the Portfolio, was the most significant contributor followed by INTECH Risk-Managed Value Fund and INTECH Risk-Managed Growth Fund.
Outlook
After last year’s strong performance across most asset classes, we are expecting more muted returns in 2010, driven less by emphasis on market or beta exposure and more on security selection or alpha in both equity and fixed income. We believe the re-emergence of stock and bond picking should play into the strength of the investment teams at Janus, Perkins and INTECH.
Thank you for investing in Janus Smart Portfolio – Conservative.
Janus Smart Portfolios | 21
Janus Smart Portfolio - Conservative (unaudited)
Janus Smart Portfolio – Conservative (% of Net Assets)
Janus Flexible Bond Fund – Class I Shares | 47.1% | |||
INTECH Risk-Managed Value Fund – Class I Shares | 7.9% | |||
Janus International Equity Fund – Class I Shares | 6.3% | |||
Janus Short-Term Bond Fund – Class J Shares | 5.7% | |||
Janus Growth and Income Fund – Class J Shares | 5.5% | |||
INTECH Risk-Managed Growth Fund – Class I Shares | 5.4% | |||
Janus High-Yield Fund – Class J Shares | 5.2% | |||
Janus Contrarian Fund – Class I Shares | 3.5% | |||
Perkins Large Cap Value Fund – Class I Shares | 3.4% | |||
Janus Orion Fund – Class J Shares | 3.3% | |||
Janus Research Fund – Class J Shares | 3.2% | |||
Janus Overseas Fund – Class I Shares | 2.8% | |||
Janus Global Real Estate Fund – Class I Shares | 0.7% |
Janus Smart Portfolio - Conservative At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2009
22 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Two-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Conservative – Class A Shares | |||||||||||
NAV | 4.28% | 23.13% | 5.86% | 1.12% | 1.12% | ||||||
MOP | –1.75% | 16.05% | 4.31% | ||||||||
Janus Smart Portfolio – Conservative – Class C Shares | |||||||||||
NAV | 4.17% | 22.28% | 5.11% | 1.87% | 1.87% | ||||||
CDSC | 3.16% | 21.09% | 5.11% | ||||||||
Janus Smart Portfolio – Conservative – Class I Shares | 4.22% | 23.37% | 6.12% | 0.87% | 0.87% | ||||||
Janus Smart Portfolio – Conservative – Class J Shares | 4.23% | 23.37% | 6.12% | 0.99% | 0.99% | ||||||
Janus Smart Portfolio – Conservative – Class S Shares | 4.11% | 22.65% | 5.57% | 1.37% | 1.37% | ||||||
S&P 500® Index | 8.05% | 26.46% | –0.67% | ||||||||
Conservative Allocation Index | 2.66% | 15.67% | 3.88% | ||||||||
Lipper Quartile – Class J Shares | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Conservative Funds | – | 97/441 | 5/304 | ||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Portfolio’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
Janus Smart Portfolios | 23
Janus Smart Portfolio - Conservative (unaudited)
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 annual fund operating expenses allocated to any class (excluding any expenses of an underlying fund (acquired fund fees and expenses), distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares) brokerage commissions, interest, dividends, taxes, and extraordinary expenses to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Portfolio expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 Portfolio’s total operating expenses at period end did not exceed the expense limit so no waivers were in effect for the most recent period presented.
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, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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, which 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.
The underlying funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the underlying fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of the underlying 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 underlying funds and selling of bonds within the underlying funds by the portfolio managers.
The underlying funds that invest in 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 Portfolio distributions or the redemption of Portfolio shares.
Effective July 6, 2009, Janus Smart Portfolio-Conservative designated its initial share class as “Class J Shares.”
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Portfolio’s Class J Shares, calculated using the fees and expenses of each respective class, without the effect of any fee and expense limitations or waivers. If each class of the Portfolio had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
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 |
24 | DECEMBER 31, 2009
(unaudited)
Portfolio Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Portfolio and allow 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 these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,042.80 | $ | 0.73 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.04 | $ | 2.19 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,041.70 | $ | 2.01 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.26 | $ | 6.01 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,042.20 | $ | 0.29 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,024.35 | $ | 0.87 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,042.30 | $ | 0.53 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.64 | $ | 1.58 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,041.10 | $ | 1.16 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.78 | $ | 3.47 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.43% for Class A Shares, 1.18% for Class C Shares, 0.17% for Class I Shares, 0.31% for Class J Shares and 0.68% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Portfolio’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Smart Portfolios | 25
Janus Smart Portfolio - Conservative
Schedule of Investments (unaudited)
As of December 31, 2009
Shares | Value | |||||||||||
Mutual Funds(1) – 100.0% | ||||||||||||
Equity Funds – 42.0% | ||||||||||||
621,173 | INTECH Risk-Managed Growth Fund – Class I Shares | $ | 6,839,118 | |||||||||
1,200,141 | INTECH Risk-Managed Value Fund – Class I Shares | 9,961,172 | ||||||||||
338,390 | Janus Contrarian Fund – Class I Shares | 4,463,361 | ||||||||||
105,931 | Janus Global Real Estate Fund – Class I Shares | 844,269 | ||||||||||
244,831 | Janus Growth and Income Fund – Class J Shares | 6,965,453 | ||||||||||
789,794 | Janus International Equity Fund – Class I Shares | 7,937,426 | ||||||||||
423,893 | Janus Orion Fund – Class J Shares | 4,234,689 | ||||||||||
83,498 | Janus Overseas Fund – Class I Shares | 3,550,337 | ||||||||||
166,372 | Janus Research Fund – Class J Shares | 4,064,476 | ||||||||||
348,561 | Perkins Large Cap Value Fund – Class I Shares | 4,325,641 | ||||||||||
53,185,942 | ||||||||||||
Fixed-Income Funds – 58.0% | ||||||||||||
5,744,180 | Janus Flexible Bond Fund – Class I Shares | 59,682,034 | ||||||||||
780,142 | Janus High-Yield Fund – Class J Shares | 6,623,405 | ||||||||||
2,352,987 | Janus Short-Term Bond Fund – Class J Shares | 7,223,670 | ||||||||||
73,529,109 | ||||||||||||
Total Investments (total cost $118,581,637) – 100.0% | 126,715,051 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (11,662) | |||||||||||
Net Assets – 100% | $ | 126,703,389 | ||||||||||
(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. |
See Notes to Schedules of Investments and Financial Statements.
26 | DECEMBER 31, 2009
Statements of Assets and Liabilities
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
As of December 31, 2009 (unaudited) | Portfolio - | Portfolio - | Portfolio - | |||||||||||
(all numbers in thousands except net asset value per share) | Growth | Moderate | Conservative | |||||||||||
Assets: | ||||||||||||||
Investments at cost | $ | 200,885 | $ | 169,316 | $ | 118,582 | ||||||||
Investments at value | $ | 206,246 | $ | 179,701 | $ | 126,715 | ||||||||
Receivables: | ||||||||||||||
Portfolio shares sold | 181 | 698 | 518 | |||||||||||
Dividends | 173 | 275 | 318 | |||||||||||
Non-interested Trustees’ deferred compensation | 5 | 4 | 3 | |||||||||||
Other assets | 2 | 17 | – | |||||||||||
Total Assets | 206,607 | 180,695 | 127,554 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Investments purchased | 282 | 749 | 586 | |||||||||||
Portfolio shares repurchased | 29 | 37 | 218 | |||||||||||
Advisory fees | 9 | 7 | 7 | |||||||||||
Transfer agent fees and expenses | 11 | 4 | 3 | |||||||||||
Administrative fees – Class J Shares | 22 | 19 | 14 | |||||||||||
Administrative fees – Class S Shares | – | – | – | |||||||||||
Distribution fees – Class A Shares | – | – | – | |||||||||||
Distribution fees – Class C Shares | – | 1 | – | |||||||||||
Distribution fees – Class S Shares | – | – | – | |||||||||||
Networking fees – Class A Shares | – | – | – | |||||||||||
Networking fees – Class C Shares | – | – | – | |||||||||||
Networking fees – Class I Shares | – | – | – | |||||||||||
Non-interested Trustees’ fees and expenses | 1 | 1 | 1 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 5 | 4 | 3 | |||||||||||
Accrued expenses | 24 | 18 | 19 | |||||||||||
Total Liabilities | 383 | 840 | 851 | |||||||||||
Net Assets | $ | 206,224 | $ | 179,855 | $ | 126,703 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 218,629 | $ | 180,212 | $ | 125,733 | ||||||||
Undistributed net investment income/(loss)* | 48 | 63 | 84 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (17,814) | (10,804) | (7,247) | |||||||||||
Unrealized appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 5,361 | 10,384 | 8,133 | |||||||||||
Total Net Assets | $ | 206,224 | $ | 179,855 | $ | 126,703 | ||||||||
Net Assets – Class A Shares | $ | 196 | $ | 1,466 | $ | 450 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 18 | 132 | 40 | |||||||||||
Net Asset Value Per Share(1) | $ | 10.89 | $ | 11.14 | $ | 11.19 | ||||||||
Maximum Offering Price Per Share(2) | $ | 11.55 | $ | 11.82 | $ | 11.87 | ||||||||
Net Assets – Class C Shares | $ | 286 | $ | 1,013 | $ | 523 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 26 | 91 | 47 | |||||||||||
Net Asset Value Per Share(1) | $ | 10.86 | $ | 11.11 | $ | 11.17 | ||||||||
Net Assets – Class I Shares | $ | 12 | $ | 163 | $ | 10 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1 | 15 | 1 | |||||||||||
Net Asset Value Per Share | $ | 10.90 | $ | 11.14 | $ | 11.20 | ||||||||
Net Assets – Class J Shares | $ | 205,718 | $ | 177,202 | $ | 125,630 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 18,863 | 15,898 | 11,208 | |||||||||||
Net Asset Value Per Share | $ | 10.91 | $ | 11.15 | $ | 11.21 | ||||||||
Net Assets – Class S Shares | $ | 12 | $ | 11 | $ | 90 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1 | 1 | 8 | |||||||||||
Net Asset Value Per Share | $ | 10.88 | $ | 11.12 | $ | 11.20 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Smart Portfolios | 27
Statements of Operations
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
For the two-month period ended December 31, 2009 (unaudited) | Portfolio - | Portfolio - | Portfolio - | |||||||||||
(all numbers in thousands) | Growth(1) | Moderate(1) | Conservative(1) | |||||||||||
Investment Income: | ||||||||||||||
Dividends from affiliates | $ | 1,109 | $ | 1,188 | $ | 1,062 | ||||||||
Total Investment Income | 1,109 | 1,188 | 1,062 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 17 | 14 | 10 | |||||||||||
Transfer agent fees and expenses | 16 | 9 | 6 | |||||||||||
Postage expenses | 7 | 4 | 2 | |||||||||||
Printing expenses | 15 | 12 | 9 | |||||||||||
Audit fees | 6 | 6 | 6 | |||||||||||
Non-interested Trustees’ fees and expenses | 2 | 1 | 1 | |||||||||||
Administrative fees – Class J Shares | 43 | 36 | 26 | |||||||||||
Administrative fees – Class S Shares | – | – | – | |||||||||||
Distribution fees – Class A Shares | – | 1 | – | |||||||||||
Distribution fees – Class C Shares | – | 1 | 1 | |||||||||||
Distribution fees – Class S Shares | – | – | – | |||||||||||
Networking fees – Class A Shares | – | – | – | |||||||||||
Networking fees – Class C Shares | – | – | – | |||||||||||
Networking fees – Class I Shares | – | – | – | |||||||||||
Other expenses | 5 | 1 | 4 | |||||||||||
Total Expenses | 111 | 85 | 65 | |||||||||||
Expense and Fee Offset | (2) | (1) | (1) | |||||||||||
Net Expenses | 109 | 84 | 64 | |||||||||||
Net Investment Income/(Loss) | 1,000 | 1,104 | 998 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment transactions | (41) | (9) | (8) | |||||||||||
Capital gain distributions from Underlying Funds | 36 | 65 | 73 | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 12,471 | 8,116 | 3,920 | |||||||||||
Net Gain/(Loss) on Investments | 12,466 | 8,172 | 3,985 | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 13,466 | $ | 9,276 | $ | 4,983 |
(1) | Period from November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. |
See Notes to Financial Statements.
28 | DECEMBER 31, 2009
Statements of Changes in Net Assets
For the two-month period ended December 31, | Janus Smart | Janus Smart | Janus Smart | |||||||||||||||||||||||
2009 (unaudited) and the fiscal year ended | Portfolio - | Portfolio - | Portfolio - | |||||||||||||||||||||||
October 31, 2009 | Growth | Moderate | Conservative | |||||||||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 1,000 | $ | 4,494 | $ | 1,104 | $ | 4,352 | $ | 998 | $ | 3,741 | ||||||||||||||
Net realized gain/(loss) from investment transactions | (41) | (12,193) | (9) | (6,872) | (8) | (4,304) | ||||||||||||||||||||
Capital gain distributions from Underlying Funds | 36 | 1,694 | 65 | 1,069 | 73 | 428 | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 12,471 | 39,565 | 8,116 | 28,219 | 3,920 | 17,136 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 13,466 | 33,560 | 9,276 | 26,768 | 4,983 | 17,001 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | ||||||||||||||||||||||||||
Class A Shares | (3) | – | (34) | – | (14) | – | ||||||||||||||||||||
Class C Shares | (5) | – | (18) | – | (15) | – | ||||||||||||||||||||
Class I Shares | – | – | (4) | – | – | – | ||||||||||||||||||||
Class J Shares | (3,421) | (3,455) | (3,954) | (3,453) | (3,805) | (2,871) | ||||||||||||||||||||
Class S Shares | – | – | – | – | (3) | – | ||||||||||||||||||||
Net Decrease from Dividends and Distributions | (3,429) | (3,455) | (4,010) | (3,453) | (3,837) | (2,871) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Class A Shares | 37 | 145 | 269 | 1,173 | 207 | 239 | ||||||||||||||||||||
Class C Shares | 193 | 114 | 581 | 412 | 257 | 254 | ||||||||||||||||||||
Class I Shares | – | 11 | 131 | 33 | 2 | 11 | ||||||||||||||||||||
Class J Shares | 6,396 | 46,476 | 10,782 | 52,969 | 10,201 | 46,251 | ||||||||||||||||||||
Class S Shares | – | 11 | – | 11 | – | 157 | ||||||||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||||||||||
Class A Shares | 3 | – | 32 | – | 12 | – | ||||||||||||||||||||
Class C Shares | 5 | – | 17 | – | 14 | – | ||||||||||||||||||||
Class I Shares | – | – | 4 | – | – | – | ||||||||||||||||||||
Class J Shares | 3,390 | 3,405 | 3,928 | 3,428 | 3,747 | 2,848 | ||||||||||||||||||||
Class S Shares | – | – | – | – | 3 | – | ||||||||||||||||||||
Shares repurchased | ||||||||||||||||||||||||||
Class A Shares | – | – | (15) | (25) | (3) | – | ||||||||||||||||||||
Class C Shares | (27) | – | �� | (1) | – | – | – | |||||||||||||||||||
Class I Shares | – | – | (8) | – | (2) | – | ||||||||||||||||||||
Class J Shares | (4,828) | (32,674) | (3,471) | (29,732) | (4,007) | (31,902) | ||||||||||||||||||||
Class S Shares | – | – | – | – | (81) | – | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 5,169 | 17,488 | 12,249 | 28,269 | 10,350 | 17,858 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 15,206 | 47,593 | 17,515 | 51,584 | 11,496 | 31,988 | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 191,018 | 143,425 | 162,340 | 110,756 | 115,207 | 83,219 | ||||||||||||||||||||
End of period | $ | 206,224 | $ | 191,018 | $ | 179,855 | $ | 162,340 | $ | 126,703 | $ | 115,207 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 48 | $ | 2,478 | $ | 63 | $ | 2,969 | $ | 84 | $ | 2,922 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from November 1, 2008 through October 31, 2009. |
See Notes to Financial Statements.
Janus Smart Portfolios | 29
Financial Highlights
Class A Shares
Janus Smart | Janus Smart | |||||||||||||||||||||||||
For a share outstanding during the two-month period ended | Janus Smart | Portfolio – | Portfolio – | |||||||||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, | Portfolio – Growth | Moderate | Conservative | |||||||||||||||||||||||
2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.35 | $9.16 | $10.80 | $9.68 | $11.08 | $10.13 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .01 | .07 | .02 | .08 | .02 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .67 | 1.18 | .54 | 1.10 | .40 | .93 | ||||||||||||||||||||
Total from Investment Operations | .73 | 1.19 | .61 | 1.12 | .48 | .95 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.19) | – | (.27) | – | (.37) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.19) | – | (.27) | – | (.37) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $10.89 | $10.35 | $11.14 | $10.80 | $11.19 | $11.08 | ||||||||||||||||||||
Total Return** | 7.09% | 12.99% | 5.61% | 11.57% | 4.28% | 9.38% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $196 | $149 | $1,466 | $1,145 | $450 | $235 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $165 | $99 | $1,291 | $424 | $366 | $41 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.45% | 0.50% | 0.42% | 0.48% | 0.43% | 0.45% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.44% | 0.47% | 0.41% | 0.44% | 0.43% | 0.37% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.04% | 0.56% | 3.92% | 1.43% | 5.31% | 2.70% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 3% | 23% | 2% | 19% | 2% | 21% |
Class C Shares
Janus Smart | Janus Smart | |||||||||||||||||||||||||
For a share outstanding during the two-month period ended | Janus Smart | Portfolio – | Portfolio – | |||||||||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, | Portfolio – Growth | Moderate | Conservative | |||||||||||||||||||||||
2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.33 | $9.16 | $10.77 | $9.68 | $11.06 | $10.13 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | – | .10 | .01 | .09 | .01 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .68 | 1.17 | .49 | 1.08 | .37 | .92 | ||||||||||||||||||||
Total from Investment Operations | .72 | 1.17 | .59 | 1.09 | .46 | .93 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.19) | – | (.25) | – | (.35) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.19) | – | (.25) | – | (.35) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $10.86 | $10.33 | $11.11 | $10.77 | $11.17 | $11.06 | ||||||||||||||||||||
Total Return** | 6.94% | 12.77% | 5.51% | 11.26% | 4.17% | 9.18% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $286 | $110 | $1,013 | $406 | $523 | $253 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $209 | $20 | $586 | $113 | $355 | $54 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.19% | 1.37% | 1.17% | 1.26% | 1.18% | 1.20% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 1.19% | 1.26% | 1.16% | 1.20% | 1.18% | 1.13% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.81% | (0.18)% | 3.63% | 0.71% | 4.62% | 1.87% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 3% | 23% | 2% | 19% | 2% | 21% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
30 | DECEMBER 31, 2009
Class I Shares
Janus Smart | Janus Smart | |||||||||||||||||||||||||
For a share outstanding during the two-month period ended | Janus Smart | Portfolio – | Portfolio – | |||||||||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, | Portfolio – Growth | Moderate | Conservative | |||||||||||||||||||||||
2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.37 | $9.16 | $10.80 | $9.68 | $11.10 | $10.13 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .06 | – | .03 | .05 | .11 | .02 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .67 | 1.21 | .58 | 1.07 | .36 | .95 | ||||||||||||||||||||
Total from Investment Operations | .73 | 1.21 | .61 | 1.12 | .47 | .97 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.20) | – | (.27) | – | (.37) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.20) | – | (.27) | – | (.37) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $10.90 | $10.37 | $11.14 | $10.80 | $11.20 | $11.10 | ||||||||||||||||||||
Total Return** | 7.05% | 13.21% | 5.67% | 11.57% | 4.22% | 9.58% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $12 | $11 | $163 | $36 | $10 | $11 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $11 | $1 | $97 | $29 | $11 | $2 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.21% | 0.49% | 0.17% | 0.19% | 0.17% | 0.20% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.21% | 0.29% | 0.16% | 0.18% | 0.17% | 0.13% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.14% | 1.04% | 5.56% | 1.72% | 4.91% | 2.98% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 3% | 23% | 2% | 19% | 2% | 21% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios | 31
Financial Highlights (continued)
Class J Shares
For a share outstanding during the two-month period ended December | ||||||||||||||||||||||
31, 2009 (unaudited) and each fiscal year or period ended | Janus Smart Portfolio – Growth | |||||||||||||||||||||
October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.36 | $8.62 | $13.95 | $11.34 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .05 | .26 | .24 | .16 | .05 | |||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .68 | 1.69 | (4.93) | 2.62 | 1.29 | |||||||||||||||||
Total from Investment Operations | .73 | 1.95 | (4.69) | 2.78 | 1.34 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.18) | (.21) | (.24) | (.13) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.40) | (.04) | – | |||||||||||||||||
Total Distributions | (.18) | (.21) | (.64) | (.17) | – | |||||||||||||||||
Net Asset Value, End of Period | $10.91 | $10.36 | $8.62 | $13.95 | $11.34 | |||||||||||||||||
Total Return ** | 7.08% | 23.32% | (35.15)% | 24.81% | 13.40% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $205,718 | $190,737 | $143,425 | $176,461 | $66,794 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $200,541 | $154,899 | $183,091 | $124,708 | $34,131 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.33% | 0.37% | 0.25% | 0.25% | 0.25% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.32% | 0.36% | 0.24% | 0.24% | 0.24% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.98% | 2.90% | 1.95% | 1.32% | 0.98% | |||||||||||||||||
Portfolio Turnover Rate*** | 3% | 23% | 55% | 19% | 28% |
Class J Shares
For a share outstanding during the two-month period ended | ||||||||||||||||||||||
December 31, 2009 (unaudited) and each fiscal year or period ended | Janus Smart Portfolio – Moderate | |||||||||||||||||||||
October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.79 | $9.05 | $12.95 | $11.04 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .06 | .32 | .31 | .23 | .09 | |||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .56 | 1.71 | (3.64) | 1.86 | .95 | |||||||||||||||||
Total from Investment Operations | .62 | 2.03 | (3.33) | 2.09 | 1.04 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.26) | (.29) | (.29) | (.16) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.28) | (.02) | – | |||||||||||||||||
Total Distributions | (.26) | (.29) | (.57) | (.18) | – | |||||||||||||||||
Net Asset Value, End of Period | $11.15 | $10.79 | $9.05 | $12.95 | $11.04 | |||||||||||||||||
Total Return ** | 5.70% | 23.19% | (26.77)% | 19.16% | 10.40% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $177,202 | $160,742 | $110,756 | $123,007 | $51,266 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $169,895 | $124,910 | $132,650 | $87,462 | $25,078 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.29% | 0.33% | 0.21% | 0.21% | 0.21% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.29% | 0.32% | 0.20% | 0.20% | 0.20% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.84% | 3.48% | 2.63% | 2.24% | 1.97% | |||||||||||||||||
Portfolio Turnover Rate*** | 2% | 19% | 71% | 15% | 16% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from December 30, 2005 (inception date) through October 31, 2006. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
32 | DECEMBER 31, 2009
Class J Shares
For a share outstanding during the two-month period ended | ||||||||||||||||||||||
December 31, 2009 (unaudited) and each fiscal year or period ended | Janus Smart Portfolio – Conservative | |||||||||||||||||||||
October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $11.09 | $9.52 | $12.09 | $10.82 | $10.00 | |||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .08 | .38 | .33 | .26 | .13 | |||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .39 | 1.52 | (2.46) | 1.23 | .69 | |||||||||||||||||
Total from Investment Operations | .47 | 1.90 | (2.13) | 1.49 | .82 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.35) | (.33) | (.29) | (.20) | – | |||||||||||||||||
Distributions (from capital gains)* | – | – | (.15) | (.02) | – | |||||||||||||||||
Total Distributions | (.35) | (.33) | (.44) | (.22) | – | |||||||||||||||||
Net Asset Value, End of Period | $11.21 | $11.09 | $9.52 | $12.09 | $10.82 | |||||||||||||||||
Total Return ** | 4.23% | 20.71% | (18.26)% | 13.98% | 8.20% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $125,630 | $114,544 | $83,219 | $68,704 | $19,489 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $120,817 | $90,262 | $88,345 | $41,512 | $9,992 | |||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.31% | 0.31% | 0.17% | 0.18% | 0.18% | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.31% | 0.30% | 0.17% | 0.17% | 0.17% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.91% | 4.14% | 3.16% | 3.04% | 2.78% | |||||||||||||||||
Portfolio Turnover Rate*** | 2% | 21% | 90% | 16% | 20% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from December 30, 2005 (inception date) through October 31, 2006. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios | 33
Financial Highlights (continued)
Class S Shares
Janus Smart | Janus Smart | |||||||||||||||||||||||||
For a share outstanding during the two-month period ended | Janus Smart | Portfolio – | Portfolio – | |||||||||||||||||||||||
December 31, 2009 (unaudited) and the period ended October 31, | Portfolio – Growth | Moderate | Conservative | |||||||||||||||||||||||
2009 | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.35 | $9.16 | $10.78 | $9.68 | $11.07 | $10.13 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | – | .07 | .01 | .17 | .06 | ||||||||||||||||||||
Net gains/(losses) on investments (both realized and unrealized) | .67 | 1.19 | .53 | 1.09 | .29 | .88 | ||||||||||||||||||||
Total from Investment Operations | .72 | 1.19 | .60 | 1.10 | .46 | .94 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.19) | – | (.26) | – | (.33) | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.19) | – | (.26) | – | (.33) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $10.88 | $10.35 | $11.12 | $10.78 | $11.20 | $11.07 | ||||||||||||||||||||
Total Return** | 6.96% | 12.99% | 5.57% | 11.36% | 4.11% | 9.28% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $12 | $11 | $11 | $11 | $90 | $164 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $11 | $1 | $11 | $1 | $149 | $127 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.74% | 0.87% | 0.67% | 0.92% | 0.68% | 0.67% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.74% | 0.67% | 0.67% | 0.77% | 0.68% | 0.65% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.60% | 0.66% | 3.49% | 1.59% | 3.51% | 2.22% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 3% | 23% | 2% | 19% | 2% | 21% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
34 | DECEMBER 31, 2009
Notes to Schedules of Investments (unaudited)
Barclays Capital 1-3 Year U.S. 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 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. |
Janus Smart Portfolios | 35
Notes to Schedules of Investments (unaudited) (continued)
The following is a summary of the inputs that were used to value the Portfolios’ investments in securities and other financial instruments as of December 31, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Janus Smart Portfolio – Growth | |||||||||||
Mutual Funds | |||||||||||
Equity Funds | $ | – | $ | 169,243,593 | $ | – | |||||
Fixed-Income Funds | – | 37,002,483 | – | ||||||||
Total Investments in Securities | $ | – | $ | 206,246,076 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus Smart Portfolio – Moderate | |||||||||||
Mutual Funds | |||||||||||
Equity Funds | $ | – | $ | 113,615,388 | $ | – | |||||
Fixed-Income Funds | – | 66,085,239 | – | ||||||||
Total Investments in Securities | $ | – | $ | 179,700,627 | $ | – | |||||
Investments in Securities: | |||||||||||
Janus Smart Portfolio – Conservative | |||||||||||
Mutual Funds | |||||||||||
Equity Funds | $ | – | $ | 53,185,942 | $ | – | |||||
Fixed-Income Funds | – | 73,529,109 | – | ||||||||
Total Investments in Securities | $ | – | $ | 126,715,051 | $ | – | |||||
36 | DECEMBER 31, 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 funds (the “underlying funds”). 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. On November 1, 2009, the Portfolios changed their fiscal year end from October 31 to June 30. The Trust offers thirty-eight funds which include multiple series of shares, with differing investment objectives and policies. Each Portfolio in this report is classified as diversified as defined in the 1940 Act.
Each Portfolio in this report offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms. The maximum purchase in Class C Shares is $500,000 for any single purchase.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, and bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class J Shares are available to shareholders investing in the Portfolios either directly or through financial intermediaries.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
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
INTECH RISK-MANAGED CORE FUND 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 S&P 500® Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
INTECH RISK-MANAGED GROWTH FUND 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.
INTECH RISK-MANAGED INTERNATIONAL FUND 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.
INTECH RISK-MANAGED VALUE FUND 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 Smart Portfolios | 37
Notes to Financial Statements (unaudited) (continued)
JANUS BALANCED FUND seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The 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. The fund normally invests at least 25% of its assets in fixed-income senior securities. Fixed-income securities may include corporate debt securities, U.S. government obligations, mortgage-backed securities and other mortgage-related products, and short-term investments.
JANUS CONTRARIAN FUND 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 with the potential for long-term growth of capital. The portfolio manager emphasizes investments in companies with 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 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 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 FORTY FUND 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 FUND seeks long-term growth 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 industry groups: 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 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 located anywhere in the world, from larger, well-established companies to smaller, emerging growth companies. The 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. 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 GROWTH AND INCOME FUND seeks long-term capital growth and current income. The fund pursues its investment objective by normally emphasizing investments in common stocks. The fund will normally invest up to 75% of its
38 | DECEMBER 31, 2009
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 the 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.
JANUS INTERNATIONAL EQUITY FUND 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.
JANUS INTERNATIONAL FORTY FUND 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 ORION FUND seeks long-term growth of capital. The 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. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS OVERSEAS FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside of the United States. The fund normally invests in securities of issuers from several different countries, 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.
JANUS RESEARCH CORE FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in equity securities selected for their growth potential. Eligible equity securities in which the 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). The fund may invest in companies of any size.
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.
JANUS WORLDWIDE 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 of companies of any size located throughout the world. The fund normally invests in issuers from several different countries, including the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
PERKINS LARGE CAP VALUE FUND seeks capital appreciation. The fund pursues its investment objective by
Janus Smart Portfolios | 39
Notes to Financial Statements (unaudited) (continued)
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 capitalizations equal to or greater than the median market capitalization of companies included in the Russell 1000® Value Index.
PERKINS MID CAP VALUE FUND 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 mid-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 whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap® Value Index.
PERKINS SMALL CAP VALUE FUND seeks capital appreciation. The fund pursues its investment objective by investing primarily 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.
POTENTIAL UNDERLYING FUNDS INVESTING PRIMARILY IN FIXED-INCOME SECURITIES
JANUS FLEXIBLE BOND FUND seeks to obtain maximum total return, consistent with preservation of capital. The fund pursues its investment objective by primarily investing, under normal circumstances, at least 80% of its net assets in bonds. Bonds include, but are not limited to, government bonds, corporate bonds, convertible bonds, mortgage-backed securities, and zero-coupon bonds. The 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. The fund will limit its investment in high-yield/high-risk bonds to 35% or less of its net assets. The fund generates total return from a combination of current income and capital appreciation, but income is usually the dominant portion.
