Table of Contents
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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, 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: 12/31/14
Table of Contents
Item 1 | — | Reports to Shareholders |
Table of Contents
semiannual report
December 31, 2014
INTECH Emerging Markets Managed Volatility Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
1 | ||||||||
10 | ||||||||
12 | ||||||||
14 | ||||||||
15 | ||||||||
16 | ||||||||
19 | ||||||||
28 | ||||||||
30 | ||||||||
EX-99.CERT | ||||||||
EX-99.906CERT |
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
INTECH Emerging Markets Managed Volatility Fund began investment operations on December 17, 2014. The information provided for INTECH Emerging Markets Managed Volatility Fund reflects investment activity for the period December 17, 2014 to December 31, 2014.
Janus Investment Fund | 1
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
INTECH Emerging Markets Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
iShares MSCI Taiwan Capital Markets | 20.0% | |||
iShares India 50 Capital Markets | 8.0% | |||
Public Bank Bhd Commercial Banks | 2.7% | |||
DiGi.Com Bhd Wireless Telecommunication Services | 1.7% | |||
KT&G Corp. Tobacco | 1.4% | |||
33.8% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif37p01.gif)
Emerging markets comprised 95.2% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif37t01.gif)
2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif37m01.gif)
Cumulative Total Return – for the period ended December 31, 2014 | Expense Ratios – per the December 17, 2014 prospectuses (estimated for the fiscal year) | ||||||
Since | Total Annual Fund | Net Annual Fund | |||||
Inception* | Operating Expenses | Operating Expenses | |||||
INTECH Emerging Markets Managed Volatility Fund – Class A Shares | |||||||
NAV | 1.80% | 2.03% | 1.41% | ||||
MOP | –4.05% | ||||||
INTECH Emerging Markets Managed Volatility Fund – Class C Shares | |||||||
NAV | 1.80% | 2.84% | 2.22% | ||||
CDSC | 0.80% | ||||||
INTECH Emerging Markets Managed Volatility Fund – Class D Shares(1) | 1.80% | 1.84% | 1.21% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class I Shares | 1.80% | 1.73% | 1.11% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class S Shares | 1.80% | 2.19% | 1.58% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class T Shares | 1.80% | 1.94% | 1.33% | ||||
MSCI Emerging Markets IndexSM | 4.35% | ||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
Janus Investment Fund | 3
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2016.
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
Performance for very short time periods may not be indicative of future performance.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Rankings are not provided for Funds that are less than one year old.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 17, 2014 | |
(1) | Closed to new investors. |
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(12/17/14) | (12/31/14) | (12/17/14 - 12/31/14)* | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.62 | $ | 1,000.00 | $ | 1,017.69 | $ | 7.58 | 1.49% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.95 | $ | 1,000.00 | $ | 1,013.66 | $ | 11.62 | 2.29% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.61 | $ | 1,000.00 | $ | 1,017.80 | $ | 7.48 | 1.47% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.51 | $ | 1,000.00 | $ | 1,019.06 | $ | 6.21 | 1.22% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.73 | $ | 1,000.00 | $ | 1,016.33 | $ | 8.94 | 1.76% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 0.62 | $ | 1,000.00 | $ | 1,017.69 | $ | 7.58 | 1.49% | |||||||||||||||||
* | Actual Expenses Paid During Period reflect only the inception period for the Fund (December 17, 2014 to December 31, 2014) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 15/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. | |
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 5
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 66.3% | ||||||||||
Aerospace & Defense – 0.5% | ||||||||||
4,000 | AviChina Industry & Technology Co., Ltd. – Class H | $ | 2,451 | |||||||
77 | Korea Aerospace Industries, Ltd. | 2,765 | ||||||||
| ||||||||||
5,216 | ||||||||||
Air Freight & Logistics – 0.7% | ||||||||||
27 | Hyundai Glovis Co., Ltd. | 7,128 | ||||||||
1,000 | Sinotrans, Ltd. – Class H | 660 | ||||||||
| ||||||||||
7,788 | ||||||||||
Auto Components – 0.6% | ||||||||||
60 | Halla Climate Control Corp. | 2,626 | ||||||||
21 | Hyundai Wia Corp. | 3,344 | ||||||||
| ||||||||||
5,970 | ||||||||||
Automobiles – 0.9% | ||||||||||
5,000 | Geely Automobile Holdings, Ltd. | 1,578 | ||||||||
145 | Kia Motors Corp. | 6,852 | ||||||||
300 | UMW Holdings Bhd | 942 | ||||||||
| ||||||||||
9,372 | ||||||||||
Beverages – 0.5% | ||||||||||
900 | Arca Continental SAB de CV | 5,695 | ||||||||
Building Products – 0.4% | ||||||||||
8 | KCC Corp. | 3,772 | ||||||||
Capital Markets – 0.8% | ||||||||||
517 | Brait SE | 3,505 | ||||||||
241 | Daewoo Securities Co., Ltd. | 2,121 | ||||||||
69 | Korea Investment Holdings Co., Ltd. | 3,032 | ||||||||
| ||||||||||
8,658 | ||||||||||
Chemicals – 0.3% | ||||||||||
5 | Hyosung Corp. | 308 | ||||||||
400 | Mexichem SAB de CV | 1,215 | ||||||||
1,200 | Petronas Chemicals Group Bhd | 1,868 | ||||||||
| ||||||||||
3,391 | ||||||||||
Commercial Banks – 10.5% | ||||||||||
184 | Abu Dhabi Commercial Bank PJSC | 345 | ||||||||
3,000 | Agricultural Bank of China, Ltd. – Class H | 1,507 | ||||||||
1,900 | Alliance Financial Group Bhd | 2,556 | ||||||||
800 | AMMB Holdings Bhd | 1,508 | ||||||||
100 | Bangkok Bank PCL | 593 | ||||||||
600 | Bank Central Asia Tbk PT | 632 | ||||||||
2,000 | Bank of China, Ltd. – Class H | 1,120 | ||||||||
3,000 | Bank of Communications Co., Ltd – Class H | 2,778 | ||||||||
1,390 | Bank of the Philippine Islands | 2,909 | ||||||||
1 | Bank Zachodni WBK SA | 106 | ||||||||
2,840 | BDO Unibank, Inc. | 6,948 | ||||||||
331 | BS Financial Group, Inc. | 4,357 | ||||||||
2,000 | China CITIC Bank Corp., Ltd. – Class H | 1,598 | ||||||||
2,000 | China Construction Bank Corp. – Class H | 1,628 | ||||||||
2,000 | China Everbright Bank Co., Ltd. – Class H | 1,086 | ||||||||
500 | China Merchants Bank Co., Ltd. – Class H | 1,248 | ||||||||
3,000 | China Minsheng Banking Corp., Ltd. – Class H | 3,913 | ||||||||
1,000 | Chongqing Rural Commercial Bank Co., Ltd. – Class H | 621 | ||||||||
64 | DGB Financial Group, Inc. | 659 | ||||||||
239 | First Gulf Bank PJSC | 1,093 | ||||||||
2,600 | Grupo Financiero Inbursa SAB de CV | 6,712 | ||||||||
700 | Grupo Financiero Santander Mexico SAB de CV | 1,463 | ||||||||
1,700 | Hong Leong Bank Bhd | 6,807 | ||||||||
2,000 | Industrial & Commercial Bank of China, Ltd. – Class H | 1,453 | ||||||||
304 | Industrial Bank of Korea | 3,872 | ||||||||
700 | Kasikornbank PCL | 4,865 | ||||||||
4 | KB Financial Group, Inc. | 131 | ||||||||
23 | Komercni Banka A/S | 4,741 | ||||||||
7,900 | Krung Thai Bank PCL | 5,414 | ||||||||
1,300 | Malayan Banking Bhd | 3,401 | ||||||||
92 | National Bank of Abu Dhabi PJSC | 348 | ||||||||
47 | Powszechna Kasa Oszczednosci Bank Polski SA | 473 | ||||||||
5,500 | Public Bank Bhd | 28,779 | ||||||||
1,600 | RHB Capital Bhd | 3,485 | ||||||||
100 | Siam Commercial Bank PCL | 553 | ||||||||
40 | Woori Bank* | 364 | ||||||||
| ||||||||||
110,066 | ||||||||||
Commercial Services & Supplies – 0.3% | ||||||||||
20 | KEPCO Plant Service & Engineering Co., Ltd. | 1,444 | ||||||||
33 | S1 Corp. | 2,134 | ||||||||
| ||||||||||
3,578 | ||||||||||
Construction & Engineering – 1.3% | ||||||||||
1,000 | China Communications Construction Co., Ltd. – Class H | 1,202 | ||||||||
1,000 | China Railway Group, Ltd. – Class H | 820 | ||||||||
900 | Dialog Group Bhd | 387 | ||||||||
800 | Gamuda Bhd | 1,146 | ||||||||
18 | Hyundai Development Co. | 627 | ||||||||
2,300 | IJM Corp. Bhd | 4,324 | ||||||||
400 | Promotora y Operadora de Infraestructura SAB de CV* | 4,810 | ||||||||
| ||||||||||
13,316 | ||||||||||
Construction Materials – 0.5% | ||||||||||
84 | Cementos Argos SA | 359 | ||||||||
2,300 | Cemex SAB de CV* | 2,345 | ||||||||
258 | Grupo Argos SA | 2,213 | ||||||||
| ||||||||||
4,917 | ||||||||||
Consumer Finance – 0.6% | ||||||||||
100 | Compartamos SAB de CV | 201 | ||||||||
147 | Samsung Card Co., Ltd. | 5,903 | ||||||||
| ||||||||||
6,104 | ||||||||||
Diversified Consumer Services – 0.4% | ||||||||||
700 | Kroton Educacional SA | 4,035 | ||||||||
Diversified Financial Services – 0.6% | ||||||||||
70 | Ayala Corp. | 1,080 | ||||||||
53 | Corp. Financiera Colombiana SA | 888 | ||||||||
351 | FirstRand, Ltd. | 1,522 | ||||||||
125 | Grupo de Inversiones Suramericana SA | 2,084 | ||||||||
85 | RMB Holdings, Ltd. | 468 | ||||||||
| ||||||||||
6,042 | ||||||||||
Diversified Telecommunication Services – 2.7% | ||||||||||
2,000 | China Telecom Corp., Ltd. – Class H | 1,175 | ||||||||
2,233 | Orange Polska SA | 5,236 | ||||||||
16 | Rostelecom OJSC (ADR)* | 144 | ||||||||
5,200 | Telekom Malaysia Bhd | 10,204 | ||||||||
13,800 | Telekomunikasi Indonesia Persero Tbk PT | 3,169 | ||||||||
26,500 | True Corp. PCL | 8,838 | ||||||||
| ||||||||||
28,766 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
6 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Electric Utilities – 1.8% | ||||||||||
265 | CEZ A/S | $ | 6,817 | |||||||
112 | Energa SA | 727 | ||||||||
61 | Interconexion Electrica SA ESP | 221 | ||||||||
951 | PGE Polska Grupa Energetyczna SA | 5,055 | ||||||||
1,275 | Tauron Polska Energia SA | 1,811 | ||||||||
1,100 | Tenaga Nasional Bhd | 4,337 | ||||||||
| ||||||||||
18,968 | ||||||||||
Electrical Equipment – 0.3% | ||||||||||
6,000 | Shanghai Electric Group Co., Ltd. – Class H | 3,180 | ||||||||
Electronic Equipment, Instruments & Components – 0.3% | ||||||||||
49 | LG Display Co., Ltd. | 1,484 | ||||||||
22 | LG Innotek Co., Ltd. | 2,225 | ||||||||
| ||||||||||
3,709 | ||||||||||
Food & Staples Retailing – 2.2% | ||||||||||
9,800 | CP ALL PCL | 12,608 | ||||||||
300 | Raia Drogasil SA | 2,851 | ||||||||
6,500 | Sun Art Retail Group, Ltd. | 6,447 | ||||||||
800 | Wal-Mart de Mexico SAB de CV | 1,720 | ||||||||
| ||||||||||
23,626 | ||||||||||
Food Products – 2.7% | ||||||||||
4,800 | Charoen Pokphand Foods PCL | 3,975 | ||||||||
3 | CJ CheilJedang Corp. | 837 | ||||||||
700 | Gruma SAB de CV | 7,466 | ||||||||
800 | Grupo Bimbo SAB de CV – Series A | 2,207 | ||||||||
1,600 | Indofood Sukses Makmur Tbk PT | 873 | ||||||||
700 | IOI Corp. Bhd | 960 | ||||||||
100 | JBS SA | 421 | ||||||||
2 | Orion Corp. | 1,840 | ||||||||
600 | Thai Union Frozen Products PCL* | 1,650 | ||||||||
118 | Tiger Brands, Ltd. | 3,740 | ||||||||
930 | Universal Robina Corp. | 4,051 | ||||||||
| ||||||||||
28,020 | ||||||||||
Gas Utilities – 0.2% | ||||||||||
4,700 | Perusahaan Gas Negara Persero Tbk PT | 2,265 | ||||||||
Health Care Providers & Services – 2.8% | ||||||||||
14,700 | Bangkok Dusit Medical Services PCL | 7,653 | ||||||||
400 | Bumrungrad Hospital PCL | 1,713 | ||||||||
4,000 | IHH Healthcare Bhd | 5,507 | ||||||||
183 | Mediclinic International, Ltd. | 1,583 | ||||||||
617 | Netcare, Ltd. | 2,018 | ||||||||
2,200 | Shanghai Pharmaceuticals Holding Co., Ltd. – Class H | 4,946 | ||||||||
1,600 | Sinopharm Group Co., Ltd. – Class H | 5,632 | ||||||||
| ||||||||||
29,052 | ||||||||||
Hotels, Restaurants & Leisure – 1.6% | ||||||||||
900 | Genting Malaysia Bhd | 1,046 | ||||||||
89 | Hotel Shilla Co., Ltd. | 7,361 | ||||||||
124 | Kangwon Land, Inc. | 3,408 | ||||||||
3,400 | Minor International PCL | 3,354 | ||||||||
73 | OPAP SA | 780 | ||||||||
296 | Tsogo Sun Holdings, Ltd. | 743 | ||||||||
| ||||||||||
16,692 | ||||||||||
Household Durables – 1.3% | ||||||||||
109 | Coway Co., Ltd. | 8,294 | ||||||||
1,054 | Steinhoff International Holdings, Ltd. | 5,398 | ||||||||
| ||||||||||
13,692 | ||||||||||
Household Products – 0.1% | ||||||||||
1 | LG Household & Health Care, Ltd. | 567 | ||||||||
300 | Unilever Indonesia Tbk PT | 783 | ||||||||
| ||||||||||
1,350 | ||||||||||
Independent Power and Renewable Electricity Producers – 0.9% | ||||||||||
1,000 | Aboitiz Power Corp. | 954 | ||||||||
2,000 | Datang International Power Generation Co., Ltd. – Class H | 1,071 | ||||||||
7,100 | Energy Development Corp. | 1,294 | ||||||||
300 | Glow Energy PCL | 813 | ||||||||
4,000 | Huaneng Power International, Inc. – Class H | 5,401 | ||||||||
| ||||||||||
9,533 | ||||||||||
Industrial Conglomerates – 3.1% | ||||||||||
700 | Alfa SAB de CV – Class A | 1,563 | ||||||||
2,000 | CITIC, Ltd. | 3,395 | ||||||||
27 | CJ Corp. | 3,825 | ||||||||
6,100 | DMCI Holdings, Inc. | 2,136 | ||||||||
300 | Grupo Carso SAB de CV – Series A1 | 1,476 | ||||||||
810 | JG Summit Holdings, Inc. | 1,189 | ||||||||
67 | LG Corp. | 3,714 | ||||||||
3,800 | Sime Darby Bhd | 9,975 | ||||||||
21 | SK Holdings Co., Ltd. | 3,113 | ||||||||
110 | SM Investments Corp. | 1,994 | ||||||||
| ||||||||||
32,380 | ||||||||||
Information Technology Services – 1.0% | ||||||||||
100 | Cielo SA | 1,568 | ||||||||
44 | SK C&C Co., Ltd. | 8,501 | ||||||||
| ||||||||||
10,069 | ||||||||||
Insurance – 2.7% | ||||||||||
200 | China Taiping Insurance Holdings Co., Ltd.* | 568 | ||||||||
50 | Dongbu Insurance Co., Ltd. | 2,498 | ||||||||
165 | Hanwha Life Insurance Co., Ltd. | 1,246 | ||||||||
141 | Hyundai Marine & Fire Insurance Co., Ltd. | 3,330 | ||||||||
390 | MMI Holdings, Ltd. | 1,012 | ||||||||
300 | New China Life Insurance Co., Ltd. – Class H | 1,499 | ||||||||
12 | Powszechny Zaklad Ubezpieczen SA | 1,642 | ||||||||
311 | Rand Merchant Insurance Holdings, Ltd. | 1,096 | ||||||||
46 | Samsung Fire & Marine Insurance Co., Ltd. | 11,786 | ||||||||
31 | Samsung Life Insurance Co., Ltd. | 3,275 | ||||||||
| ||||||||||
27,952 | ||||||||||
Internet & Catalog Retail – 0.2% | ||||||||||
200 | B2W Cia Digital | 1,677 | ||||||||
Machinery – 0.2% | ||||||||||
1,000 | Haitian International Holdings, Ltd. | 2,097 | ||||||||
Marine – 0.3% | ||||||||||
1,700 | MISC Bhd | 3,510 | ||||||||
Media – 0.4% | ||||||||||
28 | Cheil Worldwide, Inc. | 437 | ||||||||
456 | Cyfrowy Polsat SA | 3,016 | ||||||||
1 | Naspers, Ltd. – Class N | 129 | ||||||||
2,100 | Surya Citra Media Tbk PT | 594 | ||||||||
| ||||||||||
4,176 | ||||||||||
Metals & Mining – 1.4% | ||||||||||
200 | Cia de Minas Buenaventura SAA (ADR) | 1,912 | ||||||||
705 | Gold Fields, Ltd. | 3,194 | ||||||||
300 | Grupo Mexico SAB de CV – Series B | 871 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Metals & Mining – (continued) | ||||||||||
8 | Korea Zinc Co., Ltd. | $ | 2,930 | |||||||
269 | Severstal PAO (GDR)* | 2,445 | ||||||||
12,000 | Zijin Mining Group Co., Ltd. – Class H | 3,406 | ||||||||
| ||||||||||
14,758 | ||||||||||
Multi-Utilities – 0.1% | ||||||||||
1,900 | YTL Corp. Bhd | 862 | ||||||||
Multiline Retail – 0.3% | ||||||||||
200 | El Puerto de Liverpool SAB de CV | 2,004 | ||||||||
300 | Matahari Department Store Tbk PT | 364 | ||||||||
97 | Woolworths Holdings, Ltd. | 642 | ||||||||
| ||||||||||
3,010 | ||||||||||
Oil, Gas & Consumable Fuels – 1.2% | ||||||||||
3,100 | Adaro Energy Tbk PT | 260 | ||||||||
3,000 | China Coal Energy Co., Ltd. – Class H | 1,870 | ||||||||
30 | MOL Hungarian Oil and Gas PLC | 1,325 | ||||||||
31 | Polski Koncern Naftowy Orlen SA | 426 | ||||||||
1,200 | PTT Exploration & Production PCL | 4,072 | ||||||||
300 | PTT PCL | 2,942 | ||||||||
12 | Sasol, Ltd. | 449 | ||||||||
200 | Surgutneftegas OAO (ADR) | 1,032 | ||||||||
| ||||||||||
12,376 | ||||||||||
Paper & Forest Products – 0% | ||||||||||
40 | Sappi, Ltd.* | 146 | ||||||||
Personal Products – 1.8% | ||||||||||
4 | Amorepacific Corp. | 8,037 | ||||||||
11 | AMOREPACIFIC Group | 9,929 | ||||||||
100 | Hypermarcas SA | 626 | ||||||||
| ||||||||||
18,592 | ||||||||||
Pharmaceuticals – 2.5% | ||||||||||
37 | Aspen Pharmacare Holdings, Ltd. | 1,289 | ||||||||
1,000 | China Medical System Holdings, Ltd. | 1,642 | ||||||||
8,800 | Kalbe Farma Tbk PT | 1,301 | ||||||||
172 | Richter Gedeon Nyrt | 2,311 | ||||||||
18,000 | Sihuan Pharmaceutical Holdings Group, Ltd. | 11,975 | ||||||||
4,000 | Sino Biopharmaceutical | 3,619 | ||||||||
24 | Yuhan Corp. | 3,703 | ||||||||
| ||||||||||
25,840 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.6% | ||||||||||
2,000 | Fibra Uno Administracion SA de CV | 5,896 | ||||||||
58 | Growthpoint Properties, Ltd. | 137 | ||||||||
| ||||||||||
6,033 | ||||||||||
Real Estate Management & Development – 0.2% | ||||||||||
1,800 | Ayala Land, Inc. | 1,349 | ||||||||
100 | Central Pattana PCL | 137 | ||||||||
100 | China Vanke Co., Ltd. – Class H* | 222 | ||||||||
2,600 | SM Prime Holdings, Inc. | 986 | ||||||||
| ||||||||||
2,694 | ||||||||||
Road & Rail – 0.7% | ||||||||||
19,500 | BTS Group Holdings PCL | 5,686 | ||||||||
8 | CJ Korea Express Co., Ltd.* | 1,417 | ||||||||
| ||||||||||
7,103 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.6% | ||||||||||
24,000 | Hanergy Thin Film Power Group, Ltd. | 8,680 | ||||||||
6,000 | Semiconductor Manufacturing International Corp.* | 548 | ||||||||
181 | SK Hynix, Inc.* | 7,795 | ||||||||
| ||||||||||
17,023 | ||||||||||
Specialty Retail – 1.0% | ||||||||||
1,000 | Belle International Holdings, Ltd. | 1,120 | ||||||||
96 | Foschini Group, Ltd. | 1,101 | ||||||||
12,000 | GOME Electrical Appliances Holding, Ltd. | 1,753 | ||||||||
336 | Mr Price Group, Ltd. | 6,793 | ||||||||
| ||||||||||
10,767 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.5% | ||||||||||
4,000 | Lenovo Group, Ltd. | 5,215 | ||||||||
Textiles, Apparel & Luxury Goods – 1.0% | ||||||||||
4,000 | Anta Sports Products, Ltd. | 7,071 | ||||||||
1,000 | Shenzhou International Group Holdings, Ltd. | 3,298 | ||||||||
| ||||||||||
10,369 | ||||||||||
Tobacco – 2.0% | ||||||||||
200 | British American Tobacco Malaysia Bhd | 3,708 | ||||||||
400 | Gudang Garam Tbk PT | 1,962 | ||||||||
218 | KT&G Corp. | 15,119 | ||||||||
| ||||||||||
20,789 | ||||||||||
Trading Companies & Distributors – 0.2% | ||||||||||
10 | Daewoo International Corp. | 284 | ||||||||
35 | Samsung C&T Corp. | 1,941 | ||||||||
| ||||||||||
2,225 | ||||||||||
Transportation Infrastructure – 1.7% | ||||||||||
600 | Airports of Thailand PCL | 5,135 | ||||||||
1,300 | Grupo Aeroportuario del Pacifico SAB de CV | 8,172 | ||||||||
200 | Malaysia Airports Holdings Bhd | 388 | ||||||||
4,000 | Zhejiang Expressway Co., Ltd. – Class H | 4,649 | ||||||||
| ||||||||||
18,344 | ||||||||||
Wireless Telecommunication Services – 5.8% | ||||||||||
700 | Advanced Info Service PCL | 5,332 | ||||||||
900 | America Movil SAB de CV – Series L | 1,001 | ||||||||
7,200 | Axiata Group Bhd | 14,507 | ||||||||
500 | China Mobile, Ltd. | 5,874 | ||||||||
10,200 | DiGi.Com Bhd | 17,947 | ||||||||
7,400 | Maxis Bhd | 14,452 | ||||||||
15 | Philippine Long Distance Telephone Co. | 968 | ||||||||
400 | Tower Bersama Infrastructure Tbk PT | 314 | ||||||||
| ||||||||||
60,395 | ||||||||||
Total Common Stocks (cost $686,136) | 695,175 | |||||||||
Preferred Stocks – 1.6% | ||||||||||
Automobiles – 0.7% | ||||||||||
43 | Hyundai Motor Co. (2nd Preference) | 5,208 | ||||||||
21 | Hyundai Motor Co. (Preference) | 2,394 | ||||||||
| ||||||||||
7,602 | ||||||||||
Chemicals – 0.1% | ||||||||||
8 | LG Chem, Ltd. | 1,016 | ||||||||
Commercial Banks – 0.5% | ||||||||||
348 | Banco Davivienda SA | 4,058 | ||||||||
58 | Bancolombia SA | 697 | ||||||||
1,342 | Grupo Aval Acciones y Valores | 723 | ||||||||
| ||||||||||
5,478 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Diversified Financial Services – 0.1% | ||||||||||
53 | Grupo de Inversiones Suramericana SA | $ | 873 | |||||||
Independent Power and Renewable Electricity Producers – 0.2% | ||||||||||
200 | Cia Energetica de Sao Paulo – Class B | 2,017 | ||||||||
Total Preferred Stocks (cost $16,417) | 16,986 | |||||||||
Investment Companies – 28.0% | ||||||||||
Exchange-Traded Funds (ETFs) – 28.0% | ||||||||||
2,800 | iShares India 50 | 83,720 | ||||||||
13,900 | iShares MSCI Taiwan | 210,029 | ||||||||
Total Investment Companies (cost $286,961) | 293,749 | |||||||||
Total Investments (total cost $989,514) – 95.9% | 1,005,910 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 4.1% | 42,810 | |||||||||
Net Assets – 100% | $ | 1,048,720 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Taiwan | $ | 210,029 | 20 | .9% | ||||
South Korea | 178,953 | 17 | .8 | |||||
Malaysia | 142,606 | 14 | .2 | |||||
China | 120,016 | 11 | .9 | |||||
India | 83,720 | 8 | .3 | |||||
Thailand | 75,333 | 7 | .5 | |||||
Mexico | 47,351 | 4 | .7 | |||||
South Africa | 34,965 | 3 | .5 | |||||
Philippines | 25,858 | 2 | .6 | |||||
Poland | 18,492 | 1 | .8 | |||||
Brazil | 13,195 | 1 | .3 | |||||
Indonesia | 12,517 | 1 | .2 | |||||
Colombia | 12,116 | 1 | .2 | |||||
Czech Republic | 11,558 | 1 | .1 | |||||
United States | 7,466 | 0 | .7 | |||||
Hungary | 3,636 | 0 | .4 | |||||
Russia | 3,621 | 0 | .4 | |||||
Peru | 1,912 | 0 | .2 | |||||
United Arab Emirates | 1,786 | 0 | .2 | |||||
Greece | 780 | 0 | .1 | |||||
Total | $ | 1,005,910 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
MSCI Emerging Markets IndexSM | A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
LLC | Limited Liability Company | |
OJSC | Open Joint Stock Company | |
PCL | Public Company Limited | |
PJSC | Private Joint Stock Company | |
PLC | Public Limited Company |
* | Non-income producing security. |
10 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
INTECH Emerging Markets Managed Volatility Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Common Stocks | ||||||||||
Aerospace & Defense | $ | – | $ | 5,216 | $– | |||||
Air Freight & Logistics | – | 7,788 | – | |||||||
Auto Components | – | 5,970 | – | |||||||
Automobiles | – | 9,372 | – | |||||||
Building Products | – | 3,772 | – | |||||||
Capital Markets | – | 8,658 | – | |||||||
Chemicals | 1,215 | 2,176 | – | |||||||
Commercial Banks | 8,539 | 101,527 | – | |||||||
Commercial Services & Supplies | – | 3,578 | – | |||||||
Construction & Engineering | 4,810 | 8,506 | – | |||||||
Construction Materials | 2,345 | 2,572 | – | |||||||
Consumer Finance | 201 | 5,903 | – | |||||||
Diversified Consumer Services | – | 4,035 | – | |||||||
Diversified Financial Services | – | 6,042 | – | |||||||
Diversified Telecommunication Services | – | 28,766 | – | |||||||
Electric Utilities | – | 18,968 | – | |||||||
Electrical Equipment | – | 3,180 | – | |||||||
Electronic Equipment, Instruments & Components | – | 3,709 | – | |||||||
Food & Staples Retailing | 1,720 | 21,906 | – | |||||||
Food Products | 9,673 | 18,347 | – | |||||||
Gas Utilities | – | 2,265 | – | |||||||
Health Care Providers & Services | – | 29,052 | – | |||||||
Hotels, Restaurants & Leisure | – | 16,692 | – | |||||||
Household Durables | – | 13,692 | – | |||||||
Household Products | – | 1,350 | – | |||||||
Independent Power and Renewable Electricity Producers | – | 9,533 | – | |||||||
Industrial Conglomerates | 3,039 | 29,341 | – | |||||||
Information Technology Services | – | 10,069 | – | |||||||
Insurance | – | 27,952 | – | |||||||
Internet & Catalog Retail | – | 1,677 | – | |||||||
Machinery | – | 2,097 | – | |||||||
Marine | – | 3,510 | – | |||||||
Media | – | 4,176 | – | |||||||
Metals & Mining | 2,783 | 11,975 | – | |||||||
Multi-Utilities | – | 862 | – | |||||||
Multiline Retail | 2,004 | 1,006 | – | |||||||
Oil, Gas & Consumable Fuels | 1,032 | 11,344 | – | |||||||
Paper & Forest Products | – | 146 | – | |||||||