JANUS HIGH-YIELD FUND seeks to obtain high current income. Capital appreciation is a secondary investment objective when consistent with its primary objective. The 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 managers believe offer attractive risk/return characteristics. The fund may at times invest all of its assets in such securities.
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.
POTENTIAL UNDERLYING FUNDS PRIMARILY UTILIZING ALTERNATIVE STRATEGIES
JANUS GLOBAL REAL ESTATE FUND 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.
JANUS LONG/SHORT FUND seeks strong absolute risk-adjusted returns over a full market cycle. Under 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
40 | DECEMBER 31, 2009
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.
The following accounting policies have been followed by the Portfolios and are in conformity with accounting principles generally accepted in the United States of America within the investment management industry.
Investment Valuation
A Portfolio’s net asset value (“NAV”) is partially calculated based upon the NAV of each of the underlying funds in which the Portfolio invests on the day of valuation. The NAV for each class of an underlying fund 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. 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 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; (iii) a non-significant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a non-valued security and a restricted or non-public security. 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 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). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the 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, 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 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 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. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of
Janus Smart Portfolios | 41
Notes to Financial Statements (unaudited) (continued)
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.
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.
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.
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 a Portfolio may 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.
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.
In accordance with the Financial Accounting Standards Board (“FASB”) guidance, the Portfolios adopted the provisions of “Income Taxes.” These provisions require an evaluation of tax positions taken (or expected to be taken) in the course of preparing the Portfolios’ 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 in income tax expense on the Statements of Operations.
These provisions require management of the Portfolios to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the two months ended December 31, 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.
Valuation Inputs Summary
In accordance with FASB guidance, the Portfolios utilize the “Fair Value Measurements and Disclosures” to define fair value, establish a framework for measuring fair value, and expand disclosure requirements regarding fair value measurements. The Fair Value Measurement Standard does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of the Portfolios’ investments defined pursuant to this standard. 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
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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 under 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 December 31, 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 applicable) in the Notes to Schedules of Investments.
In April 2009, FASB issued “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,” which provides additional guidance for estimating fair value in accordance with Fair Value Measurements 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. Additionally, it amends the Fair Value Measurements Standard by expanding disclosure requirements for reporting entities surrounding the major categories of assets and liabilities carried at fair value. The required disclosures have been incorporated into the “Valuation Inputs Summary” in the Notes to Schedules of Investments. Management believes applying this guidance does not have a material impact on the financial statements.
2. | Derivative Instruments |
The underlying funds may invest in various types of derivatives which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The underlying funds may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives.
The underlying funds may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the underlying funds invest in a derivative for speculative purposes, the underlying funds will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the cost of the derivative. The underlying funds may not use any derivative to gain exposure to an asset or class of assets prohibited by their investment restrictions from purchasing directly. An underlying fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives are generally subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the underlying funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including credit risk, currency risk, leverage risk, liquidity risk, and index risk.
Derivatives may generally be traded over-the-counter (“OTC”) or on an exchange. Exchange-traded derivatives, such as futures contracts, are regulated and the terms of the options are standardized. Derivatives traded OTC, such as swap contracts, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased counterparty credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the underlying funds may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, certain underlying funds may require the counterparty to post collateral if an underlying fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Equity-Linked Structured Notes
The underlying funds, except INTECH Risk-Managed Core Fund, INTECH Risk-Managed Growth Fund, INTECH Risk-Managed International Fund, and INTECH Risk-Managed Value Fund (together, the “Risk-Managed 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
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Notes to Financial Statements (unaudited) (continued)
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.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The underlying funds, except the Risk-Managed funds, may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings of the underlying funds and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The underlying funds may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The underlying funds are subject to foreign currency risk in the normal course of pursuing their investment objectives through their investments in forward currency contracts.
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 on the underlying funds’ 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 underlying funds’ custodian.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The underlying funds 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 are subject to interest rate risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in futures contracts. 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 that are designated as collateral for market value on futures contracts are noted on the Schedules of Investments (if applicable). Such collateral is in the possession of the underlying funds’ custodian or with the counterparty broker.
With futures, there is minimal counterparty credit risk to the underlying funds since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation to buy (call option) or sell (put option) a financial instrument at an agreed upon price. The underlying 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 underlying funds are subject to interest rate risk, liquidity risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in options contracts. The underlying funds may use option contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. 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 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
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currencies will be utilized. The underlying funds may also invest in long-term equity anticipation securities, 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.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded over-the-counter expose the underlying funds to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the underlying funds and the counterparty and by having the counterparty post collateral to cover the underlying funds’ exposure to the counterparty.
Holdings of the underlying funds designated to cover outstanding written options are noted on 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.
Other Options
In addition to the option strategies described above, certain underlying funds may purchase and sell a variety of options with non-standard payout structures or other features (“exotic options”). Exotic options are traded OTC and typically have price movements that can vary markedly from simple put or call options. The risks associated with exotic options are that they cannot be as easily priced and may be subject to liquidity risk. While some exotic options have fairly active markets others are mostly thinly traded instruments. Some options are pure two-party transactions and may have no liquidity. Certain underlying funds may treat such instruments as illiquid and will limit their investments in such instruments to no more than 15% of the underlying fund’s net assets, when combined with all other illiquid investments of the underlying fund. Certain underlying funds may use exotic options to the extent that they are consistent with the underlying fund’s investment objective and investment policies, and applicable regulations.
Certain underlying funds may purchase and sell exotic options that have values which are determined by the correlation of two or more underlying assets. These types of options include but are not limited to outperformance options, yield curve options or other spread options.
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Notes to Financial Statements (unaudited) (continued)
Swaps
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. The underlying funds, except the Risk-Managed 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. The underlying funds are subject to market risk and interest rate risk in the normal course of pursuing their investment objectives through investments in swap contracts. 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. The underlying funds are subject to credit risk in the normal course of pursuing their investment objectives through their investments in credit default swap contracts. The underlying funds may enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which they are not otherwise exposed. With a credit default swap, 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. The underlying funds’ maximum risk of loss from counterparty risk, either as protection sellers or as protection buyers (undiscounted), is the notional value of the contract. The risk is mitigated by having a netting arrangement between the underlying funds and the counterparty and by posting of collateral by the counterparty to the underlying funds to cover the underlying funds’ exposure to the counterparty.
Funded (notional value of contract paid up front) or unfunded (notional value only paid in case of default) 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.
The underlying funds’ maximum risk of loss for equity swaps, interest rate swaps and total return swaps from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the underlying funds and the counterparty and by the posting of collateral to the underlying funds to cover the underlying funds’ exposure to the counterparty.
In accordance with FASB guidance, the Portfolios adopted the provisions for “Derivative and Hedging,” 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.
3. | Other Investments and Strategies |
Additional Investment Risk
The underlying funds, particularly Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund,
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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.
Unforeseen events in the equity and fixed-income markets may at times result in an unusually high degree of volatility in the markets, both domestic and international. These events and the resulting market upheavals may have an adverse effect on the underlying funds such as a decline in the value and liquidity of many securities held by the underlying funds, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in net asset value, and an increase in underlying fund expenses and therefore an increase in Portfolio expenses. Such unforeseen events may make it unusually difficult to identify both investment risks and opportunities and could limit or preclude the underlying funds’ ability to achieve their investment objective. The market’s behavior may at times be unpredictable. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
Bank Loans
Certain underlying funds, Janus Balanced Fund, Janus Flexible Bond Fund, Janus High-Yield Fund, Janus Long/Short 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 the underlying funds invest generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year 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.
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.
Borrowing
The underlying fund, Janus 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, Janus Long/Short 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. Janus Long/Short Fund may also borrow money to meet redemptions in order to avoid forced, unplanned sales of portfolio securities or for other temporary or emergency purposes. This allows Janus Long/Short 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 Janus Long/Short Fund involves special risk considerations that may not be associated with other funds that may only borrow for temporary or emergency purposes. Because substantially all of Janus Long/Short Fund’s assets fluctuate in value, whereas the interest obligation resulting from a borrowing will be fixed by the terms of Janus Long/Short Fund’s agreement with its lender, the NAV per share of Janus Long/Short 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 Janus Long/Short 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, Janus Long/Short 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 Janus Long/Short 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 Janus
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Notes to Financial Statements (unaudited) (continued)
Long/Short Fund compared with what it would have been without leverage.
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 investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Portfolio’s or underlying fund’s exposure to counterparty risk in respect to financial assets approximates its carrying value as recorded on each respective Statement of Assets and Liabilities, if applicable.
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 Portfolio’s or underlying fund’s cash balances are invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. 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.
Exchange-Traded Funds
The underlying funds may invest in exchange-traded funds, which generally 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, the underlying funds would bear their pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the underlying funds bear directly in connection with their own operations.
Exchange-Traded Notes
The underlying funds may invest directly in exchange-traded notes (“ETNs”), 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 periodic 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 is 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.
Floating Rate Loans
Certain underlying funds, Janus Balanced Fund, Janus Flexible Bond Fund, Janus High-Yield Fund, Janus Long/Short 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 LIBOR. 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. Floating rate loans may include fully funded term loans or revolving lines of credit.
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Initial Public Offerings
The underlying funds 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.
Interfund Lending
As permitted by the Securities and Exchange Commission (“SEC”), or the 1940 Act and rules promulgated thereunder, 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 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.
Mortgage- and Asset-Backed Securities
The underlying funds may purchase fixed or variable rate mortgage-backed securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“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 the underlying funds’ yield and the underlying funds’ 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 to decline.
Mortgage Dollar Rolls
Certain underlying funds, Janus Flexible Bond Fund, Janus Global Real Estate Fund, Janus High-Yield Fund, Janus Long/Short 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 Ginnie Mae security) to a dealer and simultaneously agree to repurchase a similar security (but not the same security) in the future at a predetermined 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.
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.
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 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 SEC. Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Deutsche Bank AG (the “Lending Agent”) may also invest the cash collateral in 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 on 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.
Securities Traded on a To-Be-Announced Basis
Certain underlying funds, Janus Flexible Bond Fund, Janus Global Real Estate Fund, Janus High-Yield Fund, Janus Long/Short 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, Fannie Mae and/or 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.
Short Sales
The underlying funds, except the Risk-Managed 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, 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 the underlying funds’ net assets may be
50 | DECEMBER 31, 2009
invested in short sales of stocks, futures, swaps, structured notes, and uncovered written calls (limitation not applicable to Janus Long/Short Fund). 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 the underlying funds 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 underlying funds are fully collateralized by other securities. The underlying 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, 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.
The underlying funds may also enter into short positions through derivative instruments such as option contracts, futures contracts, and swap agreements, which may expose the underlying funds to similar risks. To the extent that the underlying funds enter into short derivative positions, the underlying funds may be exposed to risks similar to those associated with short sales, including the risk that the underlying fund’s losses are theoretically unlimited.
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.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Portfolios pay Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects each Portfolio’s contractual investment advisory fee rate (expressed as an annual rate).
Contractual | ||||||||
Average | Investment | |||||||
Daily Net | Advisory | |||||||
Assets | Fee (%) | |||||||
Portfolio | of the Portfolio | (annual rate) | ||||||
Janus Smart Portfolio-Growth | All Asset Levels | 0.05 | ||||||
Janus Smart Portfolio-Moderate | All Asset Levels | 0.05 | ||||||
Janus Smart Portfolio-Conservative | All Asset Levels | 0.05 | ||||||
Janus Capital has contractually agreed until at least February 16, 2011, to waive the advisory fee payable by each Portfolio in an amount equal to the amount, if any, that such Portfolio’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses, exceed the 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.
Expense | |||||
Portfolio | Limit (%) | ||||
Janus Smart Portfolio-Growth | 0.45 | ||||
Janus Smart Portfolio-Moderate | 0.39 | ||||
Janus Smart Portfolio-Conservative | 0.40 | ||||
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 for Class J Shares.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of Class S Shares of the Portfolios for providing or arranging for the provision of, administrative services including but not limited to, recordkeeping, subaccounting, order processing for omnibus or networked accounts, or other shareholder services provided on behalf of investors in Class S Shares of the Portfolios. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, and other financial intermediaries for providing these services.
Certain intermediaries may charge administrative fees for administrative services, including recordkeeping, subaccounting, order processing for omnibus or
Janus Smart Portfolios | 51
Notes to Financial Statements (unaudited) (continued)
networked accounts, or other shareholder services provided by intermediaries on behalf of the shareholders of Class A Shares, Class C Shares, and Class I Shares. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Portfolios to Janus Services, which uses such fees to reimburse intermediaries.
Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, is the distributor of the Portfolios. The Portfolios have adopted a Distribution and Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Portfolios at an annual rate, as determined from time to time by the Board of Trustees, of up to 0.25% of the Class A Shares average daily net assets, of up to 1.00% of the Class C Shares average daily net assets, and of up to 0.25% of the Class S Shares average daily net assets. Payments under the Plan are not tied exclusively to actual distribution and shareholder service expenses, and the payments may exceed distribution and shareholder service expenses actually incurred by the Portfolios. If any of a Portfolio’s actual distribution and shareholder service expenses incurred during a calendar year is less than the payments made during a calendar year, the Portfolio will be reimbursed for the difference.
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 December 31, 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 two-month period ended December 31, 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 two-month period ended December 31, 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. The Portfolios reimburse Janus Capital for a portion of the compensation paid to the Chief Compliance Officer and certain compliance staff of the Trust. Total compensation of $52,482 was paid by the Trust during the two-month period ended December 31, 2009. Each Portfolio’s portion is reported as part of “Other Expenses” on the Statements of Operations.
Class A Shares include a 5.75% upfront sales charge of the offering price for the Portfolios. The sales charge is allocated between Janus Distributors and financial intermediaries. During the two-month period ended December 31, 2009, Janus Distributors retained the following upfront sales charge:
Upfront | |||||
Portfolio (Class A Shares) | Sales Charge | ||||
Janus Smart Portfolio-Growth | $ | 304 | |||
Janus Smart Portfolio-Moderate | 1,635 | ||||
Janus Smart Portfolio-Conservative | 719 | ||||
Class C Shares include a 1.00% contingent deferred sales charge paid by the redeeming shareholder to Janus Distributors. The contingent deferred sales charge applies to shares redeemed within 12 months of purchase. The redemption price may differ from the net asset value per share. The Portfolios did not collect any contingent deferred sales charges during the two-month period ended December 31, 2009.
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 Operations (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Operations (if applicable). The Portfolios could have employed the assets used by the
52 | DECEMBER 31, 2009
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 Portfolios and the 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 may be 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”). Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 2a-7 product. There are no restrictions on the Portfolios’ ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Portfolios to Janus Cash Liquidity Fund LLC. As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated cash management pooled investment vehicles and the Investing Funds.
During the two-month period ended December 31, 2009, the Portfolios recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Janus Smart Portfolio – Growth | |||||||||||||||||||||
INTECH Risk-Managed Growth Fund – Class I Shares | 26,903 | $ | 289,468 | (6,802) | $ | (85,565) | $ | (12,069) | $ | 103,607 | $ | 14,757,624 | |||||||||
INTECH Risk-Managed Value Fund – Class I Shares | 48,054 | 392,987 | (12,745) | (114,086) | (9,092) | 127,472 | 24,494,297 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 6,931 | 87,216 | (2,505) | (32,503) | (1,005) | 7,561 | 6,092,861 | ||||||||||||||
Janus Flexible Bond Fund – Class I Shares | 79,614 | 830,858 | (16,047) | (161,816) | 6,174 | 372,205 | 30,457,355 | ||||||||||||||
Janus Fund – Class I Shares | 3,425 | 87,233 | (1,230) | (31,040) | 459 | 7,579 | 6,329,751 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 18,603 | 144,420 | (4,039) | (31,637) | (138) | 64,766 | 3,654,383 | ||||||||||||||
Janus Growth and Income Fund – Class J Shares | 6,535 | 181,244 | (2,258) | (63,632) | (636) | 21,935 | 13,214,833 | ||||||||||||||
Janus High-Yield Fund – Class J Shares | 20,704 | 173,370 | (3,791) | (161,866) | (3,103) | 88,872 | 6,545,128 | ||||||||||||||
Janus International Equity Fund – Class I Shares | 56,419 | 555,311 | (16,969) | (179,812) | (11,821) | 130,488 | 30,975,669 | ||||||||||||||
Janus Orion Fund – Class J Shares | 2,892 | 27,744 | (1,092) | (10,646) | (147) | 1,192 | 3,981,468 | ||||||||||||||
Janus Overseas Fund – Class I Shares | 7,833 | 324,323 | (2,278) | (98,416) | (3,921) | 85,359 | 21,000,110 | ||||||||||||||
Janus Research Fund – Class J Shares | 8,070 | 192,155 | (2,643) | (67,308) | (4,312) | 32,846 | 13,668,896 | ||||||||||||||
Janus Twenty Fund – Class J Shares | 2,224 | 132,757 | (872) | (53,306) | (809) | – | 12,010,970 | ||||||||||||||
Perkins Large Cap Value Fund – Class I Shares | 22,025 | 269,690 | (6,799) | (84,158) | (163) | 57,278 | 11,334,463 | ||||||||||||||
Perkins Mid Cap Value Fund – Class J Shares | 3,116 | 60,450 | (1,082) | (21,335) | (336) | 7,347 | 4,106,236 | ||||||||||||||
Perkins Small Cap Value Fund – Class I Shares | 2,628 | 53,103 | (1,042) | (21,376) | (377) | – | 3,622,033 | ||||||||||||||
$ | 3,802,329 | $ | (1,218,502) | $ | (41,296) | $ | 1,108,507 | $ | 206,246,077 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Janus Smart Portfolio – Moderate | |||||||||||||||||||||
INTECH Risk-Managed Growth Fund – Class I Shares | 53,773 | $ | 582,293 | (2,441) | $ | (27,654) | $ | (1,044) | $ | 77,058 | $ | 11,106,419 | |||||||||
INTECH Risk-Managed Value Fund – Class I Shares | 103,324 | 850,026 | (4,834) | (40,249) | (334) | 92,174 | 17,909,554 | ||||||||||||||
Janus Flexible Bond Fund – Class I Shares | 325,145 | 3,396,815 | (13,553) | (142,495) | (576) | 642,962 | 53,589,750 | ||||||||||||||
Janus Fund – Class I Shares | 10,093 | 259,264 | (516) | (13,413) | (108) | 6,646 | 5,600,721 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 26,739 | 208,999 | (1,123) | (8,981) | (111) | 40,587 | 2,333,051 | ||||||||||||||
Janus Growth and Income Fund – Class J Shares | 18,782 | 524,379 | (951) | (26,950) | (340) | 19,144 | 11,664,227 | ||||||||||||||
Janus High-Yield Fund – Class J Shares | 39,754 | 333,151 | (1,581) | (15,061) | (1,756) | 76,359 | 5,737,106 | ||||||||||||||
Janus International Equity Fund – Class I Shares | 83,650 | 827,804 | (3,995) | (40,469) | (554) | 69,952 | 16,753,616 | ||||||||||||||
Janus Orion Fund – Class J Shares | 26,245 | 254,354 | (1,369) | (14,641) | (1,336) | 1,737 | 5,854,388 | ||||||||||||||
Janus Overseas Fund – Class I Shares | 17,729 | 738,917 | (841) | (36,405) | (926) | 65,270 | 16,191,762 | ||||||||||||||
Janus Research Fund – Class J Shares | 14,880 | 356,575 | (736) | (18,824) | (1,084) | 19,752 | 8,285,687 | ||||||||||||||
Janus Short-Term Bond Fund – Class J Shares | 120,864 | 371,453 | (5,765) | (17,458) | 282 | 33,329 | 6,758,382 | ||||||||||||||
Janus Twenty Fund – Class J Shares | 2,798 | 168,412 | (146) | (8,987) | (117) | – | 4,256,640 | ||||||||||||||
Perkins Large Cap Value Fund – Class I Shares | 44,533 | 548,392 | (2,158) | (26,880) | (270) | 43,157 | 8,665,577 | ||||||||||||||
Perkins Small Cap Value Fund – Class I Shares | 12,399 | 252,617 | (650) | (13,464) | (159) | – | 4,993,746 | ||||||||||||||
$ | 9,673,451 | $ | (451,931) | $ | (8,433) | $ | 1,188,127 | $ | 179,700,626 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Janus Smart Portfolio – Conservative | |||||||||||||||||||||
INTECH Risk-Managed Growth Fund – Class I Shares | 36,072 | $ | 389,544 | (1,844) | $ | (21,779) | $ | (1,836) | $ | 47,807 | $ | 6,839,118 | |||||||||
INTECH Risk-Managed Value Fund – Class I Shares | 64,523 | 530,043 | (3,406) | (28,403) | (483) | 51,611 | 9,961,172 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 16,614 | 210,561 | (940) | (12,310) | (344) | 5,519 | 4,463,361 | ||||||||||||||
Janus Flexible Bond Fund – Class I Shares | 395,693 | 4,133,019 | (18,729) | (194,397) | 1,045 | 724,866 | 59,682,034 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 10,666 | 83,210 | (511) | (4,054) | (65) | 14,862 | 844,269 |
Janus Smart Portfolios | 53
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Janus Growth and Income Fund – Class J Shares | 12,673 | 353,249 | (714) | (23,233) | (3,290) | 11,512 | 6,965,453 | ||||||||||||||
Janus High-Yield Fund – Class��J Shares | 51,988 | 434,732 | (2,379) | (21,108) | (1,165) | 88,174 | 6,623,405 | ||||||||||||||
Janus International Equity Fund – Class I Shares | 44,873 | 443,337 | (2,422) | (24,530) | (599) | 33,252 | 7,937,426 | ||||||||||||||
Janus Orion Fund – Class J Shares | 21,385 | 206,303 | (1,233) | (12,370) | (404) | 1,260 | 4,234,689 | ||||||||||||||
Janus Overseas Fund – Class I Shares | 3,631 | 151,069 | (192) | (8,308) | (331) | 14,374 | 3,550,338 | ||||||||||||||
Janus Research Fund – Class J Shares | 8,991 | 214,755 | (500) | (12,317) | (352) | 9,712 | 4,064,476 | ||||||||||||||
Janus Short-Term Bond Fund – Class J Shares | 145,504 | 447,132 | (7,792) | (23,866) | 66 | 37,405 | 7,223,670 | ||||||||||||||
Perkins Large Cap Value Fund – Class I Shares | 29,535 | 363,442 | (1,623) | (20,171) | (228) | 21,704 | 4,325,641 | ||||||||||||||
$ | 7,960,396 | $ | (406,846) | $ | (7,986) | $ | 1,062,058 | $ | 126,715,052 | ||||||||||||
Janus Capital or an affiliate invested and/or redeemed initial seed capital during the two-month period ended December 31, 2009, as indicated in the following table.
Seed | Seed | |||||||||||||||||||
Capital at | Date of | Date of | Capital at | |||||||||||||||||
Portfolio | 11/1/09 | Purchases | Purchases | Redemptions | Redemption | 12/31/09 | ||||||||||||||
Janus Smart Portfolio-Growth - Class A Shares | $ | 1,000 | $ | – | – | $ | – | – | $ | 1,000 | ||||||||||
Janus Smart Portfolio-Growth - Class C Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Growth - Class I Shares | 11,000 | – | – | – | – | 11,000 | ||||||||||||||
Janus Smart Portfolio-Growth - Class S Shares | 11,000 | – | – | – | – | 11,000 | ||||||||||||||
Janus Smart Portfolio-Moderate - Class A Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Moderate - Class C Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Moderate - Class I Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Moderate - Class S Shares | 11,000 | – | – | – | – | 11,000 | ||||||||||||||
Janus Smart Portfolio-Conservative - Class A Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Conservative - Class C Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
Janus Smart Portfolio-Conservative - Class I Shares | 6,000 | – | – | – | – | 6,000 | ||||||||||||||
Janus Smart Portfolio-Conservative - Class S Shares | 1,000 | – | – | – | – | 1,000 | ||||||||||||||
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Portfolios have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 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 | $ | 209,754,875 | $ | 12,438,778 | $ | (15,947,577) | $ | (3,508,799) | ||||||
Janus Smart Portfolio-Moderate | 177,072,062 | 11,666,261 | (9,037,696) | 2,628,565 | ||||||||||
Janus Smart Portfolio-Conservative | 123,129,006 | 7,735,410 | (4,149,365) | 3,586,045 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2009, 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.
54 | DECEMBER 31, 2009
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2009
Accumulated | |||||||||||
Portfolio | June 30, 2016 | June 30, 2017 | Capital Losses | ||||||||
Janus Smart Portfolio-Growth | $ | (3,343,688) | $ | (5,645,021) | $ | (8,988,709) | |||||
Janus Smart Portfolio-Moderate | (2,048,121) | (1,066,411) | (3,114,532) | ||||||||
Janus Smart Portfolio-Conservative | (2,173,333) | (601,361) | (2,774,694) | ||||||||
6. | Expense Ratios |
The expense ratios listed in the Financial Highlights reflect expenses prior to any expense offsets (gross expense ratio) and after expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursement). Listed below are the gross expense ratios for the Portfolios that would have been in effect, absent the waiver of certain fees and offsets.
For the two-month period ended December 31, 2009 (unaudited)
and the fiscal years or periods ended October 31
and the fiscal years or periods ended October 31
Janus Smart | Janus Smart | Janus Smart | ||||||||||
Portfolio - | Portfolio - | Portfolio - | ||||||||||
Growth | Moderate | Conservative | ||||||||||
Class A Shares | ||||||||||||
2009(1) | 0.45% | 0.42% | 0.43% | |||||||||
2009(2) | 0.50% | 0.48% | 0.45% | |||||||||
Class C Shares | ||||||||||||
2009(1) | 1.19% | 1.17% | 1.18% | |||||||||
2009(2) | 1.37% | 1.26% | 1.20% | |||||||||
Class I Shares | ||||||||||||
2009(1) | 0.21% | 0.17% | 0.17% | |||||||||
2009(2) | 0.49% | 0.19% | 0.20% | |||||||||
Class J Shares | ||||||||||||
2009(1) | 0.33% | 0.29% | 0.31% | |||||||||
2009(3) | 0.37% | 0.33% | 0.33% | |||||||||
2008 | 0.26% | 0.24% | 0.25% | |||||||||
2007 | 0.28% | 0.27% | 0.36% | |||||||||
2006(4) | 0.39% | 0.42% | 0.69% | |||||||||
Class S Shares | ||||||||||||
2009(1) | 0.74% | 0.67% | 0.68% | |||||||||
2009(2) | 0.91% | 0.92% | 0.67% | |||||||||
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | Period from November 1, 2008 through October 31, 2009. | |
(4) | Period from December 30, 2005 (inception date) through October 31, 2006. |
7. | Capital Share Transactions |
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||
Portfolio- | Portfolio- | Portfolio- | ||||||||||||||||||||||||
For the two-month period ended December 31, 2009 (unaudited) and the fiscal year ended October 31, 2009 | Growth | Moderate | Conservative | |||||||||||||||||||||||
(all numbers are in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Transactions in Portfolio Shares – Class A Shares: | ||||||||||||||||||||||||||
Shares sold | 4 | 14 | 24 | 108 | 18 | 21 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | 3 | – | 1 | – | ||||||||||||||||||||
Shares repurchased | – | – | (1) | (2) | – | – | ||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 4 | 14 | 26 | 106 | 19 | 21 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 14 | – | 106 | – | 21 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 18 | 14 | 132 | 106 | 40 | 21 | ||||||||||||||||||||
Transactions in Portfolio Shares – Class C Shares: | ||||||||||||||||||||||||||
Shares sold | 18 | 11 | 52 | 38 | 23 | 23 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | – | – | 1 | – | ||||||||||||||||||||
Shares repurchased | (3) | – | 1 | – | – | – | ||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 15 | 11 | 53 | 38 | 24 | 23 |
Janus Smart Portfolios | 55
Notes to Financial Statements (unaudited) (continued)
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||
Portfolio- | Portfolio- | Portfolio- | ||||||||||||||||||||||||
For the two-month period ended December 31, 2009 (unaudited) and the fiscal year ended October 31, 2009 | Growth | Moderate | Conservative | |||||||||||||||||||||||
(all numbers are in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 11 | – | 38 | – | 23 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 26 | 11 | 91 | 38 | 47 | 23 | ||||||||||||||||||||
Transactions in Portfolio Shares – Class I Shares: | ||||||||||||||||||||||||||
Shares sold | – | 1 | 12 | 3 | – | 1 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | 1 | – | – | – | ||||||||||||||||||||
Shares repurchased | – | – | (1) | – | – | – | ||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | – | 1 | 12 | 3 | – | 1 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 1 | – | 3 | – | 1 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 1 | 1 | 15 | 3 | 1 | 1 | ||||||||||||||||||||
Transactions in Portfolio Shares – Class J Shares: | ||||||||||||||||||||||||||
Shares sold | 590 | 5,156 | 962 | 5,504 | 895 | 4,547 | ||||||||||||||||||||
Reinvested dividends and distributions | 309 | 428 | 351 | 399 | 333 | 308 | ||||||||||||||||||||
Shares repurchased | (444) | (3,807) | (310) | (3,242) | (352) | (3,265) | ||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 455 | 1,777 | 1,003 | 2,661 | 876 | 1,590 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 18,408 | 16,631 | 14,895 | 12,234 | 10,332 | 8,742 | ||||||||||||||||||||
Shares Outstanding, End of Period | 18,863 | 18,408 | 15,898 | 14,895 | 11,208 | 10,332 | ||||||||||||||||||||
Transactions in Portfolio Shares – Class S Shares: | ||||||||||||||||||||||||||
Shares sold | – | 1 | – | 1 | – | 15 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | – | – | – | – | ||||||||||||||||||||
Shares repurchased | – | – | – | – | (7) | – | ||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | – | 1 | – | 1 | (7) | 15 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 1 | – | 1 | – | 15 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 1 | 1 | 1 | 1 | 8 | 15 |
(1) | Period from November 1, 2009 through December 31, 2009. The Portfolio changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) for Class A Shares, Class C Shares, Class I Shares and Class S Shares, and November 1, 2008 for Class J Share through October 31, 2009. |
8. | Purchases and Sales of Investment Securities |
For the two-month period ended December 31, 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 | $ | 3,802,329 | $ | 1,049,940 | $ | – | $ | – | ||||||
Janus Smart Portfolio-Moderate | 9,673,451 | 443,498 | – | – | ||||||||||
Janus Smart Portfolio-Conservative | 7,960,396 | 398,860 | – | – | ||||||||||
9. | 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
56 | DECEMBER 31, 2009
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, one of which still remains, and which was brought by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders against JCGI and Janus Capital (First Derivative Traders et al. v. Janus Capital Group Inc. et al., U.S. District Court, District of Maryland, MDL 1586, formerly referred to as Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818).
In the Wiggins case, a Motion to Dismiss was previously 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 October 2009, Janus filed a petition for a writ of certiorari with the United States Supreme Court to review the judgment of the United States Court of Appeals for the Fourth Circuit. On January 11, 2010, the Supreme Court asked the United States Solicitor General to file a brief on the question of whether Janus’ petition should be granted. As a result of these developments at the Supreme Court, the Court has stayed all further proceedings until the Supreme Court rules on Janus’ petition for a writ of certiorari. In addition to the Wiggins case, on January 20, 2010, the Court entered orders dismissing the remaining claims asserted against Janus Capital and its affiliates by fund investors in Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518 (a derivative claim involving alleged frequent trading practices).
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. On July 31, 2009, Janus filed a “Notice that Matter is Deemed Concluded.” At this time, no further proceedings are scheduled in this matter.
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.
10. | Subsequent Event |
Effective February 16, 2010, Class J Shares will be renamed Class T Shares and will be available through certain financial intermediary platforms. In addition, Class J Shares held directly with Janus will be moved to a newly created Class D Shares, a share class dedicated to shareholders investing directly with Janus. Class D Shares will commence operations on or about February 16, 2010. The transfer agency (TA) fee structure for Class D Shares and Class T Shares will be different than that of Class J Shares. Class D Shares will pay a fixed annual TA fee rate of 0.12% of net assets. Class T Shares will pay a fixed annual TA fee rate of 0.25% of net assets. Currently, Class J Shares pay a blended annual fee rate of 0.12% of average net assets for the proportion of assets sold directly and 0.25% of average net assets sold through financial intermediaries. A Portfolio’s total expense ratio could be impacted by the change in TA fee structure.
In May 2009, in accordance with FASB guidance, the Portfolios adopted the provisions of “Subsequent Events,” which provides guidance to establish general standards of accounting for and disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or are available to be issued. The guidance also requires entities to disclose the date through which subsequent events were evaluated as well as the basis for that date. Management has evaluated whether any events or transactions occurred subsequent to December 31, 2009 through February 18, 2010, the date of issuance of the Portfolios’ financial statements, and determined that there were no material events or transactions that would require recognition or disclosure in the Portfolios’ financial statements.
Janus Smart Portfolios | 57
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 without charge: (i) upon request, by calling 1-800-525-0020 (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 1-800-525-0020 (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 seven 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 11, 2009, 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, 2010 through February 1, 2011, subject to earlier termination as provided for in each agreement,
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
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 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
58 | DECEMBER 31, 2009
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.
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 non-affiliated funds subadvised by Janus Capital (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, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, 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 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
Janus Smart Portfolios | 59
Additional Information (unaudited) (continued)
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, the Trustees, each of whom is an Independent Trustee, concluded at their December 11, 2009 meeting 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.
60 | DECEMBER 31, 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 estimated for the fiscal year. The ratios also include expenses indirectly incurred by a 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. | Statements of Assets and Liabilities |
These statements are often referred to as the “balance sheets.” 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 the 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. | Statements of Operations |
These statements detail 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 will 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.
Janus Smart Portfolios | 61
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
5. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Portfolios’ net assets during the reporting period. Changes in the Portfolios’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Portfolios’ net asset size to change during the period.
The first section summarizes the information from the Statements 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 Portfolios 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 Portfolios. 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 within the Trust 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 Statements of Operations reflect 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.
62 | DECEMBER 31, 2009
Notes
Janus Smart Portfolios | 63
Notes
64 | DECEMBER 31, 2009
Notes
Janus Smart Portfolios | 65
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
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.
Fixed Income
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 capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
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.
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.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
Please consider the charges, risks, expenses and investment objectives carefully before investing or recommending to clients for investment. For a prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money.
This is for information purposes only. Janus Capital Group Inc., does not guarantee that the information supplied is accurate, complete or timely or make any warranties with regards to the results obtained from its use.
Janus Distributors LLC 151 Detroit Street, Denver, CO 80206 (1/10)
Investment products offered are: NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE
C-0110-041 | 2-28-10 125-24-71113 02-10 |
2009 SEMIANNUAL REPORT
Janus Value Funds
Perkins Mid Cap Value Fund
Perkins Small Cap Value Fund
HIGHLIGHTS
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
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40 | ||
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56 | ||
75 | ||
78 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital). Read it carefully before you invest or send money.
Lipper Rankings (unaudited)
Our funds have delivered strong long-term relative investment performance across all three asset managers, Janus, INTECH and Perkins Investment Management.
Lipper Rankings – Based on total returns as of 12/31/09 | ||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||
Growth & Core | ||||||||||||||||||||||||||
Janus Balanced Fund(1);(9/92) | Mixed-Asset Target Allocation-Moderate Funds | 43 | 219/509 | 1 | 1/412 | 1 | 1/311 | 19 | 28/148 | 4 | 1/27 | 1 | 1/338 | |||||||||||||
Janus Contrarian Fund;(2/00) | Multi-Cap Core Funds | 22 | 170/795 | 46 | 308/683 | 6 | 29/519 | – | – | 17 | 37/227 | 17 | 37/227 | |||||||||||||
Janus Enterprise Fund(1);(9/92) | Mid-Cap Growth Funds | 41 | 191/474 | 25 | 103/425 | 14 | 47/353 | 93 | 166/178 | 39 | 14/35 | 26 | 115/448 | |||||||||||||
Janus Fund;(2/70) | Large-Cap Growth Funds | 36 | 290/814 | 35 | 246/702 | 27 | 154/582 | 67 | 207/310 | 16 | 3/18 | 40 | 301/754 | |||||||||||||
Janus Growth and Income Fund(1);(5/91) | Large-Cap Core Funds | 7 | 60/906 | 40 | 304/773 | 37 | 240/653 | 68 | 252/374 | 8 | 6/78 | 48 | 388/820 | |||||||||||||
Janus Orion Fund;(6/00) | Multi-Cap Growth Funds | 8 | 36/459 | 16 | 57/378 | 3 | 9/310 | – | – | 19 | 35/192 | 57 | 238/418 | |||||||||||||
Janus Research Fund(1);(5/93) | Large-Cap Growth Funds | 16 | 124/814 | 17 | 117/702 | 14 | 78/582 | 76 | 235/310 | 4 | 3/79 | 12 | 77/652 | |||||||||||||
Janus Research Core Fund(1);(6/96) | Large-Cap Core Funds | 9 | 74/906 | 40 | 302/773 | 15 | 98/653 | 35 | 129/374 | 3 | 6/201 | 57 | 466/820 | |||||||||||||
Janus Triton Fund(1);(2/05) | Small-Cap Growth Funds | 10 | 53/540 | 2 | 9/472 | – | – | – | – | 1 | 4/399 | 1 | 4/450 | |||||||||||||
Janus Twenty Fund*;(4/85) | Large-Cap Growth Funds | 14 | 111/814 | 1 | 2/702 | 1 | 3/582 | 41 | 127/310 | 6 | 2/34 | 38 | 286/766 | |||||||||||||
Janus Venture Fund*;(4/85) | Small-Cap Growth Funds | 7 | 36/540 | 47 | 220/472 | 30 | 116/397 | 84 | 181/217 | 10 | 1/10 | 20 | 25/125 | |||||||||||||
Risk-Managed | ||||||||||||||||||||||||||
INTECH Risk-Managed Core Fund;(2/03) | Multi-Cap Core Funds | 83 | 656/795 | 68 | 464/683 | 60 | 312/519 | – | – | 48 | 182/386 | 48 | 182/386 | |||||||||||||
Value | ||||||||||||||||||||||||||
Perkins Mid Cap Value Fund(1);(8/98) | Mid-Cap Value Funds | 76 | 191/251 | 6 | 11/210 | 5 | 8/161 | 4 | 2/61 | 3 | 1/48 | 3 | 1/48 | |||||||||||||
Perkins Small Cap Value Fund;(10/87) | Small-Cap Core Funds | 27 | 198/756 | 1 | 6/631 | 4 | 18/522 | 12 | 32/269 | 4 | 5/128 | 4 | 5/128 | |||||||||||||
Global & International | ||||||||||||||||||||||||||
Janus Global Life Sciences Fund;(12/98) | Global Healthcare/Biotechnology Funds | 18 | 8/45 | 8 | 3/41 | 33 | 12/36 | 79 | 15/18 | 17 | 2/11 | 10 | 4/42 | |||||||||||||
Janus Global Opportunities Fund(1);(6/01) | Global Funds | 49 | 266/544 | 33 | 122/378 | 65 | 185/287 | – | – | 17 | 31/185 | 65 | 201/313 | |||||||||||||
Janus Global Research Fund(1);(2/05) | Global Funds | 12 | 65/544 | 10 | 36/378 | – | – | – | – | 4 | 11/292 | 4 | 11/292 | |||||||||||||
Janus Global Technology Fund;(12/98) | Global Science & Technology Funds | 65 | 50/77 | 33 | 21/64 | 26 | 15/58 | 90 | 18/19 | 36 | 6/16 | 43 | 27/63 | |||||||||||||
Janus Overseas Fund(1);(5/94) | International Funds | 1 | 2/1275 | 1 | 7/975 | 1 | 1/700 | 13 | 48/386 | 1 | 1/99 | 1 | 1/611 | |||||||||||||
Janus Worldwide Fund(1);(5/91) | Global Funds | 27 | 142/544 | 64 | 239/378 | 74 | 211/287 | 96 | 137/143 | 42 | 7/16 | 33 | 181/558 | |||||||||||||
Fixed Income | ||||||||||||||||||||||||||
Janus Flexible Bond Fund(1);(7/87) | Intermediate Investment Grade Debt Funds | 52 | 285/549 | 6 | 25/458 | 7 | 24/395 | 18 | 39/219 | 10 | 2/19 | 7 | 30/477 | |||||||||||||
Janus High-Yield Bond Fund(1);(12/95) | High Current Yield Funds | 76 | 347/459 | 25 | 98/391 | 17 | 56/341 | 16 | 33/207 | 7 | 6/90 | 23 | 70/313 | |||||||||||||
Janus Short-Term Bond Fund(1);(9/92) | Short Investment Grade Debt Funds | 59 | 144/246 | 2 | 4/223 | 2 | 3/176 | 13 | 12/94 | 20 | 5/24 | 3 | 6/231 | |||||||||||||
Asset Allocation | ||||||||||||||||||||||||||
Janus Smart Portfolio – Conservative;(12/05) | Mixed-Asset Target Allocation Conservative Funds | 22 | 97/441 | 4 | 13/361 | – | – | – | – | 2 | 5/304 | 2 | 5/304 | |||||||||||||
Janus Smart Portfolio – Moderate;(12/05) | Mixed-Asset Target Allocation Moderate Funds | 10 | 49/509 | 1 | 3/412 | – | – | – | – | 2 | 6/369 | 2 | 6/369 | |||||||||||||
Janus Smart Portfolio – Growth;(12/05) | Mixed-Asset Target Allocation Growth Funds | 7 | 43/649 | 6 | 32/549 | – | – | – | – | 3 | 13/497 | 3 | 13/497 | |||||||||||||
(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. |
*Closed to new investors.
Past performance is no guarantee of future results. For current month end performance, call 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital). You can also visit Janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital).
Ranking is for Class J Shares only; other classes may have different performance characteristics.
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.
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 Value Funds | 1
Useful Information About Your Fund Report (unaudited)
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 the managers’ best judgment at the time this report was compiled, which was December 31, 2009. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by 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 sales charges (loads) on purchase payments (applicable to Class A Shares only); redemption fees, where applicable (and any related exchange fees); and (2) ongoing costs, including management fees; distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares only); administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class L Shares, Class R Shares, Class S Shares and Class T Shares only); administrative fees (applicable to Class A Shares, Class C Shares, and Class I Shares only); 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 two-month period from November 1, 2009 to December 31, 2009 or the five-month period from August 1, 2009 to December 31, 2009 depending on the Fund.
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 each 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 each 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 Fund’s total annual fund operating expenses, excluding any performance adjustments to management fees, class-specific distribution and shareholder servicing (12b-1) fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares only), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class L Shares, Class R Shares, Class S Shares and Class T Shares only), brokerage commissions, interest, dividends, taxes and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least February 16, 2011. 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) and any related exchange fees. These
2 | DECEMBER 31, 2009
fees are fully described in the prospectuses. 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.
Janus Value Funds | 3
Perkins Large Cap Value Fund (unaudited)
Fund Snapshot We seek to outperform our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high quality, undervalued stocks with favorable reward to risk characteristics. We believe that rigorous downside analysis conducted prior to determination of upside potential allows us to mitigate losses during difficult markets and perform well in up markets. | Managed by Perkins Investment Management LLC |
Performance Overview
During the five months ended December 31, 2009, Perkins Large Cap Value Fund’s Class I Shares returned 11.97%, underperforming its benchmark, the Russell 1000® Value Index, which returned 13.90%.
Economic Environment
Despite a brief, late-October pullback, U.S. equity markets finished the five-month period with positive returns. Markets worldwide have had a strong rally off the March lows with many domestic indices gaining more than 50% since then to end near the highs of the year. Mid-cap indices outperformed large and small caps during the period, while growth indices dominated value. Health care and materials were the strongest performing sectors in the Russell 1000® Value Index during the period, while financials and consumer staples stocks underperformed. Commodities finished the period higher, led by gains in industrial metals. Gold futures set a record in early December before easing off their highs near year-end.
We continue to believe that sustained economic growth will be more muted than in past recoveries. Seventy percent of domestic GDP is tied to consumer spending and we still see significant headwinds. While there are signs of employment growth in the near future, unemployment was above 10% through December, and is likely to remain at elevated levels for an extended period. Housing remains a concern with the Mortgage Bankers Association citing rising delinquencies and foreclosures through September of this year. Commercial, governmental, and consumer balance sheets need to be de-levered in our view, and at some point fiscal and monetary stimulus must be reduced. Financial markets have stabilized and corporate debt and equity markets have had substantial rallies. While we think the U.S. has averted systemic collapse, we continue to believe financial markets are fragile. Financial institutions still carry significant toxic assets that have not been marked down, bank lending is restricted as capital is held to absorb future loan losses, and the shadow banking system, including securitization, is functioning at much smaller capacity with significant government involvement.
Investment Approach, Performance and Positioning
The Fund’s underperformance during the five-month period was largely due to our cash position and holdings within consumer discretionary and financials. An overweight position in consumer staples also weighed on comparable returns. Our stock selection within financials and energy helped relative returns.
In terms of sector positioning, the relative exposures remained as they have for some time. We were overweight consumer staples, health care and technology, and remained underweight utilities, financials and energy (while one of our larger absolute weights, energy is slightly underweight relative to the index as our ExxonMobil position is significantly less than the benchmark’s).
Derivatives
To accommodate cash flows into the Fund, we will occasionally purchase S&P 500® Futures contracts. These instruments are a very liquid way to gain market exposure and are sold as we buy individual equity issues. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Holdings That Detracted from Performance
Northern Trust Corp. negatively impacted performance as very low interest rates affected the company’s revenues. Should interest rates start to increase, we think Northern’s balance sheet is well positioned to take advantage of this and that earnings will be positively impacted. In addition, credit quality remains very healthy relative to its banking peers.
In technology, video game developer Electronic Arts, Inc. underperformed due to sluggish game sales and overall rotation in the market to more cyclical names. We do not think there is a lot of downside risk to the stock given our
4 | DECEMBER 31, 2009
(unaudited)
view that the company’s balance sheet is still strong and the company has historically generated healthy free cash flow. We hold a small position because we believe intermediate term earnings are uncertain, but the long term potential growth is substantial.
In consumer discretionary, education provider Apollo Group, Inc. declined on news that the SEC launched an informal inquiry over its revenue recognition practices and the Obama administration is reviewing its policy concerning for profit education. We eliminated our small position.
Holdings That Contributed to Performance
In industrials, railroad operator Kansas City Southern continued to rally from depressed levels as volumes seem to be recovering quicker than expected while rail freight pricing is holding up. The stock has been a core holding given its attractive assets including its East-West rail corridor, which provides the shortest route for Asian imports to the Southeast, and its Mexican subsidiary, which supports growing North-South NAFTA trade flows. Separately, United Technologies remains a core holding given its significant international exposure in global infrastructure, diversified business lines, and strong balance sheet.
Software giant Microsoft Corp. gained as Windows 7 was released and amid anticipation of a general increase in technology spending next year. The company continued to generate around $1 billion a month of free cash flow and had a cash rich balance sheet at period end.
Market Outlook
The historically strong stock market has maintained its momentum. At the bottom of the market in early March we thought that stocks were undervalued and we became more aggressive buyers. However, our opinion continues to be that the strong and rapid market bounce of over 60% in the S&P 500® Index since early March has taken stocks to what we believe to be slightly overvalued levels. A record 80% of S&P 500® Index companies reported earnings above expectations in the third quarter and this might continue to be the case over the short term due to rigorous cost controls. However, in order to see sustainable earnings growth, we need to see revenue growth. As previously stated, we believe revenue and economic growth over the next several years is likely to be below past experience due to secular deleveraging. On a short-to-intermediate term basis we believe stocks could continue to rally as interest rates are low, alternative investments are not priced relatively attractively, and investors might feel underexposed to equities.
However, even with the consensus’ perhaps aggressive estimate of 35% earnings growth in 2010 (to $75 on the S&P 500® Index) stocks were selling at almost 15 times 2010 estimated operating earnings at period end, which is in line with the long-term trend. In addition, operating earnings are at a historically high 20% premium to Generally Accepted Accounting Principles (GAAP) earnings, making stocks in our view more expensive on a GAAP basis. With valuations at these levels, we have found fewer stocks with favorable risk/reward characteristics. Additionally, with a longer term perspective we are concerned about continuing potential structural problems related to personal balance sheets, governmental budget deficits, a weakening dollar, increasing U.S. government intervention in business, and geopolitical instability. We are disappointed that many of the imbalances that led to last year’s near meltdown have not been addressed adequately in our view. We think the financial system is still fragile and that the U.S. government is performing a huge financial experiment with an outcome that we think is difficult to gauge. Despite these long-term issues, in the near term, investors have become somewhat complacent as reflected in volatility (as measured by CBOE VIX Index) declining by 50% this year to levels below those of the mid-to-late 1990’s. With this background we have allowed our cash balances to rise rather than stretch our valuation discipline.
We believe that our long term emphasis on balance sheets, free cash flow and reasonable valuations will serve us well in an environment that is likely to remain difficult and volatile. This consistent focus on long-term value might lead to short-term underperformance in a momentum driven market. But our risk sensitive discipline may help lead to outperformance in down markets.
Thank you for co-investing with us in Perkins Large Cap Value Fund.
Janus Value Funds | 5
Perkins Large Cap Value Fund (unaudited)
Perkins Large Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
United Technologies Corp. | 0.59% | |||
Anadarko Petroleum Corp. | 0.56% | |||
Kansas City Southern | 0.54% | |||
AT&T, Inc. | 0.53% | |||
General Electric Co. | 0.49% |
5 Bottom Performers – Holdings
Contribution | ||||
Apollo Group, Inc. – Class A | –0.09% | |||
Activision Blizzard, Inc. | –0.08% | |||
Nokia OYJ (ADR) | –0.08% | |||
Electronic Arts, Inc. | –0.07% | |||
Exxon Mobil Corp. | –0.06% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | 4.61% | 20.32% | 24.57% | |||||||||
Industrials | 3.53% | 9.58% | 10.50% | |||||||||
Energy | 3.32% | 14.24% | 18.88% | |||||||||
Health Care | 2.87% | 13.87% | 9.33% | |||||||||
Information Technology | 2.77% | 11.45% | 5.05% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Utilities | 0.44% | 2.18% | 7.10% | |||||||||
Telecommunication Services | 1.11% | 6.64% | 5.64% | |||||||||
Materials | 1.17% | 3.28% | 3.91% | |||||||||
Consumer Discretionary | 1.62% | 6.25% | 9.43% | |||||||||
Consumer Staples | 2.10% | 12.18% | 5.59% |
* | Based on sector classification according to the Global Industry Classification Standard codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
6 | DECEMBER 31, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
Exxon Mobil Corp. Oil Companies – Integrated | 2.9% | |||
AT&T, Inc. Telephone – Integrated | 2.3% | |||
Berkshire Hathaway, Inc. – Class B Reinsurance | 1.8% | |||
Wal-Mart Stores, Inc. Retail – Discount | 1.6% | |||
Verizon Communications, Inc. Telephone – Integrated | 1.5% | |||
10.1% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
Janus Value Funds | 7
Perkins Large Cap Value Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||
Five-Month | |||||||||||
Period Ended | One | Since | Total Annual Fund | Net Annual Fund | |||||||
12/31/09 | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Perkins Large Cap Value Fund – Class A Shares | |||||||||||
NAV | 11.87% | 24.80% | 24.80% | 2.19% | 1.25% | ||||||
MOP | 5.43% | 17.63% | 17.63% | ||||||||
Perkins Large Cap Value Fund – Class C Shares | |||||||||||
NAV | 11.57% | 23.95% | 23.95% | 2.90% | 2.00% | ||||||
CDSC | 10.45% | 22.71% | 22.71% | ||||||||
Perkins Large Cap Value Fund – Class I Shares | 11.97% | 25.15% | 25.15% | 2.15% | 1.00% | ||||||
Perkins Large Cap Value Fund – Class S Shares | 11.81% | 24.57% | 24.57% | 2.32% | 1.50% | ||||||
Perkins Large Cap Value Fund – Class T Shares | 11.91% | 24.26% | 24.26% | 2.19% | 1.25% | ||||||
Russell 1000® Value Index | 13.90% | 19.69% | 19.69% | ||||||||
Lipper Quartile – Class I Shares | – | 2nd | 2nd | ||||||||
Lipper Ranking – based on total return for Large Cap Value Funds | – | 160/527 | 160/527 | ||||||||
Visit janus.com/advisor/mutual-funds 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 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
8 | DECEMBER 31, 2009
(unaudited)
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any performance adjustments to management fees, distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class S Shares and Class T Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 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 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, and derivatives. Please see a Janus prospectus or janus.com/info 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 if the underlying securities were held directly by the Fund. 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 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 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.
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.
Due to certain investment strategies, the Fund may have an increased position in cash.
Returns include reinvestment of dividends from net investment income and distributions of 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.
Effective July 6, 2009, Janus Adviser Perkins Large Cap Value Fund merged into Perkins Large Cap Value Fund.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser Perkins Large Cap Value Fund (the “JAD predecessor fund”) into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the JAD predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, net of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class T Shares of the Fund commenced operations on July 6, 2009, after the reorganization of the JAD predecessor fund into the Fund. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the JAD predecessor fund’s Class I Shares prior to the reorganization, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers. If Class T Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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 Class I Shares only; other classes may have different performance characteristics.
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 – December 31, 2008 |
Janus Value Funds | 9
Perkins Large Cap Value Fund (unaudited)
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 – Class A Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,118.60 | $ | 5.59 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.85 | $ | 6.41 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,115.70 | $ | 8.91 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,015.07 | $ | 10.21 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,119.70 | $ | 4.49 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.11 | $ | 5.14 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,118.10 | $ | 6.70 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.59 | $ | 7.68 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class T Shares | (8/1/09) | (12/31/09) | (8/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,119.10 | $ | 5.64 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.80 | $ | 6.46 | ||||||||
† | Expenses equal to the annualized expense ratio of 1.26% for Class A Shares, 2.01% for Class C Shares, 1.01% for Class I Shares, 1.51% for Class S Shares and 1.27% for Class T Shares, multiplied by the average account value over the period, multiplied by 153/365 (to reflect a five-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a five-month period. Therefore, actual expenses are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
10 | DECEMBER 31, 2009
Perkins Large Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 86.6% | ||||||||||||
Aerospace and Defense – Equipment – 1.1% | ||||||||||||
8,500 | United Technologies Corp. | $ | 589,985 | |||||||||
Apparel Manufacturers – 0.3% | ||||||||||||
2,400 | VF Corp. | 175,776 | ||||||||||
Applications Software – 1.0% | ||||||||||||
17,500 | Microsoft Corp. | 533,575 | ||||||||||
Beverages – Non-Alcoholic – 1.3% | ||||||||||||
3,000 | Coca-Cola Co. | 171,000 | ||||||||||
9,000 | PepsiCo, Inc. | 547,200 | ||||||||||
718,200 | ||||||||||||
Brewery – 0.7% | ||||||||||||
8,500 | Molson Coors Brewing Co. – Class B | 383,860 | ||||||||||
Cable Television – 1.0% | ||||||||||||
32,000 | Comcast Corp. – Class A | 539,520 | ||||||||||
Cellular Telecommunications – 0.8% | ||||||||||||
18,000 | Vodafone Group PLC | 415,620 | ||||||||||
Chemicals – Specialty – 0.3% | ||||||||||||
2,345 | Lubrizol Corp. | 171,068 | ||||||||||
Commercial Banks – 0.8% | ||||||||||||
17,400 | BB&T Corp. | 441,438 | ||||||||||
Computer Services – 0.7% | ||||||||||||
8,600 | Accenture, Ltd. – Class A (U.S. Shares) | 356,900 | ||||||||||
Computers – 1.7% | ||||||||||||
9,000 | Hewlett-Packard Co. | 463,590 | ||||||||||
3,500 | International Business Machines Corp. | 458,150 | ||||||||||
921,740 | ||||||||||||
Computers – Memory Devices – 0.8% | ||||||||||||
23,925 | EMC Corp.* | 417,970 | ||||||||||
Consumer Products – Miscellaneous – 0.6% | ||||||||||||
5,000 | Kimberly-Clark Corp. | 318,550 | ||||||||||
Cosmetics and Toiletries – 0.7% | ||||||||||||
6,500 | Procter & Gamble Co. | 394,095 | ||||||||||
Diversified Banking Institutions – 4.0% | ||||||||||||
51,000 | Bank of America Corp.** | 768,060 | ||||||||||
1,800 | Goldman Sachs Group, Inc. | 303,912 | ||||||||||
6,500 | HSBC Holdings PLC | 371,085 | ||||||||||
17,000 | JPMorgan Chase & Co. | 708,390 | ||||||||||
2,151,447 | ||||||||||||
Diversified Operations – 3.5% | ||||||||||||
5,800 | 3M Co. | 479,486 | ||||||||||
51,200 | General Electric Co.** | 774,656 | ||||||||||
18,000 | Tyco International, Ltd. (U.S. Shares) | 642,240 | ||||||||||
1,896,382 | ||||||||||||
Electric – Integrated – 1.8% | ||||||||||||
6,100 | Entergy Corp. | 499,224 | ||||||||||
14,000 | Public Service Enterprise Group, Inc. | 465,500 | ||||||||||
964,724 | ||||||||||||
Electronic Components – Semiconductors – 1.0% | ||||||||||||
25,600 | Intel Corp. | 522,240 | ||||||||||
Engineering – Research and Development Services – 1.0% | ||||||||||||
12,000 | URS Corp.* | 534,240 | ||||||||||
Entertainment Software – 0.9% | ||||||||||||
28,500 | Activision Blizzard, Inc.* | 316,635 | ||||||||||
9,200 | Electronic Arts, Inc.* | 163,300 | ||||||||||
479,935 | ||||||||||||
Fiduciary Banks – 0.7% | ||||||||||||
7,000 | Northern Trust Corp. | 366,800 | ||||||||||
Food – Miscellaneous/Diversified – 1.8% | ||||||||||||
5,000 | General Mills, Inc. | 354,050 | ||||||||||
5,000 | Kellogg Co. | 266,000 | ||||||||||
5,000 | Kraft Foods, Inc. – Class A | 135,900 | ||||||||||
7,000 | Unilever PLC (ADR) | 223,300 | ||||||||||
979,250 | ||||||||||||
Food – Retail – 1.4% | ||||||||||||
28,000 | Kroger Co. | 574,840 | ||||||||||
8,700 | Safeway, Inc. | 185,223 | ||||||||||
760,063 | ||||||||||||
Forestry – 0.3% | ||||||||||||
3,500 | Weyerhaeuser Co. | 150,990 | ||||||||||
Gold Mining – 1.2% | ||||||||||||
17,000 | Goldcorp, Inc. (U.S. Shares) | 668,780 | ||||||||||
Instruments – Scientific – 1.1% | ||||||||||||
12,390 | Thermo Fisher Scientific, Inc.* | 590,879 | ||||||||||
Insurance Brokers – 0.9% | ||||||||||||
12,075 | AON Corp. | 462,956 | ||||||||||
Internet Infrastructure Software – 0.5% | ||||||||||||
10,000 | Akamai Technologies, Inc.* | 253,300 | ||||||||||
Internet Security – 0.8% | ||||||||||||
25,000 | Symantec Corp.* | 447,250 | ||||||||||
Investment Management and Advisory Services – 0.8% | ||||||||||||
19,000 | INVESCO, Ltd. | 446,310 | ||||||||||
Machinery – Farm – 0.6% | ||||||||||||
6,000 | Deere & Co. | 324,540 | ||||||||||
Medical – Biomedical and Genetic – 1.0% | ||||||||||||
6,400 | Amgen, Inc.* | 362,048 | ||||||||||
3,900 | Genzyme Corp.* | 191,139 | ||||||||||
553,187 | ||||||||||||
Medical – Drugs – 3.1% | ||||||||||||
11,700 | Abbott Laboratories | 631,683 | ||||||||||
15,000 | Eli Lilly & Co. | 535,650 | ||||||||||
29,000 | Pfizer, Inc. | 527,510 | ||||||||||
1,694,843 | ||||||||||||
Medical – HMO – 0.4% | ||||||||||||
3,700 | WellPoint, Inc.* | 215,673 | ||||||||||
Medical – Wholesale Drug Distributors – 0.3% | ||||||||||||
2,800 | McKesson Corp. | 175,000 | ||||||||||
Medical Instruments – 1.5% | ||||||||||||
8,600 | Medtronic, Inc. | 378,228 | ||||||||||
11,700 | St. Jude Medical, Inc.* | 430,326 | ||||||||||
808,554 | ||||||||||||
Medical Labs and Testing Services – 0.7% | ||||||||||||
5,000 | Laboratory Corp. of America Holdings* | 374,200 | ||||||||||
Medical Products – 3.4% | ||||||||||||
7,000 | Becton, Dickinson and Co. | 552,020 | ||||||||||
8,110 | Covidien PLC (U.S. Shares) | 388,388 |
See Notes to Schedules of Investments and Financial Statements.