Personal Products | – | 18,592 | – | |||||||
Pharmaceuticals | – | 25,840 | – | |||||||
Real Estate Investment Trusts (REITs) | 5,896 | 137 | – | |||||||
Real Estate Management & Development | – | 2,694 | – | |||||||
Road & Rail | – | 7,103 | – | |||||||
Semiconductor & Semiconductor Equipment | – | 17,023 | – | |||||||
Specialty Retail | – | 10,767 | – | |||||||
Technology Hardware, Storage & Peripherals | – | 5,215 | – | |||||||
Textiles, Apparel & Luxury Goods | – | 10,369 | – | |||||||
Tobacco | – | 20,789 | – | |||||||
Trading Companies & Distributors | – | 2,225 | – | |||||||
Transportation Infrastructure | 8,172 | 10,172 | – | |||||||
Wireless Telecommunication Services | 1,001 | 59,394 | – | |||||||
All Other | 5,695 | – | – | |||||||
Preferred Stocks | – | 16,986 | – | |||||||
Investment Companies | 293,749 | – | – | |||||||
Total Assets | $ | 351,874 | $ | 654,036 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | INTECH Emerging Markets Managed Volatility Fund | |||
Assets: | ||||
Investments at cost | $ | 989,514 | ||
Investments at value | $ | 1,005,910 | ||
Non-interested Trustees’ deferred compensation | 21 | |||
Receivables: | ||||
Fund shares sold | 5,000 | |||
Dividends | 1,930 | |||
Due from adviser | 116,576 | |||
Other assets | 54,644 | |||
Total Assets | 1,184,081 | |||
Liabilities: | ||||
Due to custodian | 61,903 | |||
Foreign cash due to custodian | 54,644 | |||
Payables: | ||||
Investments purchased | 12,367 | |||
Advisory fees | 425 | |||
Fund administration fees | 4 | |||
Transfer agent fees and expenses | 49 | |||
12b-1 Distribution and shareholder servicing fees | 45 | |||
Non-interested Trustees’ fees and expenses | 40 | |||
Non-interested Trustees’ deferred compensation fees | 21 | |||
Accrued expenses and other payables | 5,863 | |||
Total Liabilities | 135,361 | |||
Net Assets | $ | 1,048,720 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | INTECH Emerging Markets Managed Volatility Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 1,030,396 | ||
Undistributed net investment income/(loss)* | 1,431 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 583 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 16,310 | |||
Total Net Assets | $ | 1,048,720 | ||
Net Assets - Class A Shares | $ | 152,747 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,000 | |||
Net Asset Value Per Share(1) | $ | 10.18 | ||
Maximum Offering Price Per Share(2) | $ | 10.80 | ||
Net Assets - Class C Shares | $ | 50,899 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share(1) | $ | 10.18 | ||
Net Assets - Class D Shares | $ | 539,574 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 52,986 | |||
Net Asset Value Per Share | $ | 10.18 | ||
Net Assets - Class I Shares | $ | 101,843 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,000 | |||
Net Asset Value Per Share | $ | 10.18 | ||
Net Assets - Class S Shares | $ | 50,910 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share | $ | 10.18 | ||
Net Assets - Class T Shares | $ | 152,747 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,000 | |||
Net Asset Value Per Share | $ | 10.18 |
* | See “Federal Income Tax” 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 Investment Fund | 13
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | INTECH Emerging Markets Managed Volatility Fund(1) | |||
Investment Income: | ||||
Dividends | $ | 2,599 | ||
Foreign tax withheld | (537) | |||
Total Investment Income | 2,062 | |||
Expenses: | ||||
Advisory fees | 425 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 17 | |||
Class C Shares | 22 | |||
Class S Shares | 6 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 27 | |||
Class S Shares | 5 | |||
Class T Shares | 17 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 4 | |||
Class C Shares | 1 | |||
Class D Shares | 39 | |||
Class I Shares | 3 | |||
Class S Shares | 1 | |||
Class T Shares | 4 | |||
Shareholder reports expense | 221 | |||
Registration fees | 106,996 | |||
Custodian fees | 2,868 | |||
Professional fees | 4,071 | |||
Non-interested Trustees’ fees and expenses | 40 | |||
Fund administration fees | 4 | |||
Other expenses | 2,436 | |||
Total Expenses | 117,207 | |||
Less: Excess Expense Reimbursement | (116,576) | |||
Net Expenses | 631 | |||
Net Investment Income/(Loss) | 1,431 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 583 | |||
Total Net Realized Gain/(Loss) on Investments | 583 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 16,310 | |||
Total Change in Unrealized Net Appreciation/Depreciation | 16,310 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 18,324 |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Changes in Net Assets
INTECH Emerging Markets Managed Volatility Fund | ||||
For the period ended December 31 (unaudited) | 2014(1) | |||
Operations: | ||||
Net investment income/(loss) | $ | 1,431 | ||
Net realized gain/(loss) on investments | 583 | |||
Change in unrealized net appreciation/depreciation | 16,310 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 18,324 | |||
Dividends and Distributions to Shareholders: | ||||
Net Investment Income* | ||||
Class A Shares | – | |||
Class C Shares | – | |||
Class D Shares | – | |||
Class I Shares | – | |||
Class S Shares | – | |||
Class T Shares | – | |||
Net Realized Gain from Investment Transactions* | ||||
Class A Shares | – | |||
Class C Shares | – | |||
Class D Shares | – | |||
Class I Shares | – | |||
Class S Shares | – | |||
Class T Shares | – | |||
Net Decrease from Dividends and Distributions to Shareholders | – | |||
Capital Share Transactions: | ||||
Shares Sold | ||||
Class A Shares | 150,000 | |||
Class C Shares | 50,000 | |||
Class D Shares | 530,396 | |||
Class I Shares | 100,000 | |||
Class S Shares | 50,000 | |||
Class T Shares | 150,000 | |||
Net Increase/(Decrease) from Capital Share Transactions | 1,030,396 | |||
Net Increase/(Decrease) in Net Assets | 1,048,720 | |||
Net Assets: | ||||
Beginning of period | – | |||
End of period | $ | 1,048,720 | ||
Undistributed Net Investment Income/(Loss)* | $ | 1,431 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights
Class A Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $153 | |||||
Average Net Assets for the Period (in thousands) | $152 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 275.21% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.49% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.34% | |||||
Portfolio Turnover Rate | 0%(3) |
Class C Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $51 | |||||
Average Net Assets for the Period (in thousands) | $51 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 275.98% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 2.29% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.54% | |||||
Portfolio Turnover Rate | 0%(3) |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. | |
(3) | Less than 0.50%. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Class D Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $540 | |||||
Average Net Assets for the Period (in thousands) | $512 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 284.09% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.47% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.54% | |||||
Portfolio Turnover Rate | 0%(3) |
Class I Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.02 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.16 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $102 | |||||
Average Net Assets for the Period (in thousands) | $101 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 274.95% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.22% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.61% | |||||
Portfolio Turnover Rate | 0%(3) |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. | |
(3) | Less than 0.50%. |
See Notes to Financial Statements.
Janus Investment Fund | 17
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Financial Highlights (continued)
Class S Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $51 | |||||
Average Net Assets for the Period (in thousands) | $51 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 275.47% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.76% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.08% | |||||
Portfolio Turnover Rate | 0%(3) |
Class T Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | |||||
Total from Investment Operations | 0.18 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.18 | |||||
Total Return** | 1.80% | |||||
Net Assets, End of Period (in thousands) | $153 | |||||
Average Net Assets for the Period (in thousands) | $152 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 275.21% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.49% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.34% | |||||
Portfolio Turnover Rate | 0%(3) |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. | |
(3) | Less than 0.50%. |
See Notes to Financial Statements.
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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 Emerging Markets Managed Volatility Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The financial statements include information for the period from December 17, 2014 (inception date) through December 31, 2014. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their
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shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Emerging Market Investing
Within the parameters of its specific investment policies, the Fund, to the extent that emerging markets may be included in its benchmark index, may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” Investing in emerging markets may involve certain risks and considerations not typically associated with investing in the United States and imposes risks greater than, or in addition to, the risks associated with investing in securities of more developed foreign countries. Emerging markets securities are exposed to a number of additional risks, which may result from less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) 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 would bear its pro rata portion of the other investment company’s expenses,
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including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH Emerging Markets Managed Volatility Fund | First $ | 2 Billion | 0.95 | |||||||
Next $ | 1 Billion | 0.92 | ||||||||
Over $ | 3 Billion | 0.90 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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 (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital shall additionally reimburse or waive acquired fund fees and expenses related to exposure to India local market securities from investments in exchange-traded funds. Janus Capital has agreed to continue the waivers until at least November 1, 2016.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH Emerging Markets Managed Volatility Fund | 1.08 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the
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Notes to Financial Statements (unaudited) (continued)
Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the six-month period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/
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(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the six-month period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. There were no upfront sales charges retained by Janus Distributors during the period ended December 31, 2014.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class A Shares | 100 | % | 15 | % | ||||||
INTECH Emerging Markets Managed Volatility Fund - Class C Shares | 100 | 5 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class D Shares | 95 | 49 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class I Shares | 100 | 10 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class S Shares | 100 | 5 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class T Shares | 100 | 15 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH Emerging Markets Managed Volatility Fund | $ | 989,514 | $ | 25,479 | $ | (9,083) | $ | 16,396 | ||||||||||
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Notes to Financial Statements (unaudited) (continued)
5. | Capital Share Transactions |
INTECH Emerging Markets Managed Volatility Fund | ||||||
For the period ended December 31 (unaudited) | 2014(1) | |||||
Transactions in Fund Shares – Class A Shares: | ||||||
Shares sold | 15,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 15,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 15,000 | |||||
Transactions in Fund Shares – Class C Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
Transactions in Fund Shares – Class D Shares: | ||||||
Shares sold | 52,986 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 52,986 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 52,986 | |||||
Transactions in Fund Shares – Class I Shares: | ||||||
Shares sold | 10,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 10,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 10,000 | |||||
Transactions in Fund Shares – Class S Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
Transactions in Fund Shares – Class T Shares: | ||||||
Shares sold | 15,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 15,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 15,000 |
(1) | Period from December 17, 2014 (inception date) through December 31, 2014. |
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6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Emerging Markets Managed Volatility Fund | $ | 992,457 | $ | 3,033 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 27
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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
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital or INTECH Investment Management LLC (“INTECH”), the investment adviser and subadviser, respectively, of INTECH Emerging Markets Managed Volatility Fund (the “New Fund”), met on November 5, 2014 to consider the proposed investment advisory agreement and subadvisory agreement for the New Fund. In the course of their consideration of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital and INTECH in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for the New Fund. Based on their evaluation of information available to them, the Trustees unanimously approved the investment advisory agreement and subadvisory agreement for the New Fund for an initial term through February 2016, subject to earlier termination as provided for in each agreement.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services to be provided by Janus Capital and INTECH, taking into account the investment objective and strategy of the New Fund. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and INTECH that will be providing investment and risk management services to the New Fund. The Trustees also considered other services provided to the New Fund by Janus Capital, and the involvement of INTECH in trade executions and the broker selection process. The Trustees considered Janus Capital’s role as administrator to the New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of each of Janus Capital and INTECH in monitoring adherence to the New Fund’s investment restrictions, 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 New Fund and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent, and quality of the services to be provided by Janus Capital and INTECH were appropriate and consistent with the terms of the proposed investment advisory agreement and subadvisory agreement. They also concluded that each of Janus Capital and INTECH had sufficient personnel, with the appropriate education and experience, to serve the New Fund effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of the New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital and INTECH to their separate account clients and to non-affiliated funds subadvised by Janus Capital (for which Janus Capital provides only portfolio management services). The Trustees noted servicing that is provided by Janus Capital for the New Fund relative to those other clients, including regulatory compliance and administration services, and
28 | DECEMBER 31, 2014
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that, in serving the New Fund, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee paid by the New Fund and the proposed subadvisory fee payable by Janus Capital to INTECH was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and INTECH charges to other clients, and the expense limitation agreement agreed to by Janus Capital, including additional fees waived related to the New Fund’s investments in an iShares ETF to gain exposure to India.
Economies of Scale
The Trustees considered information about the potential for Janus Capital and INTECH to realize economies of scale as the assets of the New Fund increases. The Trustees noted that the proposed annual advisory fee rate, which included the potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that the New Fund is part of the overall Janus funds complex, which means, among other things, that the New Fund shares 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 Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital, INTECH, and their affiliates from their relationships with the New Fund. They recognized that two affiliates of Janus Capital separately serve the New Fund as transfer agent and distributor, respectively. 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 the New Fund therefor, the New Fund, Janus Capital, and INTECH may potentially benefit from their relationship with each other in other ways. They further concluded that success of the New Fund could attract other business to Janus Capital, INTECH, or other Funds, and that the success of Janus Capital and INTECH could enhance Janus Capital’s and INTECH’s ability to serve the New Fund.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the agreements for the New Fund.
Janus Investment Fund | 29
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
30 | DECEMBER 31, 2014
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
Janus Investment Fund | 31
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
32 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 33
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81526 | 125-24-93012 02-15 |
Table of Contents
semiannual report
December 31, 2014
INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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INTECH Global Income Managed Volatility Fund
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INTECH Global Income Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, INTECH Global Income Managed Volatility Fund’s Class I Shares returned -7.17%. This compares to the -1.17% return posted by the MSCI World Index, the Fund’s primary benchmark, and a -5.13% return for its secondary benchmark, the MSCI World High Dividend Yield Index.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH Global Dividend Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in the global equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
The investment process begins with the stocks in the MSCI World High Dividend Yield Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH Global Dividend Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH Global Income Managed Volatility Fund strategy focuses on seeking an excess return above the benchmark, while also reducing or managing the Fund’s standard deviation depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The global developed equity markets as measured by the MSCI World Index posted a negative return of -1.17% for the six-month period ended December 31, 2014. The MSCI World High Dividend Yield Index was down by -5.13% over the period. INTECH Global Income Managed Volatility Fund Class I Shares underperformed the MSCI World High Dividend Yield Index over the period and generated a return of -7.17%.
An overall increase in market diversity over the past six months reflected a change in the distribution of capital, in which smaller cap stocks outperformed larger cap stocks on average. INTECH Global Income Managed Volatility Fund, which tends to overweight smaller cap stocks as they provide more relative volatility capture potential, benefited from the overall increase in market diversity over the period. As compared to the MSCI World High Dividend Yield Index, which is the universe from which the Fund selects stocks, the Fund was negatively impacted by security selection, which is a residual of the investment process, during the period.
The Fund’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. The Fund’s overweight allocation to utilities sector contributed to the Fund’s relative performance over the period. However, overweight positions in some poor performing energy stocks detracted from the Fund’s relative performance over the period.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in global equity market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long
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INTECH Global Income Managed Volatility Fund (unaudited)
term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute volatility. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH Global Income Managed Volatility Fund.
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(unaudited)
INTECH Global Income Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Kimberly-Clark Corp. Household Products | 5.4% | |||
CLP Holdings, Ltd. Electric Utilities | 5.2% | |||
Lorillard, Inc. Tobacco | 5.2% | |||
PG&E Corp. Multi-Utilities | 5.2% | |||
Reynolds American, Inc. Tobacco | 4.9% | |||
25.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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*Includes Cash Equivalents and Other (11.6)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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INTECH Global Income Managed Volatility Fund (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
INTECH Global Income Managed Volatility Fund – A Shares | |||||||||||
NAV | –7.32% | –1.16% | 11.08% | 1.96% | 0.83% | ||||||
MOP | –12.65% | –6.83% | 8.94% | ||||||||
INTECH Global Income Managed Volatility Fund – C Shares | |||||||||||
NAV | –7.69% | –1.93% | 10.24% | 2.70% | 1.59% | ||||||
CDSC | –8.57% | –2.85% | 10.24% | ||||||||
INTECH Global Income Managed Volatility Fund – D Shares(1) | –7.25% | –0.99% | 11.14% | 1.78% | 0.66% | ||||||
INTECH Global Income Managed Volatility Fund – I Shares | –7.17% | –0.87% | 11.38% | 1.67% | 0.53% | ||||||
INTECH Global Income Managed Volatility Fund – S Shares | –7.40% | –0.98% | 11.07% | 2.13% | 1.02% | ||||||
INTECH Global Income Managed Volatility Fund – T Shares | –7.28% | –1.01% | 11.16% | 1.83% | 0.76% | ||||||
MSCI World IndexSM | –1.17% | 4.94% | 16.56% | ||||||||
MSCI World High Dividend Yield Index | –5.13% | 2.48% | 13.14% | ||||||||
Morningstar Quartile – Class I Shares | – | 4th | 4th | ||||||||
Morningstar Ranking – based on total returns for World Stock Funds | – | 999/1,197 | 842/938 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
Until three years from inception, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH Global Dividend Fund changed its name to INTECH Global Income Managed Volatility Fund.
* | The Fund’s inception date – December 15, 2011 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
INTECH Global Income Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 926.80 | $ | 4.03 | $ | 1,000.00 | $ | 1,021.02 | $ | 4.23 | 0.83% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 923.10 | $ | 7.85 | $ | 1,000.00 | $ | 1,017.04 | $ | 8.24 | 1.62% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 927.50 | $ | 3.21 | $ | 1,000.00 | $ | 1,021.88 | $ | 3.36 | 0.66% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 928.30 | $ | 2.62 | $ | 1,000.00 | $ | 1,022.48 | $ | 2.75 | 0.54% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 926.00 | $ | 4.90 | $ | 1,000.00 | $ | 1,020.11 | $ | 5.14 | 1.01% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 927.20 | $ | 3.69 | $ | 1,000.00 | $ | 1,021.37 | $ | 3.87 | 0.76% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
INTECH Global Income Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 97.9% | ||||||||||
Aerospace & Defense – 1.9% | ||||||||||
349 | BAE Systems PLC | $ | 2,547 | |||||||
355 | Cobham PLC | 1,780 | ||||||||
1,700 | Lockheed Martin Corp. | 327,369 | ||||||||
| ||||||||||
331,696 | ||||||||||
Capital Markets – 0.3% | ||||||||||
1,800 | CI Financial Corp. | 50,040 | ||||||||
276 | ICAP PLC | 1,925 | ||||||||
| ||||||||||
51,965 | ||||||||||
Chemicals – 0.3% | ||||||||||
7,892 | Israel Chemicals, Ltd. | 57,017 | ||||||||
24 | Koninklijke DSM NV | 1,459 | ||||||||
| ||||||||||
58,476 | ||||||||||
Commercial Banks – 2.8% | ||||||||||
8,200 | Bank of East Asia, Ltd. | 32,893 | ||||||||
800 | Bank of Montreal | 56,603 | ||||||||
18,000 | BOC Hong Kong Holdings, Ltd. | 59,936 | ||||||||
900 | Canadian Imperial Bank of Commerce | 77,362 | ||||||||
1,000 | DBS Group Holdings, Ltd. | 15,447 | ||||||||
10,700 | Hang Seng Bank, Ltd. | 177,933 | ||||||||
1,500 | Toronto-Dominion Bank# | 71,687 | ||||||||
| ||||||||||
491,861 | ||||||||||
Commercial Services & Supplies – 0.1% | ||||||||||
5,724 | G4S PLC | 24,631 | ||||||||
Communications Equipment – 0.1% | ||||||||||
500 | Cisco Systems, Inc. | 13,907 | ||||||||
Containers & Packaging – 0.5% | ||||||||||
7,239 | Amcor, Ltd. | 79,642 | ||||||||
Diversified Consumer Services – 1.3% | ||||||||||
6,500 | H&R Block, Inc. | 218,920 | ||||||||
Diversified Financial Services – 0.1% | ||||||||||
29 | Deutsche Boerse AG | 2,078 | ||||||||
2,000 | Singapore Exchange, Ltd. | 11,762 | ||||||||
| ||||||||||
13,840 | ||||||||||
Diversified Telecommunication Services – 5.7% | ||||||||||
1,000 | AT&T, Inc. | 33,590 | ||||||||
1,277 | BCE, Inc. | 58,578 | ||||||||
4,065 | Belgacom SA | 147,176 | ||||||||
1,906 | Elisa Oyj | 51,869 | ||||||||
8,700 | Nippon Telegraph & Telephone Corp. | 447,759 | ||||||||
165,000 | PCCW, Ltd. | 112,416 | ||||||||
5,000 | Singapore Telecommunications, Ltd. | 14,681 | ||||||||
111 | Swisscom AG | 58,304 | ||||||||
3,815 | TDC A/S | 29,078 | ||||||||
9,025 | Telstra Corp., Ltd. | 43,817 | ||||||||
| ||||||||||
997,268 | ||||||||||
Electric Utilities – 21.1% | ||||||||||
40,000 | Cheung Kong Infrastructure Holdings, Ltd. | 294,816 | ||||||||
105,500 | CLP Holdings, Ltd. | 913,546 | ||||||||
9,104 | Contact Energy, Ltd. | 45,293 | ||||||||
866 | Duke Energy Corp. | 72,346 | ||||||||
1,500 | Entergy Corp. | 131,220 | ||||||||
58 | Fortum Oyj | 1,253 | ||||||||
600 | NextEra Energy, Inc. | 63,774 | ||||||||
762 | Northeast Utilities | 40,782 | ||||||||
86,500 | Power Assets Holdings, Ltd. | 835,733 | ||||||||
6,100 | PPL Corp. | 221,613 | ||||||||
724 | Red Electrica Corp. SA | 63,550 | ||||||||
17,500 | Southern Co. | 859,425 | ||||||||
1,739 | SSE PLC | 43,652 | ||||||||
11,266 | Terna Rete Elettrica Nazionale SpA | 51,030 | ||||||||
1,300 | Xcel Energy, Inc. | 46,696 | ||||||||
| ||||||||||
3,684,729 | ||||||||||
Energy Equipment & Services – 0% | ||||||||||
42 | Technip SA | 2,508 | ||||||||
Food & Staples Retailing – 2.0% | ||||||||||
4,800 | Lawson, Inc. | 290,297 | ||||||||
400 | Sysco Corp. | 15,876 | ||||||||
1,762 | Woolworths, Ltd. | 43,890 | ||||||||
| ||||||||||
350,063 | ||||||||||
Food Products – 2.4% | ||||||||||
400 | Campbell Soup Co. | 17,600 | ||||||||
2,500 | ConAgra Foods, Inc. | 90,700 | ||||||||
2,000 | General Mills, Inc. | 106,660 | ||||||||
2,900 | Kellogg Co. | 189,776 | ||||||||
2,192 | Tate & Lyle PLC | 20,588 | ||||||||
| ||||||||||
425,324 | ||||||||||
Gas Utilities – 0.3% | ||||||||||
9,230 | Snam SpA | 45,527 | ||||||||
Health Care Equipment & Supplies – 0.1% | ||||||||||
254 | Cochlear, Ltd. | 16,027 | ||||||||
Health Care Providers & Services – 1.5% | ||||||||||
16,855 | Sonic Healthcare, Ltd. | 253,059 | ||||||||
Hotels, Restaurants & Leisure – 4.6% | ||||||||||
4,400 | McDonald’s Corp. | 412,280 | ||||||||
12,000 | SJM Holdings, Ltd. | 18,979 | ||||||||
3,533 | TUI AG* | 56,765 | ||||||||
110,800 | Wynn Macau, Ltd. | 308,930 | ||||||||
| ||||||||||
796,954 | ||||||||||
Household Durables – 0.5% | ||||||||||
1,600 | Garmin, Ltd. | 84,528 | ||||||||
Household Products – 7.2% | ||||||||||
3,100 | Clorox Co. | 323,051 | ||||||||
8,100 | Kimberly-Clark Corp. | 935,874 | ||||||||
| ||||||||||
1,258,925 | ||||||||||
Industrial Conglomerates – 1.3% | ||||||||||
3,000 | Keppel Corp., Ltd. | 20,023 | ||||||||
95,000 | NWS Holdings, Ltd. | 174,241 | ||||||||
8,000 | SembCorp Industries, Ltd. | 26,835 | ||||||||
| ||||||||||
221,099 | ||||||||||
Insurance – 0.9% | ||||||||||
2,329 | Admiral Group PLC | 47,689 | ||||||||
25,394 | Direct Line Insurance Group PLC | 114,521 | ||||||||
76 | SCOR SE | 2,300 | ||||||||
11 | Tryg A/S | 1,230 | ||||||||
| ||||||||||
165,740 | ||||||||||
Leisure Products – 0% | ||||||||||
100 | Hasbro, Inc. | 5,499 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH Global Income Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Machinery – 0.1% | ||||||||||
4,000 | SembCorp Marine, Ltd. | $ | 9,856 | |||||||
4,000 | Yangzijiang Shipbuilding Holdings, Ltd. | 3,634 | ||||||||
| ||||||||||
13,490 | ||||||||||
Marine – 0.3% | ||||||||||
332 | Kuehne + Nagel International AG | 45,143 | ||||||||
Media – 3.4% | ||||||||||
2,023 | Eutelsat Communications SA | 65,390 | ||||||||
4,943 | SES SA (FDR) | 177,290 | ||||||||
4,300 | Shaw Communications, Inc. – Class B | 116,061 | ||||||||
16,581 | Sky PLC | 230,750 | ||||||||
| ||||||||||
589,491 | ||||||||||
Multi-Utilities – 13.6% | ||||||||||
300 | Alliant Energy Corp. | 19,926 | ||||||||
300 | CenterPoint Energy, Inc. | 7,029 | ||||||||
1,400 | CMS Energy Corp. | 48,650 | ||||||||
12,900 | Consolidated Edison, Inc. | 851,529 | ||||||||
700 | DTE Energy Co. | 60,459 | ||||||||
400 | Integrys Energy Group, Inc. | 31,140 | ||||||||
5,191 | National Grid PLC | 73,993 | ||||||||
17,100 | PG&E Corp. | 910,404 | ||||||||
1,800 | Public Service Enterprise Group, Inc. | 74,538 | ||||||||
1,200 | SCANA Corp. | 72,480 | ||||||||
1,100 | Sempra Energy | 122,496 | ||||||||
2,000 | Wisconsin Energy Corp.# | 105,480 | ||||||||
| ||||||||||
2,378,124 | ||||||||||
Oil, Gas & Consumable Fuels – 0.1% | ||||||||||
200 | Canadian Oil Sands, Ltd. | 1,794 | ||||||||
100 | Cenovus Energy, Inc. | 2,064 | ||||||||
200 | ConocoPhillips | 13,812 | ||||||||
100 | Husky Energy, Inc. | 2,368 | ||||||||
| ||||||||||
20,038 | ||||||||||
Pharmaceuticals – 6.9% | ||||||||||
3,100 | Bristol-Myers Squibb Co. | 182,993 | ||||||||
16,400 | Eisai Co., Ltd. | 635,571 | ||||||||
700 | Eli Lilly & Co. | 48,293 | ||||||||
591 | Indivior PLC* | 1,376 | ||||||||
100 | Johnson & Johnson | 10,457 | ||||||||
2,000 | Merck & Co., Inc. | 113,580 | ||||||||
380 | Novartis AG | 34,958 | ||||||||
800 | Pfizer, Inc. | 24,920 | ||||||||
3,600 | Takeda Pharmaceutical Co., Ltd. | 149,409 | ||||||||
| ||||||||||
1,201,557 | ||||||||||
Real Estate Management & Development – 3.4% | ||||||||||
3,000 | Daito Trust Construction Co., Ltd. | 339,733 | ||||||||
6,000 | Sun Hung Kai Properties, Ltd. | 90,739 | ||||||||
7,500 | Swire Pacific, Ltd. – Class A | 97,167 | ||||||||
963 | Swiss Prime Site AG | 70,582 | ||||||||
| ||||||||||
598,221 | ||||||||||
Road & Rail – 0.3% | ||||||||||
30,000 | ComfortDelGro Corp., Ltd. | 58,748 | ||||||||
Semiconductor & Semiconductor Equipment – 0.4% | ||||||||||
200 | Intel Corp. | 7,258 | ||||||||
1,900 | Maxim Integrated Products, Inc. | 60,553 | ||||||||
| ||||||||||
67,811 | ||||||||||
Specialty Retail – 0% | ||||||||||
330 | Kingfisher PLC | 1,739 | ||||||||
Technology Hardware, Storage & Peripherals – 1.1% | ||||||||||
1,400 | Canon, Inc. | 44,474 | ||||||||
2,100 | Seagate Technology PLC | 139,650 | ||||||||
| ||||||||||
184,124 | ||||||||||
Textiles, Apparel & Luxury Goods – 0.5% | ||||||||||
600 | Coach, Inc. | 22,536 | ||||||||
413 | Hugo Boss AG | 50,699 | ||||||||
6,000 | Li & Fung, Ltd. | 5,612 | ||||||||
1,500 | Yue Yuen Industrial Holdings, Ltd. | 5,401 | ||||||||
| ||||||||||
84,248 | ||||||||||
Tobacco – 10.4% | ||||||||||
800 | Altria Group, Inc. | 39,416 | ||||||||
29 | Imperial Tobacco Group PLC | 1,270 | ||||||||
14,500 | Lorillard, Inc. | 912,630 | ||||||||
13,400 | Reynolds American, Inc. | 861,218 | ||||||||
| ||||||||||
1,814,534 | ||||||||||
Trading Companies & Distributors – 0% | ||||||||||
200 | Rexel SA | 3,571 | ||||||||
Transportation Infrastructure – 1.1% | ||||||||||
55,715 | Auckland International Airport, Ltd. | 183,305 | ||||||||
Wireless Telecommunication Services – 1.3% | ||||||||||
4,800 | NTT DOCOMO, Inc. | 70,275 | ||||||||
1,900 | Rogers Communications, Inc. – Class B | 73,890 | ||||||||
29,000 | StarHub, Ltd. | 90,836 | ||||||||
| ||||||||||
235,001 | ||||||||||
Total Common Stocks (cost $16,600,806) | 17,071,333 | |||||||||
Rights – 0% | ||||||||||
Oil, Gas & Consumable Fuels – 0% | ||||||||||
1,043 | Repsol SA* (cost $602) | 577 | ||||||||
Investment Companies – 13.7% | ||||||||||
Money Markets – 13.7% | ||||||||||
2,388,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $2,388,000) | 2,388,000 | ||||||||
Investments Purchased with Cash Collateral From Securities Lending – 0.5% | ||||||||||
89,585 | Janus Cash Collateral Fund LLC, 0.0984%°°,£ (cost $89,585) | 89,585 | ||||||||
Total Investments (total cost $19,078,993) – 112.1% | 19,549,495 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.1)% | (2,111,760) | |||||||||
Net Assets – 100% | $ | 17,437,735 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 11,430,518 | 58 | .5% | ||||
Hong Kong | 3,128,342 | 16 | .0 | |||||
Japan | 1,977,518 | 10 | .1 | |||||
United Kingdom | 566,461 | 2 | .9 | |||||
Canada | 510,447 | 2 | .6 | |||||
Australia | 436,435 | 2 | .2 | |||||
Singapore | 251,822 | 1 | .3 | |||||
France | 251,059 | 1 | .3 | |||||
New Zealand | 228,598 | 1 | .2 | |||||
Switzerland | 208,987 | 1 | .1 | |||||
Belgium | 147,176 | 0 | .7 | |||||
Germany | 109,542 | 0 | .6 | |||||
Italy | 96,557 | 0 | .5 | |||||
Spain | 64,127 | 0 | .3 | |||||
Israel | 57,017 | 0 | .3 | |||||
Finland | 53,122 | 0 | .3 | |||||
Denmark | 30,308 | 0 | .1 | |||||
Netherlands | 1,459 | 0 | .0 | |||||
Total | $ | 19,549,495 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 0.5%. | |
(1) | Formerly named INTECH Global Dividend Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
MSCI World High Dividend Yield Index | An index designed to reflect the performance of the high dividend yield securities contained within the broader MSCI World IndexSM. The index includes large and mid cap stocks from developed markets across the Americas, Asia-Pacific and Europe. | |
MSCI World IndexSM | A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
FDR | Fixed Depositary Receipt | |
LLC | Limited Liability Company | |
PLC | Public Limited Company |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
# | Loaned security; a portion of the security is on loan at December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
INTECH Global Income Managed Volatility Fund | |||||||||||||||||||||
Janus Cash Collateral Fund LLC | 422,686 | 1,552,414 | (1,885,515) | 89,585 | $ | – | $ | 1,879(1) | $ | 89,585 | |||||||||||
Janus Cash Liquidity Fund LLC | 236,030 | 9,834,066 | (7,682,096) | 2,388,000 | – | 88 | 2,388,000 | ||||||||||||||
Total | $ | – | $ | 1,967 | $ | 2,477,585 | |||||||||||||||
(1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
10 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH Global Income Managed Volatility Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
Aerospace & Defense | $ | 327,369 | $ | 4,327 | $ | – | |||||
Capital Markets | 50,040 | 1,925 | – | ||||||||
Chemicals | – | 58,476 | – | ||||||||
Commercial Banks | 205,652 | 286,209 | – | ||||||||
Commercial Services & Supplies | – | 24,631 | – | ||||||||
Containers & Packaging | – | 79,642 | – | ||||||||
Diversified Financial Services | – | 13,840 | – | ||||||||
Diversified Telecommunication Services | 92,168 | 905,100 | – | ||||||||
Electric Utilities | 1,481,149 | 2,203,580 | – | ||||||||
Energy Equipment & Services | – | 2,508 | – | ||||||||
Food & Staples Retailing | 15,876 | 334,187 | – | ||||||||
Food Products | 404,736 | 20,588 | – | ||||||||
Gas Utilities | – | 45,527 | – | ||||||||
Health Care Equipment & Supplies | – | 16,027 | – | ||||||||
Health Care Providers & Services | – | 253,059 | – | ||||||||
Hotels, Restaurants & Leisure | 469,045 | 327,909 | – | ||||||||
Industrial Conglomerates | – | 221,099 | – | ||||||||
Insurance | – | 165,740 | – | ||||||||
Machinery | – | 13,490 | – | ||||||||
Marine | – | 45,143 | – | ||||||||
Media | 116,061 | 473,430 | – | ||||||||
Multi-Utilities | 2,304,131 | 73,993 | – | ||||||||
Pharmaceuticals | 380,243 | 821,314 | – | ||||||||
Real Estate Management & Development | – | 598,221 | – | ||||||||
Road & Rail | – | 58,748 | – | ||||||||
Specialty Retail | – | 1,739 | – | ||||||||
Technology Hardware, Storage & Peripherals | 139,650 | 44,474 | – | ||||||||
Textiles, Apparel & Luxury Goods | 22,536 | 61,712 | – | ||||||||
Tobacco | 1,813,264 | 1,270 | – | ||||||||
Trading Companies & Distributors | – | 3,571 | – | ||||||||
Transportation Infrastructure | – | 183,305 | – | ||||||||
Wireless Telecommunication Services | 73,890 | 161,111 | – | ||||||||
All Other | 1,669,628 | – | – | ||||||||
Rights | 577 | – | – | ||||||||
Investment Companies | – | 2,388,000 | – | ||||||||
Investment Purchased with Cash Collateral From Securities Lending | – | 89,585 | – | ||||||||
Total Assets | $ | 9,566,015 | $ | 9,983,480 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | INTECH Global Income Managed Volatility Fund(1) | |||
Assets: | ||||
Investments at cost | $ | 19,078,993 | ||
Unaffiliated investments at value(2) | $ | 17,071,910 | ||
Affiliated investments at value | 2,477,585 | |||
Cash | 1,105 | |||
Cash denominated in foreign currency(3) | 885 | |||
Non-interested Trustees’ deferred compensation | 358 | |||
Receivables: | ||||
Investments sold | 1,600,624 | |||
Fund shares sold | 8,292 | |||
Dividends | 28,631 | |||
Foreign dividend tax reclaim | 11,835 | |||
Due from adviser | 41,110 | |||
Other assets | 276 | |||
Total Assets | 21,242,611 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 89,585 | |||
Payables: | ||||
Investments purchased | 3,642,621 | |||
Fund shares repurchased | 27,402 | |||
Dividends | 1,543 | |||
Advisory fees | 8,591 | |||
Fund administration fees | 156 | |||
Transfer agent fees and expenses | 2,170 | |||
12b-1 Distribution and shareholder servicing fees | 1,843 | |||
Non-interested Trustees’ fees and expenses | 127 | |||
Non-interested Trustees’ deferred compensation fees | 358 | |||
Accrued expenses and other payables | 30,480 | |||
Total Liabilities | 3,804,876 | |||
Net Assets | $ | 17,437,735 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | INTECH Global Income Managed Volatility Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 17,220,321 | ||
Undistributed net investment income/(loss)* | 199 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (252,912) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 470,127 | |||
Total Net Assets | $ | 17,437,735 | ||
Net Assets - Class A Shares | $ | 3,323,349 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 291,063 | |||
Net Asset Value Per Share(4) | $ | 11.42 | ||
Maximum Offering Price Per Share(5) | $ | 12.12 | ||
Net Assets - Class C Shares | $ | 1,173,377 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 103,258 | |||
Net Asset Value Per Share(4) | $ | 11.36 | ||
Net Assets - Class D Shares | $ | 7,449,813 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 653,943 | |||
Net Asset Value Per Share | $ | 11.39 | ||
Net Assets - Class I Shares | $ | 2,289,227 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 200,071 | |||
Net Asset Value Per Share | $ | 11.44 | ||
Net Assets - Class S Shares | $ | 160,662 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,094 | |||
Net Asset Value Per Share | $ | 11.40 | ||
Net Assets - Class T Shares | $ | 3,041,307 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 266,566 | |||
Net Asset Value Per Share | $ | 11.41 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH Global Dividend Fund. | |
(2) | Unaffiliated investments at value includes $87,109 of securities loaned. See Note 2 in Notes to Financial Statements. | |
(3) | Includes cost of $897. | |
(4) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(5) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | INTECH Global Income Managed Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 1,879 | ||
Dividends | 317,388 | |||
Dividends from affiliates | 88 | |||
Other income | 72 | |||
Foreign tax withheld | (13,053) | |||
Total Investment Income | 306,374 | |||
Expenses: | ||||
Advisory fees | 53,122 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 5,990 | |||
Class C Shares | 5,423 | |||
Class S Shares | 210 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 4,892 | |||
Class S Shares | 210 | |||
Class T Shares | 3,612 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 1,549 | |||
Class C Shares | 444 | |||
Class I Shares | 285 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 356 | |||
Class C Shares | 149 | |||
Class D Shares | 1,452 | |||
Class I Shares | 81 | |||
Class T Shares | 87 | |||
Shareholder reports expense | 5,984 | |||
Registration fees | 70,489 | |||
Custodian fees | 6,861 | |||
Professional fees | 22,525 | |||
Non-interested Trustees’ fees and expenses | 213 | |||
Fund administration fees | 966 | |||
Other expenses | 2,534 | |||
Total Expenses | 187,434 | |||
Less: Excess Expense Reimbursement | (114,376) | |||
Net Expenses | 73,058 | |||
Net Investment Income/(Loss) | 233,316 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (228,355) | |||
Total Net Realized Gain/(Loss) on Investments | (228,355) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (1,475,456) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (1,475,456) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (1,470,495) |
(1) | Formerly named INTECH Global Dividend Fund. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
INTECH Global | ||||||||
Income Managed Volatility Fund(1) | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 233,316 | $ | 661,043 | ||||
Net realized gain/(loss) on investments | (228,355) | 526,930 | ||||||
Change in unrealized net appreciation/depreciation | (1,475,456) | 1,590,172 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (1,470,495) | 2,778,145 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (102,204) | (172,102) | ||||||
Class C Shares | (21,652) | (17,926) | ||||||
Class D Shares | (192,173) | (230,860) | ||||||
Class I Shares | (54,896) | (69,242) | ||||||
Class S Shares | (3,706) | (7,122) | ||||||
Class T Shares | (69,462) | (34,263) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (87,688) | (259,588) | ||||||
Class C Shares | (30,899) | (23,953) | ||||||
Class D Shares | (198,183) | (313,405) | ||||||
Class I Shares | (59,895) | (99,248) | ||||||
Class S Shares | (4,215) | (6,926) | ||||||
Class T Shares | (79,471) | (27,470) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (904,444) | (1,262,105) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 286,598 | 5,027,024 | ||||||
Class C Shares | 296,271 | 695,512 | ||||||
Class D Shares | 1,465,331 | 5,245,879 | ||||||
Class I Shares | 574,225 | 609,343 | ||||||
Class S Shares | – | 25,000 | ||||||
Class T Shares | 1,431,395 | 1,820,891 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 183,611 | 431,063 | ||||||
Class C Shares | 51,979 | 41,588 | ||||||
Class D Shares | 374,634 | 541,457 | ||||||
Class I Shares | 114,791 | 168,195 | ||||||
Class S Shares | 7,921 | 14,048 | ||||||
Class T Shares | 148,813 | 60,976 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,876,470) | (1,217,666) | ||||||
Class C Shares | (39,264) | (306,624) | ||||||
Class D Shares | (2,078,813) | (2,464,694) | ||||||
Class I Shares | (114,551) | (546,853) | ||||||
Class S Shares | – | (183,600) | ||||||
Class T Shares | (369,619) | (414,240) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (543,148) | 9,547,299 | ||||||
Net Increase/(Decrease) in Net Assets | (2,918,087) | 11,063,339 | ||||||
Net Assets: | ||||||||
Beginning of period | 20,355,822 | 9,292,483 | ||||||
End of period | $ | 17,437,735 | $ | 20,355,822 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 199 | $ | 210,976 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH Global Dividend Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.95 | $11.60 | $10.40 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.16(3) | 0.57(3) | 0.35 | 0.22 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.10) | 1.86 | 1.24 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.94) | 2.43 | 1.59 | 0.57 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.43) | (0.39) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions | (0.59) | (1.08) | (0.39) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.42 | $12.95 | $11.60 | $10.40 | ||||||||||||||
Total Return** | (7.32)% | 21.79% | 15.41% | 5.70% | ||||||||||||||
Net Assets, End of Period (in thousands) | $3,323 | $6,300 | $1,625 | $931 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $4,734 | $4,861 | $996 | $881 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.94% | 1.96% | 2.69% | 5.56% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.83% | 0.81% | 0.76% | 1.02% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.48% | 4.62% | 3.18% | 4.01% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
Class C Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.89 | $11.56 | $10.37 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.09(3) | 0.45(3) | 0.27 | 0.19 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.07) | 1.87 | 1.22 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.98) | 2.32 | 1.49 | 0.54 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.24) | (0.34) | (0.30) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions | (0.55) | (0.99) | (0.30) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.36 | $12.89 | $11.56 | $10.37 | ||||||||||||||
Total Return** | (7.69)% | 20.83% | 14.50% | 5.36% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,173 | $999 | $489 | $940 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $1,069 | $613 | $793 | $900 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.85% | 2.70% | 3.50% | 6.25% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.62% | 1.57% | 1.51% | 1.70% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.50% | 3.63% | 2.26% | 3.37% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
* | See “Federal Income Tax” 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) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Class D Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.92 | $11.58 | $10.39 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.15(3) | 0.56(3) | 0.42 | 0.21 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.08) | 1.88 | 1.17 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.93) | 2.44 | 1.59 | 0.56 | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (0.29) | (0.45) | (0.40) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions and Other | (0.60) | (1.10) | (0.40) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.39 | $12.92 | $11.58 | $10.39 | ||||||||||||||
Total Return** | (7.25)% | 21.92% | 15.49% | 5.60% | ||||||||||||||
Net Assets, End of Period (in thousands) | $7,450 | $8,689 | $4,706 | $2,124 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $8,046 | $6,297 | $3,161 | $1,727 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.86% | 1.78% | 2.57% | 5.98% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.66% | 0.66% | 0.67% | 1.32% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.50% | 4.51% | 3.91% | 4.09% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
Class I Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.97 | $11.62 | $10.42 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.16(3) | 0.56(3) | 0.46 | 0.23 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.08) | 1.90 | 1.15 | 0.36 | ||||||||||||||
Total from Investment Operations | (0.92) | 2.46 | 1.61 | 0.59 | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (0.30) | (0.46) | (0.41) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions and Other | (0.61) | (1.11) | (0.41) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.44 | $12.97 | $11.62 | $10.42 | ||||||||||||||
Total Return** | (7.17)% | 22.09% | 15.66% | 5.90% | ||||||||||||||
Net Assets, End of Period (in thousands) | $2,289 | $1,995 | $1,571 | $1,897 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,199 | $1,855 | $1,927 | $1,542 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.76% | 1.67% | 2.45% | 5.07% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.54% | 0.52% | 0.51% | 0.75% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.58% | 4.54% | 3.63% | 4.64% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
* | See “Federal Income Tax” 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) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class S Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.93 | $11.58 | $10.39 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.46(3) | 0.43 | 0.21 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.08) | 1.98 | 1.15 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.95) | 2.44 | 1.58 | 0.56 | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.44) | (0.39) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions and Other | (0.58) | (1.09) | (0.39) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.40 | $12.93 | $11.58 | $10.39 | ||||||||||||||
Total Return** | (7.40)% | 21.99% | 15.40% | 5.60% | ||||||||||||||
Net Assets, End of Period (in thousands) | $161 | $174 | $286 | $880 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $166 | $199 | $726 | $872 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.20% | 2.13% | 2.96% | 5.82% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.01% | 0.77% | 0.86% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.14% | 3.72% | 2.86% | 3.77% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
Class T Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | INTECH Global Income Managed Volatility Fund(1) | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.94 | $11.60 | $10.40 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.15(3) | 0.55(3) | 0.46 | 0.22 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (1.08) | 1.88 | 1.14 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.93) | 2.43 | 1.60 | 0.57 | ||||||||||||||
Less Distributions and Other: | ||||||||||||||||||
Dividends (from net investment income)* | (0.29) | (0.44) | (0.40) | (0.17) | ||||||||||||||
Distributions (from capital gains)* | (0.31) | (0.65) | – | – | ||||||||||||||
Total Distributions and Other | (0.60) | (1.09) | (0.40) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.41 | $12.94 | $11.60 | $10.40 | ||||||||||||||
Total Return** | (7.28)% | 21.84% | 15.55% | 5.70% | ||||||||||||||
Net Assets, End of Period (in thousands) | $3,041 | $2,200 | $615 | $1,233 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,850 | $855 | $1,249 | $1,093 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.00% | 1.83% | 2.69% | 5.53% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.76% | 0.71% | 0.69% | 1.03% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.39% | 4.49% | 3.27% | 4.09% | ||||||||||||||
Portfolio Turnover Rate | 97% | 51% | 116% | 24% |
* | See “Federal Income Tax” 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) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
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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 Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund) (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or
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Notes to Financial Statements (unaudited) (continued)
evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 of net investment income are generally declared and distributed monthly, and realized capital gains (if any) are distributed annually.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their
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shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The following table shows the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Transfers Out | ||||||
of Level 1 | ||||||
Fund | to Level 2 | |||||
INTECH Global Income Managed Volatility Fund | $ | 4,905,043 | ||||
Financial assets were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current
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Notes to Financial Statements (unaudited) (continued)
period and no factor was applied at the end of the prior fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
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Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable).