Janus Value Funds | 11
Perkins Large Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Medical Products – (continued) | ||||||||||||
9,000 | Johnson & Johnson | $ | 579,690 | |||||||||
5,500 | Zimmer Holdings, Inc.* | 325,105 | ||||||||||
1,845,203 | ||||||||||||
Metal – Copper – 0.4% | ||||||||||||
2,800 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 224,812 | ||||||||||
Multi-Line Insurance – 1.3% | ||||||||||||
21,700 | Allstate Corp.** | 651,868 | ||||||||||
4,750 | Old Republic International Corp. | 47,690 | ||||||||||
699,558 | ||||||||||||
Multimedia – 2.3% | ||||||||||||
30,200 | News Corp. – Class A | 413,438 | ||||||||||
11,500 | Time Warner, Inc. | 335,110 | ||||||||||
8,795 | Viacom, Inc. – Class B* | 261,475 | ||||||||||
7,000 | Walt Disney Co. | 225,750 | ||||||||||
1,235,773 | ||||||||||||
Networking Products – 1.0% | ||||||||||||
21,500 | Cisco Systems, Inc.* | 514,710 | ||||||||||
Non-Hazardous Waste Disposal – 0.2% | ||||||||||||
4,205 | Republic Services, Inc. | 119,044 | ||||||||||
Oil – Field Services – 0.5% | ||||||||||||
4,000 | Schlumberger, Ltd. (U.S. Shares) | 260,360 | ||||||||||
Oil and Gas Drilling – 0.6% | ||||||||||||
3,700 | Transocean, Ltd. (U.S. Shares) | 306,360 | ||||||||||
Oil Companies – Exploration and Production – 7.1% | ||||||||||||
12,500 | Anadarko Petroleum Corp. | 780,249 | ||||||||||
3,000 | Apache Corp. | 309,510 | ||||||||||
4,000 | Devon Energy Corp. | 294,000 | ||||||||||
11,600 | EnCana Corp. (U.S. Shares) | 375,724 | ||||||||||
3,000 | EQT Corp. | 131,760 | ||||||||||
19,000 | Forest Oil Corp.* | 422,750 | ||||||||||
9,800 | Noble Energy, Inc. | 697,956 | ||||||||||
2,700 | Occidental Petroleum Corp. | 219,645 | ||||||||||
4,500 | Questar Corp. | 187,065 | ||||||||||
8,000 | Ultra Petroleum Corp. (U.S. Shares)* | 398,880 | ||||||||||
3,817,539 | ||||||||||||
Oil Companies – Integrated – 4.3% | ||||||||||||
22,600 | Exxon Mobil Corp.** | 1,541,094 | ||||||||||
12,700 | Hess Corp. | 768,350 | ||||||||||
2,309,444 | ||||||||||||
Oil Field Machinery and Equipment – 0.3% | ||||||||||||
4,000 | National Oilwell Varco, Inc. | 176,360 | ||||||||||
Pipelines – 0.9% | ||||||||||||
4,800 | Kinder Morgan Energy Partners L.P. | 292,704 | ||||||||||
3,600 | Plains All American Pipeline L.P. | 190,260 | ||||||||||
482,964 | ||||||||||||
Property and Casualty Insurance – 1.1% | ||||||||||||
12,000 | Chubb Corp. | 590,160 | ||||||||||
Reinsurance – 2.5% | ||||||||||||
300 | Berkshire Hathaway, Inc. – Class B*,** | 985,800 | ||||||||||
4,500 | Everest Re Group, Ltd. | 385,560 | ||||||||||
1,371,360 | ||||||||||||
REIT – Apartments – 0.3% | ||||||||||||
4,000 | Equity Residential | 135,120 | ||||||||||
REIT – Regional Malls – 0.4% | ||||||||||||
2,712 | Simon Property Group, Inc. | 216,418 | ||||||||||
REIT – Storage – 0.5% | ||||||||||||
3,000 | Public Storage | 244,350 | ||||||||||
Retail – Apparel and Shoe – 0.6% | ||||||||||||
16,500 | Gap, Inc. | 345,675 | ||||||||||
Retail – Building Products – 0.7% | ||||||||||||
16,500 | Lowe’s Cos., Inc. | 385,935 | ||||||||||
Retail – Discount – 2.0% | ||||||||||||
4,500 | Target Corp. | 217,665 | ||||||||||
16,200 | Wal-Mart Stores, Inc. | 865,890 | ||||||||||
1,083,555 | ||||||||||||
Retail – Drug Store – 0.7% | ||||||||||||
11,600 | CVS Caremark Corp. | 373,636 | ||||||||||
Retail – Restaurants – 0.7% | ||||||||||||
6,000 | McDonald’s Corp. | 374,640 | ||||||||||
Savings/Loan/Thrifts – 0.9% | ||||||||||||
28,100 | People’s United Financial, Inc. | 469,270 | ||||||||||
Semiconductor Equipment – 1.0% | ||||||||||||
36,800 | Applied Materials, Inc. | 512,992 | ||||||||||
Super-Regional Banks – 3.2% | ||||||||||||
5,100 | PNC Financial Services Group, Inc. | 269,229 | ||||||||||
9,000 | SunTrust Banks, Inc. | 182,610 | ||||||||||
30,000 | U.S. Bancorp | 675,300 | ||||||||||
22,000 | Wells Fargo & Co. | 593,780 | ||||||||||
1,720,919 | ||||||||||||
Telephone – Integrated – 5.0% | ||||||||||||
43,995 | AT&T, Inc.** | 1,233,179 | ||||||||||
18,000 | CenturyTel, Inc. | 651,780 | ||||||||||
25,000 | Verizon Communications, Inc.** | 828,250 | ||||||||||
2,713,209 | ||||||||||||
Tobacco – 0.3% | ||||||||||||
3,000 | Philip Morris International, Inc. | 144,570 | ||||||||||
Tools – Hand Held – 0.7% | ||||||||||||
9,000 | Snap-On, Inc. | 380,340 | ||||||||||
Transportation – Railroad – 1.8% | ||||||||||||
13,400 | Kansas City Southern* | 446,086 | ||||||||||
4,500 | Norfolk Southern Corp. | 235,890 | ||||||||||
4,900 | Union Pacific Corp. | 313,110 | ||||||||||
995,086 | ||||||||||||
Wireless Equipment – 0.4% | ||||||||||||
18,000 | Nokia OYJ (ADR) | 231,300 | ||||||||||
X-Ray Equipment – 0.4% | ||||||||||||
14,000 | Hologic, Inc.* | 203,000 | ||||||||||
Total Common Stock (cost $40,476,432) | 46,683,502 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
12 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Repurchase Agreement – 14.5% | ||||||||||||
$ | 7,800,000 | RBC Capital Markets Corporation 0.0100% dated 12/31/09, maturing 1/4/10 to be repurchased at $7,800,009 collateralized by $18,472,725 in U.S. Government Agencies 2.4890%-16.0000%, 7/1/10-8/1/48 with a value of $7,956,000 (cost $7,800,000) | $ | 7,800,000 | ||||||||
Total Investments (total cost $48,276,432) – 101.1% | 54,483,502 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (1.1)% | (581,693) | |||||||||||
Net Assets – 100% | $ | 53,901,809 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 831,870 | 1.5% | |||||
Canada | 1,443,384 | 2.6% | ||||||
Finland | 231,300 | 0.4% | ||||||
Ireland | 745,288 | 1.4% | ||||||
Netherlands Antilles | 260,360 | 0.5% | ||||||
Switzerland | 948,600 | 1.7% | ||||||
United Kingdom | 1,010,005 | 1.9% | ||||||
United States†† | 49,012,695 | 90.0% | ||||||
Total | $ | 54,483,502 | 100.0% |
†† | Includes Cash Equivalents (75.6% excluding Cash Equivalents). |
Financial Futures – Long | ||||||
50 Contracts | S&P 500® (E-mini) expires March 2010 principal amount $2,743,142, value $2,776,750 cumulative appreciation | $ | 33,608 | |||
See Notes to Schedules of Investments and Financial Statements.
Janus Value Funds | 13
Perkins Mid Cap Value Fund (unaudited)
Fund Snapshot We seek to outperform our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high quality, undervalued stocks with favorable reward to risk characteristics. We believe that rigorous downside analysis conducted prior to determination of upside potential allows us to mitigate losses during difficult markets and perform well in up markets. | Managed by Perkins Investment Management LLC |
Performance Overview
During the two months ended December 31, 2009, Perkins Mid Cap Value Fund’s Class J Shares returned 6.25%, underperforming the Fund’s benchmark, the Russell Midcap® Value Index, which returned 10.47%.
Economic Environment
Despite a brief, late-October pullback, U.S. equity markets finished the period with positive returns. Markets worldwide have had a strong rally off the March lows with many domestic indices gaining more than 50% since then to end near the highs of the year. Small cap indices outperformed mid- and large caps for the period, while growth indices dominated value. Telecommunication services and materials were the strongest performing sectors in the Russell Midcap® Value Index during the two months, while consumer staples and energy stocks underperformed. Commodities finished the period higher, led by gains in industrial metals. Gold futures set a record in early December before easing off their highs near year-end.
We continue to believe that sustained economic growth will be more muted than in past recoveries. Seventy percent of U.S. Gross Domestic Product (GDP) is tied to consumer spending and we still see significant headwinds. While there are signs of employment growth in the near future, unemployment was above 10% through December, and is likely to remain at elevated levels for an extended period. Housing remains a concern with the Mortgage Bankers Association citing rising delinquencies and foreclosures through September of this year. Commercial, governmental, and consumer balance sheets need to be de-levered in our view, and at some point fiscal and monetary stimulus must be reduced. Financial markets have stabilized and corporate debt and equity markets have had substantial rallies. While we think the U.S. has averted systemic collapse, we continue to believe financial markets are fragile. Financial institutions still carry significant toxic assets that have not been marked down, bank lending is restricted as capital is held to absorb future loan losses, and the shadow banking system, including securitization, is functioning at much smaller capacity with significant government involvement.
Investment Approach, Performance and Positioning
Our focus on financially strong companies and our attempt to limit losses in the first three months of the year was the key to our positive full year returns. This attention to risk has been central to our ability to substantially outperform over the long term. In that context we are pleased to have compounded an average annualized return of 11.03% (J Shares) over the past 10 years while the Russell Midcap® Value Index had an average annualized return of 7.58%. The broad U.S. equity market, represented by the S&P 500® Index, had an average annualized return of -0.95% over the same period.
During the two-month period, the Fund provided positive returns but lagged on a relative basis. Our higher-than-average cash position, our small investment in index put options and our holdings within health care and information technology underperformed while our stock selection within industrials helped relative returns. In terms of sector positioning, the relative exposures remained as they have for some time. We were overweight health care, technology and energy and underweight utilities, consumer discretionary and financials through period end.
Derivatives
In an attempt to help minimize downside risk in the Fund we used relatively small positions in put options on the Russell Midcap® Value Index during the period given our view of greater market uncertainty and risk. These positions proved to be a drag on relative results in the period as the market rallied. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Holdings That Detracted from Performance
Video game retailer GameStop Corp. underperformed on concerns about heavy discounting and pressure from Wal-
14 | DECEMBER 31, 2009
(unaudited)
Mart Stores, Inc. We continue to like the stock given its healthy balance sheet, strong free cash flow generation, and attractive valuation. In industrials, Jacobs Engineering Group, Inc. was a detractor during the period. We added on weakness to this engineering and construction provider as the company has one of the best management teams in the industry, an extremely strong balance sheet and favorable long term prospects.
Consumer staples stocks lagged during the period, which hurt companies like Kroger Co. We increased our exposure to names like Kroger Co., one of the best managed grocers in our view, which sold at about 11 times this year’s earnings and was close to its 12-month low at period end.
Holdings That Contributed to Performance
In industrials, railroad operator Kansas City Southern continued to rally from depressed levels as volumes seem to be recovering quicker than expected while rail freight pricing is holding up. The stock has been a core holding given its attractive assets including its East-West rail corridor, which provides the shortest route for Asian imports to the Southeast, and its Mexican subsidiary, which supports growing North-South NAFTA trade flows. Separately, tool manufacturer Snap-On, Inc. rebounded after announcing moderating revenue declines and better margins. The company remains a large holding due to its good balance sheet, strong free cash flow generation and reasonable valuation.
Managed care providers rallied as more visibility developed on the health-care reform. In addition, Health Net, Inc. benefitted from positive developments in one of their larger existing contracts. We trimmed our position on strength as the risk/reward became less favorable.
Market Outlook
The historically strong stock market has maintained its momentum. At the bottom of the market in early March we thought that stocks were undervalued and we became more aggressive buyers. However, our opinion continues to be that the strong and rapid market bounce of over 60% in the S&P 500® Index and over 80% in the Russell Midcap® Value Index since early March has taken stocks to what we believe to be slightly overvalued levels. A record 80% of S&P 500® Index companies reported earnings above expectations in the third quarter and this might continue to be the case over the short term due to rigorous cost controls. However, in order to see sustainable earnings growth, we need to see revenue growth. As previously stated, we believe revenue and economic growth over the next several years is likely to be below past experience due to secular deleveraging. On a short-to-intermediate term basis we believe stocks could continue to rally as interest rates are low, inventory rebuilding leads to above average GDP growth, alternative investments are not priced relatively attractively, and investors might feel underexposed to equities.
However, even with the consensus’ perhaps aggressive estimate of 35% earnings growth in 2010 (to $75 on the S&P 500® Index) stocks were selling at almost 15 times 2010 estimated operating earnings at period end, which is in line with the long-term trend. In addition, operating earnings are at a historically high 20% premium to Generally Accepted Accounting Principles (GAAP) earnings, making stocks in our view more expensive on a GAAP basis. With valuations at these levels, we have found fewer stocks with favorable risk/reward characteristics. Additionally, with a longer term perspective we are concerned about continuing potential structural problems related to personal balance sheets, governmental budget deficits, a weakening dollar, increasing government intervention in business, and geopolitical instability. We are disappointed that many of the imbalances that led to last year’s near meltdown have not been addressed adequately in our view. We think the financial system is still fragile and that U.S. government is performing a huge financial experiment with an outcome that we think is difficult to gauge. Despite these long-term issues, in the near term, investors have become somewhat complacent as reflected in volatility (as measured by CBOE VIX Index) declining by 50% this year to levels below those of the mid-to-late 1990’s. With this background we have allowed our cash balances to rise rather than stretch our valuation discipline.
We believe that our long-term emphasis on balance sheets, free cash flow and reasonable valuations will serve us well in an environment that is likely to remain difficult and volatile. This consistent focus on long-term value might lead to short-term underperformance in a momentum driven market. But more importantly our risk sensitive discipline has historically led to outperformance in down markets, such as 2008, and longer term, well above average returns as exhibited by our double-digit annualized 10-year returns in perhaps the worst decade in the stock market’s history.
Thank you for your co-investment in Perkins Mid Cap Value Fund.
Janus Value Funds | 15
Perkins Mid Cap Value Fund (unaudited)
Perkins Mid Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Lubrizol Corp. | 0.94% | |||
Kansas City Southern | 0.84% | |||
Tyco International, Ltd. (U.S. Shares) | 0.50% | |||
Forest Oil Corp. | 0.50% | |||
Snap-On, Inc. | 0.48% |
5 Bottom Performers – Holdings
Contribution | ||||
Apollo Group, Inc. – Class A | –0.15% | |||
Electronic Arts, Inc. | –0.13% | |||
Brown & Brown, Inc. | –0.10% | |||
GameStop Corp. – Class A | –0.09% | |||
Kroger Co. | –0.08% |
5 Top Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | 6.25% | 23.69% | 27.68% | |||||||||
Energy | 3.60% | 11.91% | 9.26% | |||||||||
Industrials | 3.48% | 11.02% | 10.82% | |||||||||
Information Technology | 3.17% | 11.42% | 7.04% | |||||||||
Health Care | 2.65% | 12.75% | 4.26% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Telecommunication Services | 0.33% | 1.21% | 2.45% | |||||||||
Utilities | 0.75% | 3.92% | 11.92% | |||||||||
Consumer Staples | 1.35% | 8.45% | 6.48% | |||||||||
Consumer Discretionary | 1.99% | 9.37% | 12.47% | |||||||||
Materials | 2.33% | 6.27% | 7.63% |
* | Based on sector classification according to the Global Industry Classification Standard codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
16 | DECEMBER 31, 2009
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
URS Corp. Engineering – Research and Development Services | 1.4% | |||
Everest Re Group, Ltd. Reinsurance | 1.3% | |||
Noble Energy, Inc. Oil Companies – Exploration and Production | 1.3% | |||
Kroger Co. Food – Retail | 1.3% | |||
Allstate Corp. Multi-Line Insurance | 1.3% | |||
6.6% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Emerging markets comprised 0.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
Janus Value Funds | 17
Perkins Mid Cap Value Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||||
Two-Month | |||||||||||||||
Period | |||||||||||||||
Ended | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
12/31/09 | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Perkins Mid Cap Value Fund – Class A Shares | |||||||||||||||
NAV | 6.24% | 30.04% | 5.07% | 10.87% | 12.70% | 1.17% | 1.17% | ||||||||
MOP | 0.13% | 22.57% | 3.83% | 10.22% | 12.12% | ||||||||||
Perkins Mid Cap Value Fund – Class C Shares | |||||||||||||||
NAV | 6.07% | 28.52% | 4.30% | 10.13% | 12.00% | 1.97% | 1.97% | ||||||||
CDSC | 5.01% | 27.24% | 4.30% | 10.13% | 12.00% | ||||||||||
Perkins Mid Cap Value Fund – Class I Shares | 6.32% | 30.37% | 5.30% | 11.03% | 12.85% | 0.84% | 0.84% | ||||||||
Perkins Mid Cap Value Fund – Class J Shares | 6.25% | 30.37% | 5.30% | 11.03% | 12.85% | 1.14% | 1.14% | ||||||||
Perkins Mid Cap Value Fund – Class L Shares(1) | 6.31% | 30.74% | 5.49% | 11.20% | 13.00% | 1.17% | 0.91% | ||||||||
Perkins Mid Cap Value Fund – Class R Shares | 6.17% | 29.32% | 4.68% | 10.51% | 12.38% | 1.59% | 1.59% | ||||||||
Perkins Mid Cap Value Fund – Class S Shares | 6.16% | 29.79% | 4.93% | 10.75% | 12.60% | 1.34% | 1.34% | ||||||||
Russell Midcap® Value Index | 10.47% | 34.21% | 1.98% | 7.58% | 7.15% | ||||||||||
Lipper Quartile – Class J Shares | – | 4th | 1st | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for Mid-Cap Value Funds | – | 191/251 | 8/161 | 2/61 | 1/48 | ||||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
See important disclosures on the next page.
18 | DECEMBER 31, 2009
(unaudited)
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any performance adjustments to management fees, distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class L Shares, Class R Shares and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Janus Services LLC has agreed to voluntarily waive all or a portion of the administrative fee applicable to the Fund’s Class L Shares. Total returns shown include fee waivers, if any, and without such waivers, the total returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 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 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, and derivatives. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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 if the underlying securities were held directly by the Fund. 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.
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.
Due to certain investment strategies, the Fund may have an increased position in cash.
Effective July 6, 2009, the Fund designated its Investor Shares as “Class J Shares.”
Effective July 6, 2009, the Fund designated its Institutional Shares as “Class L Shares.”
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser Perkins Mid Cap Value Fund (the “JAD predecessor fund”) into corresponding shares of Perkins Mid Cap Value Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009, after the reorganization of Class I Shares of the JAD predecessor fund into the corresponding share class of Perkins Mid Cap Value Fund. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 — Class J Shares (formerly named 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 — Class L Shares (formerly named 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 Class J Shares only; other classes may have different performance characteristics.
Janus Value Funds | 19
Perkins Mid Cap Value Fund (unaudited)
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.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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 – 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 – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,062.40 | $ | 1.90 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.66 | $ | 5.60 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,060.70 | $ | 3.15 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,015.98 | $ | 9.30 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,063.20 | $ | 1.34 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.27 | $ | 3.97 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,062.50 | $ | 1.79 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.96 | $ | 5.30 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class L Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,063.07 | $ | 1.41 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.08 | $ | 4.17 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class R Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,061.73 | $ | 2.61 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.57 | $ | 7.70 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,062.17 | $ | 2.18 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.84 | $ | 6.43 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.10% for Class A Shares, 1.83% for Class C Shares, 0.77% for Class I Shares, 1.04% for Class J Shares, 0.82% for Class L Shares, 1.51% for Class R Shares and 1.26% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
20 | DECEMBER 31, 2009
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Common Stock – 88.3% | ||||||||||||
Aerospace and Defense – 0.6% | ||||||||||||
1,250,000 | Rockwell Collins, Inc. | $ | 69,200,000 | |||||||||
Apparel Manufacturers – 0.4% | ||||||||||||
650,000 | VF Corp. | 47,606,000 | ||||||||||
Automotive – Truck Parts and Equipment – Original – 0.9% | ||||||||||||
1,850,000 | BorgWarner, Inc* | 61,457,000 | ||||||||||
1,603,600 | Johnson Controls, Inc. | 43,682,064 | ||||||||||
105,139,064 | ||||||||||||
Brewery – 0.8% | ||||||||||||
2,000,000 | Molson Coors Brewing Co. – Class B | 90,320,000 | ||||||||||
Building – Residential and Commercial – 0.8% | ||||||||||||
2,900,000 | KB Home | 39,672,000 | ||||||||||
5,600,000 | Pulte Homes, Inc.* | 56,000,000 | ||||||||||
95,672,000 | ||||||||||||
Cable Television – 0.3% | ||||||||||||
1,833,000 | Comcast Corp. – Class A | 30,904,380 | ||||||||||
Chemicals – Diversified – 0.5% | ||||||||||||
950,571 | FMC Corp. | 53,003,839 | ||||||||||
Chemicals – Specialty – 0.9% | ||||||||||||
1,400,000 | Lubrizol Corp. | 102,130,000 | ||||||||||
Coal – 0.5% | ||||||||||||
2,600,000 | Arch Coal, Inc. | 57,850,000 | ||||||||||
Commercial Banks – 0.8% | ||||||||||||
3,500,000 | BB&T Corp. | 88,795,000 | ||||||||||
Computer Aided Design – 0.2% | ||||||||||||
800,000 | Autodesk, Inc.* | 20,328,000 | ||||||||||
Computer Services – 1.0% | ||||||||||||
1,500,000 | Accenture, Ltd. – Class A (U.S. Shares) | 62,250,000 | ||||||||||
2,400,000 | SRA International, Inc.*,£ | 45,840,000 | ||||||||||
108,090,000 | ||||||||||||
Computers – 0.7% | ||||||||||||
1,500,500 | Hewlett-Packard Co. | 77,290,755 | ||||||||||
Computers – Integrated Systems – 1.2% | ||||||||||||
3,200,000 | Diebold, Inc. | 91,040,000 | ||||||||||
4,200,000 | NCR Corp.* | 46,746,000 | ||||||||||
137,786,000 | ||||||||||||
Computers – Memory Devices – 0.7% | ||||||||||||
4,425,100 | EMC Corp.* | 77,306,497 | ||||||||||
Consumer Products – Miscellaneous – 0.7% | ||||||||||||
531,000 | Fortune Brands, Inc. | 22,939,200 | ||||||||||
929,500 | Kimberly-Clark Corp. | 59,218,445 | ||||||||||
82,157,645 | ||||||||||||
Containers – Metal and Glass – 1.0% | ||||||||||||
2,200,000 | Ball Corp. | 113,740,000 | ||||||||||
Containers – Paper and Plastic – 0.3% | ||||||||||||
1,600,242 | Temple-Inland, Inc. | 33,781,109 | ||||||||||
Cosmetics and Toiletries – 0.4% | ||||||||||||
800,300 | Procter & Gamble Co. | 48,522,189 | ||||||||||
Diagnostic Equipment – 0.4% | ||||||||||||
1,000,500 | Gen-Probe, Inc.* | 42,921,450 | ||||||||||
Disposable Medical Products – 0.6% | ||||||||||||
900,000 | C.R. Bard, Inc. | 70,110,000 | ||||||||||
Distribution/Wholesale – 0.4% | ||||||||||||
900,000 | Tech Data Corp.* | 41,994,000 | ||||||||||
Diversified Banking Institutions – 0.8% | ||||||||||||
1,600,000 | HSBC Holdings PLC | 91,344,000 | ||||||||||
Diversified Operations – 1.1% | ||||||||||||
3,500,567 | Tyco International, Ltd. (U.S. Shares) | 124,900,231 | ||||||||||
Electric – Integrated – 1.6% | ||||||||||||
1,041,900 | Entergy Corp. | 85,269,096 | ||||||||||
1,250,000 | PPL Corp. | 40,387,500 | ||||||||||
1,772,700 | Public Service Enterprise Group, Inc. | 58,942,275 | ||||||||||
184,598,871 | ||||||||||||
Electronic Components – Miscellaneous – 0.3% | ||||||||||||
1,100,000 | Garmin, Ltd. | 33,770,000 | ||||||||||
Electronic Components – Semiconductors – 1.3% | ||||||||||||
5,600,000 | Intersil Corp. – Class A | 85,904,000 | ||||||||||
2,450,200 | QLogic Corp.* | 46,235,274 | ||||||||||
593,694 | Semtech Corp.* | 10,098,735 | ||||||||||
142,238,009 | ||||||||||||
Electronic Connectors – 0.4% | ||||||||||||
1,400,000 | Thomas & Betts Corp.* | 50,106,000 | ||||||||||
Engineering – Research and Development Services – 2.7% | ||||||||||||
2,512,800 | Jacobs Engineering Group, Inc.* | 94,506,408 | ||||||||||
2,500,000 | McDermott International, Inc. (U.S. Shares)* | 60,025,000 | ||||||||||
3,450,000 | URS Corp.* | 153,593,999 | ||||||||||
308,125,407 | ||||||||||||
Entertainment Software – 0.5% | ||||||||||||
3,000,000 | Electronic Arts, Inc.* | 53,250,000 | ||||||||||
Fiduciary Banks – 0.4% | ||||||||||||
820,605 | Northern Trust Corp. | 42,999,702 | ||||||||||
Finance – Investment Bankers/Brokers – 0.3% | ||||||||||||
1,500,212 | Raymond James Financial, Inc. | 35,660,039 | ||||||||||
Food – Baking – 0.6% | ||||||||||||
2,700,000 | Flowers Foods, Inc. | 64,152,000 | ||||||||||
Food – Miscellaneous/Diversified – 1.7% | ||||||||||||
950,000 | General Mills, Inc. | 67,269,500 | ||||||||||
1,473,100 | Kellogg Co. | 78,368,920 | ||||||||||
505,100 | Kraft Foods, Inc. – Class A | 13,728,618 | ||||||||||
1,000,000 | Unilever PLC (ADR) | 31,900,000 | ||||||||||
191,267,038 | ||||||||||||
Food – Retail – 1.3% | ||||||||||||
7,100,000 | Kroger Co. | 145,763,000 | ||||||||||
Footwear and Related Apparel – 0.3% | ||||||||||||
1,187,278 | Wolverine World Wide, Inc. | 32,317,707 | ||||||||||
Forestry – 1.1% | ||||||||||||
2,283,300 | Potlatch Corp.£ | 72,791,604 | ||||||||||
1,350,000 | Weyerhaeuser Co. | 58,239,000 | ||||||||||
131,030,604 | ||||||||||||
Gold Mining – 1.2% | ||||||||||||
3,400,000 | Goldcorp, Inc. (U.S. Shares) | 133,756,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Value Funds | 21
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Hotels and Motels – 0.2% | ||||||||||||
320,900 | Hyatt Hotels Corp.* | $ | 9,566,029 | |||||||||
506,570 | Marriott International, Inc. – Class A | 13,804,033 | ||||||||||
23,370,062 | ||||||||||||
Instruments – Scientific – 1.5% | ||||||||||||
3,250,000 | PerkinElmer, Inc. | 66,917,500 | ||||||||||
2,200,000 | Thermo Fisher Scientific, Inc.* | 104,918,000 | ||||||||||
171,835,500 | ||||||||||||
Insurance Brokers – 1.4% | ||||||||||||
1,800,110 | AON Corp. | 69,016,217 | ||||||||||
4,900,000 | Brown & Brown, Inc. | 88,053,000 | ||||||||||
157,069,217 | ||||||||||||
Internet Infrastructure Software – 0.5% | ||||||||||||
2,300,000 | Akamai Technologies, Inc.* | 58,259,000 | ||||||||||
Internet Security – 0.8% | ||||||||||||
5,300,000 | Symantec Corp.* | 94,817,000 | ||||||||||
Investment Management and Advisory Services – 1.9% | ||||||||||||
2,400,000 | AllianceBernstein Holding L.P. | 67,440,000 | ||||||||||
6,200,030 | INVESCO, Ltd. | 145,638,705 | ||||||||||
213,078,705 | ||||||||||||
Life and Health Insurance – 0.4% | ||||||||||||
2,000,000 | Lincoln National Corp. | 49,760,000 | ||||||||||
Machinery – Farm – 0.8% | ||||||||||||
1,600,000 | Deere & Co. | 86,544,000 | ||||||||||
Machinery – General Industrial – 0.6% | ||||||||||||
2,100,000 | IDEX Corp. | 65,415,000 | ||||||||||
Medical – Biomedical and Genetic – 1.2% | ||||||||||||
2,400,000 | Charles River Laboratories International, Inc.* | 80,856,000 | ||||||||||
400,000 | Genzyme Corp.* | 19,604,000 | ||||||||||
597,861 | Life Technologies Corp.* | 31,226,280 | ||||||||||
131,686,280 | ||||||||||||
Medical – Drugs – 0.7% | ||||||||||||
1,475,000 | Endo Pharmaceuticals Holdings, Inc.* | 30,252,250 | ||||||||||
1,615,200 | Forest Laboratories, Inc.* | 51,864,072 | ||||||||||
82,116,322 | ||||||||||||
Medical – HMO – 0.3% | ||||||||||||
1,600,000 | Health Net, Inc.* | 37,264,000 | ||||||||||
Medical – Wholesale Drug Distributors – 0.8% | ||||||||||||
1,400,000 | Cardinal Health, Inc. | 45,136,000 | ||||||||||
650,000 | McKesson Corp. | 40,625,000 | ||||||||||
85,761,000 | ||||||||||||
Medical Instruments – 0.6% | ||||||||||||
1,950,000 | St. Jude Medical, Inc.* | 71,721,000 | ||||||||||
Medical Labs and Testing Services – 1.2% | ||||||||||||
1,800,000 | Laboratory Corp. of America Holdings* | 134,712,000 | ||||||||||
Medical Products – 2.4% | ||||||||||||
1,400,400 | Becton, Dickinson and Co. | 110,435,544 | ||||||||||
1,800,000 | Covidien PLC (U.S. Shares) | 86,202,000 | ||||||||||
1,250,000 | Zimmer Holdings, Inc.* | 73,887,500 | ||||||||||
270,525,044 | ||||||||||||
Medical Sterilization Products – 0.3% | ||||||||||||
1,100,000 | STERIS Corp. | 30,767,000 | ||||||||||
Metal – Copper – 0.4% | ||||||||||||
600,000 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 48,174,000 | ||||||||||
Metal Processors and Fabricators – 0.2% | ||||||||||||
800,000 | Kaydon Corp. | 28,608,000 | ||||||||||
Multi-Line Insurance – 1.9% | ||||||||||||
4,850,600 | Allstate Corp. | 145,712,024 | ||||||||||
7,233,267 | Old Republic International Corp. | 72,622,001 | ||||||||||
218,334,025 | ||||||||||||
Multimedia – 0.9% | ||||||||||||
929,100 | McGraw-Hill Cos., Inc. | 31,134,141 | ||||||||||
2,300,000 | Viacom, Inc. – Class B* | 68,379,000 | ||||||||||
99,513,141 | ||||||||||||
Networking Products – 1.1% | ||||||||||||
2,300,800 | Cisco Systems, Inc.* | 55,081,152 | ||||||||||
3,000,000 | Polycom, Inc.* | 74,910,000 | ||||||||||
129,991,152 | ||||||||||||
Non-Hazardous Waste Disposal – 0.5% | ||||||||||||
1,907,600 | Republic Services, Inc. | 54,004,156 | ||||||||||
Oil and Gas Drilling – 0.6% | ||||||||||||
832,596 | Transocean, Ltd. (U.S. Shares) | 68,938,949 | ||||||||||
Oil Companies – Exploration and Production – 7.7% | ||||||||||||
1,390,000 | Anadarko Petroleum Corp. | 86,763,800 | ||||||||||
2,000,000 | Bill Barrett Corp.* | 62,220,000 | ||||||||||
950,000 | Cabot Oil & Gas Corp. | 41,410,500 | ||||||||||
950,000 | Devon Energy Corp. | 69,825,000 | ||||||||||
1,900,000 | EnCana Corp. (U.S. Shares) | 61,541,000 | ||||||||||
1,700,000 | EQT Corp. | 74,664,000 | ||||||||||
5,250,000 | Forest Oil Corp.* | 116,812,500 | ||||||||||
2,100,000 | Noble Energy, Inc. | 149,561,999 | ||||||||||
2,600,000 | Questar Corp. | 108,082,000 | ||||||||||
1,200,000 | St. Mary Land & Exploration Co. | 41,088,000 | ||||||||||
1,500,000 | Ultra Petroleum Corp. (U.S. Shares)* | 74,790,000 | ||||||||||
886,758,799 | ||||||||||||
Oil Companies – Integrated – 1.2% | ||||||||||||
2,200,000 | Hess Corp. | 133,100,000 | ||||||||||
Oil Field Machinery and Equipment – 0.4% | ||||||||||||
950,000 | National Oilwell Varco, Inc. | 41,885,500 | ||||||||||
Paper and Related Products – 0.3% | ||||||||||||
700,000 | Rayonier, Inc. | 29,512,000 | ||||||||||
Pharmacy Services – 0.3% | ||||||||||||
1,250,000 | Omnicare, Inc. | 30,225,000 | ||||||||||
Pipelines – 1.3% | ||||||||||||
1,080,000 | Kinder Morgan Energy Partners L.P. | 65,858,400 | ||||||||||
1,650,000 | Plains All American Pipeline L.P. | 87,202,500 | ||||||||||
153,060,900 | ||||||||||||
Property and Casualty Insurance – 1.4% | ||||||||||||
1,050,000 | Chubb Corp. | 51,639,000 | ||||||||||
2,200,000 | HCC Insurance Holdings, Inc. | 61,534,000 | ||||||||||
1,150,000 | Mercury General Corp. | 45,149,000 | ||||||||||
158,322,000 | ||||||||||||
Reinsurance – 2.5% | ||||||||||||
39,850 | Berkshire Hathaway, Inc. – Class B* | 130,947,100 | ||||||||||
1,774,289 | Everest Re Group, Ltd. | 152,021,082 | ||||||||||
282,968,182 |
See Notes to Schedules of Investments and Financial Statements.