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Deutsche Bank AG | $ | 87,109 | $ | – | $ | (87,109) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan 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 as permitted by the SEC. 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. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. 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 on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government
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Notes to Financial Statements (unaudited) (continued)
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 as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
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 on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH Global Income Managed Volatility Fund | All Asset Levels | 0.55 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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 (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH Global Income Managed Volatility Fund | 0.50 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. For the period ended December 31, 2014, Janus Capital recovered $0 from the
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Fund. The recoupment of such reimbursements to Janus Capital by the Fund expired December 15, 2014.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed
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Notes to Financial Statements (unaudited) (continued)
by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH Global Income Managed Volatility Fund | $ | 698 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming
26 | DECEMBER 31, 2014
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shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH Global Income Managed Volatility Fund | $ | 60 | ||||
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
INTECH Global Income Managed Volatility Fund - Class A Shares | - | % | - | % | ||||||
INTECH Global Income Managed Volatility Fund - Class C Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class D Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class I Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class S Shares | 85 | 1 | ||||||||
INTECH Global Income Managed Volatility Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships, and investments in passive foreign investment companies.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH Global Income Managed Volatility Fund | $ | 19,091,801 | $ | 648,628 | $ | (190,934) | $ | 457,694 | ||||||||||
5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | INTECH Global Income Managed Volatility Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 23,215 | 408,638 | ||||||||
Reinvested dividends and distributions | 15,466 | 35,321 | ||||||||
Shares repurchased | (234,110) | (97,519) | ||||||||
Net Increase/(Decrease) in Fund Shares | (195,429) | 346,440 | ||||||||
Shares Outstanding, Beginning of Period | 486,492 | 140,052 | ||||||||
Shares Outstanding, End of Period | 291,063 | 486,492 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 24,492 | 55,803 | ||||||||
Reinvested dividends and distributions | 4,458 | 3,417 | ||||||||
Shares repurchased | (3,153) | (24,112) | ||||||||
Net Increase/(Decrease) in Fund Shares | 25,797 | 35,108 | ||||||||
Shares Outstanding, Beginning of Period | 77,461 | 42,353 | ||||||||
Shares Outstanding, End of Period | 103,258 | 77,461 |
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Notes to Financial Statements (unaudited) (continued)
For the period ended December 31 (unaudited) | INTECH Global Income Managed Volatility Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 118,786 | 420,677 | ||||||||
Reinvested dividends and distributions | 31,840 | 44,434 | ||||||||
Shares repurchased | (169,114) | (199,182) | ||||||||
Net Increase/(Decrease) in Fund Shares | (18,488) | 265,929 | ||||||||
Shares Outstanding, Beginning of Period | 672,431 | 406,502 | ||||||||
Shares Outstanding, End of Period | 653,943 | 672,431 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 45,955 | 49,276 | ||||||||
Reinvested dividends and distributions | 9,737 | 13,770 | ||||||||
Shares repurchased | (9,418) | (44,476) | ||||||||
Net Increase/(Decrease) in Fund Shares | 46,274 | 18,570 | ||||||||
Shares Outstanding, Beginning of Period | 153,797 | 135,227 | ||||||||
Shares Outstanding, End of Period | 200,071 | 153,797 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | 1,956 | ||||||||
Reinvested dividends and distributions | 674 | 1,152 | ||||||||
Shares repurchased | – | (14,389) | ||||||||
Net Increase/(Decrease) in Fund Shares | 674 | (11,281) | ||||||||
Shares Outstanding, Beginning of Period | 13,420 | 24,701 | ||||||||
Shares Outstanding, End of Period | 14,094 | 13,420 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 114,223 | 144,796 | ||||||||
Reinvested dividends and distributions | 12,664 | 4,960 | ||||||||
Shares repurchased | (30,309) | (32,790) | ||||||||
Net Increase/(Decrease) in Fund Shares | 96,578 | 116,966 | ||||||||
Shares Outstanding, Beginning of Period | 169,988 | 53,022 | ||||||||
Shares Outstanding, End of Period | 266,566 | 169,988 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Global Income Managed Volatility Fund | $ | 18,346,307 | $ | 19,698,620 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 29
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
32 | DECEMBER 31, 2014
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
Janus Investment Fund | 41
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
42 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 43
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Notes
44 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 45
Table of Contents
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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
�� |
C-0215-81524 | 125-24-93013 02-15 |
Table of Contents
semiannual report
December 31, 2014
INTECH International Managed Volatility Fund (formerly named INTECH International Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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INTECH International Managed Volatility Fund
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Table of Contents
INTECH International Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, INTECH International Managed Volatility Fund’s Class I Shares returned -9.67%. This compares to the -9.24% return posted by the MSCI EAFE Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH International Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in international equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
The investment process begins with the stocks in the MSCI EAFE Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH International Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH International Managed Volatility Fund strategy focuses on seeking an excess return above the benchmark, while also reducing or managing the standard deviation of the portfolio depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The MSCI EAFE Index return declined by -9.24% for the period as the appreciation of the U.S. Dollar currency versus major currencies detracted from the returns of non-U.S. markets expressed in U.S. Dollars. INTECH International Managed Volatility Fund’s Class I Shares underperformed the MSCI EAFE Index over the period and generated a return of -9.67%.
An overall increase in market diversity over the past six months reflected a change in the distribution of capital, in which smaller cap stocks outperformed larger cap stocks on average within the MSCI EAFE Index. INTECH International Managed Volatility Fund, which tends to overweight smaller cap stocks as they provide more relative volatility capture potential, benefited from the overall increase in market diversity over the period. However, the Fund was negatively impacted by security selection, which is a residual of the investment process during the period.
The Fund’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. The Fund’s average overweight allocation to the consumer discretionary sector and underweight allocation to the health care sector detracted from the Fund’s relative performance over the period. However, security selection, which is a residual of the investment process, offset some adverse sector positioning and contributed to the Fund’s relative performance over the period.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in international equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long-term, we believe that by reducing risk when market
Janus Investment Fund | 1
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute volatility. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH International Managed Volatility Fund.
2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
INTECH International Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Next PLC Multiline Retail | 2.1% | |||
CSL, Ltd. Biotechnology | 1.7% | |||
Nestle SA Food Products | 1.7% | |||
Oriental Land Co., Ltd. Hotels, Restaurants & Leisure | 1.6% | |||
Power Assets Holdings, Ltd. Electric Utilities | 1.5% | |||
8.6% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29p02.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29t02.gif)
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Janus Investment Fund | 3
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29m02.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratio – per the October 28, 2014 prospectus | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
INTECH International Managed Volatility Fund – Class A Shares | |||||||||||
NAV | –9.80% | –6.11% | 5.65% | –0.01% | 1.21% | ||||||
MOP | –14.99% | –11.54% | 4.41% | –0.78% | |||||||
INTECH International Managed Volatility Fund – Class C Shares | |||||||||||
NAV | –10.10% | –6.79% | 5.63% | –0.15% | 1.93% | ||||||
CDSC | –10.88% | –7.60% | 5.63% | –0.15% | |||||||
INTECH International Managed Volatility Fund – Class I Shares | –9.67% | –5.75% | 5.78% | 0.13% | 0.81% | ||||||
INTECH International Managed Volatility Fund – Class S Shares | –9.85% | –5.99% | 5.67% | –0.03% | 1.33% | ||||||
INTECH International Managed Volatility Fund – Class T Shares | –9.72% | –6.00% | 5.64% | –0.95% | 1.12% | ||||||
MSCI EAFE® Index | –9.24% | –4.90% | 5.33% | –0.14% | |||||||
Morningstar Quartile – Class I Shares | – | 3rd | 2nd | 2nd | |||||||
Morningstar Ranking – based on total returns for Foreign Large Blend Funds | – | 450/780 | 229/667 | 205/560 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds.
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 the 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 predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectus for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH International Fund changed its name to INTECH International Managed Volatility Fund.
* | The predecessor Fund’s inception date – May 2, 2007 |
Janus Investment Fund | 5
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectus. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 902.00 | $ | 5.94 | $ | 1,000.00 | $ | 1,018.95 | $ | 6.31 | 1.24% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 899.00 | $ | 9.24 | $ | 1,000.00 | $ | 1,015.48 | $ | 9.80 | 1.93% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 903.30 | $ | 3.98 | $ | 1,000.00 | $ | 1,021.02 | $ | 4.23 | 0.83% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 901.50 | $ | 6.42 | $ | 1,000.00 | $ | 1,018.45 | $ | 6.82 | 1.34% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 902.80 | $ | 5.23 | $ | 1,000.00 | $ | 1,019.71 | $ | 5.55 | 1.09% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectus for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
INTECH International Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 98.6% | ||||||||||
Aerospace & Defense – 0.5% | ||||||||||
26,373 | BAE Systems PLC | $ | 192,500 | |||||||
19,585 | Cobham PLC | 98,195 | ||||||||
347 | Safran SA | 21,355 | ||||||||
18,000 | Singapore Technologies Engineering, Ltd. | 46,096 | ||||||||
515 | Zodiac Aerospace | 17,378 | ||||||||
| ||||||||||
375,524 | ||||||||||
Air Freight & Logistics – 0.1% | ||||||||||
9,525 | Toll Holdings, Ltd. | 45,324 | ||||||||
2,400 | Yamato Holdings Co., Ltd. | 47,265 | ||||||||
| ||||||||||
92,589 | ||||||||||
Airlines – 0.4% | ||||||||||
34,000 | ANA Holdings, Inc. | 83,701 | ||||||||
42,000 | Cathay Pacific Airways, Ltd. | 91,401 | ||||||||
2,000 | Japan Airlines Co., Ltd. | 58,431 | ||||||||
6,000 | Singapore Airlines, Ltd. | 52,472 | ||||||||
| ||||||||||
286,005 | ||||||||||
Auto Components – 0.8% | ||||||||||
6,300 | Koito Manufacturing Co., Ltd. | 192,180 | ||||||||
4,200 | NGK Spark Plug Co., Ltd. | 126,850 | ||||||||
7,400 | NOK Corp. | 187,972 | ||||||||
2,100 | Sumitomo Electric Industries, Ltd. | 26,206 | ||||||||
| ||||||||||
533,208 | ||||||||||
Automobiles – 0.4% | ||||||||||
3,200 | Fuji Heavy Industries, Ltd. | 112,707 | ||||||||
5,200 | Mitsubishi Motors Corp. | 47,645 | ||||||||
3,400 | Nissan Motor Co., Ltd. | 29,620 | ||||||||
2,100 | Suzuki Motor Corp. | 63,139 | ||||||||
300 | Toyota Motor Corp. | 18,711 | ||||||||
| ||||||||||
271,822 | ||||||||||
Beverages – 0.8% | ||||||||||
3,300 | Asahi Group Holdings, Ltd. | 101,875 | ||||||||
1,180 | Diageo PLC | 33,840 | ||||||||
12,800 | Suntory Beverage & Food, Ltd. | 442,030 | ||||||||
| ||||||||||
577,745 | ||||||||||
Biotechnology – 2.1% | ||||||||||
2,037 | Actelion, Ltd. | 234,422 | ||||||||
16,983 | CSL, Ltd. | 1,195,498 | ||||||||
| ||||||||||
1,429,920 | ||||||||||
Building Products – 0% | ||||||||||
306 | Assa Abloy AB – Class B | 16,182 | ||||||||
Capital Markets – 0.4% | ||||||||||
8,513 | Investec PLC | 71,107 | ||||||||
745 | Partners Group Holding AG | 216,121 | ||||||||
| ||||||||||
287,228 | ||||||||||
Chemicals – 2.3% | ||||||||||
1,000 | Air Water, Inc. | 15,855 | ||||||||
27,000 | Asahi Kasei Corp. | 247,479 | ||||||||
13,000 | Daicel Corp. | 152,233 | ||||||||
96 | EMS-Chemie Holding AG | 38,988 | ||||||||
2,000 | Hitachi Chemical Co., Ltd. | 35,435 | ||||||||
30,408 | Israel Chemicals, Ltd. | 219,687 | ||||||||
25,000 | Mitsubishi Chemical Holdings Corp. | 121,763 | ||||||||
8,000 | Mitsubishi Gas Chemical Co., Inc. | 40,195 | ||||||||
23,000 | Mitsui Chemicals, Inc. | 65,342 | ||||||||
7,000 | Nippon Paint Holdings Co., Ltd. | 203,212 | ||||||||
1,500 | Nitto Denko Corp. | 83,899 | ||||||||
1,600 | Shin-Etsu Chemical Co., Ltd. | 104,109 | ||||||||
6 | Sika AG | 17,603 | ||||||||
863 | Symrise AG | 52,330 | ||||||||
1,000 | Taiyo Nippon Sanso Corp. | 11,036 | ||||||||
13,000 | Teijin, Ltd. | 34,626 | ||||||||
6,000 | Toray Industries, Inc. | 48,062 | ||||||||
1,981 | Yara International ASA | 88,654 | ||||||||
| ||||||||||
1,580,508 | ||||||||||
Commercial Banks – 5.3% | ||||||||||
5,069 | Banco Santander SA | 42,381 | ||||||||
130,190 | Bank Hapoalim BM | 614,999 | ||||||||
56,292 | Bank Leumi Le-Israel BM | 193,431 | ||||||||
28,800 | Bank of East Asia, Ltd. | 115,527 | ||||||||
3,537 | Bankinter SA | 28,199 | ||||||||
3,068 | Bendigo & Adelaide Bank, Ltd. | 31,878 | ||||||||
141,000 | BOC Hong Kong Holdings, Ltd. | 469,498 | ||||||||
11,556 | CaixaBank SA | 60,017 | ||||||||
2,000 | Chiba Bank, Ltd. | 13,129 | ||||||||
1,100 | Chugoku Bank, Ltd. | 15,022 | ||||||||
481 | Commonwealth Bank of Australia | 33,397 | ||||||||
32,000 | DBS Group Holdings, Ltd. | 494,289 | ||||||||
9,000 | Fukuoka Financial Group, Inc. | 46,475 | ||||||||
55,000 | Hang Seng Bank, Ltd. | 914,608 | ||||||||
2,000 | Hiroshima Bank, Ltd. | 9,508 | ||||||||
5,795 | HSBC Holdings PLC | 54,759 | ||||||||
5,716 | Intesa Sanpaolo SpA | 16,534 | ||||||||
15,084 | Lloyds Banking Group PLC* | 17,810 | ||||||||
4,926 | Mizrahi Tefahot Bank, Ltd. | 51,754 | ||||||||
22,000 | Oversea-Chinese Banking Corp., Ltd. | 172,952 | ||||||||
1,100 | Suruga Bank, Ltd. | 20,158 | ||||||||
10,000 | United Overseas Bank, Ltd. | 184,927 | ||||||||
| ||||||||||
3,601,252 | ||||||||||
Commercial Services & Supplies – 0.2% | ||||||||||
809 | Brambles, Ltd. | 6,965 | ||||||||
736 | Societe BIC SA | 97,666 | ||||||||
| ||||||||||
104,631 | ||||||||||
Construction & Engineering – 1.5% | ||||||||||
1,464 | ACS Actividades de Construccion y Servicios SA | 50,685 | ||||||||
4,478 | Boskalis Westminster NV | 244,790 | ||||||||
30,000 | Kajima Corp. | 124,006 | ||||||||
8,000 | Obayashi Corp. | 51,424 | ||||||||
47,000 | Shimizu Corp. | 320,086 | ||||||||
37,000 | Taisei Corp. | 210,648 | ||||||||
| ||||||||||
1,001,639 | ||||||||||
Construction Materials – 0.1% | ||||||||||
12,000 | Taiheiyo Cement Corp. | 37,766 | ||||||||
Containers & Packaging – 0.6% | ||||||||||
38,414 | Amcor, Ltd. | 422,623 | ||||||||
Diversified Financial Services – 1.3% | ||||||||||
22,000 | First Pacific Co., Ltd. | 21,719 | ||||||||
280 | Groupe Bruxelles Lambert SA | 23,830 | ||||||||
25,000 | Hong Kong Exchanges & Clearing, Ltd. | 550,027 | ||||||||
2,469 | Pargesa Holding SA | 190,252 | ||||||||
20,000 | Singapore Exchange, Ltd. | 117,625 | ||||||||
| ||||||||||
903,453 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH International Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Diversified Telecommunication Services – 5.3% | ||||||||||
9,664 | Belgacom SA | $ | 349,890 | |||||||
205,877 | Bezeq Israeli Telecommunication Corp., Ltd. | 366,616 | ||||||||
8,686 | Elisa Oyj | 236,376 | ||||||||
274,000 | HKT Trust & HKT, Ltd. | 356,548 | ||||||||
30 | Iliad SA | 7,206 | ||||||||
5,926 | Koninklijke KPN NV | 18,681 | ||||||||
9,000 | Nippon Telegraph & Telephone Corp. | 463,200 | ||||||||
1,692 | Orange SA | 28,771 | ||||||||
78,000 | Singapore Telecommunications, Ltd. | 229,019 | ||||||||
226,589 | Spark New Zealand, Ltd. | 548,830 | ||||||||
757 | Swisscom AG | 397,622 | ||||||||
25,143 | TDC A/S | 191,642 | ||||||||
75,635 | Telstra Corp., Ltd. | 367,209 | ||||||||
10,408 | TPG Telecom, Ltd. | 56,795 | ||||||||
| ||||||||||
3,618,405 | ||||||||||
Electric Utilities – 6.5% | ||||||||||
61,000 | Cheung Kong Infrastructure Holdings, Ltd. | 449,594 | ||||||||
87,500 | CLP Holdings, Ltd. | 757,680 | ||||||||
28,311 | EDP – Energias de Portugal SA | 109,478 | ||||||||
608 | Electricite de France SA | 16,693 | ||||||||
26,064 | Enel SpA | 116,525 | ||||||||
11,460 | Fortum Oyj | 247,614 | ||||||||
1,200 | Hokuriku Electric Power Co. | 15,327 | ||||||||
31,574 | Iberdrola SA | 212,410 | ||||||||
106,500 | Power Assets Holdings, Ltd. | 1,028,966 | ||||||||
7,820 | Red Electrica Corp. SA | 686,413 | ||||||||
25,043 | SSE PLC | 628,619 | ||||||||
44,302 | Terna Rete Elettrica Nazionale SpA | 200,669 | ||||||||
| ||||||||||
4,469,988 | ||||||||||
Electrical Equipment – 0.6% | ||||||||||
3,800 | Mabuchi Motor Co., Ltd. | 149,779 | ||||||||
3,500 | Nidec Corp. | 227,057 | ||||||||
| ||||||||||
376,836 | ||||||||||
Electronic Equipment, Instruments & Components – 1.0% | ||||||||||
900 | Hamamatsu Photonics KK | 43,014 | ||||||||
13,600 | Hoya Corp. | 455,417 | ||||||||
700 | Murata Manufacturing Co., Ltd. | 76,476 | ||||||||
1,400 | TDK Corp. | 82,501 | ||||||||
| ||||||||||
657,408 | ||||||||||
Energy Equipment & Services – 0.1% | ||||||||||
4,274 | Saipem SpA | 44,882 | ||||||||
Food & Staples Retailing – 0.7% | ||||||||||
856 | ICA Gruppen AB | 33,527 | ||||||||
1,200 | Lawson, Inc. | 72,574 | ||||||||
14,719 | Woolworths, Ltd. | 366,639 | ||||||||
| ||||||||||
472,740 | ||||||||||
Food Products – 8.3% | ||||||||||
11,000 | Ajinomoto Co., Inc. | 203,861 | ||||||||
4,107 | Aryzta AG | 315,667 | ||||||||
15,030 | Associated British Foods PLC | 730,153 | ||||||||
12 | Barry Callebaut AG | 12,294 | ||||||||
7,900 | Calbee, Inc. | 272,759 | ||||||||
96 | Chocoladefabriken Lindt & Sprungli AG (PC) | 474,075 | ||||||||
11 | Chocoladefabriken Lindt & Sprungli AG (REG) | 631,552 | ||||||||
3,799 | Kerry Group PLC – Class A | 262,085 | ||||||||
2,000 | Kikkoman Corp. | 49,076 | ||||||||
4,400 | MEIJI Holdings Co., Ltd. | 400,798 | ||||||||
16,142 | Nestle SA | 1,183,591 | ||||||||
18,000 | NH Foods, Ltd. | 393,783 | ||||||||
8,000 | Nisshin Seifun Group, Inc. | 77,527 | ||||||||
5,400 | Nissin Foods Holdings Co., Ltd. | 258,460 | ||||||||
34,685 | Orkla ASA | 236,550 | ||||||||
2,741 | Tate & Lyle PLC | 25,744 | ||||||||
4,000 | Toyo Suisan Kaisha, Ltd. | 129,178 | ||||||||
14,000 | Wilmar International, Ltd. | 34,162 | ||||||||
| ||||||||||
5,691,315 | ||||||||||
Gas Utilities – 4.2% | ||||||||||
74,482 | APA Group | 453,391 | ||||||||
13,120 | Enagas SA | 415,236 | ||||||||
17,745 | Gas Natural SDG SA | 446,355 | ||||||||
372,000 | Hong Kong & China Gas Co., Ltd. | 847,160 | ||||||||
13,000 | Osaka Gas Co., Ltd. | 48,597 | ||||||||
47,199 | Snam SpA | 232,811 | ||||||||
30,000 | Toho Gas Co., Ltd. | 147,043 | ||||||||
53,000 | Tokyo Gas Co., Ltd. | 286,044 | ||||||||
| ||||||||||
2,876,637 | ||||||||||
Health Care Equipment & Supplies – 1.6% | ||||||||||
1,585 | Cochlear, Ltd. | 100,010 | ||||||||
5,382 | Coloplast A/S – Class B | 453,072 | ||||||||
501 | Essilor International SA | 55,763 | ||||||||
3,429 | Smith & Nephew PLC | 62,946 | ||||||||
389 | Sonova Holding AG | 57,042 | ||||||||
1,500 | Sysmex Corp. | 66,556 | ||||||||
12,000 | Terumo Corp. | 273,342 | ||||||||
| ||||||||||
1,068,731 | ||||||||||
Health Care Providers & Services – 2.0% | ||||||||||
2,529 | Celesio AG | 81,764 | ||||||||
1,374 | Fresenius Medical Care AG & Co. KGaA | 102,819 | ||||||||
936 | Fresenius SE & Co. KGaA | 48,872 | ||||||||
400 | Miraca Holdings, Inc. | 17,241 | ||||||||
7,961 | Ramsay Health Care, Ltd. | 369,070 | ||||||||
30,204 | Ryman Healthcare, Ltd. | 200,451 | ||||||||
34,279 | Sonic Healthcare, Ltd. | 514,661 | ||||||||
| ||||||||||
1,334,878 | ||||||||||
Hotels, Restaurants & Leisure – 2.8% | ||||||||||
394 | Carnival PLC | 17,788 | ||||||||
19,106 | Compass Group PLC | 325,609 | ||||||||
1,043 | InterContinental Hotels Group PLC | 41,790 | ||||||||
3,800 | McDonald’s Holdings Co. Japan, Ltd. | 83,146 | ||||||||
4,800 | Oriental Land Co., Ltd. | 1,100,919 | ||||||||
4,721 | Tabcorp Holdings, Ltd. | 15,922 | ||||||||
23,319 | Tatts Group, Ltd. | 65,587 | ||||||||
4,011 | Whitbread PLC | 295,963 | ||||||||
| ||||||||||
1,946,724 | ||||||||||
Household Durables – 0.1% | ||||||||||
700 | Casio Computer Co., Ltd. | 10,752 | ||||||||
1,200 | Panasonic Corp. | 14,101 | ||||||||
200 | Rinnai Corp. | 13,469 | ||||||||
20,000 | Techtronic Industries Co. | 64,101 | ||||||||
| ||||||||||
102,423 | ||||||||||
Household Products – 0.6% | ||||||||||
833 | Reckitt Benckiser Group PLC | 67,191 | ||||||||
14,400 | Unicharm Corp. | 346,588 | ||||||||
| ||||||||||
413,779 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Independent Power and Renewable Electricity Producers – 0.4% | ||||||||||
5,800 | Electric Power Development Co., Ltd. | $ | 196,351 | |||||||
56,421 | Meridian Energy, Ltd. | 77,331 | ||||||||
| ||||||||||
273,682 | ||||||||||
Industrial Conglomerates – 0.8% | ||||||||||
26,000 | Hutchison Whampoa, Ltd. | 297,696 | ||||||||
18,000 | Keihan Electric Railway Co., Ltd. | 96,152 | ||||||||
12,000 | Keppel Corp., Ltd. | 80,093 | ||||||||
16,000 | SembCorp Industries, Ltd. | 53,670 | ||||||||
| ||||||||||
527,611 | ||||||||||
Information Technology Services – 0.6% | ||||||||||
52,000 | Fujitsu, Ltd. | 277,043 | ||||||||
1,200 | Nomura Research Institute, Ltd. | 36,853 | ||||||||
600 | NTT Data Corp. | 22,433 | ||||||||
2,400 | Otsuka Corp. | 75,966 | ||||||||
| ||||||||||
412,295 | ||||||||||
Insurance – 1.7% | ||||||||||
5,179 | Admiral Group PLC | 106,046 | ||||||||
8,598 | Aviva PLC | 64,418 | ||||||||
258 | Baloise Holding AG | 32,961 | ||||||||
10,109 | Gjensidige Forsikring ASA | 164,775 | ||||||||
81,478 | Insurance Australia Group, Ltd. | 412,985 | ||||||||
11,796 | Suncorp Group, Ltd. | 134,384 | ||||||||
1,403 | Tryg A/S | 156,891 | ||||||||
216 | Zurich Insurance Group AG | 67,659 | ||||||||
| ||||||||||
1,140,119 | ||||||||||
Leisure Products – 0.4% | ||||||||||
2,500 | Bandai Namco Holdings, Inc. | 53,072 | ||||||||
1,700 | Shimano, Inc. | 219,932 | ||||||||
| ||||||||||
273,004 | ||||||||||
Life Sciences Tools & Services – 0.2% | ||||||||||
1,399 | Lonza Group AG | 157,711 | ||||||||
432 | QIAGEN NV* | 10,115 | ||||||||
| ||||||||||
167,826 | ||||||||||
Machinery – 1.1% | ||||||||||
200 | FANUC Corp. | 33,013 | ||||||||
6,000 | IHI Corp. | 30,469 | ||||||||
5,300 | Komatsu, Ltd. | 117,518 | ||||||||
479 | Kone Oyj – Class B | 21,753 | ||||||||
3,172 | MAN SE | 353,724 | ||||||||
265 | Schindler Holding AG | 38,249 | ||||||||
27,000 | Sumitomo Heavy Industries, Ltd. | 145,125 | ||||||||
700 | THK Co., Ltd. | 16,903 | ||||||||
| ||||||||||
756,754 | ||||||||||
Media – 3.7% | ||||||||||
14,870 | Eutelsat Communications SA | 480,651 | ||||||||
16,500 | Hakuhodo DY Holdings, Inc. | 158,178 | ||||||||
2,139 | Kabel Deutschland Holding AG | 290,856 | ||||||||
2,535 | Reed Elsevier NV | 60,576 | ||||||||
7,704 | Reed Elsevier PLC | 131,055 | ||||||||
22,406 | SES SA (FDR) | 803,632 | ||||||||
146,000 | Singapore Press Holdings, Ltd. | 463,883 | ||||||||
1,348 | Sky PLC | 18,760 | ||||||||
4,400 | Toho Co., Ltd. | 99,855 | ||||||||
| ||||||||||
2,507,446 | ||||||||||
Metals & Mining – 1.2% | ||||||||||
211,913 | Alumina, Ltd.* | 307,017 | ||||||||
14,000 | Hitachi Metals, Ltd. | 238,456 | ||||||||
94,000 | Kobe Steel, Ltd. | 162,632 | ||||||||
2,366 | Newcrest Mining, Ltd. | 21,063 | ||||||||
4,478 | Norsk Hydro ASA | 25,204 | ||||||||
1,258 | Randgold Resources, Ltd. | 85,107 | ||||||||
| ||||||||||
839,479 | ||||||||||
Multi-Utilities – 1.7% | ||||||||||
23,913 | AGL Energy, Ltd. | 259,895 | ||||||||
3,150 | GDF Suez | 73,561 | ||||||||
58,826 | National Grid PLC | 838,510 | ||||||||
| ||||||||||
1,171,966 | ||||||||||
Multiline Retail – 2.4% | ||||||||||
2,100 | Don Quijote Holdings Co., Ltd. | 143,462 | ||||||||
2,700 | Isetan Mitsukoshi Holdings, Ltd. | 33,106 | ||||||||
13,936 | Next PLC | 1,469,731 | ||||||||
| ||||||||||
1,646,299 | ||||||||||
Oil, Gas & Consumable Fuels – 2.1% | ||||||||||
4,680 | BP PLC | 29,713 | ||||||||
12,313 | Caltex Australia, Ltd. | 340,648 | ||||||||
254 | Delek Group, Ltd. | 63,839 | ||||||||
3,800 | Inpex Corp. | 42,169 | ||||||||
817 | Koninklijke Vopak NV | 42,319 | ||||||||
3,559 | Neste Oil Oyj | 86,228 | ||||||||
1,966 | Origin Energy, Ltd. | 18,549 | ||||||||
3,047 | Royal Dutch Shell PLC – Class A | 100,985 | ||||||||
12,313 | Statoil ASA | 215,926 | ||||||||
13,000 | TonenGeneral Sekiyu KK | 111,148 | ||||||||
731 | Total SA | 37,685 | ||||||||
10,781 | Woodside Petroleum, Ltd. | 335,079 | ||||||||
| ||||||||||
1,424,288 | ||||||||||
Personal Products – 0.5% | ||||||||||
8,200 | Kao Corp. | 323,541 | ||||||||
Pharmaceuticals – 8.3% | ||||||||||
31,900 | Astellas Pharma, Inc. | 444,046 | ||||||||
4,649 | AstraZeneca PLC | 326,997 | ||||||||
3,400 | Chugai Pharmaceutical Co., Ltd. | 83,592 | ||||||||
7,000 | Eisai Co., Ltd. | 271,280 | ||||||||
434 | Indivior PLC* | 1,010 | ||||||||
8,000 | Kyowa Hakko Kirin Co., Ltd. | 75,318 | ||||||||
85 | Merck KGaA | 8,063 | ||||||||
12,600 | Mitsubishi Tanabe Pharma Corp. | 184,672 | ||||||||
4,727 | Novartis AG | 434,861 | ||||||||
23,838 | Novo Nordisk A/S – Class B | 1,008,812 | ||||||||
100 | Ono Pharmaceutical Co., Ltd. | 8,863 | ||||||||
246 | Orion Oyj – Class B | 7,636 | ||||||||
11,500 | Otsuka Holdings Co., Ltd. | 344,965 | ||||||||
468 | Roche Holding AG | 126,885 | ||||||||
972 | Sanofi | 88,574 | ||||||||
1,900 | Santen Pharmaceutical Co., Ltd. | 101,697 | ||||||||
10,300 | Shionogi & Co., Ltd. | 266,870 | ||||||||
11,032 | Shire PLC | 780,454 | ||||||||
3,600 | Sumitomo Dainippon Pharma Co., Ltd. | 34,997 | ||||||||
1,800 | Takeda Pharmaceutical Co., Ltd. | 74,705 | ||||||||
15,421 | Teva Pharmaceutical Industries, Ltd. | 887,435 | ||||||||
1,864 | UCB SA | 141,442 | ||||||||
| ||||||||||
5,703,174 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
INTECH International Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Professional Services – 0.1% | ||||||||||
2,590 | Capita PLC | $ | 43,401 | |||||||
Real Estate Investment Trusts (REITs) – 5.2% | ||||||||||
196,000 | CapitaCommercial Trust | 259,513 | ||||||||
632 | Corio NV | 30,840 | ||||||||
37,994 | Dexus Property Group | 214,793 | ||||||||
720 | Fonciere Des Regions | 66,617 | ||||||||
27,380 | Goodman Group | 126,190 | ||||||||
136,366 | GPT Group | 481,658 | ||||||||
4,335 | Intu Properties PLC | 22,414 | ||||||||
89 | Japan Prime Realty Investment Corp. | 309,021 | ||||||||
4 | Japan Real Estate Investment Corp. | 19,254 | ||||||||
144 | Japan Retail Fund Investment Corp. | 303,723 | ||||||||
65,500 | Link REIT | 408,916 | ||||||||
173 | Nippon Prologis REIT, Inc. | 375,115 | ||||||||
76,580 | Scentre Group* | 217,705 | ||||||||
2,759 | Stockland | 9,214 | ||||||||
35,000 | Suntec Real Estate Investment Trust | 51,749 | ||||||||
242 | United Urban Investment Corp. | 380,182 | ||||||||
41,216 | Westfield Corp. | 301,266 | ||||||||
| ||||||||||
3,578,170 | ||||||||||
Real Estate Management & Development – 6.4% | ||||||||||
8,000 | CapitaLand, Ltd. | 19,882 | ||||||||
31,000 | Cheung Kong Holdings, Ltd. | 517,329 | ||||||||
4,500 | Daito Trust Construction Co., Ltd. | 509,600 | ||||||||
1,627 | Deutsche Annington Immobilien SE | 55,337 | ||||||||
1,276 | Deutsche Wohnen AG | 30,314 | ||||||||
9,000 | Hang Lung Properties, Ltd. | 25,085 | ||||||||
47,000 | Henderson Land Development Co., Ltd. | 326,283 | ||||||||
36,000 | Hysan Development Co., Ltd. | 159,979 | ||||||||
28,500 | Kerry Properties, Ltd. | 102,977 | ||||||||
33,511 | Lend Lease Group | 446,082 | ||||||||
122,000 | New World Development Co., Ltd. | 139,562 | ||||||||
20,000 | Sun Hung Kai Properties, Ltd. | 302,461 | ||||||||
38,000 | Swire Pacific, Ltd. – Class A | 492,314 | ||||||||
102,200 | Swire Properties, Ltd. | 301,646 | ||||||||
5,320 | Swiss Prime Site AG | 389,923 | ||||||||
49,000 | UOL Group, Ltd. | 257,211 | ||||||||
2,000 | Wharf Holdings, Ltd. | 14,364 | ||||||||
55,000 | Wheelock & Co., Ltd. | 255,399 | ||||||||
| ||||||||||
4,345,748 | ||||||||||
Road & Rail – 2.8% | ||||||||||
4,926 | Asciano, Ltd. | 24,112 | ||||||||
700 | Central Japan Railway Co. | 105,033 | ||||||||
258,000 | ComfortDelGro Corp., Ltd. | 505,237 | ||||||||
100 | East Japan Railway Co. | 7,493 | ||||||||
5,000 | Hankyu Hanshin Holdings, Inc. | 26,905 | ||||||||
3,000 | Keio Corp. | 21,534 | ||||||||
15,000 | Keisei Electric Railway Co., Ltd. | 182,945 | ||||||||
78,500 | MTR Corp., Ltd. | 320,646 | ||||||||
100,000 | Nagoya Railroad Co., Ltd. | 372,399 | ||||||||
3,000 | Odakyu Electric Railway Co., Ltd. | 26,626 | ||||||||
3,000 | Tobu Railway Co., Ltd. | 12,822 | ||||||||
7,100 | West Japan Railway Co. | 336,496 | ||||||||
| ||||||||||
1,942,248 | ||||||||||
Semiconductor & Semiconductor Equipment – 0.2% | ||||||||||
4,300 | ASM Pacific Technology, Ltd. | 40,885 | ||||||||
133 | ASML Holding NV | 14,247 | ||||||||
700 | Tokyo Electron, Ltd. | 53,130 | ||||||||
| ||||||||||
108,262 | ||||||||||
Software – 1.0% | ||||||||||
8,235 | Dassault Systemes | 501,109 | ||||||||
3,233 | NICE Systems, Ltd. | 163,924 | ||||||||
2,307 | Sage Group PLC | 16,635 | ||||||||
1,000 | Trend Micro, Inc. | 27,364 | ||||||||
| ||||||||||
709,032 | ||||||||||
Specialty Retail – 1.5% | ||||||||||
10,279 | Dixons Carphone PLC | 74,026 | ||||||||
400 | Fast Retailing Co., Ltd. | 145,757 | ||||||||
6,300 | Nitori Holdings Co., Ltd. | 338,609 | ||||||||
1,100 | Shimamura Co., Ltd. | 94,790 | ||||||||
8,000 | USS Co., Ltd. | 123,132 | ||||||||
84,600 | Yamada Denki Co., Ltd. | 282,417 | ||||||||
| ||||||||||
1,058,731 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.4% | ||||||||||
1,200 | Brother Industries, Ltd. | 21,775 | ||||||||
2,100 | Canon, Inc. | 66,711 | ||||||||
2,600 | FUJIFILM Holdings Corp. | 78,478 | ||||||||
3,700 | Konica Minolta, Inc. | 39,917 | ||||||||
2,000 | Seiko Epson Corp. | 84,021 | ||||||||
| ||||||||||
290,902 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.2% | ||||||||||
2,800 | Asics Corp. | 66,925 | ||||||||
3,453 | Hugo Boss AG | 423,888 | ||||||||
102,000 | Li & Fung, Ltd. | 95,401 | ||||||||
944 | Pandora A/S | 76,585 | ||||||||
49,000 | Yue Yuen Industrial Holdings, Ltd. | 176,435 | ||||||||
| ||||||||||
839,234 | ||||||||||
Tobacco – 0.6% | ||||||||||
1,103 | British American Tobacco PLC | 59,923 | ||||||||
5,122 | Imperial Tobacco Group PLC | 224,281 | ||||||||
3,200 | Japan Tobacco, Inc. | 87,880 | ||||||||
1,191 | Swedish Match AB | 37,173 | ||||||||
| ||||||||||
409,257 | ||||||||||
Trading Companies & Distributors – 1.0% | ||||||||||
22,798 | Bunzl PLC | 621,394 | ||||||||
2,000 | ITOCHU Corp. | 21,387 | ||||||||
1,300 | Marubeni Corp. | 7,794 | ||||||||
800 | Mitsubishi Corp. | 14,674 | ||||||||
800 | Mitsui & Co., Ltd. | 10,696 | ||||||||
| ||||||||||
675,945 | ||||||||||
Transportation Infrastructure – 1.2% | ||||||||||
1,897 | Aeroports de Paris | 229,903 | ||||||||
2,452 | Atlantia SpA | 56,945 | ||||||||
19,834 | Groupe Eurotunnel SA | 255,999 | ||||||||
35,619 | Transurban Group | 248,935 | ||||||||
| ||||||||||
791,782 | ||||||||||
Water Utilities – 1.0% | ||||||||||
3,898 | Severn Trent PLC | 120,842 | ||||||||
40,035 | United Utilities Group PLC | 567,264 | ||||||||
| ||||||||||
688,106 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Wireless Telecommunication Services – 0.3% | ||||||||||
2,200 | KDDI Corp. | $ | 137,678 | |||||||
400 | NTT DOCOMO, Inc. | 5,856 | ||||||||
3,383 | Tele2 AB – Class B | 40,982 | ||||||||
| ||||||||||
184,516 | ||||||||||
Total Investments (total cost $67,325,203) – 98.6% | 67,429,659 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.4% | 939,685 | |||||||||
Net Assets – 100% | $ | 68,369,344 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Japan | $ | 18,550,906 | 27 | .5% | ||||
Hong Kong | 9,644,207 | 14 | .3 | |||||
United Kingdom | 8,366,980 | 12 | .4 | |||||
Australia | 7,944,544 | 11 | .8 | |||||
Switzerland | 5,017,478 | 7 | .4 | |||||
Singapore | 3,022,780 | 4 | .5 | |||||
France | 2,782,563 | 4 | .1 | |||||
Israel | 2,561,685 | 3 | .8 | |||||
Spain | 1,941,696 | 2 | .9 | |||||
Denmark | 1,887,002 | 2 | .8 | |||||
Germany | 1,458,082 | 2 | .1 | |||||
New Zealand | 826,612 | 1 | .2 | |||||
Norway | 731,109 | 1 | .1 | |||||
Italy | 668,366 | 1 | .0 | |||||
Finland | 599,607 | 0 | .9 | |||||
Belgium | 515,162 | 0 | .8 | |||||
Netherlands | 411,453 | 0 | .6 | |||||
Ireland | 262,085 | 0 | .4 | |||||
Sweden | 127,864 | 0 | .2 | |||||
Portugal | 109,478 | 0 | .2 | |||||
Total | $ | 67,429,659 | 100 | .0% | ||||
(1) | Formerly named INTECH International Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
MSCI EAFE® Index | 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. | |
FDR | Fixed Depositary Receipt | |
LLC | Limited Liability Company | |
PC | Participation Certificate | |
PLC | Public Limited Company | |
REG | Registered |
* | Non-income producing security. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
INTECH International Managed Volatility Fund | |||||||||||||||||||||
Janus Cash Collateral Fund LLC | 2,157,687 | 4,447,629 | (6,605,316) | – | $ | – | $ | 12,106(1) | $ | – | |||||||||||
Janus Cash Liquidity Fund LLC | 441,146 | 28,356,221 | (28,797,367) | – | – | 235 | – | ||||||||||||||
Total | $ | – | $ | 12,341 | $ | – | |||||||||||||||
(1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
12 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH International Managed Volatility Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
Aerospace & Defense | $ | – | $ | 375,524 | $ | – | |||||
Air Freight & Logistics | – | 92,589 | – | ||||||||
Airlines | – | 286,005 | – | ||||||||
Auto Components | – | 533,208 | – | ||||||||
Automobiles | – | 271,822 | – | ||||||||
Beverages | – | 577,745 | – | ||||||||
Biotechnology | – | 1,429,920 | – | ||||||||
Building Products | – | 16,182 | – | ||||||||
Capital Markets | – | 287,228 | – | ||||||||
Chemicals | – | 1,580,508 | – | ||||||||
Commercial Banks | – | 3,601,252 | – | ||||||||
Commercial Services & Supplies | – | 104,631 | – | ||||||||
Construction & Engineering | – | 1,001,639 | – | ||||||||
Construction Materials | – | 37,766 | – | ||||||||
Containers & Packaging | – | 422,623 | – | ||||||||
Diversified Financial Services | – | 903,453 | – | ||||||||
Diversified Telecommunication Services | – | 3,618,405 | – | ||||||||
Electric Utilities | – | 4,469,988 | – | ||||||||
Electrical Equipment | – | 376,836 | – | ||||||||
Electronic Equipment, Instruments & Components | – | 657,408 | – | ||||||||
Energy Equipment & Services | – | 44,882 | – | ||||||||
Food & Staples Retailing | – | 472,740 | – | ||||||||
Food Products | – | 5,691,315 | – | ||||||||
Gas Utilities | – | 2,876,637 | – | ||||||||
Health Care Equipment & Supplies | – | 1,068,731 | – | ||||||||
Health Care Providers & Services | – | 1,334,878 | – | ||||||||
Hotels, Restaurants & Leisure | – | 1,946,724 | – | ||||||||
Household Durables | – | 102,423 | – | ||||||||
Household Products | – | 413,779 | – | ||||||||
Independent Power and Renewable Electricity Producers | – | 273,682 | – | ||||||||
Industrial Conglomerates | – | 527,611 | – | ||||||||
Information Technology Services | – | 412,295 | – | ||||||||
Insurance | – | 1,140,119 | – | ||||||||
Leisure Products | – | 273,004 | – | ||||||||
Life Sciences Tools & Services | – | 167,826 | – | ||||||||
Machinery | – | 756,754 | – | ||||||||
Media | – | 2,507,446 | – | ||||||||
Metals & Mining | – | 839,479 | – | ||||||||
Multi-Utilities | – | 1,171,966 | – | ||||||||
Multiline Retail | – | 1,646,299 | – | ||||||||
Oil, Gas & Consumable Fuels | – | 1,424,288 | – | ||||||||
Personal Products | – | 323,541 | – | ||||||||
Pharmaceuticals | – | 5,703,174 | – | ||||||||
Professional Services | – | 43,401 | – | ||||||||
Real Estate Investment Trusts (REITs) | – | 3,578,170 | – | ||||||||
Real Estate Management & Development | – | 4,345,748 | – | ||||||||
Road & Rail | – | 1,942,248 | – | ||||||||
Semiconductor & Semiconductor Equipment | – | 108,262 | – | ||||||||
Software | – | 709,032 | – | ||||||||
Specialty Retail | – | 1,058,731 | – | ||||||||
Technology Hardware, Storage & Peripherals | – | 290,902 | – | ||||||||
Textiles, Apparel & Luxury Goods | – | 839,234 | – | ||||||||
Tobacco | – | 409,257 | – | ||||||||
Trading Companies & Distributors | – | 675,945 | – | ||||||||
Transportation Infrastructure | – | 791,782 | – | ||||||||
Water Utilities | – | 688,106 | – | ||||||||
Wireless Telecommunication Services | – | 184,516 | – | ||||||||
Total Assets | $ | – | $ | 67,429,659 | $ | – | |||||
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | INTECH International Managed Volatility Fund(1) | |||
Assets: | ||||
Investments at cost | $ | 67,325,203 | ||
Investments at value | $ | 67,429,659 | ||
Cash denominated in foreign currency(2) | 89,472 | |||
Non-interested Trustees’ deferred compensation | 1,402 | |||
Receivables: | ||||
Investments sold | 7,918,995 | |||
Fund shares sold | 2,802 | |||
Dividends | 76,324 | |||
Foreign dividend tax reclaim | 37,396 | |||
Other assets | 9,409 | |||
Total Assets | 75,565,459 | |||
Liabilities: | ||||
Due to custodian | 2,240,123 | |||
Payables: | ||||
Investments purchased | 4,842,686 | |||
Fund shares repurchased | 34,687 | |||
Advisory fees | 33,410 | |||
Fund administration fees | 607 | |||
Transfer agent fees and expenses | 1,282 | |||
12b-1 Distribution and shareholder servicing fees | 1,541 | |||
Non-interested Trustees’ fees and expenses | 444 | |||
Non-interested Trustees’ deferred compensation fees | 1,402 | |||
Accrued expenses and other payables | 39,933 | |||
Total Liabilities | 7,196,115 | |||
Net Assets | $ | 68,369,344 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 71,148,700 | ||
Undistributed net investment income/(loss)* | (627,817) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (2,244,163) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 92,624 | |||
Total Net Assets | $ | 68,369,344 | ||
Net Assets - Class A Shares | $ | 5,039,982 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 666,387 | |||
Net Asset Value Per Share(3) | $ | 7.56 | ||
Maximum Offering Price Per Share(4) | $ | 8.02 | ||
Net Assets - Class C Shares | $ | 431,835 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 57,536 | |||
Net Asset Value Per Share(3) | $ | 7.51 | ||
Net Assets - Class I Shares | $ | 61,506,341 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,177,400 | |||
Net Asset Value Per Share | $ | 7.52 | ||
Net Assets - Class S Shares | $ | 60,388 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,924 | |||
Net Asset Value Per Share | $ | 7.62 | ||
Net Assets - Class T Shares | $ | 1,330,798 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 177,036 | |||
Net Asset Value Per Share | $ | 7.52 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH International Fund. | |
(2) | Includes cost of $89,482. | |
(3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | INTECH International Managed Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 12,106 | ||
Dividends | 739,060 | |||
Dividends from affiliates | 235 | |||
Other income | 97 | |||
Foreign tax withheld | (60,168) | |||
Total Investment Income | 691,330 | |||
Expenses: | ||||
Advisory fees | 201,251 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 6,641 | |||
Class C Shares | 2,484 | |||
Class S Shares | 80 | |||
Transfer agent administrative fees and expenses: | ||||
Class S Shares | 80 | |||
Class T Shares | 2,272 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 3,889 | |||
Class C Shares | 181 | |||
Class I Shares | 562 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 507 | |||
Class C Shares | 55 | |||
Class I Shares | 1,362 | |||
Class S Shares | 2 | |||
Class T Shares | 75 | |||
Shareholder reports expense | 1,354 | |||
Registration fees | 45,877 | |||
Custodian fees | 15,109 | |||
Professional fees | 28,663 | |||
Non-interested Trustees’ fees and expenses | 679 | |||
Fund administration fees | 3,659 | |||
Other expenses | 4,408 | |||
Total Expenses | 319,190 | |||
Net Expenses | 319,190 | |||
Net Investment Income/(Loss) | 372,140 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 49,348 | |||
Total Net Realized Gain/(Loss) on Investments | 49,348 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (7,833,706) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (7,833,706) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (7,412,218) |