22 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
REIT – Apartments – 1.1% | ||||||||||||
386,000 | Avalonbay Communities, Inc. | $ | 31,694,460 | |||||||||
1,400,000 | BRE Properties, Inc. – Class A | 46,312,000 | ||||||||||
1,483,800 | Equity Residential | 50,122,764 | ||||||||||
128,129,224 | ||||||||||||
REIT – Diversified – 0.3% | ||||||||||||
1,048,120 | Liberty Property Trust | 33,550,321 | ||||||||||
REIT – Mortgage – 0.6% | ||||||||||||
7,000,000 | Chimera Investment Corp. | 27,160,000 | ||||||||||
2,605,100 | Redwood Trust, Inc. | 37,669,746 | ||||||||||
64,829,746 | ||||||||||||
REIT – Office Property – 0.6% | ||||||||||||
536,082 | Alexandria Real Estate Equities, Inc. | 34,464,712 | ||||||||||
1,050,900 | Mack-Cali Realty Corp. | 36,329,613 | ||||||||||
70,794,325 | ||||||||||||
REIT – Storage – 0.6% | ||||||||||||
825,300 | Public Storage | 67,220,685 | ||||||||||
REIT – Warehouse/Industrial – 0.7% | ||||||||||||
2,000,000 | AMB Property Corp. | 51,100,000 | ||||||||||
2,400,000 | ProLogis | 32,856,000 | ||||||||||
83,956,000 | ||||||||||||
Rental Auto/Equipment – 0.4% | ||||||||||||
1,800,000 | Aaron Rents, Inc. | 49,914,000 | ||||||||||
Retail – Apparel and Shoe – 1.2% | ||||||||||||
1,800,000 | American Eagle Outfitters, Inc. | 30,564,000 | ||||||||||
2,800,000 | Gap, Inc. | 58,660,000 | ||||||||||
2,100,000 | Men’s Wearhouse, Inc. | 44,226,000 | ||||||||||
133,450,000 | ||||||||||||
Retail – Auto Parts – 1.4% | ||||||||||||
2,200,000 | Advance Auto Parts, Inc. | 89,056,000 | ||||||||||
1,700,000 | O’Reilly Automotive, Inc.* | 64,804,000 | ||||||||||
153,860,000 | ||||||||||||
Retail – Automobile – 0.4% | ||||||||||||
1,200,000 | Copart, Inc.* | 43,956,000 | ||||||||||
Retail – Computer Equipment – 0.6% | ||||||||||||
2,900,000 | GameStop Corp. – Class A* | 63,626,000 | ||||||||||
Retail – Discount – 1.6% | ||||||||||||
2,100,000 | Big Lots, Inc.* | 60,858,000 | ||||||||||
2,300,000 | Wal-Mart Stores, Inc. | 122,935,000 | ||||||||||
183,793,000 | ||||||||||||
Retail – Drug Store – 1.1% | ||||||||||||
2,422,900 | CVS Caremark Corp. | 78,041,609 | ||||||||||
1,203,000 | Walgreen Co. | 44,174,160 | ||||||||||
122,215,769 | ||||||||||||
Retail – Pet Food and Supplies – 0.5% | ||||||||||||
2,200,000 | PetSmart, Inc. | 58,718,000 | ||||||||||
Savings/Loan/Thrifts – 2.2% | ||||||||||||
5,000,000 | NewAlliance Bancshares, Inc. | 60,050,000 | ||||||||||
8,700,000 | People’s United Financial, Inc. | 145,290,000 | ||||||||||
2,400,000 | Washington Federal, Inc. | 46,416,000 | ||||||||||
251,756,000 | ||||||||||||
Schools – 0.3% | ||||||||||||
600,000 | Apollo Group, Inc. – Class A* | 36,348,000 | ||||||||||
Semiconductor Components/Integrated Circuits – 0.3% | ||||||||||||
1,100,000 | Analog Devices, Inc. | 34,738,000 | ||||||||||
Semiconductor Equipment – 0.7% | ||||||||||||
6,000,000 | Applied Materials, Inc. | 83,640,000 | ||||||||||
Super-Regional Banks – 0.9% | ||||||||||||
900,000 | PNC Financial Services Group, Inc. | 47,511,000 | ||||||||||
2,500,000 | SunTrust Banks, Inc. | 50,725,000 | ||||||||||
98,236,000 | ||||||||||||
Telephone – Integrated – 1.6% | ||||||||||||
1,500,000 | AT&T, Inc. | 42,045,000 | ||||||||||
3,800,000 | CenturyTel, Inc. | 137,598,000 | ||||||||||
179,643,000 | ||||||||||||
Textile – Home Furnishings – 0.3% | ||||||||||||
750,000 | Mohawk Industries, Inc.* | 35,700,000 | ||||||||||
Tools – Hand Held – 1.0% | ||||||||||||
2,750,000 | Snap-On, Inc. | 116,215,000 | ||||||||||
Toys – 0.4% | ||||||||||||
2,500,000 | Mattel, Inc. | 49,950,000 | ||||||||||
Transportation – Marine – 0.3% | ||||||||||||
850,000 | Kirby Corp.* | 29,605,500 | ||||||||||
Transportation – Railroad – 2.1% | ||||||||||||
4,150,000 | Kansas City Southern* | 138,153,500 | ||||||||||
700,000 | Norfolk Southern Corp. | 36,694,000 | ||||||||||
952,500 | Union Pacific Corp. | 60,864,750 | ||||||||||
235,712,250 | ||||||||||||
Wireless Equipment – 0.4% | ||||||||||||
3,300,000 | Nokia OYJ | 42,405,000 | ||||||||||
X-Ray Equipment – 0.6% | ||||||||||||
4,600,000 | Hologic, Inc.* | 66,700,000 | ||||||||||
Total Common Stock (cost $8,535,321,204) | 10,006,685,290 | |||||||||||
Purchased Options – Puts – 0.3% | ||||||||||||
41,806 | iShares Russell Midcap® Value Index expires January 2010 exercise price $33.22** | 948,160 | ||||||||||
25,802 | iShares Russell Midcap® Value Index expires January 2010 exercise price $35.38** | 1,035,434 | ||||||||||
27,388 | iShares Russell Midcap® Value Index expires March 2010 exercise price $33.81** | 2,474,780 | ||||||||||
26,542 | iShares Russell Midcap® Value Index expires April 2010 exercise price $36.52** | 5,163,215 | ||||||||||
31,514 | iShares Russell Midcap® Value Index expires June 2010 exercise price $35.18** | 7,664,205 | ||||||||||
1,994 | S&P MidCap 400 Index expires March 2010 exercise price $681.49** | 3,383,718 | ||||||||||
1,590 | S&P MidCap 400 Index expires June 2010 exercise price $682.79** | 5,520,210 | ||||||||||
1,982 | S&P MidCap 400 Index expires July 2010 exercise price $684.98** | 7,952,537 |
See Notes to Schedules of Investments and Financial Statements.
Janus Value Funds | 23
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares/Principal/Contract Amounts | Value | |||||||||||
Purchased Options – Puts – (continued) | ||||||||||||
1,276 | S&P MidCap 400 Index expires July 2010 exercise price $723.25** | $ | 7,390,758 | |||||||||
Total Purchased Options – Puts (premium paid $72,401,803) | 41,533,017 | |||||||||||
Repurchase Agreements – 11.4% | ||||||||||||
$ | 607,200,000 | Calyon New York Branch, 0.0100% dated 12/31/09, maturing 1/4/10 to be repurchased at $607,200,675 collateralized by $597,871,708 in U.S. Treasuries 0.0875% – 5.7500% 8/15/10 – 1/15/28 with a value of $619,344,018 | 607,200,000 | |||||||||
100,000,000 | Deutsche Bank Securities, Inc., 0.0000% dated 12/31/09, maturing 1/4/10 to be repurchased at $100,000,000 collateralized by $101,217,200 in U.S. Government Agencies 1.3750%, 3/15/12 with a value of $102,000,037 | 100,000,000 | ||||||||||
400,000,000 | ING Financial Markets, LLC, 0.0000% dated 12/31/09, maturing 1/4/10 to be repurchased at $400,000,000 collateralized by $506,268,200 in U.S. Government Agencies 0.0000% – 9.1250% 1/14/10 – 1/15/28 with a value of $408,002,905 | 400,000,000 | ||||||||||
181,600,000 | RBC Capital Markets Corp., 0.0100% dated 12/31/09, maturing 1/4/10 to be repurchased at $181,600,202 collateralized by $430,082,940 in U.S. Government Agencies 2.4890% – 16.0000% 7/1/10 – 8/1/48 with a value of $185,232,000 | 181,600,000 | ||||||||||
Total Repurchase Agreements (cost $1,288,800,000) | 1,288,800,000 | |||||||||||
Total Investments (total cost $9,896,523,007) – 100.0% | 11,337,018,307 | |||||||||||
Liabilities, net of Cash, Receivables and Other Assets – 0.0% | (1,518,521) | |||||||||||
Net Assets – 100% | $ | 11,335,499,786 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 297,659,786 | 2.6% | |||||
Canada | 270,087,000 | 2.4% | ||||||
Cayman Islands | 33,770,000 | 0.3% | ||||||
Finland | 42,405,000 | 0.4% | ||||||
Ireland | 148,452,000 | 1.3% | ||||||
Panama | 60,025,000 | 0.5% | ||||||
Switzerland | 193,839,179 | 1.7% | ||||||
United Kingdom | 123,244,000 | 1.1% | ||||||
United States†† | 10,167,536,342 | 89.7% | ||||||
Total | $ | 11,337,018,307 | 100.0% |
†† | Includes Cash Equivalents (78.3% excluding Cash Equivalents). |
Schedule of Written Options – Puts | Value | |||
iShares Russell Midcap® Value Index expires January 2010 20,903 contracts exercise price $29.83 | $ | (135,033) | ||
iShares Russell Midcap® Value Index expires January 2010 12,901 contracts exercise price $31.77 | (118,173) | |||
iShares Russell Midcap® Value Index expires March 2010 13,694 contracts exercise price $30.36 | (538,037) | |||
iShares Russell Midcap® Value Index expires April 2010 13,271 contracts exercise price $32.80 | (1,107,598) | |||
iShares Russell Midcap® Value Index expires June 2010 15,757 contracts exercise price $31.59 | (2,109,705) | |||
S&P MidCap 400 Index expires March 2010 997 contracts exercise price $611.95 | (627,073) | |||
S&P MidCap 400 Index expires June 2010 795 contracts exercise price $613.11 | (1,401,513) | |||
S&P MidCap 400 Index expires July 2010 1,322 contracts exercise price $615.08 | (2,829,040) | |||
S&P MidCap 400 Index expires July 2010 638 contracts exercise price $649.45 | (2,016,476) | |||
Total Written Options – Puts | ||||
(premiums received $18,521,823) | $ | (10,882,648) | ||
See Notes to Schedules of Investments and Financial Statements.
24 | DECEMBER 31, 2009
Perkins Small Cap Value Fund (unaudited)
Fund Snapshot We seek to outperform our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high quality, undervalued stocks with favorable reward to risk characteristics. We believe that rigorous downside analysis conducted prior to determination of upside potential allows us to mitigate losses during difficult markets and perform well in up markets. | Managed by Perkins Investment Management LLC |
Performance Overview
Because of the change in the fiscal calendar, we are providing commentary on the brief two month period ending December 31, 2009. During that time, the Perkins Small Cap Value Fund’s Class J Shares returned 7.50%, versus an 11.00% return for the Fund’s benchmark, the Russell 2000® Value Index.
Markets worldwide have had a strong rally off the March lows with many domestic indices gaining more than 60% since that time to end near the highs of the year. In that time, small cap indices outperformed mid- and large caps and growth indices dominated value. The same could be said for the current two month period where telecommunication services and materials were the strongest performing sectors in the Russell 2000® Value Index, while consumer staples and financial stocks underperformed. Commodities finished the period higher, led by gains in industrial metals. Gold futures set a record in early December before easing off their highs near year-end.
We continue to believe that sustained economic growth will be more muted than in past recoveries. Seventy percent of domestic GDP is tied to consumer spending and we still see significant headwinds. While there are signs of employment growth in the near future, unemployment was above 10% through December, and is likely to remain at elevated levels for an extended period. Housing remains a concern with the Mortgage Bankers Association citing rising delinquencies and foreclosures through September of this year. Commercial, governmental, and consumer balance sheets need to be de-levered in our view, and at some point fiscal and monetary stimulus must be reduced. Financial markets have stabilized and corporate debt and equity markets have had substantial rallies. While we think the U.S. has averted systemic collapse, we continue to believe financial markets are fragile. Financial institutions still carry significant toxic assets that have not been marked down, bank lending is restricted as capital is held to absorb future loan losses, and the shadow banking system, including securitization, is functioning at much smaller capacity with significant government involvement.
Investment Approach
We are pleased to have returned 7.50% in such a short amount of time. However, the Fund didn’t perform as well as the Russell 2000® Value Index. In addition to an elevated cash position, the primary detractors were financial and health care stocks that lagged those in the benchmark. Our holdings within information technology provided the biggest boost to relative results.
We believe our attention to risk has been central to our ability to substantially outperform over the longer term and feel that it would be inappropriate to draw conclusions based on a two month period. In that context we are pleased to have compounded an average annualized return of 3.23%, 6.12% and 10.39% over a 3, 5 and 10 year period, respectively, while our benchmark has declined 8.20% and 0.01% annualized average over the 3 and 5 year period, respectively, and gained on average 8.27% annualized over the last 10 years. By comparison, the broad U.S. equity market, represented by the S&P 500® Index had an average annualized return of -0.95% over the same 10-year period.
As is always the case, our focus has been on financially strong companies. In terms of sector positioning, the relative exposures remained as they have for some time. We were overweight health care and technology and underweight utilities and financials. However, we have recently added to select financials and consumer staples stocks where the downside risk appeared relatively limited to us, and continued to reduce consumer discretionary and industrials stocks given their strong recent performance and, in our opinion, deteriorating reward to risk profiles.
Holdings That Detracted From Performance
Within the financial sector property and casualty insurance stocks were relatively weak as the market seems to be focusing its attention on the potential earnings recovery of
Janus Value Funds | 25
Perkins Small Cap Value Fund (unaudited)
regional banks. This out of favor situation gave us an opportunity to add to our positions in Navigators Group, Inc. and RLI Corp. at historically low valuations in relation to tangible book values that continue to grow, albeit at a slower than historical rate. We have trimmed our position in insurer Old Republic, however, as the company continues to experience problems with its mortgage insurance business.
We also added to Ruddick Corp. within the consumer staples sector. The regional grocer continues to execute well in growing its store base in the mid-Atlantic and the downside risk appeared relatively limited given the recent weakness in the stock price.
Holdings That Contributed to Performance
In industrials, railroad operator Kansas City Southern continued to rally from depressed levels as volumes seem to be recovering quicker than expected while rail freight pricing is relatively steady. Tool manufacturer Snap-On, Inc. rebounded after announcing moderating revenue declines and better margins.
Within the technology sector, we took advantage of relative strength in Microsemi Corp. to reduce our position and added to our position in Intersil Corp. as it had lagged and had a more favorable reward to risk profile. Both of these semiconductor manufacturers have significant amounts of net cash on their balance sheets and generated free cash flow through the worst of the 2008/2009 downturn.
Shares of regional bank Washington Federal rose after a successful capital raise. The stock remains a core holding as the strength of their balance sheet should offer downside support while giving management the ability to be opportunistic and gain market share in the Northwest.
Market Outlook
The historically strong stock market has maintained its momentum. We have been pleasantly surprised by the continuation of the strong stock market rally in 2009. Our stocks have generally outperformed, but an above average cash position and our small investment in index put options has reduced our overall return. At the bottom of the market in early March we thought that stocks were undervalued and we became more aggressive buyers. However, our opinion continues to be that the strong and rapid market bounce of over 60% in the S&P 500® Index and over 80% in the Russell 2000® Value Index since early March has taken stocks to what we believe to be slightly overvalued levels. Earnings have been somewhat above expectations and over the short term might continue to be so due to rigorous cost controls. However, in order to see sustainable earnings growth, we need to see revenue growth. As previously stated, we believe revenue and economic growth over the next several years is likely to be below past experience due to secular deleveraging. On a short-to-intermediate term basis we believe stocks could continue to rally as interest rates are low, alternative investments are not priced relatively attractively, and investors might feel underexposed to equities.
However, even with the consensus’ perhaps aggressive estimate of 35% earnings growth in 2010 (to $75 on the S&P 500® Index) stocks were selling at almost 15 times 2010 estimated operating earnings at period end, which is in line with the long-term trend. In addition, operating earnings are at a historically high 20% premium to Generally Accepted Accounting Principles (GAAP) earnings, making stocks in our view more expensive on a GAAP basis. With valuations at these levels, we have found fewer stocks with favorable reward/risk characteristics. Additionally, with a longer term perspective we are concerned about continuing potential structural problems such as overleveraged balance sheets, governmental budget deficits, a weakening dollar, increasing government intervention in business, and geopolitical instability. We are disappointed that many of the imbalances that led to last year’s near meltdown have not been addressed adequately. We think the financial system is still fragile and that the U.S. government is performing a huge financial experiment with an outcome too difficult to gauge. Despite these long term issues, in the near term investors have become somewhat complacent as reflected in volatility (as measured by CBOE VIX Index) declining by 50 % this year to levels below those of the mid-to-late 1990’s. With this background we have allowed our cash balances to rise rather than stretch our valuation discipline.
We believe that our long term emphasis on balance sheets, free cash flow and reasonable valuations will serve us well in an environment that is likely to remain difficult and volatile. This consistent focus on long term value might lead to short term underperformance in a momentum driven market. But more importantly our risk-sensitive discipline has historically helped lead to outperformance in down markets, such as 2008, and longer term, well above average returns as exhibited by our near double-digit annualized 10-year returns in what was a difficult decade for the stock market.
Thank you for your investment in Perkins Small Cap Value Fund.
26 | DECEMBER 31, 2009
(unaudited)
Perkins Small Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Kansas City Southern | 1.11% | |||
Washington Federal, Inc. | 1.05% | |||
Lubrizol Corp. | 1.02% | |||
Forest Oil Corp. | 0.89% | |||
Albany International Corp. – Class A | 0.81% |
5 Bottom Performers – Holdings
Contribution | ||||
Premiere Global Services, Inc. | –0.20% | |||
CardioNet, Inc. | –0.19% | |||
Brown & Brown, Inc. | –0.18% | |||
J2 Global Communications, Inc. | –0.09% | |||
Glacier Bancorp, Inc. | –0.05% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Financials | 6.51% | 30.47% | 33.65% | |||||||||
Information Technology | 5.95% | 16.83% | 11.03% | |||||||||
Industrials | 5.12% | 12.31% | 16.94% | |||||||||
Consumer Discretionary | 4.38% | 8.39% | 11.54% | |||||||||
Energy | 3.46% | 8.21% | 5.74% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Telecommunication Services | –0.20% | 0.84% | 0.57% | |||||||||
Utilities | 0.43% | 1.04% | 6.34% | |||||||||
Consumer Staples | 0.78% | 4.48% | 2.90% | |||||||||
Materials | 1.85% | 4.11% | 6.38% | |||||||||
Health Care | 2.85% | 13.32% | 4.91% |
* | Based on sector classification according to the Global Industry Classification Standard codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
Janus Value Funds | 27
Perkins Small Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2009
RLI Corp. Property and Casualty Insurance | 1.7% | |||
Navigators Property and Casualty Insurance | 1.6% | |||
Forest Oil Corp. Oil Companies – Exploration and Production | 1.6% | |||
NewAlliance Bancshares, Inc. Savings/Loan/Thrifts | 1.5% | |||
Brown & Brown, Inc. Insurance Brokers | 1.5% | |||
7.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2009
Top County Allocations – Long Positions (% of Investment Securities)
As of December 31, 2009
28 | DECEMBER 31, 2009
(unaudited)
Performance
Average Annual Total Return – for the periods ended December 31, 2009 | Expense Ratios – estimated for the fiscal year | ||||||||||||
Two-Month | |||||||||||||
Period Ended | One | Five | Ten | Total Annual Fund | Net Annual Fund | ||||||||
12/31/09 | Year | Year | Year | Operating Expenses | Operating Expenses | ||||||||
Perkins Small Cap Value Fund – Class A Shares | |||||||||||||
NAV | 7.44% | 36.23% | 5.83% | 10.11% | 1.89% | 1.21% | |||||||
MOP | 1.26% | 28.40% | 4.58% | 9.46% | |||||||||
Perkins Small Cap Value Fund – Class C Shares | |||||||||||||
NAV | 7.31% | 34.58% | 5.09% | 9.35% | 2.70% | 1.96% | |||||||
CDSC | 6.24% | 33.24% | 5.09% | 9.35% | |||||||||
Perkins Small Cap Value Fund – Class I Shares | 7.54% | 36.59% | 6.12% | 10.39% | 0.86% | 0.86% | |||||||
Perkins Small Cap Value Fund – Class J Shares | 7.50% | 36.59% | 6.12% | 10.39% | 1.15% | 1.15% | |||||||
Perkins Small Cap Value Fund – Class L Shares(1) | 7.51% | 36.91% | 6.35% | 10.66% | 1.12% | 0.87% | |||||||
Perkins Small Cap Value Fund – Class R Shares | 7.35% | 35.62% | 5.60% | 9.88% | 1.61% | 1.61% | |||||||
Perkins Small Cap Value Fund – Class S Shares | 7.45% | 36.19% | 5.87% | 10.16% | 1.36% | 1.36% | |||||||
Russell 2000® Value Index | 11.00% | 20.58% | –0.01% | 8.27% | |||||||||
Lipper Quartile – Class J Shares | – | 2nd | 1st | 1st | |||||||||
Lipper Ranking – based on total return for Small-Cap Core Funds | – | 198/756 | 18/522 | 32/269 | |||||||||
Visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) 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 877.33JANUS(52687) (or 800.525.3713 if you hold Shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus Capital) for performance current to the most recent month-end.
Performance shown for Class A Shares at Maximum Offering Price (MOP) includes the Fund’s maximum sales charge of 5.75%. Performance shown at Net Asset Value (NAV) does not include this charge and would have been lower had this charge been taken into account.
Performance shown for Class C Shares includes a 1% contingent deferred sales charge (CDSC) on periods of less than 12 months. Performance shown at Net Asset Value (NAV) does not include this sales charge and would have been lower had this sales charge been taken into account.
See important disclosures on the next page.
Janus Value Funds | 29
Perkins Small Cap Value Fund (unaudited)
Janus Capital has contractually agreed to waive the Fund’s total annual fund operating expenses allocated to any class (excluding any performance adjustments to management fees, distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares and Class S Shares), administrative fees payable pursuant to the Transfer Agency Agreement (applicable to Class J Shares, Class L Shares, Class R Shares, and Class S Shares), brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to certain limits until at least February 16, 2011. Returns shown include fee waivers, if any, and without such waivers, returns would have been lower.
Janus Services LLC has agreed to voluntarily waive all or a portion of the administrative fee applicable to the Fund’s Class L Shares. Total returns shown include fee waivers, if any, and without such waivers, the total returns would have been lower.
Expense information shown reflects estimated annualized expenses that the share classes of the Fund expect to incur during the fiscal year. The expense information shown includes administrative fee expenses, if applicable. 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 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 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, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com/info (or janus.com/reports if you hold Shares directly with Janus Capital) 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 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.
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.
Due to certain investment strategies, the Fund may have an increased position in cash.
Effective July 6, 2009, the Fund designated its Investor Shares as “Class J Shares.”
Effective July 6, 2009, the Fund designated its Institutional Shares as “Class L Shares.”
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of Janus Adviser Perkins Small Company Value Fund (the “JAD predecessor fund”) into corresponding shares of Perkins Small Cap Value Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares calculated using the fees and expenses of the corresponding class of the JAD predecessor fund, respectively, without the effect of any fee and expense limitations or waivers. If each class of the Fund had been available during periods prior to July 6, 2009, the performance shown for each respective class may have been different.
Class I Shares commenced operations on July 6, 2009, after the reorganization of Class I Shares of the JAD predecessor fund into the corresponding share class of Perkins Small Cap Value Fund. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, calculated using the fees and expenses of Class J Shares, without the effect of any fee and expense limitations or waivers. If Class I Shares of the Fund had been available during periods prior to July 6, 2009, the performance shown may have been different.
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 – Class J Shares (formerly named 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 – Class L Shares (formerly named 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 Class J Shares only; other classes may have different performance characteristics.
When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
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.
30 | DECEMBER 31, 2009
(unaudited)
See “Explanations of Charts, Tables and Financial Statements.”