(1) | Formerly named INTECH International Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
INTECH International Managed Volatility Fund(1) | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 372,140 | $ | 1,617,502 | ||||
Net realized gain/(loss) on investments | 49,348 | 8,398,330 | ||||||
Change in unrealized net appreciation/depreciation | (7,833,706) | 4,156,190 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (7,412,218) | 14,172,022 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (89,175) | (39,689) | ||||||
Class C Shares | (5,137) | (1,938) | ||||||
Class I Shares | (1,265,058) | (1,796,718) | ||||||
Class S Shares | (1,098) | (1,270) | ||||||
Class T Shares | (24,096) | (3,678) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (588,211) | (272) | ||||||
Class C Shares | (51,586) | (9) | ||||||
Class I Shares | (7,132,161) | (11,461) | ||||||
Class S Shares | (6,924) | (10) | ||||||
Class T Shares | (167,847) | (26) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (9,331,293) | (1,855,071) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 684,589 | 4,966,221 | ||||||
Class C Shares | 23,700 | 581,716 | ||||||
Class I Shares | 1,836,568 | 5,093,283 | ||||||
Class S Shares | – | – | ||||||
Class T Shares | 590,480 | 2,608,832 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 677,386 | 39,961 | ||||||
Class C Shares | 55,155 | 1,947 | ||||||
Class I Shares | 8,367,123 | 1,807,383 | ||||||
Class S Shares | 8,022 | 1,280 | ||||||
Class T Shares | 190,773 | 3,637 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (441,932) | (491,460) | ||||||
Class C Shares | (59,084) | (194,095) | ||||||
Class I Shares | (2,732,837) | (9,665,704) | ||||||
Class S Shares | – | (71,360) | ||||||
Class T Shares | (1,587,592) | (384,966) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 7,612,351 | 4,296,675 | ||||||
Net Increase/(Decrease) in Net Assets | (9,131,160) | 16,613,626 | ||||||
Net Assets: | ||||||||
Beginning of period | 77,500,504 | 60,886,878 | ||||||
End of period | $ | 68,369,344 | $ | 77,500,504 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (627,817) | $ | 384,607 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH International Fund. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and each | INTECH International Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
year ended July 31 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.66 | $8.07 | $6.79 | $8.10 | $6.16 | $6.56 | $8.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.03(3) | 0.25(3) | 0.22 | 0.12 | 0.66 | 0.13 | 0.16 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.97) | 1.57 | 1.21 | (1.36) | 1.39 | (0.47) | (2.31) | |||||||||||||||||||||||
Total from Investment Operations | (0.94) | 1.82 | 1.43 | (1.24) | 2.05 | (0.34) | (2.15) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.15) | (0.23) | (0.15) | (0.07) | (0.11) | (0.06) | (0.26) | |||||||||||||||||||||||
Distributions (from capital gains)* | (1.01) | –(4) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (1.16) | (0.23) | (0.15) | (0.07) | (0.11) | (0.06) | (0.26) | |||||||||||||||||||||||
Net Asset Value, End of Period | $7.56 | $9.66 | $8.07 | $6.79 | $8.10 | $6.16 | $6.56 | |||||||||||||||||||||||
Total Return** | (9.80)% | 22.74% | 21.27% | (15.33)% | 33.42% | (5.32)% | (23.53)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,040 | $5,342 | $473 | $445 | $526 | $1,684 | $1,836 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,242 | $2,240 | $317 | $452 | $1,910 | $1,900 | $1,632 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.24% | 1.21% | 1.22% | 1.42% | 3.22% | 4.61% | 6.45% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.24% | 1.20% | 1.22% | 1.26% | 1.07%(5) | 0.73%(5) | 0.64%(5) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.64% | 2.69% | 1.26% | 1.72% | 2.05% | 1.87% | 2.62% | |||||||||||||||||||||||
Portfolio Turnover Rate | 153% | 160% | 143% | 140% | 179% | 119% | 115% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and | INTECH International Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
each year ended July 31 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.58 | $8.14 | $6.78 | $8.11 | $6.17 | $6.57 | $8.93 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | –(3)(4) | 0.19(3) | 2.46 | 0.17 | 0.58 | 0.13 | 0.16 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.96) | 1.57 | (0.93) | (1.43) | 1.47 | (0.47) | (2.30) | |||||||||||||||||||||||
Total from Investment Operations | (0.96) | 1.76 | 1.53 | (1.26) | 2.05 | (0.34) | (2.14) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.10) | (0.32) | (0.17) | (0.07) | (0.11) | (0.06) | (0.22) | |||||||||||||||||||||||
Distributions (from capital gains)* | (1.01) | –(4) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (1.11) | (0.32) | (0.17) | (0.07) | (0.11) | (0.06) | (0.22) | |||||||||||||||||||||||
Net Asset Value, End of Period | $7.51 | $9.58 | $8.14 | $6.78 | $8.11 | $6.17 | $6.57 | |||||||||||||||||||||||
Total Return** | (10.10)% | 21.91% | 22.79% | (15.55)% | 33.37% | (5.31)% | (23.61)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $432 | $526 | $113 | $433 | $563 | $1,642 | $1,737 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $490 | $179 | $251 | $574 | $1,877 | $1,827 | $1,552 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.93% | 1.93% | 1.32% | 1.71% | 3.96% | 5.33% | 7.20% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.93% | 1.93% | 1.18% | 1.47% | 1.21%(6) | 0.73%(6) | 0.69%(6) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0%(7) | 2.13% | 1.20% | 1.33% | 1.92% | 1.88% | 2.56% | |||||||||||||||||||||||
Portfolio Turnover Rate | 153% | 160% | 143% | 140% | 179% | 119% | 115% |
* | See “Federal Income Tax” 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) | Formerly named INTECH International Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.25% in 2011, 1.25% in 2010 and 0.93% in 2009 without the waiver of these fees and expenses. | |
(6) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 2.00% in 2011, 2.00% in 2010 and 1.68% in 2009 without the waiver of these fees and expenses. | |
(7) | Less than 0.005%. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | INTECH International Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
June 30 and each year ended July 31 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.63 | $8.03 | $6.77 | $8.06 | $6.14 | $6.55 | $8.98 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.05(3) | 0.21(3) | 0.18 | 0.12 | 0.03 | 0.13 | 0.15 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.97) | 1.63 | 1.28 | (1.35) | 2.00 | (0.48) | (2.30) | |||||||||||||||||||||||
Total from Investment Operations | (0.92) | 1.84 | 1.46 | (1.23) | 2.03 | (0.35) | (2.15) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.18) | (0.24) | (0.20) | (0.06) | (0.11) | (0.06) | (0.28) | |||||||||||||||||||||||
Distributions (from capital gains)* | (1.01) | –(4) | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | – | –(5) | – | |||||||||||||||||||||||
Total Distributions | (1.19) | (0.24) | (0.20) | (0.06) | (0.11) | (0.06) | (0.28) | |||||||||||||||||||||||
Net Asset Value, End of Period | $7.52 | $9.63 | $8.03 | $6.77 | $8.06 | $6.14 | $6.55 | |||||||||||||||||||||||
Total Return** | (9.67)% | 23.21% | 21.78% | (15.18)% | 33.20% | (5.48)% | (23.56)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $61,506 | $69,062 | $59,981 | $35,608 | $20,713 | $1,180 | $2,327 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $64,621 | $66,596 | $42,583 | $29,910 | $1,393 | $2,223 | $1,935 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.83% | 0.81% | 0.92% | 1.13% | 3.08% | 4.68% | 6.34% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.83% | 0.81% | 0.92% | 1.00% | 0.86% | 1.00% | 0.68% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.07% | 2.27% | 1.86% | 2.05% | 2.28% | 1.38% | 2.65% | |||||||||||||||||||||||
Portfolio Turnover Rate | 153% | 160% | 143% | 140% | 179% | 119% | 115% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and each | INTECH International Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
year ended July 31 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.74 | $8.09 | $6.79 | $8.12 | $6.16 | $6.56 | $8.95 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.03(3) | 0.15(3) | 2.47 | 0.10 | 0.70 | 0.13 | 0.16 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.98) | 1.69 | (1.02) | (1.36) | 1.37 | (0.47) | (2.30) | |||||||||||||||||||||||
Total from Investment Operations | (0.95) | 1.84 | 1.45 | (1.26) | 2.07 | (0.34) | (2.14) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.16) | (0.19) | (0.15) | (0.07) | (0.11) | (0.06) | (0.25) | |||||||||||||||||||||||
Distributions (from capital gains)* | (1.01) | –(4) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (1.17) | (0.19) | (0.15) | (0.07) | (0.11) | (0.06) | (0.25) | |||||||||||||||||||||||
Net Asset Value, End of Period | $7.62 | $9.74 | $8.09 | $6.79 | $8.12 | $6.16 | $6.56 | |||||||||||||||||||||||
Total Return** | (9.85)% | 22.92% | 21.48% | (15.54)% | 33.75% | (5.32)% | (23.54)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $60 | $67 | $118 | $421 | $498 | $1,642 | $1,733 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $63 | $86 | $254 | $432 | $1,870 | $1,831 | $1,551 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.34% | 1.33% | 1.48% | 1.66% | 3.46% | 4.83% | 6.66% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.34% | 1.13% | 1.29% | 1.44% | 1.07%(6) | 0.72%(6) | 0.65%(6) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.56% | 1.69% | 1.09% | 1.52% | 2.05% | 1.89% | 2.60% | |||||||||||||||||||||||
Portfolio Turnover Rate | 153% | 160% | 143% | 140% | 179% | 119% | 115% |
* | See “Federal Income Tax” 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) | Formerly named INTECH International Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(6) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.50% in 2011, 1.50% in 2010 and 1.18% in 2009 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
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Class T Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH International Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009(3) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.60 | $8.01 | $6.77 | $8.09 | $6.16 | $6.55 | $5.93 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.04(4) | 0.32(4) | 0.08 | 0.06 | 0.17 | 0.12 | –(5) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.97) | 1.49 | 1.35 | (1.31) | 1.87 | (0.45) | 0.62 | |||||||||||||||||||||||
Total from Investment Operations | (0.93) | 1.81 | 1.43 | (1.25) | 2.04 | (0.33) | 0.62 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.14) | (0.22) | (0.19) | (0.07) | (0.11) | (0.06) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (1.01) | –(5) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (1.15) | (0.22) | (0.19) | (0.07) | (0.11) | (0.06) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $7.52 | $9.60 | $8.01 | $6.77 | $8.09 | $6.16 | $6.55 | |||||||||||||||||||||||
Total Return** | (9.72)% | 22.78% | 21.30% | (15.47)% | 33.26% | 5.17% | 10.46% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,331 | $2,504 | $202 | $59 | $45 | $10 | $1 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,796 | $1,121 | $70 | $40 | $29 | $8 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.09% | 1.12% | 1.27% | 1.41% | 2.41% | 4.81% | 13.96% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.09% | 1.12% | 1.26% | 1.25% | 0.54%(6) | 0.31%(6) | 1.25% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.79% | 3.44% | 1.24% | 1.80% | 3.12% | 2.47% | (0.35)% | |||||||||||||||||||||||
Portfolio Turnover Rate | 153% | 160% | 143% | 140% | 179% | 119% | 115% |
* | See “Federal Income Tax” 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) | Formerly named INTECH International Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(4) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(5) | Less than $0.005 on a per share basis. | |
(6) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.25% in 2011 and 1.25% in 2010 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
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 International Managed Volatility Fund (formerly named INTECH International Fund) (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not
20 | DECEMBER 31, 2014
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opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The following table shows the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Transfers Out | ||||||
of Level 1 | ||||||
Fund | to Level 2 | |||||
INTECH International Managed Volatility Fund | $ | 43,974,637 | ||||
Financial assets were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current period and no factor was applied at the end of the prior fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with
22 | DECEMBER 31, 2014
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the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. 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 as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
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 on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH International Managed Volatility Fund | All Asset Levels | 0.55 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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 (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
INTECH International Managed Volatility Fund | 0.95 | 1.00 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that
24 | DECEMBER 31, 2014
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may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/
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Notes to Financial Statements (unaudited) (continued)
(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH International Managed Volatilty Fund | $ | 6 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH International Managed Volatility Fund | $ | 89 | ||||
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
INTECH International Managed Volatility Fund - Class A Shares | – | % | – | % | ||||||
INTECH International Managed Volatility Fund - Class C Shares | – | – | ||||||||
INTECH International Managed Volatility Fund - Class I Shares | 98 | 88 | ||||||||
INTECH International Managed Volatility Fund - Class S Shares | 100 | 0 | ||||||||
INTECH International Managed Volatility Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
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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, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships, and investments in passive foreign investment companies.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH International Managed Volatility Fund | $ | 67,928,734 | $ | 1,421,681 | $ | (1,920,756) | $ | (499,075) | ||||||||||
5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | INTECH International Managed Volatility Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 75,629 | 546,197 | ||||||||
Reinvested dividends and distributions | 89,130 | 4,445 | ||||||||
Shares repurchased | (51,184) | (56,480) | ||||||||
Net Increase/(Decrease) in Fund Shares | 113,575 | 494,162 | ||||||||
Shares Outstanding, Beginning of Period | 552,812 | 58,650 | ||||||||
Shares Outstanding, End of Period | 666,387 | 552,812 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 2,457 | 61,670 | ||||||||
Reinvested dividends and distributions | 7,315 | 218 | ||||||||
Shares repurchased | (7,146) | (20,838) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,626 | 41,050 | ||||||||
Shares Outstanding, Beginning of Period | 54,910 | 13,860 | ||||||||
Shares Outstanding, End of Period | 57,536 | 54,910 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 206,258 | 558,826 | ||||||||
Reinvested dividends and distributions | 1,106,763 | 201,942 | ||||||||
Shares repurchased | (310,280) | (1,056,819) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,002,741 | (296,051) | ||||||||
Shares Outstanding, Beginning of Period | 7,174,659 | 7,470,710 | ||||||||
Shares Outstanding, End of Period | 8,177,400 | 7,174,659 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 1,047 | 141 | ||||||||
Shares repurchased | – | (7,782) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,047 | (7,641) | ||||||||
Shares Outstanding, Beginning of Period | 6,877 | 14,518 | ||||||||
Shares Outstanding, End of Period | 7,924 | 6,877 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 66,698 | 277,905 | ||||||||
Reinvested dividends and distributions | 25,268 | 407 | ||||||||
Shares repurchased | (175,771) | (42,667) | ||||||||
Net Increase/(Decrease) in Fund Shares | (83,805) | 235,645 | ||||||||
Shares Outstanding, Beginning of Period | 260,841 | 25,196 | ||||||||
Shares Outstanding, End of Period | 177,036 | 260,841 |
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Notes to Financial Statements (unaudited) (continued)
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 International Managed Volatility Fund | $ | 110,447,065 | $ | 112,101,318 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
Janus Investment Fund | 41
Table of Contents
Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
42 | DECEMBER 31, 2014
Table of Contents
Notes
Janus Investment Fund | 43
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Notes
44 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 45
Table of Contents
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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81209 | 125-24-93014 02-15 |
Table of Contents
semiannual report
December 31, 2014
INTECH U.S. Core Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Table of Contents
INTECH U.S. Core Fund
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Table of Contents
INTECH U.S. Core Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, INTECH U.S. Core Fund’s Class T Shares returned 6.27%. This compares to the 6.12% return posted by the S&P 500 Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investing process seeks to build a more efficient portfolio than its benchmark, with returns in excess of the index while maintaining benchmark-like risk. The process does not attempt to predict the direction of the market, nor does it have a view of any particular company in the portfolio. Instead, it employs a proprietary optimization process to build portfolios with the potential to outperform the index by capturing stocks’ natural volatility.
Within specific risk controls, INTECH’s disciplined mathematical process establishes target proportional weightings for stocks in the Fund as a result of an optimization routine. Once the weights are determined and the portfolio is constructed, it is rebalanced and re-optimized on a periodic basis. By limiting the distance any one stock position can deviate from its benchmark weight, INTECH’s process attempts to manage the relative risk of the portfolio. We believe that instituting an investment process aimed at providing consistent, positive excess returns at benchmark-like risk, will allow us to meet our shareholders’ objectives while minimizing the risk of significant underperformance relative to the benchmark.
PERFORMANCE REVIEW
The U.S. equity market as measured by the S&P 500 Index posted a positive return of 6.12% for the six-month period ended December 31, 2014. INTECH U.S. Core Fund’s Class T Shares outperformed the S&P 500 Index over the period and generated a return of 6.27%.
While diversity was decreasing for most of the period, a sharp reversal in the fourth quarter reflected a change in the distribution of capital, in which smaller stocks outperformed larger stocks in the index. INTECH U.S. Core Fund, which has tended to overweight smaller cap stocks as they provide more relative volatility capture potential, benefited from an overall rise in market diversity in the latter part of the period.
The strategy’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. Over the past six months, the Fund’s average active sector positioning detracted from the strategy’s relative return. Specifically, an underweight position to the information technology sector detracted from relative performance. However, the Fund benefited from a positive selection effect within the industrials sector. The overall positive selection effect more than offset the adverse sector positioning and the Fund outperformed the S&P 500 Index over the period.
OUTLOOK
INTECH attempts to generate a targeted excess return at the least amount of tracking error through all market cycles regardless of the direction the market moves or the magnitude of the move. While we may experience short periods of underperformance, we aim to exceed the benchmark over a three- to five-year time horizon.
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
Going forward, INTECH will continue to implement its mathematical investment process in a disciplined and deliberate manner, with risk management remaining the hallmark of the investment process. At the same time, INTECH continues to make marginal improvements to the process, seeking an efficient portfolio that offers better long-term results than its benchmark regardless of the market’s direction.
Thank you for your investment in INTECH U.S. Core Fund.
Janus Investment Fund | 1
Table of Contents
INTECH U.S. Core Fund (unaudited)
INTECH U.S. Core Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Anthem, Inc. Health Care Providers & Services | 2.5% | |||
LyondellBasell Industries NV – Class A Chemicals | 2.4% | |||
Lockheed Martin Corp. Aerospace & Defense | 2.0% | |||
Facebook, Inc. – Class A Internet Software & Services | 2.0% | |||
Southwest Airlines Co. Airlines | 2.0% | |||
10.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29p04.gif)
*Includes Cash Equivalents and Other (0.2)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
INTECH U.S. Core Fund – Class A Shares | |||||||||||||
NAV | 6.24% | 13.38% | 16.33% | 7.97% | 10.66% | 0.97% | |||||||
MOP | 0.12% | 6.84% | 14.95% | 7.33% | 10.11% | ||||||||
INTECH U.S. Core Fund – Class C Shares | |||||||||||||
NAV | 5.85% | 12.56% | 15.45% | 7.16% | 9.83% | 1.75% | |||||||
CDSC | 4.89% | 11.56% | 15.45% | 7.16% | 9.83% | ||||||||
INTECH U.S. Core Fund – Class D Shares(1) | 6.40% | 13.60% | 16.55% | 8.23% | 10.94% | 0.80% | |||||||
INTECH U.S. Core Fund – Class I Shares | 6.41% | 13.72% | 16.69% | 8.19% | 10.90% | 0.68% | |||||||
INTECH U.S. Core Fund – Class N Shares | 6.27% | 13.46% | 16.45% | 8.19% | 10.90% | 0.64% | |||||||
INTECH U.S. Core Fund – Class S Shares | 6.18% | 13.22% | 16.18% | 7.79% | 10.47% | 1.14% | |||||||
INTECH U.S. Core Fund – Class T Shares | 6.27% | 13.46% | 16.45% | 8.19% | 10.90% | 0.89% | |||||||
S&P 500® Index | 6.12% | 13.69% | 15.45% | 7.67% | 10.08% | ||||||||
Morningstar Quartile – Class T Shares | – | 1st | 1st | 2nd | 1st | ||||||||
Morningstar Ranking – based on total returns for Large Growth Funds | – | 272/1,760 | 143/1,538 | 473/1,331 | 304/1,260 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
Janus Investment Fund | 3
Table of Contents
INTECH U.S. Core Fund (unaudited)
The expense ratios for Class N Shares are estimated.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
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.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on October 28, 2014. Performance shown for periods prior to October 28, 2014, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – February 28, 2003 | |
(1) | Closed to new investors. |
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)* | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,062.40 | $ | 4.57 | $ | 1,000.00 | $ | 1,020.77 | $ | 4.48 | 0.88% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,058.50 | $ | 8.56 | $ | 1,000.00 | $ | 1,016.89 | $ | 8.39 | 1.65% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,064.00 | $ | 3.75 | $ | 1,000.00 | $ | 1,021.58 | $ | 3.67 | 0.72% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,064.10 | $ | 3.12 | $ | 1,000.00 | $ | 1,022.18 | $ | 3.06 | 0.60% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,043.40 | $ | 0.95 | $ | 1,000.00 | $ | 1,022.58 | $ | 2.65 | 0.52% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,061.80 | $ | 5.56 | $ | 1,000.00 | $ | 1,019.81 | $ | 5.45 | 1.07% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,062.70 | $ | 4.21 | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81% | |||||||||||||||||
* | Actual Expenses Paid During Period for Class N Shares reflect only the inception period for the Fund (October 28, 2014 to December 31, 2014) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 65/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. For all other share classes, the Actual Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). | |
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 5
Table of Contents
INTECH U.S. Core Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 99.5% | ||||||||||
Aerospace & Defense – 3.5% | ||||||||||
74,600 | Lockheed Martin Corp. | $ | 14,365,722 | |||||||
19,800 | Northrop Grumman Corp. | 2,918,322 | ||||||||
73,200 | Raytheon Co. | 7,918,044 | ||||||||
| ||||||||||
25,202,088 | ||||||||||
Air Freight & Logistics – 0.7% | ||||||||||
72,300 | CH Robinson Worldwide, Inc. | 5,414,547 | ||||||||
Airlines – 2.0% | ||||||||||
333,700 | Southwest Airlines Co. | 14,122,184 | ||||||||
Beverages – 2.1% | ||||||||||
3,200 | Coca-Cola Co. | 135,104 | ||||||||
600 | Constellation Brands, Inc. – Class A* | 58,902 | ||||||||
101,200 | Dr Pepper Snapple Group, Inc. | 7,254,016 | ||||||||
63,500 | Molson Coors Brewing Co. – Class B | 4,732,020 | ||||||||
32,800 | PepsiCo, Inc. | 3,101,568 | ||||||||
| ||||||||||
15,281,610 | ||||||||||
Biotechnology – 1.9% | ||||||||||
136,300 | Gilead Sciences, Inc.* | 12,847,638 | ||||||||
2,800 | Regeneron Pharmaceuticals, Inc.* | 1,148,700 | ||||||||
| ||||||||||
13,996,338 | ||||||||||
Capital Markets – 2.3% | ||||||||||
57,700 | Bank of New York Mellon Corp. | 2,340,889 | ||||||||
23,500 | Goldman Sachs Group, Inc. | 4,555,005 | ||||||||
4,900 | Invesco, Ltd. | 193,648 | ||||||||
62,100 | Morgan Stanley | 2,409,480 | ||||||||
85,300 | Northern Trust Corp. | 5,749,220 | ||||||||
14,300 | State Street Corp. | 1,122,550 | ||||||||
| ||||||||||
16,370,792 | ||||||||||
Chemicals – 5.0% | ||||||||||
9,200 | Air Products & Chemicals, Inc. | 1,326,916 | ||||||||
23,400 | Airgas, Inc. | 2,695,212 | ||||||||
10,800 | Dow Chemical Co. | 492,588 | ||||||||
43,300 | Ecolab, Inc. | 4,525,716 | ||||||||
21,600 | International Flavors & Fragrances, Inc. | 2,189,376 | ||||||||
217,500 | LyondellBasell Industries NV – Class A | 17,267,325 | ||||||||
56,600 | Sigma-Aldrich Corp. | 7,769,482 | ||||||||
| ||||||||||
36,266,615 | ||||||||||
Commercial Banks – 1.3% | ||||||||||
44,700 | BB&T Corp. | 1,738,383 | ||||||||
28,800 | M&T Bank Corp. | 3,617,856 | ||||||||
13,400 | U.S. Bancorp | 602,330 | ||||||||
59,080 | Wells Fargo & Co. | 3,238,766 | ||||||||
| ||||||||||
9,197,335 | ||||||||||
Commercial Services & Supplies – 2.1% | ||||||||||
27,000 | ADT Corp.# | 978,210 | ||||||||
48,900 | Cintas Corp. | 3,835,716 | ||||||||
120,900 | Republic Services, Inc. | 4,866,225 | ||||||||
102,800 | Waste Management, Inc. | 5,275,696 | ||||||||
| ||||||||||
14,955,847 | ||||||||||
Communications Equipment – 0.3% | ||||||||||
18,200 | F5 Networks, Inc.* | 2,374,463 | ||||||||
Consumer Finance – 2.3% | ||||||||||
76,900 | Capital One Financial Corp. | 6,348,095 | ||||||||
145,800 | Discover Financial Services | 9,548,442 | ||||||||
41,300 | Navient Corp. | 892,493 | ||||||||
| ||||||||||
16,789,030 | ||||||||||
Containers & Packaging – 0.5% | ||||||||||
55,500 | Ball Corp. | 3,783,435 | ||||||||
Diversified Financial Services – 2.2% | ||||||||||
77,500 | CME Group, Inc. | 6,870,375 | ||||||||
41,400 | McGraw Hill Financial, Inc. | 3,683,772 | ||||||||
27,100 | Moody’s Corp. | 2,596,451 | ||||||||
56,700 | NASDAQ OMX Group, Inc. | 2,719,332 | ||||||||
| ||||||||||
15,869,930 | ||||||||||
Diversified Telecommunication Services – 1.6% | ||||||||||
224,100 | CenturyLink, Inc. | 8,869,878 | ||||||||
348,700 | Windstream Holdings, Inc.# | 2,873,288 | ||||||||
| ||||||||||
11,743,166 | ||||||||||
Electric Utilities – 3.0% | ||||||||||
7,900 | American Electric Power Co., Inc. | 479,688 | ||||||||
12,712 | Duke Energy Corp. | 1,061,960 | ||||||||
33,400 | Edison International | 2,187,032 | ||||||||
91,600 | Entergy Corp. | 8,013,168 | ||||||||
48,500 | Exelon Corp. | 1,798,380 | ||||||||
10,100 | NextEra Energy, Inc. | 1,073,529 | ||||||||
140,300 | Pepco Holdings, Inc. | 3,778,279 | ||||||||
26,200 | PPL Corp. | 951,846 | ||||||||
51,200 | Southern Co. | 2,514,432 | ||||||||
4,900 | Xcel Energy, Inc. | 176,008 | ||||||||
| ||||||||||
22,034,322 | ||||||||||
Energy Equipment & Services – 1.2% | ||||||||||
137,400 | National Oilwell Varco, Inc. | 9,003,822 | ||||||||
Food & Staples Retailing – 2.7% | ||||||||||
900 | Costco Wholesale Corp. | 127,575 | ||||||||
85,400 | CVS Caremark Corp. | 8,224,874 | ||||||||
115,100 | Kroger Co. | 7,390,571 | ||||||||
115,800 | Safeway, Inc. | 4,066,896 | ||||||||
| ||||||||||
19,809,916 | ||||||||||
Food Products – 2.3% | ||||||||||
90,700 | Archer-Daniels-Midland Co. | 4,716,400 | ||||||||
187,900 | ConAgra Foods, Inc. | 6,817,012 | ||||||||
10,700 | Hormel Foods Corp. | 557,470 | ||||||||
1,800 | Keurig Green Mountain, Inc. | 238,311 | ||||||||
40,300 | Mead Johnson Nutrition Co. | 4,051,762 | ||||||||
| ||||||||||
16,380,955 | ||||||||||
Gas Utilities – 0.1% | ||||||||||
14,600 | AGL Resources, Inc. | 795,846 | ||||||||
Health Care Equipment & Supplies – 1.9% | ||||||||||
5,500 | Becton Dickinson and Co. | 765,380 | ||||||||
103,400 | CareFusion Corp.* | 6,135,756 | ||||||||
53,800 | Edwards Lifesciences Corp.* | 6,853,044 | ||||||||
400 | Intuitive Surgical, Inc.* | 211,576 | ||||||||
| ||||||||||
13,965,756 | ||||||||||
Health Care Providers & Services – 7.9% | ||||||||||
57,263 | Aetna, Inc. | 5,086,672 | ||||||||
104,100 | AmerisourceBergen Corp. | 9,385,656 | ||||||||
142,300 | Anthem, Inc. | 17,882,841 | ||||||||
89,700 | Cardinal Health, Inc. | 7,241,481 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
6 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Health Care Providers & Services – (continued) | ||||||||||
47,700 | DaVita HealthCare Partners, Inc.* | $ | 3,612,798 | |||||||
600 | Humana, Inc. | 86,178 | ||||||||
25,500 | McKesson Corp. | 5,293,290 | ||||||||
11,600 | Quest Diagnostics, Inc. | 777,896 | ||||||||
54,600 | Tenet Healthcare Corp.* | 2,766,582 | ||||||||
47,600 | Universal Health Services, Inc. – Class B | 5,295,976 | ||||||||
| ||||||||||
57,429,370 | ||||||||||
Health Care Technology – 0.1% | ||||||||||
8,500 | Cerner Corp.* | 549,610 | ||||||||
Hotels, Restaurants & Leisure – 3.1% | ||||||||||
14,700 | Chipotle Mexican Grill, Inc.* | 10,062,297 | ||||||||
115,500 | Marriott International, Inc. – Class A | 9,012,465 | ||||||||
41,900 | Wyndham Worldwide Corp. | 3,593,344 | ||||||||
| ||||||||||
22,668,106 | ||||||||||
Household Durables – 0.6% | ||||||||||
7,400 | Leggett & Platt, Inc. | 315,314 | ||||||||
108,300 | Newell Rubbermaid, Inc. | 4,125,147 | ||||||||
| ||||||||||
4,440,461 | ||||||||||
Household Products – 0.1% | ||||||||||
5,500 | Clorox Co. | 573,155 | ||||||||
Information Technology Services – 1.0% | ||||||||||
3,500 | Automatic Data Processing, Inc. | 291,795 | ||||||||
15,500 | Fidelity National Information Services, Inc. | 964,100 | ||||||||
6,500 | Paychex, Inc. | 300,105 | ||||||||
418,700 | Xerox Corp. | 5,803,182 | ||||||||
| ||||||||||
7,359,182 | ||||||||||
Insurance – 1.6% | ||||||||||
21,400 | Allstate Corp. | 1,503,350 | ||||||||
28,400 | Aon PLC | 2,693,172 | ||||||||
41,000 | Marsh & McLennan Cos., Inc. | 2,346,840 | ||||||||
55,600 | Principal Financial Group, Inc. | 2,887,864 | ||||||||
16,700 | Travelers Cos., Inc. | 1,767,695 | ||||||||
7,900 | XL Group PLC | 271,523 | ||||||||
| ||||||||||
11,470,444 | ||||||||||
Internet & Catalog Retail – 1.0% | ||||||||||
21,200 | Netflix, Inc.* | 7,242,132 | ||||||||
Internet Software & Services – 2.0% | ||||||||||
181,200 | Facebook, Inc. – Class A* | 14,137,224 | ||||||||
1,400 | VeriSign, Inc. | 79,800 | ||||||||
| ||||||||||
14,217,024 | ||||||||||
Leisure Products – 0% | ||||||||||
3,900 | Hasbro, Inc. | 214,461 | ||||||||
Life Sciences Tools & Services – 0% | ||||||||||
700 | Thermo Fisher Scientific, Inc. | 87,703 | ||||||||
Media – 2.0% | ||||||||||
16,800 | Cablevision Systems Corp. – Class A# | 346,752 | ||||||||
19,600 | DIRECTV* | 1,699,320 | ||||||||
37,400 | Time Warner Cable, Inc. | 5,687,044 | ||||||||
36,600 | Time Warner, Inc. | 3,126,372 | ||||||||
36,900 | Walt Disney Co. | 3,475,611 | ||||||||
| ||||||||||
14,335,099 | ||||||||||
Metals & Mining – 1.5% | ||||||||||
475,700 | Alcoa, Inc. | 7,511,303 | ||||||||
192,100 | Newmont Mining Corp. | 3,630,690 | ||||||||
| ||||||||||
11,141,993 | ||||||||||
Multi-Utilities – 1.9% | ||||||||||
17,600 | CMS Energy Corp. | 611,600 | ||||||||
25,000 | Consolidated Edison, Inc. | 1,650,250 | ||||||||
5,400 | DTE Energy Co. | 466,398 | ||||||||
6,700 | Integrys Energy Group, Inc. | 521,595 | ||||||||
124,700 | NiSource, Inc. | 5,289,774 | ||||||||
45,600 | Sempra Energy | 5,078,016 | ||||||||
17,200 | TECO Energy, Inc. | 352,428 | ||||||||
| ||||||||||
13,970,061 | ||||||||||
Multiline Retail – 1.3% | ||||||||||
83,600 | Kohl’s Corp. | 5,102,944 | ||||||||
9,200 | Macy’s, Inc. | 604,900 | ||||||||
2,400 | Nordstrom, Inc. | 190,536 | ||||||||
46,600 | Target Corp. | 3,537,406 | ||||||||
| ||||||||||
9,435,786 | ||||||||||
Oil, Gas & Consumable Fuels – 3.3% | ||||||||||
1,900 | Cimarex Energy Co. | 201,400 | ||||||||
46,100 | ConocoPhillips | 3,183,666 | ||||||||
74,200 | Hess Corp. | 5,477,444 | ||||||||
96,900 | Marathon Oil Corp. | 2,741,301 | ||||||||
47,300 | Phillips 66 | 3,391,410 | ||||||||
38,900 | Spectra Energy Corp. | 1,412,070 | ||||||||
166,800 | Williams Cos., Inc. | 7,495,992 | ||||||||
| ||||||||||
23,903,283 | ||||||||||
Pharmaceuticals – 4.9% | ||||||||||
42,302 | Actavis PLC* | 10,888,958 | ||||||||
11,600 | Allergan, Inc. | 2,466,044 | ||||||||
56,500 | Eli Lilly & Co. | 3,897,935 | ||||||||
63,700 | Hospira, Inc.* | 3,901,625 | ||||||||
57,000 | Mallinckrodt PLC* | 5,644,710 | ||||||||
206,400 | Zoetis, Inc. | 8,881,392 | ||||||||
| ||||||||||
35,680,664 | ||||||||||
Professional Services – 0.5% | ||||||||||
8,100 | Dun & Bradstreet Corp. | 979,776 | ||||||||
9,300 | Equifax, Inc. | 752,091 | ||||||||
30,200 | Nielsen NV | 1,350,846 | ||||||||
12,600 | Robert Half International, Inc. | 735,588 | ||||||||
| ||||||||||
3,818,301 | ||||||||||
Real Estate Investment Trusts (REITs) – 4.8% | ||||||||||
54,200 | American Tower Corp. | 5,357,670 | ||||||||
70,700 | Apartment Investment & Management Co. – Class A | 2,626,505 | ||||||||
39,200 | AvalonBay Communities, Inc. | 6,404,888 | ||||||||
5,200 | Boston Properties, Inc. | 669,188 | ||||||||
50,300 | Crown Castle International Corp. | 3,958,610 | ||||||||
107,300 | Equity Residential | 7,708,432 | ||||||||
19,900 | Essex Property Trust, Inc. | 4,111,340 | ||||||||
40,300 | Host Hotels & Resorts, Inc. | 957,931 | ||||||||
4,200 | Macerich Co. | 350,322 | ||||||||
14,600 | Vornado Realty Trust | 1,718,566 | ||||||||
21,300 | Weyerhaeuser Co. | 764,457 | ||||||||
| ||||||||||
34,627,909 | ||||||||||
Road & Rail – 5.1% | ||||||||||
214,900 | CSX Corp. | 7,785,827 | ||||||||
58,000 | Kansas City Southern | 7,077,740 | ||||||||
107,100 | Norfolk Southern Corp. | 11,739,231 | ||||||||
84,800 | Union Pacific Corp. | 10,102,224 | ||||||||
| ||||||||||
36,705,022 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH U.S. Core Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Semiconductor & Semiconductor Equipment – 5.1% | ||||||||||
61,100 | Avago Technologies, Ltd. | $ | 6,146,049 | |||||||
193,000 | Broadcom Corp. – Class A | 8,362,690 | ||||||||
92,000 | Intel Corp. | 3,338,680 | ||||||||
65,500 | KLA-Tencor Corp. | 4,605,960 | ||||||||
60,900 | Lam Research Corp. | 4,831,806 | ||||||||
272,400 | Micron Technology, Inc.* | 9,536,724 | ||||||||
| ||||||||||
36,821,909 | ||||||||||
Software – 1.4% | ||||||||||
65,800 | Citrix Systems, Inc.* | 4,198,040 | ||||||||
24,800 | Intuit, Inc. | 2,286,312 | ||||||||
10,000 | Red Hat, Inc.* | 691,400 | ||||||||
108,900 | Symantec Corp. | 2,793,829 | ||||||||
| ||||||||||
9,969,581 | ||||||||||
Specialty Retail – 3.0% | ||||||||||
125,800 | Best Buy Co., Inc. | 4,903,684 | ||||||||
3,100 | GameStop Corp. – Class A# | 104,780 | ||||||||
77,100 | Home Depot, Inc. | 8,093,187 | ||||||||
72,200 | L Brands, Inc. | 6,248,910 | ||||||||
3,800 | O’Reilly Automotive, Inc.* | 731,956 | ||||||||
33,000 | Staples, Inc. | 597,960 | ||||||||
35,600 | Urban Outfitters, Inc.* | 1,250,628 | ||||||||
| ||||||||||
21,931,105 | ||||||||||
Technology Hardware, Storage & Peripherals – 2.8% | ||||||||||
3,600 | Apple, Inc. | 397,368 | ||||||||
86,600 | EMC Corp. | 2,575,484 | ||||||||
107,700 | NetApp, Inc. | 4,464,165 | ||||||||
74,200 | SanDisk Corp. | 7,270,116 | ||||||||
47,700 | Western Digital Corp. | 5,280,390 | ||||||||
| ||||||||||
19,987,523 | ||||||||||
Textiles, Apparel & Luxury Goods – 2.4% | ||||||||||
21,300 | Ralph Lauren Corp. | 3,943,908 | ||||||||
66,700 | Under Armour, Inc. – Class A* | 4,528,930 | ||||||||
122,800 | VF Corp. | 9,197,720 | ||||||||
| ||||||||||
17,670,558 | ||||||||||
Thrifts & Mortgage Finance – 0.4% | ||||||||||
113,200 | Hudson City Bancorp, Inc. | 1,145,584 | ||||||||
118,900 | People’s United Financial, Inc. | 1,804,902 | ||||||||
| ||||||||||
2,950,486 | ||||||||||
Tobacco – 2.6% | ||||||||||
204,700 | Altria Group, Inc. | 10,085,569 | ||||||||
137,300 | Lorillard, Inc. | 8,641,662 | ||||||||
| ||||||||||
18,727,231 | ||||||||||
Trading Companies & Distributors – 0.1% | ||||||||||
4,700 | United Rentals, Inc.* | 479,447 | ||||||||
Total Common Stocks (cost $649,390,446) | 721,765,603 | |||||||||
Investment Companies – 0.7% | ||||||||||
Money Markets – 0.7% | ||||||||||
5,231,416 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $5,231,416) | 5,231,416 | ||||||||
Investments Purchased with Cash Collateral From Securities Lending – 0.5% | ||||||||||
3,329,388 | Janus Cash Collateral Fund LLC, 0.0984%°°,£ (cost $3,329,388) | 3,329,388 | ||||||||
Total Investments (total cost $657,951,250) – 100.7% | 730,326,407 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.7)% | (4,924,106) | |||||||||
Net Assets – 100% | $ | 725,402,301 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
S&P 500® Index | A commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance. | |
LLC | Limited Liability Company | |
PLC | Public Limited Company |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
# | Loaned security; a portion of the security is on loan at December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
INTECH U.S. Core Fund | |||||||||||||||||||||
Janus Cash Collateral Fund LLC | 27,567,537 | 38,005,644 | (62,243,793) | 3,329,388 | $ | – | $ | 13,924(1) | $ | 3,329,388 | |||||||||||
Janus Cash Liquidity Fund LLC | 3,538,525 | 74,649,891 | (72,957,000) | 5,231,416 | – | 1,947 | 5,231,416 | ||||||||||||||
Total | $ | – | $ | 15,871 | $ | 8,560,804 | |||||||||||||||
(1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH U.S. Core Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 721,765,603 | $ | – | $ | – | |||||
Investment Companies | – | 5,231,416 | – | ||||||||
Investments Purchased with Cash Collateral From Securities Lending | – | 3,329,388 | – | ||||||||
Total Assets | $ | 721,765,603 | $ | 8,560,804 | $ | – | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | INTECH U.S. Core Fund | |||
Assets: | ||||
Investments at cost | $ | 657,951,250 | ||
Unaffiliated investments at value(1) | $ | 721,765,603 | ||
Affiliated investments at value | 8,560,804 | |||
Cash | 85 | |||
Non-interested Trustees’ deferred compensation | 14,890 | |||
Receivables: | ||||
Investments sold | 386,225 | |||
Fund shares sold | 480,074 | |||
Dividends | 1,071,766 | |||
Dividends from affiliates | 390 | |||
Other assets | 9,420 | |||
Total Assets | 732,289,257 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 3,329,388 | |||
Payables: | ||||
Investments purchased | 1,729,328 | |||
Fund shares repurchased | 1,303,913 | |||
Advisory fees | 294,522 | |||
Fund administration fees | 6,339 | |||
Transfer agent fees and expenses | 92,021 | |||
12b-1 Distribution and shareholder servicing fees | 29,313 | |||
Non-interested Trustees’ fees and expenses | 3,992 | |||
Non-interested Trustees’ deferred compensation fees | 14,890 | |||
Accrued expenses and other payables | 83,250 | |||
Total Liabilities | 6,886,956 | |||
Net Assets | $ | 725,402,301 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | INTECH U.S. Core Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 580,162,857 | ||
Undistributed net investment income/(loss)* | (2,000,428) | |||
Undistributed net realized gain/(loss) from investments* | 74,862,161 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 72,377,711 | |||
Total Net Assets | $ | 725,402,301 | ||
Net Assets - Class A Shares | $ | 23,878,800 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,174,969 | |||
Net Asset Value Per Share(2) | $ | 20.32 | ||
Maximum Offering Price Per Share(3) | $ | 21.56 | ||
Net Assets - Class C Shares | $ | 17,879,055 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 884,300 | |||
Net Asset Value Per Share(2) | $ | 20.22 | ||
Net Assets - Class D Shares | $ | 307,247,582 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,108,953 | |||
Net Asset Value Per Share | $ | 20.34 | ||
Net Assets - Class I Shares | $ | 179,447,922 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,823,202 | |||
Net Asset Value Per Share | $ | 20.34 | ||
Net Assets - Class N Shares | $ | 52,804 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,598 | |||
Net Asset Value Per Share | $ | 20.32 | ||
Net Assets - Class S Shares | $ | 40,711,173 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,007,379 | |||
Net Asset Value Per Share | $ | 20.28 | ||
Net Assets - Class T Shares | $ | 156,184,965 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,681,096 | |||
Net Asset Value Per Share | $ | 20.33 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Unaffiliated investments at value include $3,240,095 of securities loaned. See Note 2 in Notes to Financial Statements. | |
(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 Investment Fund | 11
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | INTECH U.S. Core Fund | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 13,924 | ||
Dividends | 7,566,084 | |||
Dividends from affiliates | 1,947 | |||
Other income | 73 | |||
Foreign tax withheld | (4,489) | |||
Total Investment Income | 7,577,539 | |||
Expenses: | ||||
Advisory fees | 1,763,045 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 27,686 | |||
Class C Shares | 79,799 | |||
Class S Shares | 42,219 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 179,056 | |||
Class S Shares | 42,219 | |||
Class T Shares | 192,330 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 6,499 | |||
Class C Shares | 5,488 | |||
Class I Shares | 35,546 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 1,273 | |||
Class C Shares | 1,242 | |||
Class D Shares | 36,074 | |||
Class I Shares | 4,061 | |||
Class S Shares | 238 | |||
Class T Shares | 1,392 | |||
Shareholder reports expense | 65,694 | |||
Registration fees | 73,102 | |||
Custodian fees | 6,576 | |||
Professional fees | 21,959 | |||
Non-interested Trustees’ fees and expenses | 6,561 | |||
Fund administration fees | 35,323 | |||
Other expenses | 20,567 | |||
Total Expenses | 2,647,949 | |||
Net Expenses | 2,647,949 | |||
Net Investment Income/(Loss) | 4,929,590 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | 110,764,780 | |||
Total Net Realized Gain/(Loss) on Investments | 110,764,780 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (72,154,591) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (72,154,591) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 43,539,779 |
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
INTECH U.S. | ||||||||
Core Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014(1) | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 4,929,590 | $ | 4,984,969 | ||||
Net realized gain/(loss) on investments | 110,764,780 | 63,418,240 | ||||||
Change in unrealized net appreciation/depreciation | (72,154,591) | 63,294,707 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 43,539,779 | 131,697,916 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (268,894) | (106,975) | ||||||
Class C Shares | (113,169) | – | ||||||
Class D Shares | (4,032,376) | (1,738,038) | ||||||
Class I Shares | (2,552,408) | (1,141,080) | ||||||
Class N Shares | (790) | N/A | ||||||
Class S Shares | (447,314) | (144,066) | ||||||
Class T Shares | (1,959,455) | (798,297) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (2,063,321) | (709,906) | ||||||