(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 – Class A Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,075.50 | $ | 1.65 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class C Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,073.10 | $ | 3.14 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,016.08 | $ | 9.20 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class I Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,075.40 | $ | 1.35 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.27 | $ | 3.97 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class J Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,075.00 | $ | 1.84 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.86 | $ | 5.40 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class L Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,075.10 | $ | 1.42 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.07 | $ | 4.18 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class R Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,073.50 | $ | 2.63 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.54 | $ | 7.73 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example – Class S Shares | (11/1/09) | (12/31/09) | (11/1/09-12/31/09)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,074.50 | $ | 2.22 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.75 | $ | 6.51 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.95% for Class A Shares, 1.81% for Class C Shares, 0.78% for Class I Shares, 1.06% for Class J Shares, 0.82% for Class L Shares, 1.52% for Class R Shares and 1.28% for Class S Shares, multiplied by the average account value over the period, multiplied by 61/365 (to reflect a two-month period). Expenses include effect of contractual waivers by Janus Capital. Due to the change in the Fund’s fiscal year end, the actual expenses paid reflect only a two-month period. Therefore, actual expenses for these classes are lower than would be expected for a six-month period. Hypothetical expenses reflect a six-month period. |
Janus Value Funds | 31
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Common Stock – 78.9% | ||||||||||||
Apparel Manufacturers – 0.5% | ||||||||||||
565,100 | Volcom, Inc.* | $ | 9,459,774 | |||||||||
Applications Software – 0.9% | ||||||||||||
625,000 | Progress Software Corp.* | 18,256,250 | ||||||||||
Building – Heavy Construction – 0.6% | ||||||||||||
573,200 | Sterling Construction Co., Inc.* | 10,993,976 | ||||||||||
Chemicals – Specialty – 0.8% | ||||||||||||
210,000 | Lubrizol Corp. | 15,319,500 | ||||||||||
Circuit Boards – 0.7% | ||||||||||||
1,160,000 | TTM Technologies, Inc.* | 13,374,800 | ||||||||||
Commercial Banks – 4.8% | ||||||||||||
21,800 | Columbia Banking System, Inc. | 352,724 | ||||||||||
3,200,000 | F.N.B. Corp. | 21,728,000 | ||||||||||
825,000 | Firstmerit Corp. | 16,615,500 | ||||||||||
1,678,600 | Glacier Bancorp, Inc. | 23,030,392 | ||||||||||
330,000 | Hancock Holding Co. | 14,450,700 | ||||||||||
1,300,000 | Old National Bancorp | 16,159,000 | ||||||||||
92,336,316 | ||||||||||||
Commercial Services – 0.2% | ||||||||||||
240,000 | ICT Group, Inc.* | 3,919,200 | ||||||||||
Commercial Services – Finance – 0.3% | ||||||||||||
125,000 | Global Payments, Inc. | 6,732,500 | ||||||||||
Computer Services – 0.9% | ||||||||||||
880,000 | SRA International, Inc.* | 16,808,000 | ||||||||||
Computers – Integrated Systems – 2.6% | ||||||||||||
950,000 | Diebold, Inc. | 27,027,500 | ||||||||||
725,000 | Jack Henry & Associates, Inc. | 16,762,000 | ||||||||||
500,000 | NCR Corp.* | 5,565,000 | ||||||||||
49,354,500 | ||||||||||||
Computers – Peripheral Equipment – 0.5% | ||||||||||||
300,000 | Synaptics, Inc.* | 9,195,000 | ||||||||||
Consulting Services – 2.0% | ||||||||||||
180,000 | Advisory Board Co.* | 5,518,800 | ||||||||||
435,000 | CRA International, Inc.* | 11,592,750 | ||||||||||
190,000 | MAXIMUS, Inc. | 9,500,000 | ||||||||||
830,000 | Navigant Consulting, Inc.* | 12,333,800 | ||||||||||
38,945,350 | ||||||||||||
Containers – Paper and Plastic – 1.3% | ||||||||||||
600,000 | Sonoco Products Co. | 17,550,000 | ||||||||||
350,000 | Temple-Inland, Inc. | 7,388,500 | ||||||||||
24,938,500 | ||||||||||||
Diagnostic Equipment – 0.5% | ||||||||||||
510,000 | Immucor, Inc.* | 10,322,400 | ||||||||||
Direct Marketing – 0.6% | ||||||||||||
1,000,000 | Harte-Hanks, Inc. | 10,780,000 | ||||||||||
Distribution/Wholesale – 0.8% | ||||||||||||
188,000 | Fossil, Inc.* | 6,309,280 | ||||||||||
200,000 | Tech Data Corp.* | 9,332,000 | ||||||||||
15,641,280 | ||||||||||||
Electronic Components – Semiconductors – 2.5% | ||||||||||||
970,000 | Intersil Corp. – Class A | 14,879,800 | ||||||||||
670,000 | Microsemi Corp.* | 11,892,500 | ||||||||||
450,000 | QLogic Corp.* | 8,491,500 | ||||||||||
710,000 | Semtech Corp.* | 12,077,100 | ||||||||||
47,340,900 | ||||||||||||
Electronic Connectors – 0.6% | ||||||||||||
350,000 | Thomas & Betts Corp.* | 12,526,500 | ||||||||||
Enterprise Software/Services – 1.0% | ||||||||||||
1,600,000 | Omnicell, Inc.*,£ | 18,704,000 | ||||||||||
Food – Baking – 1.4% | ||||||||||||
1,120,000 | Flowers Foods, Inc. | 26,611,200 | ||||||||||
Food – Retail – 1.2% | ||||||||||||
890,000 | Ruddick Corp. | 22,899,700 | ||||||||||
Footwear and Related Apparel – 1.0% | ||||||||||||
150,000 | Skechers U.S.A., Inc. – Class A* | 4,411,500 | ||||||||||
560,000 | Wolverine World Wide, Inc. | 15,243,200 | ||||||||||
19,654,700 | ||||||||||||
Forestry – 1.4% | ||||||||||||
825,000 | Potlatch Corp. | 26,301,000 | ||||||||||
Golf – 0.7% | ||||||||||||
1,900,000 | Callaway Golf Co. | 14,326,000 | ||||||||||
Hospital Beds and Equipment – 1.0% | ||||||||||||
790,000 | Hill-Rom Holdings, Inc. | 18,952,100 | ||||||||||
Human Resources – 0.5% | ||||||||||||
750,000 | MPS Group, Inc.* | 10,305,000 | ||||||||||
Industrial Automation and Robotics – 0.5% | ||||||||||||
545,000 | Cognex Corp. | 9,657,400 | ||||||||||
Instruments – Scientific – 1.1% | ||||||||||||
700,000 | PerkinElmer, Inc. | 14,413,000 | ||||||||||
140,500 | Varian, Inc.* | 7,241,370 | ||||||||||
21,654,370 | ||||||||||||
Insurance Brokers – 1.5% | ||||||||||||
1,600,000 | Brown & Brown, Inc. | 28,752,000 | ||||||||||
Internet Infrastructure Software – 0.4% | ||||||||||||
300,000 | Akamai Technologies, Inc.* | 7,599,000 | ||||||||||
Internet Telephony – 0.9% | ||||||||||||
890,000 | J2 Global Communications, Inc.* | 18,111,500 | ||||||||||
Investment Management and Advisory Services – 0.3% | ||||||||||||
200,000 | AllianceBernstein Holding L.P. | 5,620,000 | ||||||||||
Lasers – Systems and Components – 0.1% | ||||||||||||
170,000 | Electro Scientific Industries, Inc.* | 1,839,400 | ||||||||||
Machinery – Electrical – 0.6% | ||||||||||||
390,000 | Franklin Electric Co., Inc. | 11,341,200 | ||||||||||
Machinery – General Industrial – 1.5% | ||||||||||||
620,000 | Albany International Corp. – Class A | 13,925,200 | ||||||||||
380,000 | Wabtec Corp. | 15,519,200 | ||||||||||
29,444,400 | ||||||||||||
Medical – Biomedical and Genetic – 1.0% | ||||||||||||
550,000 | Charles River Laboratories International, Inc.* | 18,529,500 | ||||||||||
Medical – Generic Drugs – 0.7% | ||||||||||||
320,000 | Perrigo Co. | 12,748,800 | ||||||||||
Medical Imaging Systems – 0.4% | ||||||||||||
625,000 | Vital Images, Inc.* | 7,931,250 |
See Notes to Schedules of Investments and Financial Statements.
32 | DECEMBER 31, 2009
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Medical Instruments – 0.5% | ||||||||||||
550,000 | Angiodynamics, Inc.* | $ | 8,844,000 | |||||||||
Medical Labs and Testing Services – 1.0% | ||||||||||||
100,000 | Covance, Inc.* | 5,457,000 | ||||||||||
400,000 | Genoptix, Inc.* | 14,212,000 | ||||||||||
19,669,000 | ||||||||||||
Medical Laser Systems – 0.1% | ||||||||||||
385,000 | LCA-Vision, Inc.* | 1,971,200 | ||||||||||
Medical Products – 1.0% | ||||||||||||
550,000 | PSS World Medical, Inc.* | 12,413,500 | ||||||||||
156,000 | West Pharmaceutical Services, Inc. | 6,115,200 | ||||||||||
18,528,700 | ||||||||||||
Medical Sterilization Products – 1.2% | ||||||||||||
830,000 | STERIS Corp. | 23,215,100 | ||||||||||
Metal Processors and Fabricators – 1.0% | ||||||||||||
545,000 | Kaydon Corp. | 19,489,200 | ||||||||||
Miscellaneous Manufacturing – 0% | ||||||||||||
74,579 | Movado Group, Inc.* | 724,908 | ||||||||||
Multi-Line Insurance – 1.3% | ||||||||||||
2,467,653 | Old Republic International Corp. | 24,775,236 | ||||||||||
Networking Products – 0.9% | ||||||||||||
670,000 | Polycom, Inc.* | 16,729,900 | ||||||||||
Oil Companies – Exploration and Production – 4.2% | ||||||||||||
525,000 | Bill Barrett Corp.* | 16,332,750 | ||||||||||
230,000 | Cabot Oil & Gas Corp. | 10,025,700 | ||||||||||
400,000 | Comstock Resources, Inc.* | 16,228,000 | ||||||||||
1,400,000 | Forest Oil Corp.* | 31,150,000 | ||||||||||
200,000 | St. Mary Land & Exploration Co. | 6,848,000 | ||||||||||
80,584,450 | ||||||||||||
Paper and Related Products – 1.1% | ||||||||||||
750,000 | Glatfelter | 9,112,500 | ||||||||||
270,000 | Rayonier, Inc. | 11,383,200 | ||||||||||
20,495,700 | ||||||||||||
Patient Monitoring Equipment – 0.2% | ||||||||||||
550,000 | CardioNet, Inc.* | 3,267,000 | ||||||||||
Pipelines – 1.8% | ||||||||||||
125,000 | Magellan Midstream Partners L.P. | 5,416,250 | ||||||||||
455,000 | Spectra Energy Partners L.P. | 13,454,350 | ||||||||||
850,000 | Western Gas Partners L.P. | 16,566,500 | ||||||||||
35,437,100 | ||||||||||||
Property and Casualty Insurance – 4.1% | ||||||||||||
355,000 | Infinity Property & Casualty Corp. | 14,427,200 | ||||||||||
670,000 | Navigators* | 31,563,700 | ||||||||||
630,000 | RLI Corp. | 33,547,500 | ||||||||||
79,538,400 | ||||||||||||
Radio – 0.1% | ||||||||||||
275,000 | Entercom Communications Corp.* | 1,944,250 | ||||||||||
Reinsurance – 0.2% | ||||||||||||
124,505 | Validus Holdings, Ltd. | 3,354,165 | ||||||||||
REIT – Apartments – 0.5% | ||||||||||||
300,000 | BRE Properties, Inc. – Class A | 9,924,000 | ||||||||||
REIT – Hotels – 0.7% | ||||||||||||
1,500,000 | DiamondRock Hospitality Co. | 12,705,000 | ||||||||||
REIT – Mortgage – 0.8% | ||||||||||||
1,025,000 | Redwood Trust, Inc. | 14,821,500 | ||||||||||
REIT – Office Property – 1.9% | ||||||||||||
1,050,000 | Government Properties Income Trust | 24,129,000 | ||||||||||
160,000 | Mack-Cali Realty Corp. | 5,531,200 | ||||||||||
360,000 | Parkway Properties, Inc. | 7,495,200 | ||||||||||
37,155,400 | ||||||||||||
Rental Auto/Equipment – 0.9% | ||||||||||||
600,000 | Aaron Rents, Inc. | 16,638,000 | ||||||||||
Resorts and Theme Parks – 0.8% | ||||||||||||
1,300,000 | Cedar Fair L.P. | 14,833,000 | ||||||||||
Retail – Apparel and Shoe – 1.7% | ||||||||||||
438,609 | Bebe Stores, Inc. | 2,750,078 | ||||||||||
1,400,000 | Finish Line (The), Inc. – Class A | 17,570,000 | ||||||||||
640,000 | Men’s Wearhouse, Inc. | 13,478,400 | ||||||||||
33,798,478 | ||||||||||||
Retail – Convenience Stores – 1.3% | ||||||||||||
760,000 | Casey’s General Stores, Inc. | 24,259,200 | ||||||||||
Retail – Leisure Products – 0.1% | ||||||||||||
260,000 | MarineMax, Inc.* | 2,389,400 | ||||||||||
Retail – Pet Food and Supplies – 1.2% | ||||||||||||
840,000 | PetSmart, Inc. | 22,419,600 | ||||||||||
Retail – Propane Distribution – 0.7% | ||||||||||||
370,000 | Inergy L.P. | 13,201,600 | ||||||||||
Savings/Loan/Thrifts – 5.3% | ||||||||||||
1,700,000 | First Niagara Financial Group, Inc. | 23,647,000 | ||||||||||
2,400,000 | NewAlliance Bancshares, Inc. | 28,824,000 | ||||||||||
2,200,000 | Provident Financial Services, Inc. | 23,430,000 | ||||||||||
1,400,000 | Washington Federal, Inc. | 27,076,000 | ||||||||||
102,977,000 | ||||||||||||
Semiconductor Equipment – 0.4% | ||||||||||||
590,000 | Verigy, Ltd. (U.S. Shares) | 7,593,300 | ||||||||||
Telecommunication Services – 0.8% | ||||||||||||
1,900,000 | Premiere Global Services, Inc.* | 15,675,000 | ||||||||||
Tools – Hand Held – 1.4% | ||||||||||||
650,000 | Snap-On, Inc. | 27,469,000 | ||||||||||
Transactional Software – 0.2% | ||||||||||||
250,000 | Bottomline Technologies, Inc.* | 4,392,500 | ||||||||||
Transportation – Marine – 1.4% | ||||||||||||
750,000 | Kirby Corp.* | 26,122,500 | ||||||||||
Transportation – Railroad – 1.2% | ||||||||||||
676,480 | Kansas City Southern* | 22,520,019 | ||||||||||
X-Ray Equipment – 0.6% | ||||||||||||
750,000 | Hologic, Inc.* | 10,875,000 | ||||||||||
Total Common Stock (cost $1,267,755,058) | 1,515,565,072 | |||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Value Funds | 33
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2009
Shares or Principal Amount | Value | |||||||||||
Repurchase Agreement – 19.9% | ||||||||||||
$ | 382,700,000 | Calyon New York Branch, 0.0100% dated 12/31/09, maturing 1/4/10 to be repurchased at $382,700,425 collateralized by $376,820,656 in U.S. Treasuries 0.0875% – 5.7500%, 8/15/10 – 1/15/28 With a value of $390,354,011 (cost $382,700,000) | $ | 382,700,000 | ||||||||
Total Investments (total cost $1,650,455,058) – 98.8% | 1,898,265,072 | |||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.2% | 23,928,014 | |||||||||||
Net Assets – 100% | $ | 1,922,193,086 | ||||||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 3,354,165 | 0.2% | |||||
Singapore | 7,593,300 | 0.4% | ||||||
United States†† | 1,887,317,607 | 99.4% | ||||||
Total | $ | 1,898,265,072 | 100.0% |
†† | Includes Cash Equivalents (79.3% excluding Cash Equivalents) |
See Notes to Schedules of Investments and Financial Statements.
34 | DECEMBER 31, 2009
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Janus Value Funds | 35
Statements of Assets and Liabilities
As of December 31, 2009 (unaudited) | Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | |||||||||||
(all numbers in thousands except net asset value per share) | Value Fund | Value Fund | Value Fund | |||||||||||
Assets: | ||||||||||||||
Investments at cost | $ | 48,276 | $ | 9,896,523 | $ | 1,650,455 | ||||||||
Unaffiliated investments at value | $ | 46,684 | $ | 10,048,218 | $ | 1,515,565 | ||||||||
Repurchase agreements | 7,800 | 1,288,800 | 382,700 | |||||||||||
Cash | 14 | 1,570 | 460 | |||||||||||
Receivables: | ||||||||||||||
Investments sold | 147 | 63,203 | 14,012 | |||||||||||
Fund shares sold | 96 | 46,944 | 20,404 | |||||||||||
Dividends | 51 | 11,816 | 1,972 | |||||||||||
Interest | – | 5 | – | |||||||||||
Non-interested Trustees’ deferred compensation | 1 | 278 | 47 | |||||||||||
Other assets | 1 | 189 | 46 | |||||||||||
Total Assets | 54,794 | 11,461,023 | 1,935,206 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Options written, at value(1) | – | 10,883 | – | |||||||||||
Investments purchased | 802 | 92,112 | 10,323 | |||||||||||
Fund shares repurchased | – | 12,538 | 1,066 | |||||||||||
Dividends and distributions | – | – | 43 | |||||||||||
Advisory fees | 35 | 6,790 | 968 | |||||||||||
Transfer agent fees and expenses | – | 75 | 7 | |||||||||||
Administrative fees – Class J Shares | N/A | 1,861 | 186 | |||||||||||
Administrative fees – Class L Shares | N/A | 102 | 169 | |||||||||||
Administrative fees – Class R Shares | N/A | 17 | 1 | |||||||||||
Administrative fees – Class S Shares | – | 102 | 7 | |||||||||||
Administrative fees – Class T Shares | – | N/A | N/A | |||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | – | 183 | 6 | |||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 1 | 115 | 7 | |||||||||||
Distribution fees and shareholder servicing fees- Class R Shares | N/A | 34 | 2 | |||||||||||
Distribution fees – Class S Shares | – | 102 | 7 | |||||||||||
Networking fees – Class A Shares | – | 164 | – | |||||||||||
Networking fees – Class C Shares | – | 3 | – | |||||||||||
Networking fees – Class I Shares | – | 23 | – | |||||||||||
Non-interested Trustees’ fees and expenses | – | 84 | 10 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 1 | 278 | 47 | |||||||||||
Accrued expenses and other payables | 24 | 57 | 164 | |||||||||||
Variation margin | 29 | – | – | |||||||||||
Total Liabilities | 892 | 125,523 | 13,013 | |||||||||||
Net Assets | $ | 53,902 | $ | 11,335,500 | $ | 1,922,193 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 47,440 | $ | 10,971,296 | $ | 1,776,880 | ||||||||
Undistributed net investment income/(loss)* | 4 | 1,696 | 5,813 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 217 | (1,085,601) | (108,305) | |||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 6,241 | 1,448,109 | 247,805 | |||||||||||
Total Net Assets | $ | 53,902 | $ | 11,335,500 | $ | 1,922,193 | ||||||||
Net Assets – Class A Shares | $ | 1,837 | $ | 896,560 | $ | 33,930 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 148 | 45,280 | 1,620 | |||||||||||
Net Asset Value Per Share(2) | $ | 12.41 | $ | 19.80 | $ | 20.95 | ||||||||
Maximum Offering Price Per Share(3) | $ | 13.17 | $ | 21.01 | $ | 22.23 | ||||||||
Net Assets – Class C Shares | $ | 771 | $ | 140,098 | $ | 10,525 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 62 | 7,092 | 505 | |||||||||||
Net Asset Value Per Share(2) | $ | 12.37 | $ | 19.75 | $ | 20.85 | ||||||||
Net Assets – Class I Shares | $ | 50,650 | $ | 1,540,852 | $ | 344,431 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,081 | 77,815 | 16,435 | |||||||||||
Net Asset Value Per Share | $ | 12.41 | $ | 19.80 | $ | 20.96 | ||||||||
Net Assets – Class J Shares | N/A | $ | 7,802,141 | $ | 804,263 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | N/A | 394,034 | 38,431 | |||||||||||
Net Asset Value Per Share | N/A | $ | 19.80 | $ | 20.93 | |||||||||
Net Assets – Class L Shares | N/A | $ | 377,027 | $ | 689,148 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | N/A | 18,928 | 32,509 | |||||||||||
Net Asset Value Per Share | N/A | $ | 19.92 | $ | 21.20 | |||||||||
Net Assets – Class R Shares | N/A | $ | 83,495 | $ | 4,720 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | N/A | 4,219 | 226 | |||||||||||
Net Asset Value Per Share | N/A | $ | 19.79 | $ | 20.89 |
See Notes to Financial Statements.
36 | DECEMBER 31, 2009
As of December 31, 2009 (unaudited) | Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | |||||||||||
(all numbers in thousands except net asset value per share) | Value Fund | Value Fund | Value Fund | |||||||||||
Net Assets – Class S Shares | $ | 623 | $ | 495,327 | $ | 35,176 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 50 | 25,022 | 1,681 | |||||||||||
Net Asset Value Per Share | $ | 12.42 | $ | 19.80 | $ | 20.92 | ||||||||
Net Assets – Class T Shares | $ | 21 | N/A | N/A | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2 | N/A | N/A | |||||||||||
Net Asset Value Per Share | $ | 12.40 | N/A | N/A |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Includes premiums of $18,521,823 on written options for Perkins Mid Cap Value Fund. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Value Funds | 37
Statements of Operations
For the two- or five-month period ended December 31, | ||||||||||||||
2009 (unaudited) | Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | |||||||||||
(all numbers in thousands) | Value Fund(1) | Value Fund(2) | Value Fund(2) | |||||||||||
Investment Income: | ||||||||||||||
Interest | $ | 3 | $ | 198 | $ | 51 | ||||||||
Dividends | 311 | 37,511 | 8,538 | |||||||||||
Dividends from affiliates | – | 1,164 | – | |||||||||||
Foreign tax withheld | (1) | (102) | – | |||||||||||
Total Investment Income | 313 | 38,771 | 8,589 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 111 | 13,382 | 2,121 | |||||||||||
Transfer agent fees and expenses | 2 | 114 | 6 | |||||||||||
Custody fees | 2 | 10 | 2 | |||||||||||
Registration fees | 64 | 97 | 38 | |||||||||||
Audit fees | 14 | 11 | – | |||||||||||
System fees | 22 | 5 | 8 | |||||||||||
Non-interested Trustees’ fees and expenses | – | 75 | 9 | |||||||||||
Administrative fees – Class J Shares | N/A | 3,625 | 351 | |||||||||||
Administrative fees – Class L Shares | N/A | 191 | 335 | |||||||||||
Administrative fees – Class R Shares | N/A | 32 | 2 | |||||||||||
Administrative fees – Class S Shares | 1 | 196 | 13 | |||||||||||
Administrative fees – Class T Shares | – | N/A | N/A | |||||||||||
Distribution fees and shareholder servicing fees – Class A Shares | 1 | 352 | 11 | |||||||||||
Distribution fees and shareholder servicing fees – Class C Shares | 3 | 219 | 13 | |||||||||||
Distribution fees and shareholder servicing fees- Class R Shares | N/A | 64 | 3 | |||||||||||
Distribution fees – Class S Shares | 1 | 196 | 13 | |||||||||||
Networking fees – Class A Shares | – | 125 | – | |||||||||||
Networking fees – Class C Shares | – | 15 | – | |||||||||||
Networking fees – Class I Shares | – | 23 | – | |||||||||||
Other expenses | 16 | 183 | 93 | |||||||||||
Non-recurring costs (Note 4) | N/A | – | – | |||||||||||
Cost assumed by Janus Capital Management LLC (Note 4) | N/A | – | – | |||||||||||
Total Expenses | 237 | 18,915 | 3,018 | |||||||||||
Expense and Fee Offset | – | (25) | (2) | |||||||||||
Net Expenses | 237 | 18,890 | 3,016 | |||||||||||
Less: Excess Expense Reimbursement | (56) | (157) | (280) | |||||||||||
Net Expenses after Expense Reimbursement | 181 | 18,733 | 2,736 | |||||||||||
Net Investment Income/(Loss) | 132 | 20,038 | 5,853 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 640 | 69,830 | 44,782 | |||||||||||
Net realized gain/(loss) from futures contracts | 39 | – | – | |||||||||||
Net realized gain/(loss) from options contracts | – | (68,412) | – | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,415 | 630,677 | 76,288 | |||||||||||
Net Gain/(Loss) on Investments | 4,094 | 632,095 | 121,070 | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 4,226 | $ | 652,133 | $ | 126,923 |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. |
See Notes to Financial Statements.
38 | DECEMBER 31, 2009
Statements of Changes in Net Assets
For the five-month period ended December 31, 2009 (unaudited) | Perkins Large Cap | |||||||||
and the fiscal year ended July 31, 2009 | Value Fund | |||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 132 | $ | 145 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 640 | 11 | ||||||||
Net realized gain/(loss) from futures contracts | 39 | (388) | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,415 | 2,825 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 4,226 | 2,593 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | ||||||||||
Class A Shares | (4) | (2) | ||||||||
Class I Shares | (156) | (91) | ||||||||
Class S Shares | – | – | ||||||||
Class T Shares | – | – | ||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||
Class A Shares | (3) | – | ||||||||
Class C Shares | (1) | – | ||||||||
Class I Shares | (100) | – | ||||||||
Class S Shares | (1) | – | ||||||||
Class T Shares | – | – | ||||||||
Net Decrease from Dividends and Distributions | (265) | (93) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | ||||||||||
Class A Shares | 1,067 | 674 | ||||||||
Class C Shares | 150 | 500 | ||||||||
Class I Shares | 18,219 | 29,470 | ||||||||
Class S Shares | – | 500 | ||||||||
Class T Shares | 20 | 1 | ||||||||
Reinvested dividends and distributions | ||||||||||
Class A Shares | 4 | 2 | ||||||||
Class C Shares | 1 | – | ||||||||
Class I Shares | 255 | 91 | ||||||||
Class S Shares | 1 | – | ||||||||
Class T Shares | – | – | ||||||||
Shares repurchased | ||||||||||
Class A Shares | (45) | (27) | ||||||||
Class C Shares | – | – | ||||||||
Class I Shares | (426) | (3,016) | ||||||||
Class S Shares | – | – | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | 19,246 | 28,195 | ||||||||
Net Increase/(Decrease) in Net Assets | 23,207 | 30,695 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 30,695 | – | ||||||||
End of period | $ | 53,902 | $ | 30,695 | ||||||
Undistributed net investment income/(loss)* | 4 | 31 |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. |
See Notes to Financial Statements.
Janus Value Funds | 39
Statements of Changes in Net Assets
For the two-month period ended December 31, 2009 | Perkins Mid Cap | Perkins Small Cap | ||||||||||||||||
(unaudited) and the fiscal year ended October 31, 2009 | Value Fund | Value Fund | ||||||||||||||||
(all numbers in thousands) | 2009(1) | 2009(2) | 2009(1) | 2009(2) | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 20,038 | $ | 56,738 | $ | 5,853 | $ | 12,682 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 69,830 | (824,044) | 44,782 | (152,057) | ||||||||||||||
Net realized gain/(loss) from options contracts | (68,412) | 41,325 | – | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 630,677 | 2,224,553 | 76,288 | 367,791 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 652,133 | 1,498,572 | 126,923 | 228,416 | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income* | ||||||||||||||||||
Class A Shares | (1,093) | – | – | – | ||||||||||||||
Class I Shares | (4,581) | – | – | – | ||||||||||||||
Class J Shares | (13,927) | (84,359) | – | (8,212) | ||||||||||||||
Class L Shares | (1,021) | (5,821) | – | (11,913) | ||||||||||||||
Class R Shares | (2) | – | – | – | ||||||||||||||
Class S Shares | (491) | – | – | – | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Class A Shares | – | – | – | – | ||||||||||||||
Class C Shares | – | – | – | – | ||||||||||||||
Class I Shares | – | – | – | – | ||||||||||||||
Class J Shares | – | (246,288) | – | (44,332) | ||||||||||||||
Class L Shares | – | (13,958) | – | (47,807) | ||||||||||||||
Class S Shares | – | – | – | – | ||||||||||||||
Return of Capital | ||||||||||||||||||
Class J Shares | N/A | N/A | N/A | (1,484) | ||||||||||||||
Class L Shares | N/A | N/A | N/A | (2,063) | ||||||||||||||
Net Decrease from Dividends and Distributions | (21,115) | (350,426) | – | (115,811) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Class A Shares | 92,589 | 158,332 | 12,892 | 11,204 | ||||||||||||||
Class C Shares | 15,472 | 29,160 | 3,973 | 4,122 | ||||||||||||||
Class I Shares | 244,123 | 352,580 | 96,414 | 233,119 | ||||||||||||||
Class J Shares | 414,047 | 2,899,132 | 137,213 | 327,680 | ||||||||||||||
Class L Shares | 13,508 | 112,534 | 9,489 | 246,475 | ||||||||||||||
Class R Shares | 11,779 | 21,222 | 1,345 | 760 | ||||||||||||||
Class S Shares | 57,765 | 111,281 | 9,235 | 6,215 | ||||||||||||||
Shares issued in connection with acquisition (see Note 9) | ||||||||||||||||||
Class A Shares | N/A | 663,866 | N/A | 10,144 | ||||||||||||||
Class C Shares | N/A | 89,080 | N/A | 2,010 | ||||||||||||||
Class I Shares | N/A | 853,788 | N/A | 5,513 | ||||||||||||||
Class J Shares | N/A | N/A | N/A | 1,832 | ||||||||||||||
Class R Shares | N/A | 47,867 | N/A | 2,921 | ||||||||||||||
Class S Shares | N/A | 313,849 | N/A | 15,455 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Class A Shares | 922 | – | – | – | ||||||||||||||
Class C Shares | – | – | – | – | ||||||||||||||
Class I Shares | 3,307 | – | – | – | ||||||||||||||
Class J Shares | 13,396 | 319,498 | – | 52,497 | ||||||||||||||
Class L Shares | 1,000 | 18,926 | – | 60,646 | ||||||||||||||
Class R Shares | 2 | – | – | – | ||||||||||||||
Class S Shares | 482 | – | – | – | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Class A Shares | (27,882) | (84,083) | (907) | (1,662) | ||||||||||||||
Class C Shares | (4,144) | (7,048) | (192) | (120) | ||||||||||||||
Class I Shares | (44,954) | (74,692) | (8,735) | (2,098) | ||||||||||||||
Class J Shares | (388,278) | (1,942,713) | (44,131) | (245,452) | ||||||||||||||
Class L Shares | (8,536) | (175,832) | (76,748) | (248,613) | ||||||||||||||
Class R Shares | (3,994) | (6,362) | (645) | (354) | ||||||||||||||
Class S Shares | (24,777) | (45,609) | (2,700) | (2,931) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 365,827 | 3,654,776 | 136,503 | 479,363 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 996,845 | 4,802,922 | 263,426 | 591,968 | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 10,338,655 | 5,535,733 | 1,658,767 | 1,066,799 | ||||||||||||||
End of period | $ | 11,335,500 | $ | 10,338,655 | $ | 1,922,193 | $ | 1,658,767 | ||||||||||
Undistributed net investment income/(loss)* | $ | 1,696 | $ | 2,773 | $ | 5,813 | $ | (40) |
* | See Note 5 in Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from November 1, 2008 through October 31, 2009. |
See Notes to Financial Statements.
40 | DECEMBER 31, 2009
Financial Highlights
Class A Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 | Perkins Large Cap Value Fund | |||||||||
(unaudited) and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $11.14 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | – | .05 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.32 | 1.11 | ||||||||
Total from Investment Operations | 1.32 | 1.16 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.03) | (.02) | ||||||||
Distributions (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.05) | (.02) | ||||||||
Net Asset Value, End of Period | $12.41 | $11.14 | ||||||||
Total Return** | 11.86% | 11.64% | ||||||||
Net Assets, End of Period (in thousands) | $1,837 | $718 | ||||||||
Average Net Assets for the Period (in thousands) | $943 | $530 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.27% | 1.23% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.26% | 1.23% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.48% | 1.19% | ||||||||
Portfolio Turnover Rate*** | 33% | 57% |
Class A Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Mid Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(4) | 2009(5) | ||||||||
Net Asset Value, Beginning of Period | $18.66 | $16.07 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | (.01) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.60 | ||||||||
Total from Investment Operations | 1.16 | 2.59 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.02) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.02) | – | ||||||||
Net Asset Value, End of Period | $19.80 | $18.66 | ||||||||
Total Return** | 6.24% | 16.12% | ||||||||
Net Assets, End of Period (in thousands) | $896,560 | $781,960 | ||||||||
Average Net Assets for the Period (in thousands) | $841,592 | $736,402 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.10% | 1.22% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.10% | 1.22% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.02% | 0.35% | ||||||||
Portfolio Turnover Rate*** | 69% | 88% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
Janus Value Funds | 41
Financial Highlights (continued)
Class A Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Small Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $19.48 | $16.47 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .08 | (.07) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.39 | 3.08 | ||||||||
Total from Investment Operations | 1.47 | 3.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $20.95 | $19.48 | ||||||||
Total Return** | 7.55% | 18.28% | ||||||||
Net Assets, End of Period (in thousands) | $33,930 | $20,039 | ||||||||
Average Net Assets for the Period (in thousands) | $26,863 | $13,537 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.95% | 0.97% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 0.95% | 0.96% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.94% | 0.62% | ||||||||
Portfolio Turnover Rate*** | 62% | 85% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
42 | DECEMBER 31, 2009
Class C Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 | Perkins Large Cap Value Fund | |||||||||
(unaudited) and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $11.11 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | (.01) | .02 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.29 | 1.09 | ||||||||
Total from Investment Operations | 1.28 | 1.11 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.02) | – | ||||||||
Net Asset Value, End of Period | $12.37 | $11.11 | ||||||||
Total Return** | 11.57% | 11.10% | ||||||||
Net Assets, End of Period (in thousands) | $771 | $556 | ||||||||
Average Net Assets for the Period (in thousands) | $618 | $484 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 2.01% | 1.98% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 2.01% | 1.97% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.19)% | 0.48% | ||||||||
Portfolio Turnover Rate*** | 33% | 57% |
Class C Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Mid Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(4) | 2009(5) | ||||||||
Net Asset Value, Beginning of Period | $18.62 | $16.07 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .01 | (.05) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.60 | ||||||||
Total from Investment Operations | 1.13 | 2.55 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $19.75 | $18.62 | ||||||||
Total Return** | 6.07% | 15.87% | ||||||||
Net Assets, End of Period (in thousands) | $140,098 | $121,166 | ||||||||
Average Net Assets for the Period (in thousands) | $131,183 | $107,362 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.84% | 1.97% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.83% | 1.97% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.29% | (0.41)% | ||||||||
Portfolio Turnover Rate*** | 69% | 88% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
Janus Value Funds | 43
Financial Highlights (continued)
Class C Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Small Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $19.43 | $16.47 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .07 | (.10) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.35 | 3.06 | ||||||||
Total from Investment Operations | 1.42 | 2.96 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $20.85 | $19.43 | ||||||||
Total Return** | 7.31% | 17.97% | ||||||||
Net Assets, End of Period (in thousands) | $10,525 | $6,196 | ||||||||
Average Net Assets for the Period (in thousands) | $7,916 | $3,739 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.81% | 1.95% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.81% | 1.95% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.09% | (0.39)% | ||||||||
Portfolio Turnover Rate*** | 62% | 85% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
44 | DECEMBER 31, 2009
Class I Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 | Perkins Large Cap Value Fund | |||||||||
(unaudited) and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $11.14 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | .04 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.30 | 1.13 | ||||||||
Total from Investment Operations | 1.33 | 1.17 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.04) | (.03) | ||||||||
Distributions (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.06) | (.03) | ||||||||
Net Asset Value, End of Period | $12.41 | $11.14 | ||||||||
Total Return** | 11.97% | 11.76% | ||||||||
Net Assets, End of Period (in thousands) | $50,650 | $28,863 | ||||||||
Average Net Assets for the Period (in thousands) | $39,282 | $17,284 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.02% | 1.00% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.01% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.79% | 1.36% | ||||||||
Portfolio Turnover Rate*** | 33% | 57% |
Class I Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Mid Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(4) | 2009(5) | ||||||||
Net Asset Value, Beginning of Period | $18.68 | $16.07 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .04 | .01 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.14 | 2.60 | ||||||||
Total from Investment Operations | 1.18 | 2.61 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.06) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.06) | – | ||||||||
Net Asset Value, End of Period | $19.80 | $18.68 | ||||||||
Total Return** | 6.32% | 16.24% | ||||||||
Net Assets, End of Period (in thousands) | $1,540,852 | $1,258,548 | ||||||||
Average Net Assets for the Period (in thousands) | $1,428,368 | $1,058,484 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.78% | 0.81% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 0.77% | 0.81% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.36% | 0.75% | ||||||||
Portfolio Turnover Rate*** | 69% | 88% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
Janus Value Funds | 45
Financial Highlights (continued)
Class I Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Small Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $19.49 | $16.47 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .07 | (.02) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.40 | 3.04 | ||||||||
Total from Investment Operations | 1.47 | 3.02 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $20.96 | $19.49 | ||||||||
Total Return** | 7.54% | 18.34% | ||||||||
Net Assets, End of Period (in thousands) | $344,431 | $236,437 | ||||||||
Average Net Assets for the Period (in thousands) | $283,180 | $42,710 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 0.78% | 0.77% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 0.78% | 0.75% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.13% | 0.80% | ||||||||
Portfolio Turnover Rate*** | 62% | 85% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
46 | DECEMBER 31, 2009
Class J Shares
For a share outstanding during the two-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.67 | $16.63 | $26.56 | $24.87 | $23.24 | $22.22 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .11 | .29 | .32 | .37 | .14 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.97 | (7.09) | 3.30 | 3.33 | 2.89 | ||||||||||||||||||||
Total from Investment Operations | 1.17 | 3.08 | (6.80) | 3.62 | 3.70 | 3.03 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.04) | (.25) | (.40) | (.31) | (.24) | (.08) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (.79) | (2.73) | (1.62) | (1.83) | (1.93) | ||||||||||||||||||||
Total Distributions | (.04) | (1.04) | (3.13) | (1.93) | (2.07) | (2.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $19.80 | $18.67 | $16.63 | $26.56 | $24.87 | $23.24 | ||||||||||||||||||||
Total Return** | 6.25% | 20.27% | (28.59)% | 15.38% | 16.88% | 14.26% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $7,802,141 | $7,321,160 | $5,170,228 | $5,892,209 | $5,181,449 | $4,188,183 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $7,591,428 | $5,907,999 | $6,009,064 | $5,710,028 | $4,806,698 | $3,797,215 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.05% | 1.11% | 1.07% | 0.86% | 0.93% | 0.93% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 1.04% | 1.11% | 1.06% | 0.85% | 0.93% | 0.92% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.08% | 0.84% | 1.47% | 1.49% | 1.69% | 0.67% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 69% | 88% | 103% | 95% | 95% | 86% |
Class J Shares
For a share outstanding during the two-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | Perkins Small Cap Value Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $19.47 | $17.98 | $27.90 | $30.29 | $31.16 | $32.98 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .07 | .08 | .32 | .32 | .39 | .29 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.39 | 3.39 | (5.83) | 2.57 | 3.49 | 3.16 | ||||||||||||||||||||
Total from Investment Operations | 1.46 | 3.47 | (5.51) | 2.89 | 3.88 | 3.45 | ||||||||||||||||||||
Less Distributions and other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.31) | (.33) | (.45) | (.30) | (.31) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (1.62) | (4.08) | (4.83) | (4.45) | (4.96) | ||||||||||||||||||||
Return of Capital | N/A | (.05) | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Total Distributions and other | – | (1.98) | (4.41) | (5.28) | (4.75) | (5.27) | ||||||||||||||||||||
Net Asset Value, End of Period | $20.93 | $19.47 | $17.98 | $27.90 | $30.29 | $31.16 | ||||||||||||||||||||
Total Return** | 7.50% | 22.87% | (22.57)% | 10.77% | 13.71% | 11.34% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $804,263 | $659,087 | $503,335 | $813,857 | $1,153,144 | $1,338,093 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $724,622 | $441,820 | $662,033 | $974,404 | $1,259,565 | $1,440,206 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 1.06% | 1.11% | 1.03% | 1.01% | 1.01% | 1.00% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 1.06% | 1.11% | 1.03% | 1.00% | 1.00% | 0.99% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.85% | 1.06% | 1.44% | 1.13% | 1.26% | 0.84% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 62% | 85% | 112% | 59% | 62% | 44% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | See Note 6 in Notes to Financial Statements. | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
Janus Value Funds | 47
Financial Highlights (continued)
Class L Shares
For a share outstanding during the two-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $18.79 | $16.75 | $26.69 | $24.99 | $23.34 | $22.31 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .23 | .49 | .39 | .39 | .15 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.14 | 2.93 | (7.31) | 3.28 | 3.37 | 2.92 | ||||||||||||||||||||
Total from Investment Operations | 1.18 | 3.16 | (6.82) | 3.67 | 3.76 | 3.07 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.33) | (.39) | (.35) | (.28) | (.11) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (.79) | (2.73) | (1.62) | (1.83) | (1.93) | ||||||||||||||||||||
Total Distributions | (.05) | (1.12) | (3.12) | (1.97) | (2.11) | (2.04) | ||||||||||||||||||||
Net Asset Value, End of Period | $19.92 | $18.79 | $16.75 | $26.69 | $24.99 | $23.34 | ||||||||||||||||||||
Total Return** | 6.31% | 20.67% | (28.49)% | 15.49% | 17.08% | 14.40% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $377,027 | $350,003 | $365,505 | $885,293 | $1,068,045 | $734,926 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $365,627 | $298,741 | $759,342 | $1,043,566 | $921,447 | $597,747 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.82% | 0.87% | 0.84% | 0.77% | 0.78% | 0.77% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.82% | 0.87% | 0.84% | 0.77% | 0.77% | 0.77% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.31% | 1.11% | 1.76% | 1.60% | 1.79% | 0.82% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 69% | 88% | 103% | 95% | 95% | 86% |
Class L Shares
For a share outstanding during the two-month | ||||||||||||||||||||||||||
period ended December 31, 2009 (unaudited) | Perkins Small Cap Value Fund | |||||||||||||||||||||||||
and each fiscal year ended October 31 | 2009(1) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $19.72 | $18.24 | $28.20 | $30.54 | $31.38 | $33.19 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .08 | .09 | .33 | .38 | .54 | .37 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.40 | 3.45 | (5.86) | 2.61 | 3.43 | 3.17 | ||||||||||||||||||||
Total from Investment Operations | 1.48 | 3.54 | (5.53) | 2.99 | 3.97 | 3.54 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.38) | (.35) | (.50) | (.36) | (.39) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (1.62) | (4.08) | (4.83) | (4.45) | (4.96) | ||||||||||||||||||||
Return of Capital | N/A | (.06) | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Total Distributions | – | (2.06) | (4.43) | (5.33) | (4.81) | (5.35) | ||||||||||||||||||||
Net Asset Value, End of Period | $21.20 | $19.72 | $18.24 | $28.20 | $30.54 | $31.38 | ||||||||||||||||||||
Total Return** | 7.51% | 23.12% | (22.39)% | 11.06% | 13.93% | 11.57% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $689,148 | $706,873 | $563,464 | $771,789 | $923,755 | $1,185,733 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $685,503 | $613,826 | $664,935 | $831,092 | $1,092,751 | $1,323,226 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.82% | 0.85% | 0.82% | 0.80% | 0.80% | 0.79% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(2) | 0.82% | 0.85% | 0.81% | 0.79% | 0.79% | 0.79% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.10% | 1.28% | 1.65% | 1.34% | 1.51% | 1.05% | ||||||||||||||||||||
Portfolio Turnover Rate*** | 62% | 85% | 112% | 59% | 62% | 44% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | See Note 6 in Notes to Financial Statements. | |
(3) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of gross expenses to average net assets and was less than 0.01%. |
See Notes to Financial Statements.
48 | DECEMBER 31, 2009
Class R Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Mid Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $18.64 | $16.07 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | (.03) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.60 | ||||||||
Total from Investment Operations | 1.15 | 2.57 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $19.79 | $18.64 | ||||||||
Total Return** | 6.17% | 15.99% | ||||||||
Net Assets, End of Period (in thousands) | $83,495 | $71,203 | ||||||||
Average Net Assets for the Period (in thousands) | $76,735 | $64,070 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.52% | 1.53% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.51% | 1.53% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.61% | 0.03% | ||||||||
Portfolio Turnover Rate*** | 69% | 88% |
Class R Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Small Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $19.46 | $16.47 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .06 | (.12) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.37 | 3.11 | ||||||||
Total from Investment Operations | 1.43 | 2.99 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $20.89 | $19.46 | ||||||||
Total Return** | 7.35% | 18.15% | ||||||||
Net Assets, End of Period (in thousands) | $4,720 | $3,734 | ||||||||
Average Net Assets for the Period (in thousands) | $4,062 | $3,362 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.52% | 1.54% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.52% | 1.54% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.39% | 0.10% | ||||||||
Portfolio Turnover Rate*** | 62% | 85% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Value Funds | 49
Financial Highlights (continued)
Class S Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 | Perkins Large Cap Value Fund | |||||||||
(unaudited) and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $11.13 | $10.00 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | .04 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.29 | 1.10 | ||||||||
Total from Investment Operations | 1.31 | 1.14 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | (.01) | ||||||||
Distributions (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.02) | (.01) | ||||||||
Net Asset Value, End of Period | $12.42 | $11.13 | ||||||||
Total Return** | 11.81% | 11.40% | ||||||||
Net Assets, End of Period (in thousands) | $623 | $557 | ||||||||
Average Net Assets for the Period (in thousands) | $597 | $484 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.51% | 1.48% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.51% | 1.47% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.32% | 0.98% | ||||||||
Portfolio Turnover Rate*** | 33% | 57% |
Class S Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Mid Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(4) | 2009(5) | ||||||||
Net Asset Value, Beginning of Period | $18.66 | $16.07 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .03 | (.02) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.61 | ||||||||
Total from Investment Operations | 1.16 | 2.59 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.02) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (.02) | – | ||||||||
Net Asset Value, End of Period | $19.80 | $18.66 | ||||||||
Total Return** | 6.22% | 16.12% | ||||||||
Net Assets, End of Period (in thousands) | $495,327 | $434,615 | ||||||||
Average Net Assets for the Period (in thousands) | $468,815 | $397,613 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.26% | 1.28% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.26% | 1.28% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.86% | 0.28% | ||||||||
Portfolio Turnover Rate*** | 69% | 88% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. | |
(4) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
50 | DECEMBER 31, 2009
Class S Shares
For a share outstanding during the | ||||||||||
two-month period ended December 31, 2009 | Perkins Small Cap Value Fund | |||||||||
(unaudited) and the period ended October 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $19.47 | $16.47 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .07 | (.10) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.38 | 3.10 | ||||||||
Total from Investment Operations | 1.45 | 3.00 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | – | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $20.92 | $19.47 | ||||||||
Total Return** | 7.45% | 18.21% | ||||||||
Net Assets, End of Period (in thousands) | $35,176 | $26,401 | ||||||||
Average Net Assets for the Period (in thousands) | $30,189 | $24,792 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.28% | 1.21% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.28% | 1.20% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.61% | 0.46% | ||||||||
Portfolio Turnover Rate*** | 62% | 85% |
* | See Note 5 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 November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Value Funds | 51
Financial Highlights (continued)
Class T Shares
For a share outstanding during the | ||||||||||
five-month period ended December 31, 2009 | Perkins Large Cap Value Fund | |||||||||
(unaudited) and the period ended July 31, 2009 | 2009(1) | 2009(2) | ||||||||
Net Asset Value, Beginning of Period | $11.13 | $10.22 | ||||||||
Income from Investment Operations: | ||||||||||
Net investment income/(loss) | .02 | – | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.30 | .91 | ||||||||
Total from Investment Operations | 1.32 | .91 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (.03) | – | ||||||||
Distributions (from capital gains)* | (.02) | – | ||||||||
Total Distributions | (.05) | – | ||||||||
Net Asset Value, End of Period | $12.40 | $11.13 | ||||||||
Total Return** | 11.91% | 8.90% | ||||||||
Net Assets, End of Period (in thousands) | $21 | $1 | ||||||||
Average Net Assets for the Period (in thousands) | $8 | $1 | ||||||||
Ratio of Gross Expenses to Average Net Assets***(3) | 1.27% | 1.26% | ||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 1.27% | 1.25% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.64% | 1.39% | ||||||||
Portfolio Turnover Rate*** | 33% | 57% |
* | See Note 5 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 August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(3) | See Note 6 in Notes to Financial Statements. |
See Notes to Financial Statements.
52 | DECEMBER 31, 2009
Notes to Schedules of Investments (unaudited)
Lipper Large-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) above Lipper’s USDE large-cap floor. Large-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 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 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. | |
Russell 1000® Value Index | Measures the performance of those Russell 1000® 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 2000® Value Index | Measures the performance of those Russell 2000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
Russell 3000® Index | Measures the performance of the stocks of the 3,000 largest publicly-traded U.S. companies, based on market capitalization, and it measures the performance of about 98% of the total market capitalization of the publicly traded U.S. equity market. | |
Russell Midcap® Value Index | Measures the performance of those Russell Midcap® Index companies with lower price-to-book ratios and lower 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. | |
ADR | American 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, swap agreements and/or securities with extended settlement dates. |
Janus Value Funds | 53
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 period ended December 31, 2009. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Perkins Mid Cap Value Fund | |||||||||||||||||||||
Potlatch Corp. | – | $ | – | – | $ | – | $ | – | $ | 1,164,483 | $ | 72,791,604 | |||||||||
SRA International, Inc. | 585,100 | 10,700,643 | – | – | – | – | 45,840,000 | ||||||||||||||
$ | 10,700,643 | $ | – | $ | – | $ | 1,164,483 | $ | 118,631,604 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 12/31/09 | |||||||||||||||
Perkins Small Cap Value Fund | |||||||||||||||||||||
Omnicell, Inc. | �� | $ | – | – | $ | – | $ | – | $ | – | $ | 18,704,000 | |||||||||
The following is a summary of the inputs that were used to value the Funds’ investments in securities and other financial instruments as of December 31, 2009. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2009)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Investments in Securities: | |||||||||||
Perkins Large Cap Value Fund | |||||||||||
Common Stock | |||||||||||
Cellular Telecommunications | $ | – | $ | 415,620 | $ | – | |||||
Diversified Banking Institutions | 1,780,362 | 371,085 | – | ||||||||
Food – Miscellaneous/Diversified | 755,950 | 223,300 | – | ||||||||
Wireless Equipment | – | 231,300 | – | ||||||||
All Other | 42,905,885 | – | – | ||||||||
Repurchase Agreement | – | 7,800,000 | – | ||||||||
Total Investments in Securities | $ | 45,442,197 | $ | 9,041,305 | $ | – | |||||
Investments in Securities: | |||||||||||
Perkins Mid Cap Value Fund | |||||||||||
Common Stock | |||||||||||
Diversified Banking Institutions | $ | – | $ | 91,344,000 | $ | – | |||||
Food – Miscellaneous/Diversified | 159,367,038 | 31,900,000 | – | ||||||||
Wireless Equipment | – | 42,405,000 | – | ||||||||
All Other | 9,681,669,252 | – | – | ||||||||
Repurchase Agreements | – | 1,288,800,000 | – | ||||||||
Total Investments in Securities | $ | 9,841,036,290 | $ | 1,454,449,000 | $ | – | |||||
Purchased Options | $ | – | $ | 41,533,017 | $ | – | |||||
Investments in Securities: | |||||||||||
Perkins Small Cap Value Fund | |||||||||||
Common Stock | $ | 1,515,565,072 | $ | – | $ | – | |||||
Repurchase Agreement | – | 382,700,000 | – | ||||||||
Total Investments in Securities | $ | 1,515,565,072 | $ | 382,700,000 | $ | – | |||||
Investments in Purchased Options: | |||||||||||
Perkins Mid Cap Value Fund | $ | – | $ | 41,533,017 | $ | – | |||||
Other Financial Instruments:(1) | |||||||||||
Perkins Large Cap Value Fund | $ | – | $ | (28,500) | $ | – | |||||
Perkins Mid Cap Value Fund | – | (10,882,648) | – | ||||||||
(1) | Other financial instruments include futures, forward currency, written option, and swap contracts. Forward currency contracts and swap 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 are reported at their market value at measurement date. |
54 | DECEMBER 31, 2009
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates as of December 31, 2009 is noted below.
Fund | Aggregate Value | ||||
Perkins Large Cap Value Fund | $ | 4,325,434 | |||
Perkins Mid Cap Value Fund | 22,094,606 | ||||
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 Value Funds | 55
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 |
Perkins Large Cap Value Fund, Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund (individually, a “Fund” and collectively, the “Funds”) 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 thirty-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.
Each Fund in this report offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms. The maximum purchase in Class C Shares is $500,000 for any single purchase.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, and bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class J Shares are available to shareholders investing in the Funds either directly or through financial intermediaries.
Class L Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals and financial intermediaries who are willing to maintain a minimum account balance of $250,000.
Class R Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, and certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America within the investment management 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
56 | DECEMBER 31, 2009
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; (iii) a non-significant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a non-valued security and a restricted or non-public security. 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. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
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.
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 may 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.
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
Janus Value Funds | 57
Notes to Financial Statements (unaudited) (continued)
M of the Internal Revenue Code applicable to regulated investment companies.
In accordance with the Financial Accounting Standards Board (“FASB”) guidance, the Funds adopted the provisions of “Income Taxes.” These provisions require an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’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 Funds recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense on the Statements of Operations.
These provisions require management of the Funds to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the two-month or five-month period ended December 31, 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.
Valuation Inputs Summary
In accordance with FASB guidance, the Funds utilize the “Fair Value Measurements and Disclosures” to define fair value, establish a framework for measuring fair value, and expand disclosure requirements regarding fair value measurements. The Fair Value Measurement Standard does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of the Funds’ investments defined pursuant to this standard. 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 under 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 December 31, 2009 to value the Funds’ investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” (if applicable) in the Notes to Schedules of Investments.
In April 2009, FASB issued “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,” which provides additional guidance for estimating fair value in accordance with Fair Value Measurements 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. Additionally, it amends the Fair Value Measurement Standard by expanding disclosure requirements for reporting entities surrounding the major categories of assets and liabilities carried at fair value. The required disclosures have been incorporated into the “Valuation Inputs Summary” in the Notes to Schedules of Investments. Management believes applying this guidance does not have a material impact on the financial statements.
2. | Derivative Instruments |
The Funds may invest in various types of derivatives which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Funds may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives.
58 | DECEMBER 31, 2009
The Funds may use derivative instruments for hedging (to offset risks associated with an investment, currency exposure, or market conditions) or for speculative (to seek to enhance returns) purposes. When the Funds invest in a derivative for speculative purposes, the Funds will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the cost of the derivative. A Fund may not use any derivative to gain exposure to an asset or class of assets prohibited by its investment restrictions from purchasing directly. A Fund’s ability to use derivatives instruments may also be limited by tax considerations.
Investments in derivatives are generally subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including credit risk, currency risk, leverage risk, liquidity risk, and index risk.
Derivatives may generally be traded over-the-counter (“OTC”) or on an exchange. Exchange-traded derivatives, such as futures contracts, are regulated and the terms of the options are standardized. Derivatives traded OTC, such as swap contracts, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased counterparty credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Funds may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, a Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
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.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The Funds may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Funds may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Funds are subject to foreign currency risk in the normal course of pursuing their investment objectives through their investments in forward currency contracts.
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 on 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
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The 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 are subject to interest rate risk, market risk, and currency risk in the normal course of pursuing their investment objectives
Janus Value Funds | 59
Notes to Financial Statements (unaudited) (continued)
through their investments in futures contracts. 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 held by the Funds that are designated as collateral for market value on futures contracts are noted on the Schedules of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian or with the counterparty broker.
With futures, there is minimal counterparty credit risk to the Funds since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation to buy (call option) or sell (put option) a financial instrument at an agreed upon price. 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 are subject to interest rate risk, liquidity risk, market risk, and currency risk in the normal course of pursuing their investment objectives through their investments in options contracts. The Funds may use option contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. 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, 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 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.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded over-the-counter expose the Funds to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Funds and the counterparty and by having the counterparty post collateral to cover the Funds’ exposure to the counterparty.
Holdings of the Funds designated to cover outstanding written options are noted on the Schedules of Investments (if applicable). Options written are reported as a liability on
60 | DECEMBER 31, 2009
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 following Fund recognized realized gains/(losses) from written options contracts during the two-month period ended December 31, 2009 as indicated in the table below:
Fund | Gains | ||||
Perkins Mid Cap Value Fund | $ | 35,056,675 | |||
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 two-month period ended December 31, 2009 is indicated in the table below:
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Perkins Mid Cap Value Fund | ||||||||
Options outstanding at October 31, 2009 | 119,494 | $ | 39,390,528 | |||||
Options written | 33,473 | 14,187,970 | ||||||
Options closed | – | – | ||||||
Options expired | (72,689) | (35,056,675) | ||||||
Options exercised | – | – | ||||||
Options outstanding at December 31, 2009 | 80,278 | $ | 18,521,823 | |||||
Other Options
In addition to the option strategies described above, a Fund may purchase and sell a variety of options with non-standard payout structures or other features (“exotic options”). Exotic options are traded OTC and typically have price movements that can vary markedly from simple put or call options. The risks associated with exotic options are that they cannot be as easily priced and may be subject to liquidity risk. While some exotic options have fairly active markets others are mostly thinly traded instruments. Some options are pure two-party transactions and may have no liquidity. The Funds may treat such instruments as illiquid and will limit its investments in such instruments to no more than 15% of each Fund’s net assets, when combined with all other illiquid investments of each Fund. A Fund may use exotic options to the extent that they are consistent with the Fund’s investment objective and investment policies, and applicable regulations.
The Funds may purchase and sell exotic options that have values which are determined by the correlation of two or more underlying assets. These types of options include but are not limited to outperformance options, yield curve options or other spread options.
Swaps
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. 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. The Funds are subject to market risk and interest rate risk in the normal course of pursuing their investment objectives through investments in swap contracts. 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 of the Funds are reported as an asset or liability on the Statements of Assets and Liabilities (if applicable). Realized gains and losses of the 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. The Funds are subject to credit risk in the normal course of pursuing their investment objectives through their investments in credit default swap contracts. The Funds may enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which they are not otherwise exposed. With a credit default swap, one party in the swap is a lender and faces credit risk from a third party, and the counterparty in the
Janus Value Funds | 61
Notes to Financial Statements (unaudited) (continued)
credit default swap agrees to insure this risk in exchange for regular periodic payments. The Funds’ maximum risk of loss from counterparty risk, either as protection sellers or as protection buyers (undiscounted), is the notional value of the contract. The risk is mitigated by having a netting arrangement between the Funds and the counterparty and by posting of collateral by the counterparty to the Funds to cover the Funds’ exposure to the counterparty.
Funded (notional value of contract paid up front) or unfunded (notional value only paid in case of default) 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.
The Funds’ maximum risk of loss for equity swaps, interest rate swaps and total return swaps from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Funds and the counterparty and by the posting of collateral to the Funds to cover the Funds’ exposure to the counterparty.
In accordance with FASB guidance, the Funds adopted the provisions for “Derivatives and Hedging”, which require 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.
Fair Value of Derivative Instruments as of December 31, 2009
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Perkins Large Cap Value Fund | ||||||||||||
Equity Contracts | ||||||||||||
Futures(a) | Variation Margin | $ | – | Variation Margin | $ | 28,500 | ||||||
Total | $ | – | $ | 28,500 | ||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Perkins Mid Cap Value Fund | ||||||||||||
Equity Contracts | ||||||||||||
Options | Unaffiliated investments at value | $ | 41,533,017 | Options written, at value | $ | 10,882,648 | ||||||
Total | $ | 41,533,017 | $ | 10,882,648 | ||||||||
(a) | Includes cumulative appreciation/(depreciation) of futures contracts as reported on the Schedule of Investments. Only the current day’s variation margin is reported on the Statement of Assets and Liabilities. |
62 | DECEMBER 31, 2009
The effect of Derivative Instruments on the Statements of Operations for the period ended December 31, 2009
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Perkins Large Cap Value Fund | ||||||||||||||||||||
Equity Contracts | $ | 38,954 | $ | – | $ | – | $ | – | $ | 38,954 | ||||||||||
Total | $ | 38,954 | $ | – | $ | – | $ | – | $ | 38,954 | ||||||||||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Perkins Large Cap Value Fund | ||||||||||||||||||||
Equity Contracts | $ | 33,608 | $ | – | $ | – | $ | – | $ | 33,608 | ||||||||||
Total | $ | 33,608 | $ | – | $ | – | $ | – | $ | 33,608 | ||||||||||
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Perkins Mid Cap Value Fund | ||||||||||||||||||||
Equity Contracts | $ | – | $ | – | $ | (68,411,651 | ) | $ | – | $ | (68,411,651 | ) | ||||||||
Total | $ | – | $ | – | $ | (68,411,651 | ) | $ | – | $ | (68,411,651 | ) | ||||||||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | Futures | Swaps | Options | Forward Currency Contracts | Total | |||||||||||||||
Perkins Mid Cap Value Fund | ||||||||||||||||||||
Equity Contracts | $ | – | $ | – | $ | 17,232,820 | $ | – | $ | 17,232,820 | ||||||||||
Total | $ | – | $ | – | $ | 17,232,820 | $ | – | $ | 17,232,820 | ||||||||||
Please see the Funds’ Statements of Operations for the Funds’ “Net Realized and Unrealized Gain/(Loss) on Investments.”
The value of derivative instruments at period end and the effect of derivatives on the Statements of Operations are indicative of the Funds’ volumes throughout the period.
3. | Other investments and strategies |
Additional Investment Risk
Unforeseen events in the equity and fixed-income markets may at times result in an unusually high degree of volatility in the markets, both domestic and international. These events and the resulting market upheavals may have an adverse effect on the Funds such as a decline in the value and liquidity of many securities held by the Funds, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in net asset value, and an increase in Fund expenses. Such unforeseen events may make it unusually difficult to identify both investment risks and opportunities and could limit or preclude each Fund’s ability to achieve its investment objective. The market’s behavior may at times be unpredictable. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
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 investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of a Fund’s exposure to counterparty risk in respect to financial assets approximates their carrying value as recorded on the 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 types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. A Fund intends to enter into financial transactions with
Janus Value Funds | 63
Notes to Financial Statements (unaudited) (continued)
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.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which generally 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 (“ETNs”), 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 periodic 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 is meant to be held until maturity. The Funds’ decision to sell their ETN holdings may be limited by the availability of a secondary market.
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. The Fund may not experience similar performance as its assets grow.
Interfund Lending
As permitted by the Securities and Exchange Commission (“SEC”), or the 1940 Act and rules promulgated thereunder, 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.
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.
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 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 SEC. Cash collateral may be invested as permitted by the 1940 Act and rules promulgated thereunder.
Deutsche Bank AG (the “Lending Agent”) may also invest the cash collateral in 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
64 | DECEMBER 31, 2009
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 on 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.
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 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 the 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 the Funds 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 on 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.
The Funds may also enter into short positions through derivative instruments such as option contracts, futures contracts, and swap agreements, which may expose the Funds to similar risks. To the extent that the Funds enter into short derivative positions, the Funds may be exposed to risks similar to those associated with short sales, including the risk that the Funds’ losses are theoretically unlimited.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
Each Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Funds’ contractual investment advisory “base” fee rate prior to any performance adjustment (expressed as an annual rate).
Base | ||||||||
Average Daily Net | Fee (%) | |||||||
Fund | Assets of the Fund | (annual rate) | ||||||
Perkins Large Cap Value Fund | N/A | 0.64 | ||||||
Perkins Mid Cap Value Fund | N/A | 0.64 | ||||||
Perkins Small Cap Value Fund | N/A | 0.72 | ||||||
For each Fund, the investment advisory fee rate is determined by calculating a base fee 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 depending on how well each Fund has performed relative to its benchmark index, as shown below:
Fund | Benchmark Index | ||||
Perkins Large Cap Value Fund | Russell 1000® Value Index | ||||
Perkins Mid Cap Value Fund | Russell Midcap® Value Index | ||||
Perkins Small Cap Value Fund | Russell 2000® Value Index | ||||
Only the base fee rate applied until February 2007 for Perkins Mid Cap Value Fund and January 2010 for each of Perkins Large Cap Value Fund and Perkins Small Cap
Janus Value Funds | 65
Notes to Financial Statements (unaudited) (continued)
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 rate 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 is made until a Fund’s performance-based fee structure has been in effect for at least 12 months. When a 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 Adjustments began February 2007 for Perkins Mid Cap Value Fund and January 2010 for each of Perkins Large Cap Value Fund and 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 a Fund’s relative performance compared 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 a Fund is calculated net of expenses, whereas a Fund’s benchmark index does not have any fees or expenses. Reinvestment of dividends and distributions is included in calculating both the performance of a Fund and the Fund’s benchmark index. 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. Under extreme circumstances involving underperformance by a rapidly shrinking Fund, the dollar amount of the Performance Adjustment could be more than the dollar amount of the Base Fee Rate. In such circumstances, Janus Capital would reimburse the applicable Fund.
The investment performance of the Fund’s Class A Shares (waiving the upfront sales load) for the performance measurement period is used to calculate the Performance Adjustment. For performance measurement periods prior to July 6, 2009, the Funds calculated their Performance Adjustment by comparing the performance of Class J Shares (formerly named Investor Shares) against the investment record of its benchmark index. For periods beginning July 6, 2009, the investment performance of a Fund’s load-waived Class A Shares for the performance measurement period is used to calculate the Performance Adjustment. Because the Performance Adjustment is based on a rolling 36-month performance measurement period, calculations based solely on the performance of a Fund’s load-waived Class A Shares will not be fully implemented for 36 months after July 6, 2009. Until that time, a Fund’s performance will be compared to a blended investment performance record that includes the Fund’s Class J Shares performance for the portion of the performance measurement period prior to July 6, 2009, and the Fund’s load-waived Class A Shares for the remainder of the period.
After Janus Capital determines whether a Fund’s performance was above or below its benchmark index by comparing the investment performance of the Fund’s load-waived Class A Shares, or Class J Shares as the case may be, against the cumulative investment record of the Fund’s benchmark index, Janus Capital applies the same Performance Adjustment (positive or negative) across each other class of shares of the Fund, as applicable.
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 Funds’ prospectuses and statements 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.
66 | DECEMBER 31, 2009
During the two-month period ended December 31, 2009, the following Fund recorded a Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Perkins Mid Cap Value Fund | $ | 1,719,549 | |||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Funds. Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee paid by the Funds to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Funds’ performance relative to their benchmark indices over the performance measurement period.
Perkins or its predecessors have 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.
As Perkins Mid Cap Value Fund’s and Perkins Small Cap Value Fund’s administrator, Janus Capital receives an administrative services fee at an annual rate of up to 0.05% of the average daily net assets of each Fund for providing certain administrative services including, but not limited to, recordkeeping and registration functions.
Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund pay 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 certain Funds’ total net assets sold directly and the proportion of certain Funds’ net assets sold through 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 for both Class J Shares and Class L Shares.
In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Funds. Certain intermediaries may charge administrative fees to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Funds to Janus Services, which uses such fees to reimburse intermediaries.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of Class R Shares and Class S Shares of the Funds as applicable for providing or arranging for the provision of, administrative services including but not limited to, recordkeeping, subaccounting, order processing for omnibus or networked accounts, or other shareholder services provided on behalf of investors in Class R Shares and Class S Shares of the Funds, as applicable. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, and other financial intermediaries for providing these services.
Class T Shares of Perkins Large Cap Value Fund pay an annual administrative fee of 0.25% of net assets of Class T Shares for administrative services, including recordkeeping, subaccounting, or other shareholder services provided by intermediaries on behalf of the shareholders of the Fund. These administrative fees are paid by Class T Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Janus Services or its affiliates may also pay administrative fees to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to the Fund.
Janus Services has agreed to voluntarily waive the administrative fee payable of Class L Shares of Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Services without prior notification to shareholders. Removal of this fee waiver may have a significant impact on Class L Shares’ total expense ratio. If applicable, amounts waived to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, is the distributor of the Funds. The Funds have adopted a Distribution and Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by the Funds at an annual rate, as determined from time to time by the Board of Trustees, of up to 0.25% of the Class A Shares average daily net assets, of up to 1.00% of the Class C Shares average daily net assets, of up to 0.50% of the Class R Shares average daily net assets, and of up to 0.25% of the Class S Shares average daily net assets. Payments under the Plan are not tied exclusively to actual distribution and shareholder service expenses, and the payments may exceed distribution and shareholder service expenses actually incurred by the Funds. If any of a Fund’s actual distribution and shareholder service expenses incurred during a calendar year is less than the payments made
Janus Value Funds | 67
Notes to Financial Statements (unaudited) (continued)
during a calendar year, the Fund will be reimbursed for the difference.
Janus Capital has agreed until at least February 16, 2011 to reimburse the Funds by the amount, if any, that such Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, if applicable, class-specific distribution and shareholder servicing fees applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares, the administrative fees payable pursuant to the Transfer Agency Agreement applicable to Class J Shares, Class L Shares, Class R Shares, Class S Shares, and Class T Shares, brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses), exceed the annual rates noted below. If applicable, amounts reimbursed to the Funds by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statements of Operations.
Expense | |||||
Fund | Limit (%) | ||||
Perkins Large Cap Value Fund | 1.00 | ||||
Perkins Mid Cap Value Fund | 0.86 | ||||
Perkins Small Cap Value Fund | 0.96 | ||||
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 December 31, 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 two-month or five-month period ended December 31, 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 two-month or five-month period ended December 31, 2009.
For the five-month period ended December 31, 2009, Janus Capital assumed $9,091 of legal, consulting and Trustee costs and fees incurred by the funds in the Trust and Janus Aspen Series together with the Trust (the “Portfolios”), in connection with the regulatory and civil litigation matters discussed in Note 10. 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. The Funds reimburse Janus Capital for a portion of the compensation paid to the Chief Compliance Officer and certain compliance staff of the Trust. Total compensation of $128,761 was paid by the Trust during the five-month period ended December 31, 2009. Each Fund’s portion is reported as part of “Other Expenses” on the Statements of Operations.
Class A Shares include a 5.75% upfront sales charge of the offering price for the Funds. The sales charge is allocated between Janus Distributors and financial intermediaries. During the two-month or five-month period ended December 31, 2009, Janus Distributors retained the following upfront sales charge:
Upfront | |||||
Fund (Class A Shares) | Sales Charge | ||||
Perkins Large Cap Value Fund | $ | 298 | |||
Perkins Mid Cap Value Fund | 12,554 | ||||
Perkins Small Cap Value Fund | 7,678 | ||||
Class C Shares include a 1.00% contingent deferred sales charge paid by the redeeming shareholder to Janus Distributors. The contingent deferred sales charge applies to shares redeemed within 12 months of purchase. The redemption price may differ from the net asset value per share. During the two-month period ended December 31, 2009, redeeming shareholders of Class C Shares paid the following contingent deferred sales charges:
Contingent Deferred | |||||
Fund (Class C Shares) | Sales Charge | ||||
Perkins Mid Cap Value Fund | $ | 1,427 | |||
Perkins Small Cap Value Fund | 213 | ||||
68 | DECEMBER 31, 2009
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 Operations (if applicable). Custodian offsets received reduce “Custodian fees” on the Statements of Operations (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.
Janus Capital or an affiliate invested and/or redeemed initial seed capital during the five-month period ended December 31, 2009, as indicated in the following table.
Seed Capital | Date of | Date of | Seed Capital | |||||||||||||||||
Fund | at 8/1/09 | Purchases | Purchases | Redemptions | Redemption | at 12/31/09 | ||||||||||||||
Perkins Large Cap Value Fund - Class A Shares | $ | 500,000 | $ | – | – | $ | – | – | $ | 500,000 | ||||||||||
Perkins Large Cap Value Fund - Class C Shares | 500,000 | – | – | – | – | 500,000 | ||||||||||||||
Perkins Large Cap Value Fund - Class I Shares | 500,000 | – | – | – | – | 500,000 | ||||||||||||||
Perkins Large Cap Value Fund - Class S Shares | 500,000 | – | – | – | – | 500,000 | ||||||||||||||
Perkins Large Cap Value Fund - Class T Shares | 1,000 | 10,000 | 10/29/2009 | – | – | 11,000 | ||||||||||||||
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The 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 December 31, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | Net Tax Appreciation | ||||||||||
Perkins Large Cap Value Fund | $ | 48,362,887 | $ | 6,355,041 | $ | (234,426) | $ | 6,120,615 | ||||||
Perkins Mid Cap Value Fund | 10,022,216,995 | 1,592,220,523 | (277,419,211) | 1,314,801,312 | ||||||||||
Perkins Small Cap Value Fund | 1,637,447,190 | 261,312,141 | (494,259) | 260,817,882 | ||||||||||
Net capital loss carryovers as of October 31, 2009 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, 2009
June | June | Accumulated | |||||||||
Fund | 30, 2016 | 30, 2017 | Capital Losses | ||||||||
Perkins Mid Cap Value Fund(1) | (149,143,508) | (764,121,072) | (913,264,580) | ||||||||
Perkins Small Cap Value Fund(1) | (14,556,221) | (148,559,227) | (163,115,448) | ||||||||
(1) | Capital loss carryovers subject to annual limitations. |
The capital loss carryforward in Perkins Small Cap Value Fund is subject to annual limitations under applicable tax laws and may expire unused as a result of the Janus Adviser Small Company Value Fund acquisition during the current year. Due to these limitations, the carryforward amount in the table below will not be available for use. As a result, this amount has been reclassified as paid-in capital.
Janus Value Funds | 69
Notes to Financial Statements (unaudited) (continued)
Fund | Capital Loss Carryover Unavailable Due to Merger | ||||||||||||||||||||||
Perkins Small Cap Value Fund | $ | 2,413,283 | |||||||||||||||||||||
6. | Expense Ratios |
The expense ratios listed in the Financial Highlights reflect expenses prior to any expense offsets (gross expense ratio) and after expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursement). Listed below are the gross expense ratios for the Funds that would have been in effect, absent the waiver of certain fees and offsets.
For the two- or five-month period ended December 31, 2009 (unaudited)
and the fiscal years or periods ended October 31 or July 31
and the fiscal years or periods ended October 31 or July 31
Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | ||||||||||
Value Fund | Value Fund | Value Fund | ||||||||||
Class A Shares | ||||||||||||
2009(1) | 1.61% | N/A | N/A | |||||||||
2009(2) | N/A | 1.10% | 0.95% | |||||||||
2009(3) | 2.19% | N/A | N/A | |||||||||
2009(4) | N/A | 1.27% | 1.02% | |||||||||
Class C Shares | ||||||||||||
2009(1) | 2.45% | N/A | N/A | |||||||||
2009(2) | N/A | 1.84% | 1.81% | |||||||||
2009(3) | 2.90% | N/A | N/A | |||||||||
2009(4) | N/A | 2.00% | 2.13% | |||||||||
Class I Shares | ||||||||||||
2009(1) | 1.33% | N/A | N/A | |||||||||
2009(2) | N/A | 0.78% | 0.78% | |||||||||
2009(3) | 2.15% | N/A | N/A | |||||||||
2009(4) | N/A | 0.81% | 0.77% | |||||||||
Class J Shares | ||||||||||||
2009(2) | N/A | 1.05%(6) | 1.06%(6) | |||||||||
2009(5) | N/A | 1.11%(6) | 1.11%(6) | |||||||||
2008 | N/A | 1.07%(6) | 1.03%(6) | |||||||||
2007 | N/A | 0.86%(6) | 1.01%(6) | |||||||||
2006 | N/A | 0.93%(6) | 1.01%(6) | |||||||||
2005 | N/A | 0.93%(6) | 0.97%(6) | |||||||||
Class L Shares | ||||||||||||
2009(2) | N/A | 1.08%(6) | 1.06%(6) | |||||||||
2009(5) | N/A | 1.13%(6) | 1.10%(6) | |||||||||
2008 | N/A | 1.04%(6) | 1.02%(6) | |||||||||
2007 | N/A | 0.81%(6) | 0.97%(6) | |||||||||
2006 | N/A | 0.89%(6) | 1.00%(6) | |||||||||
2005 | N/A | 0.88%(6) | 0.96%(6) | |||||||||
Class R Shares | ||||||||||||
2009(2) | N/A | 1.52% | 1.52% | |||||||||
2009(4) | N/A | 1.53% | 1.54% | |||||||||
Class S Shares | ||||||||||||
2009(1) | 1.95% | N/A | N/A | |||||||||
2009(2) | N/A | 1.26% | 1.28% | |||||||||
2009(3) | 2.32% | N/A | N/A | |||||||||
2009(4) | N/A | 1.28% | 1.29% | |||||||||
Class T Shares | ||||||||||||
2009(1) | 1.28% | N/A | N/A | |||||||||
2009(7) | 4.70% | N/A | N/A | |||||||||
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(3) | Period from December 31, 2008 (inception date) through July 31, 2009. | |
(4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
(5) | Period from November 1, 2008 through October 31, 2009. | |
(6) | The effect of non-recurring costs assumed by Janus Capital (Note 4) is included in the ratio of operating expenses to average net assets without waivers and/or expense reimbursements and was less than 0.01%. | |
(7) | Period from July 6, 2009 (inception date) through July 31, 2009. |
70 | DECEMBER 31, 2009
7. | Capital Share Transactions |
For the two- or five-month period ended December 31, 2009 (unaudited) and | Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | |||||||||||||||||||||||
the fiscal years ended October 31, 2009 or July 31, 2009 (all numbers in | Value Fund | Value Fund | Value Fund | |||||||||||||||||||||||
thousands) | 2009(1) | 2009(2) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | ||||||||||||||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||||||||||||||||||
Shares sold | 87 | 67 | 4,763 | 8,635 | 636 | 575 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | 37,761 | N/A | 538 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | 47 | – | – | – | ||||||||||||||||||||
Shares repurchased | (3) | (3) | (1,434) | (4,492) | (44) | (85) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 84 | 64 | 3,376 | 41,904 | 592 | 1,028 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 64 | – | 41,904 | – | 1,028 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 148 | 64 | 45,280 | 41,904 | 1,620 | 1,028 | ||||||||||||||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||||||||||||||||||
Shares sold | 12 | 50 | 797 | 1,597 | 195 | 214 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | 5,297 | N/A | 111 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | – | – | – | – | ||||||||||||||||||||
Shares repurchased | – | – | (214) | (385) | (9) | (6) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 12 | 50 | 583 | 6,509 | 186 | 319 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 50 | – | 6,509 | – | 319 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 62 | 50 | 7,092 | 6,509 | 505 | 319 | ||||||||||||||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||||||||||||||||||
Shares sold | 1,504 | 2,866 | 12,593 | 18,921 | 4,733 | 11,739 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | 52,515 | N/A | 497 | ||||||||||||||||||||
Reinvested dividends and distributions | 21 | 9 | 169 | – | – | – | ||||||||||||||||||||
Shares repurchased | (35) | (284) | (2,303) | (4,080) | (429) | (105) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 1,490 | 2,591 | 10,459 | 67,356 | 4,304 | 12,131 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 2,591 | – | 67,356 | – | 12,131 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 4,081 | 2,591 | 77,815 | 67,356 | 16,435 | 12,131 | ||||||||||||||||||||
Transactions in Fund Shares – Class J Shares: | ||||||||||||||||||||||||||
Shares sold | N/A | N/A | 21,274 | 182,232 | 6,724 | 18,146 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | N/A | – | 139 | ||||||||||||||||||||
Reinvested dividends and distributions | N/A | N/A | 686 | 21,752 | – | 3,565 | ||||||||||||||||||||
Shares repurchased | N/A | N/A | (20,065) | (122,827) | (2,142) | (15,988) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | N/A | 1,895 | 81,157 | 4,582 | 5,862 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | 392,139 | 310,982 | 33,849 | 27,987 | ||||||||||||||||||||
Shares Outstanding, End of Period | N/A | N/A | 394,034 | 392,139 | 38,431 | 33,849 | ||||||||||||||||||||
Transactions in Fund Shares – Class L Shares: | ||||||||||||||||||||||||||
Shares sold | N/A | N/A | 687 | 6,973 | 465 | 14,737 | ||||||||||||||||||||
Reinvested dividends and distributions | N/A | N/A | 51 | 1,280 | – | 4,056 | ||||||||||||||||||||
Shares repurchased | N/A | N/A | (437) | (11,441) | (3,806) | (13,839) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | N/A | 301 | (3,188) | (3,341) | 4,954 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | 18,627 | 21,815 | 35,850 | 30,896 | ||||||||||||||||||||
Shares Outstanding, End of Period | N/A | N/A | 18,928 | 18,627 | 32,509 | 35,850 | ||||||||||||||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||||||||||||||||||
Shares sold | N/A | N/A | 606 | 1,181 | 66 | 39 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | 2,983 | N/A | 171 | ||||||||||||||||||||
Reinvested dividends and distributions | N/A | N/A | – | – | – | – | ||||||||||||||||||||
Shares repurchased | N/A | N/A | (207) | (344) | (32) | (18) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | N/A | 399 | 3,820 | 34 | 192 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | 3,820 | – | 192 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | N/A | N/A | 4,219 | 3,820 | 226 | 192 |
Janus Value Funds | 71
Notes to Financial Statements (unaudited) (continued)
For the two- or five-month period ended December 31, 2009 (unaudited) and | Perkins Large Cap | Perkins Mid Cap | Perkins Small Cap | |||||||||||||||||||||||
the fiscal years ended October 31, 2009 or July 31, 2009 (all numbers in | Value Fund | Value Fund | Value Fund | |||||||||||||||||||||||
thousands) | 2009(1) | 2009(2) | 2009(3) | 2009(4) | 2009(3) | 2009(4) | ||||||||||||||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||||||||||||||||||
Shares sold | – | 50 | 2,977 | 6,098 | 459 | 332 | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | 19,652 | N/A | 1,177 | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | 25 | – | – | – | ||||||||||||||||||||
Shares repurchased | – | – | (1,275) | (2,455) | (134) | (153) | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | – | 50 | 1,727 | 23,295 | 325 | 1,356 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 50 | – | 23,295 | – | 1,356 | – | ||||||||||||||||||||
Shares Outstanding, End of Period | 50 | 50 | 25,022 | 23,295 | 1,681 | 1,356 | ||||||||||||||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||||||||||||||||||
Shares sold | 2 | 98* | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Shares issued in connection with acquisition (see Note 9) | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | – | – | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Shares repurchased | – | – | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 2 | 98* | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 98* | – | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Shares Outstanding, End of Period | 2 | 98* | N/A | N/A | N/A | N/A |
* | Transactions not in thousands. | |
(1) | Period from August 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from July 31 to June 30. | |
(2) | Period from December 31, 2008 (inception date) through July 31, 2009 for Class A Shares, Class C Shares, Class I Shares, and Class S Shares and July 6, 2009 (inception date) through July 31, 2009 for Class T Shares. | |
(3) | Period from November 1, 2009 through December 31, 2009. The Fund changed its fiscal year end from October 31 to June 30. | |
(4) | Period from July 6, 2009 (inception date) through October 31, 2009 for Class A Shares, Class C Shares, Class I Shares, Class R Shares, and Class S Shares and November 1, 2008 through October 31, 2009 for Class J Shares and Class L Shares. |
8. | Purchases and Sales of Investment Securities |
For the two-month or five-month period ended December 31, 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 | ||||||||||
Perkins Large Cap Value Fund | $ | 20,156 | $ | 4,859 | $ | – | $ | – | ||||||
Perkins Mid Cap Value Fund | 1,361,719,692 | 1,090,747,676 | – | – | ||||||||||
Perkins Small Cap Value Fund | 203,729 | 145,130 | – | – | ||||||||||
9. | Fund Acquisition |
On July 6, 2009, Perkins Mid Cap Value Fund and Perkins Small Cap Value Fund acquired all of the net assets of Janus Adviser Perkins Mid Cap Value Fund and Janus Adviser Perkins Small Company Value Fund, respectively, pursuant to separate plans of reorganization approved by the Trustees of Janus Investment Fund. The reorganization involved certain funds that were a series of the Janus Adviser Series trust (“JAD Trust”) being merged into corresponding funds of the Trust. The reorganization was accomplished by a tax-free exchange of the series of the JAD Trust for the series of the Trust. The table below reflects the merger activity.
Target Fund’s | ||||||||||||||||||||||||
Target Fund’s | Acquiring | Acquiring | Unrealized | |||||||||||||||||||||
Shares | Target Fund’s | Fund’s Shares | Fund’s Net | Combined Net | Appreciation/ | |||||||||||||||||||
Outstanding | Net Assets Prior | Issued in | Assets Prior to | Assets after | (Depreciation) | |||||||||||||||||||
Fund | Prior to Merger | to Merger | Merger | Merger | Merger | Prior to Merger | ||||||||||||||||||
Perkins Mid Cap Value Fund | 138,163,103 | $ | 1,899,985,868 | 118,208,457 | $ | 6,489,618,981 | $ | 8,389,604,849 | $ | 68,465,211 | ||||||||||||||
Perkins Small Cap Value Fund | 4,271,025 | 43,398,734 | 2,495,253 | 1,097,606,566 | 1,141,005,300 | (5,523,182 | ) |
72 | DECEMBER 31, 2009
10. | 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, one of which still remains, and which was brought by a putative class of shareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders against JCGI and Janus Capital (First Derivative Traders et al. v. Janus Capital Group Inc. et al., U.S. District Court, District of Maryland, MDL 1586, formerly referred to as Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818).
In the Wiggins case, a Motion to Dismiss was previously 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 October 2009, Janus filed a petition for a writ of certiorari with the United States Supreme Court to review the judgment of the United States Court of Appeals for the Fourth Circuit. On January 11, 2010, the Supreme Court asked the United States Solicitor General to file a brief on the question of whether Janus’ petition should be granted. As a result of these developments at the Supreme Court, the Court has stayed all further proceedings until the Supreme Court rules on Janus’ petition for a writ of certiorari. In addition to the Wiggins case, on January 20, 2010, the Court entered orders dismissing the remaining claims asserted against Janus Capital and its affiliates by fund investors in Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518 (a derivative claim involving alleged frequent trading practices).
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. On July 31, 2009, Janus filed a “Notice that Matter is Deemed Concluded.” At this time, no further proceedings are scheduled in this matter.
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.
11. | Subsequent Events |
Effective February 16, 2010, Class J Shares will be renamed Class T Shares and will be available through certain financial intermediary platforms. In addition, Class J Shares held directly with Janus will be moved to a newly created Class D Shares, a share class dedicated to shareholders investing directly with Janus. Class D Shares will commence operations on or about February 16, 2010. The transfer agency (TA) fee structure for Class D Shares and Class T Shares will be different than that of Class J Shares. Class D Shares will pay a fixed annual TA fee rate of 0.12% of net assets. Class T Shares will pay a fixed annual TA fee rate of 0.25% of net assets. Currently, Class J Shares pay a blended annual fee rate of 0.12% of average net assets for the proportion of assets sold directly and 0.25% of average net assets sold through financial intermediaries. A Fund’s total expense ratio could be impacted by the change in TA fee structure.
In May 2009, in accordance with the FASB guidance, the Funds adopted the provision of “Subsequent Events,” which provides guidance to establish general standards of accounting for and disclosures of events that occur subsequent to the balance sheet date but before financial statements are issued or are available to be issued. The
Janus Value Funds | 73
Notes to Financial Statements (unaudited) (continued)
guidance also requires entities to disclose the date through which subsequent events were evaluated as well as the basis for that date. Management has evaluated whether any events or transactions occurred subsequent to December 31, 2009 through February 18, 2010, the date of issuance of the Funds’ financial statements, and determined that there were no other material events or transactions that would require recognition or disclosure in the Funds’ financial statements.
74 | DECEMBER 31, 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 without charge: (i) upon request, by calling 1-800-525-0020 (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 1-800-525-0020 (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 seven 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 11, 2009, 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, 2010 through February 1, 2011, subject to earlier termination as provided for in each agreement,
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
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 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
Janus Value Funds | 75
Additional Information (unaudited) (continued)
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.
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 non-affiliated funds subadvised by Janus Capital (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, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, 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 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
76 | DECEMBER 31, 2009
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, the Trustees, each of whom is an Independent Trustee, concluded at their December 11, 2009 meeting 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.
Janus Value Funds | 77
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 estimated for the fiscal year. The ratios also include expenses indirectly incurred by a 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.
If a Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports each 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 Funds’ 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
78 | DECEMBER 31, 2009
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.
3. | Statements of Assets and Liabilities |
These statements are often referred to as the “balance sheets.” 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 the 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. | Statements of Operations |
These statements detail 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 will 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 Statements 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 Funds 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. 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 Funds. 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. The total return may include adjustments in accordance with generally accepted accounting principles. As a result, the
Janus Value Funds | 79
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
total return may differ from the total return reflected for shareholder transactions.
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 within the Trust 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 Statements of Operations reflect 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 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 asset size 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.
80 | DECEMBER 31, 2009
Notes
Janus Value Funds | 81
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
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.
Fixed Income
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 capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
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.
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.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
Please consider the charges, risks, expenses and investment objectives carefully before investing or recommending to clients for investment. For a prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money.
This is for information purposes only. Janus Capital Group Inc., does not guarantee that the information supplied is accurate, complete or timely or make any warranties with regards to the results obtained from its use.
Janus Distributors LLC 151 Detroit Street, Denver, CO 80206 (1/10)
Investment products offered are: NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE
C-0110-041 | 2-28-10 125-24-71115 02-10 |
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, as amended) 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)(l) | 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, as amended, 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, as amended, 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, as amended, 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, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, 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 | |||
President and Chief Executive Officer of Janus Investment Fund | ||||
(Principal Executive Officer) | ||||
Date: | February 26, 2010 |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, 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 | |||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||||
Date: | February 26, 2010 | |||
By: | /s/ Jesper Nergaard | |||
Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer of Janus Investment Fund (Principal Accounting Officer and Principal Financial Officer) | ||||
Date: | February 26, 2010 |