Class C Shares | (1,613,253) | (406,946) | ||||||
Class D Shares | (27,476,602) | (9,598,255) | ||||||
Class I Shares | (16,084,717) | (5,389,027) | ||||||
Class N Shares | (4,713) | N/A | ||||||
Class S Shares | (3,650,313) | (950,584) | ||||||
Class T Shares | (14,157,903) | (4,897,157) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (74,425,228) | (25,880,331) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 5,523,500 | 8,245,172 | ||||||
Class C Shares | 4,281,775 | 4,275,209 | ||||||
Class D Shares | 20,912,157 | 41,263,190 | ||||||
Class I Shares | 16,804,577 | 104,048,932 | ||||||
Class N Shares | 50,000 | N/A | ||||||
Class S Shares | 12,409,101 | 26,799,092 | ||||||
Class T Shares | 17,098,212 | 40,051,072 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 2,280,488 | 798,639 | ||||||
Class C Shares | 1,162,392 | 219,900 | ||||||
Class D Shares | 31,143,810 | 11,208,285 | ||||||
Class I Shares | 18,374,908 | 6,459,372 | ||||||
Class N Shares | 5,503 | N/A | ||||||
Class S Shares | 4,097,031 | 1,094,251 | ||||||
Class T Shares | 15,565,048 | 5,590,656 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (5,536,442) | (6,172,027) | ||||||
Class C Shares | �� | (780,318) | (1,651,898) | |||||
Class D Shares | (17,552,990) | (33,834,242) | ||||||
Class I Shares | (23,194,926) | (33,312,776) | ||||||
Class N Shares | – | N/A | ||||||
Class S Shares | (4,325,628) | (7,489,023) | ||||||
Class T Shares | (17,054,211) | (31,327,767) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets (continued)
INTECH U.S. | ||||||||
Core Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014(1) | 2014 | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 81,263,987 | 136,266,037 | ||||||
Net Increase/(Decrease) in Net Assets | 50,378,538 | 242,083,622 | ||||||
Net Assets: | ||||||||
Beginning of period | 675,023,763 | 432,940,141 | ||||||
End of period | $ | 725,402,301 | $ | 675,023,763 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (2,000,428) | $ | 2,444,388 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Period from October 28, 2014 (inception date) through December 31, 2014 for Class N Shares. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | INTECH U.S. Core Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.27 | $17.66 | $14.72 | $14.31 | $10.72 | $10.56 | $9.26 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.14(3) | 0.14(3) | 0.18 | 0.15 | 0.10 | 0.07 | 0.05 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.19 | 4.34 | 2.96 | 0.39 | 3.58 | 0.16 | 1.25 | |||||||||||||||||||||||
Total from Investment Operations | 1.33 | 4.48 | 3.14 | 0.54 | 3.68 | 0.23 | 1.30 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.26) | (0.11) | (0.20) | (0.13) | (0.09) | (0.07) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (2.28) | (0.87) | (0.20) | (0.13) | (0.09) | (0.07) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.32 | $21.27 | $17.66 | $14.72 | $14.31 | $10.72 | $10.56 | |||||||||||||||||||||||
Total Return** | 6.24% | 25.84% | 21.48% | 3.83% | 34.44% | 2.11% | 14.04% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $23,879 | $22,550 | $16,242 | $13,486 | $14,544 | $11,026 | $13,008 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $21,838 | $18,644 | $13,430 | $13,834 | $13,331 | $12,844 | $14,686 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.88% | 0.97% | 0.98% | 0.99% | 0.98% | 1.15% | 1.25% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.88% | 0.97% | 0.98% | 0.99% | 0.98% | 1.06% | 1.08% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.28% | 0.70% | 1.05% | 1.03% | 0.82% | 0.85% | 1.20% | |||||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% | 111% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Core Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.14 | $17.59 | $14.68 | $14.26 | $10.71 | $10.54 | $9.26 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.06(3) | (0.01)(3) | 0.04 | 0.03 | –(4) | 0.03 | 0.02 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.18 | 4.32 | 2.96 | 0.39 | 3.56 | 0.16 | 1.26 | |||||||||||||||||||||||
Total from Investment Operations | 1.24 | 4.31 | 3.00 | 0.42 | 3.56 | 0.19 | 1.28 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.14) | – | (0.09) | – | (0.01) | (0.02) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (2.16) | (0.76) | (0.09) | – | (0.01) | (0.02) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.22 | $21.14 | $17.59 | $14.68 | $14.26 | $10.71 | $10.54 | |||||||||||||||||||||||
Total Return** | 5.85% | 24.87% | 20.51% | 2.95% | 33.26% | 1.82% | 13.82% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $17,879 | $14,013 | $9,154 | $6,450 | $6,755 | $6,452 | $7,938 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $15,732 | $11,106 | $7,536 | $6,402 | $6,690 | $7,678 | $8,527 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.65% | 1.75% | 1.77% | 1.83% | 1.80% | 1.56% | 2.17% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.65% | 1.75% | 1.77% | 1.83% | 1.80% | 1.56% | 1.83% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.55% | (0.07)% | 0.25% | 0.20% | (0.01)% | 0.35% | 0.44% | |||||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% | 111% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | INTECH U.S. Core Fund | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.29 | $17.67 | $14.74 | $14.32 | $10.74 | $10.95 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.16(2) | 0.17(2) | 0.19 | 0.17 | 0.13 | 0.05 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.21 | 4.35 | 2.97 | 0.39 | 3.59 | (0.26) | ||||||||||||||||||||
Total from Investment Operations | 1.37 | 4.52 | 3.16 | 0.56 | 3.72 | (0.21) | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.30) | (0.14) | (0.23) | (0.14) | (0.14) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | ||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
Total Distributions and Other | (2.32) | (0.90) | (0.23) | (0.14) | (0.14) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $20.34 | $21.29 | $17.67 | $14.74 | $14.32 | $10.74 | ||||||||||||||||||||
Total Return** | 6.40% | 26.02% | 21.62% | 3.96% | 34.74% | (1.92)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $307,248 | $286,019 | $220,548 | $174,853 | $173,097 | $135,712 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $294,306 | $255,973 | $192,611 | $168,338 | $156,479 | $150,392 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.72% | 0.80% | 0.85% | 0.84% | 0.82% | 0.61% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.72% | 0.80% | 0.85% | 0.84% | 0.82% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.44% | 0.87% | 1.17% | 1.20% | 0.96% | 1.22% | ||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | INTECH U.S. Core Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.31 | $17.68 | $14.75 | $14.33 | $10.75 | $10.57 | $9.26 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.20(2) | 0.19 | 0.20 | 0.16 | 0.11 | 0.05 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.20 | 4.35 | 2.99 | 0.37 | 3.57 | 0.16 | 1.26 | |||||||||||||||||||||||
Total from Investment Operations | 1.37 | 4.55 | 3.18 | 0.57 | 3.73 | 0.27 | 1.31 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.32) | (0.16) | (0.25) | (0.15) | (0.15) | 0.09 | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | – | |||||||||||||||||||||||
Total Distributions and Other | (2.34) | (0.92) | (0.25) | (0.15) | (0.15) | (0.09) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.34 | $21.31 | $17.68 | $14.75 | $14.33 | $10.75 | $10.57 | |||||||||||||||||||||||
Total Return** | 6.41% | 26.22% | 21.75% | 4.06% | 34.84% | 2.51% | 14.15% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $179,448 | $174,615 | $71,592 | $50,196 | $55,567 | $50,382 | $45,795 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $179,790 | $147,897 | $56,472 | $52,297 | $53,512 | $51,959 | $49,319 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.60% | 0.68% | 0.75% | 0.72% | 0.72% | 0.53% | 0.80% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.60% | 0.68% | 0.75% | 0.72% | 0.72% | 0.53% | 0.78% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.53% | 1.00% | 1.27% | 1.31% | 1.07% | 1.37% | 1.49% | |||||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% | 111% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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.
16 | DECEMBER 31, 2014
Table of Contents
Class N Shares
INTECH U.S. Core Fund | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(1) | |||||
Net Asset Value, Beginning of Period | $21.73 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.11 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.84 | |||||
Total from Investment Operations | 0.95 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | (0.34) | |||||
Distributions (from capital gains)* | (2.02) | |||||
Total Distributions | (2.36) | |||||
Net Asset Value, End of Period | $20.32 | |||||
Total Return** | 4.34% | |||||
Net Assets, End of Period (in thousands) | $53 | |||||
Average Net Assets for the Period (in thousands) | $52 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.52% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.52% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.70% | |||||
Portfolio Turnover Rate | 87% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Core Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.23 | $17.66 | $14.73 | $14.29 | $10.73 | $10.55 | $9.26 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.12(2) | 0.11(2) | 0.16 | 0.12 | 0.08 | 0.07 | 0.04 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.20 | 4.34 | 2.94 | 0.40 | 3.57 | 0.17 | 1.25 | |||||||||||||||||||||||
Total from Investment Operations | 1.32 | 4.45 | 3.10 | 0.52 | 3.65 | 0.24 | 1.29 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.25) | (0.12) | (0.17) | (0.09) | (0.09) | (0.06) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | 0.01 | –(5) | –(5) | –(5) | |||||||||||||||||||||||
Total Distributions and Other | (2.27) | (0.88) | (0.17) | (0.08) | (0.09) | (0.06) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.28 | $21.23 | $17.66 | $14.73 | $14.29 | $10.73 | $10.55 | |||||||||||||||||||||||
Total Return** | 6.18% | 25.61% | 21.20% | 3.75% | 34.11% | 2.26% | 13.93% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $40,711 | $30,533 | $5,996 | $4,645 | $4,836 | $3,888 | $4,558 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $33,277 | $24,601 | $4,857 | $4,525 | $4,423 | $4,677 | $5,179 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.07% | 1.14% | 1.17% | 1.16% | 1.18% | 1.03% | 1.27% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.07% | 1.14% | 1.17% | 1.16% | 1.18% | 1.02% | 1.25% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.16% | 0.54% | 0.86% | 0.88% | 0.61% | 0.89% | 1.02% | |||||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% | 111% |
* | See “Federal Income Tax” 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 October 28, 2014 (inception date) through December 31, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. | |
(5) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | INTECH U.S. Core Fund | |||||||||||||||||||||||||||||
ended June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.29 | $17.67 | $14.74 | $14.31 | $10.74 | $10.56 | $10.21 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.15(2) | 0.16(2) | 0.18 | 0.15 | 0.12 | 0.12 | 0.18 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 1.19 | 4.34 | 2.97 | 0.40 | 3.58 | 0.14 | 0.46 | |||||||||||||||||||||||
Total from Investment Operations | 1.34 | 4.50 | 3.15 | 0.55 | 3.70 | 0.26 | 0.64 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.12) | (0.22) | (0.12) | (0.13) | (0.08) | (0.29) | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.02) | (0.76) | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | –(3) | |||||||||||||||||||||||
Total Distributions and Other | (2.30) | (0.88) | (0.22) | (0.12) | (0.13) | (0.08) | (0.29) | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.33 | $21.29 | $17.67 | $14.74 | $14.31 | $10.74 | $10.56 | |||||||||||||||||||||||
Total Return** | 6.27% | 25.94% | 21.58% | 3.93% | 34.53% | 2.39% | 6.70% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $156,185 | $147,294 | $109,408 | $83,640 | $74,483 | $58,922 | $222,932 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $151,749 | $129,992 | $92,764 | $75,220 | $66,619 | $140,726 | $215,954 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.81% | 0.89% | 0.92% | 0.91% | 0.92% | 0.79% | 0.91% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.81% | 0.89% | 0.92% | 0.91% | 0.92% | 0.79% | 0.91% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.35% | 0.79% | 1.11% | 1.14% | 0.87% | 1.16% | 1.78% | |||||||||||||||||||||||
Portfolio Turnover Rate | 87% | 59% | 67% | 73% | 93% | 80% | 111% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
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 U.S. Core Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is
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Notes to Financial Statements (unaudited) (continued)
intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
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Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July
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Notes to Financial Statements (unaudited) (continued)
2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
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The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable).
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Deutsche Bank AG | $3,240,095 | $– | $(3,240,095) | $– | ||||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan 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 as permitted by the SEC. 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. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. 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 on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. 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 as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an
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Notes to Financial Statements (unaudited) (continued)
inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
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 on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | 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 or base fee rate, as applicable (expressed as an annual rate).
Base | ||||||
Fund | Fee Rate (%) | |||||
INTECH U.S. Core Fund | 0.50 | |||||
For the 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 U.S. Core Fund | S&P 500® Index | |||||
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 the Fund 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 Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the period ended December 31, 2014 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
INTECH U.S. Core Fund | 0.50 | |||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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). The subadvisory fee paid by Janus Capital to INTECH adjusts up or down based on the Fund’s performance relative to its benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and
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extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
INTECH U.S. Core Fund | 0.80 | 0.75 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder
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Notes to Financial Statements (unaudited) (continued)
service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH U.S. Core Fund | $ | 4,090 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase
26 | DECEMBER 31, 2014
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price or the value of the redemption of the Class A Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
INTECH U.S. Core Fund | $ | 596 | ||||
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH U.S. Core Fund | $ | 816 | ||||
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
INTECH U.S. Core Fund - Class A Shares | - | % | - | % | ||||||
INTECH U.S. Core Fund - Class C Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class D Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class I Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class N Shares | 100 | 0 | ||||||||
INTECH U.S. Core Fund - Class S Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH U.S. Core Fund | $ | 658,198,665 | $ | 80,239,098 | $ | (8,111,356) | $ | 72,127,742 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Losses incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
No Expiration | Accumulated | ||||||||||||||||||
Fund | June 30, 2016 | Short-Term | Long-Term | Capital Losses | |||||||||||||||
INTECH U.S. Core Fund(1) | $(6,794,544) | $– | $– | $(6,794,544) | |||||||||||||||
(1) | Capital loss carryovers subject to annual limitations, $(3,397,272) should be available in the next fiscal year. |
5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | INTECH U.S. Core Fund | |||||||||
and the year ended June 30 | 2014(1) | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 259,147 | 422,423 | ||||||||
Reinvested dividends and distributions | 111,734 | 40,935 | ||||||||
Shares repurchased | (256,161) | (322,668) | ||||||||
Net Increase/(Decrease) in Fund Shares | 114,720 | 140,689 | ||||||||
Shares Outstanding, Beginning of Period | 1,060,249 | 919,560 | ||||||||
Shares Outstanding, End of Period | 1,174,969 | 1,060,249 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 200,965 | 215,544 | ||||||||
Reinvested dividends and distributions | 57,232 | 11,294 | ||||||||
Shares repurchased | (36,769) | (84,210) | ||||||||
Net Increase/(Decrease) in Fund Shares | 221,428 | 142,628 | ||||||||
Shares Outstanding, Beginning of Period | 662,872 | 520,244 | ||||||||
Shares Outstanding, End of Period | 884,300 | 662,872 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 969,568 | 2,109,015 | ||||||||
Reinvested dividends and distributions | 1,525,162 | 574,195 | ||||||||
Shares repurchased | (817,693) | (1,730,977) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,677,037 | 952,233 | ||||||||
Shares Outstanding, Beginning of Period | 13,431,916 | 12,479,683 | ||||||||
Shares Outstanding, End of Period | 15,108,953 | 13,431,916 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 780,842 | 5,509,570 | ||||||||
Reinvested dividends and distributions | 899,849 | 330,910 | ||||||||
Shares repurchased | (1,052,785) | (1,693,959) | ||||||||
Net Increase/(Decrease) in Fund Shares | 627,906 | 4,146,521 | ||||||||
Shares Outstanding, Beginning of Period | 8,195,296 | 4,048,775 | ||||||||
Shares Outstanding, End of Period | 8,823,202 | 8,195,296 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,328 | N/A | ||||||||
Reinvested dividends and distributions | 270 | N/A | ||||||||
Shares repurchased | – | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,598 | N/A | ||||||||
Shares Outstanding, Beginning of Period | – | N/A | ||||||||
Shares Outstanding, End of Period | 2,598 | N/A |
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For the period ended December 31 (unaudited) | INTECH U.S. Core Fund | |||||||||
and the year ended June 30 | 2014(1) | 2014 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 570,185 | 1,425,569 | ||||||||
Reinvested dividends and distributions | 201,131 | 56,144 | ||||||||
Shares repurchased | (201,956) | (383,161) | ||||||||
Net Increase/(Decrease) in Fund Shares | 569,360 | 1,098,552 | ||||||||
Shares Outstanding, Beginning of Period | 1,438,019 | 339,467 | ||||||||
Shares Outstanding, End of Period | 2,007,379 | 1,438,019 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 792,105 | 2,040,524 | ||||||||
Reinvested dividends and distributions | 762,245 | 286,407 | ||||||||
Shares repurchased | (792,865) | (1,599,484) | ||||||||
Net Increase/(Decrease) in Fund Shares | 761,485 | 727,447 | ||||||||
Shares Outstanding, Beginning of Period | 6,919,611 | 6,192,164 | ||||||||
Shares Outstanding, End of Period | 7,681,096 | 6,919,611 | �� |
(1) | Period from October 28, 2014 (inception date) through December 31, 2014 for Class N Shares. |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 U.S. Core Fund | $618,547,066 | $606,271,552 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 29
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
Janus Investment Fund | 41
Table of Contents
Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
42 | DECEMBER 31, 2014
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
44 | DECEMBER 31, 2014
Table of Contents
Notes
Janus Investment Fund | 45
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81503 | 125-24-93015 02-15 |
Table of Contents
semiannual report
December 31, 2014
INTECH U.S. Managed Volatility Fund
(formerly named INTECH U.S.
Value Fund)
(formerly named INTECH U.S.
Value Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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INTECH U.S. Managed Volatility Fund
1 | ||
12 | ||
13 | ||
15 | ||
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18 | ||
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INTECH U.S. Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, INTECH U.S. Managed Volatility Fund returned 1.89% for its Class I Shares. This compares to the 5.57% return posted by the Russell 1000 Index, the Fund’s benchmark, and 4.78% by the Russell 1000 Value Index, the Fund’s former benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH U.S. Value Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
In connection with the transition to a managed volatility strategy, the benchmark for the Fund changed to the Russell 1000 Index from the Russell 1000 Value Index. The transition to the Russell 1000 Index is expected to provide shareholders with broader exposure to large cap U.S. equities than the previous value-focused index.
The investment process begins with the stocks in the Russell 1000 Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH U.S. Value Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH U.S. Managed Volatility Fund strategy focuses on seeking an excess return above the benchmark, while also reducing or managing the Fund’s standard deviation depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The U.S. equity market as measured by the Russell 1000 Index posted a positive return of 5.57% for the six-month period ending December 31, 2014. INTECH U.S. Managed Volatility Fund Class I Shares underperformed the Russell 1000 Index over the period and generated a return of 1.89%.
The strategy’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. As compared to the Russell 1000 Value Index, which was the Fund’s benchmark prior to the transition on December 17, 2014, the Fund was underweight on average the health care and consumer staples sectors, which were two of the best performing sectors over the period. This active sector positioning detracted from relative performance for the period. An overall negative selection effect, which is a residual of the investment process, also detracted from the Fund’s relative performance, especially among the energy and information technology sectors, over the period.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the
Janus Investment Fund | 1
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INTECH U.S. Managed Volatility Fund (unaudited)
benchmark with lower absolute volatility. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH U.S. Managed Volatility Fund.
2 | DECEMBER 31, 2014
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(unaudited)
INTECH U.S. Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
General Mills, Inc. Food Products | 3.0% | |||
Altria Group, Inc. Tobacco | 2.2% | |||
Southwest Airlines Co. Airlines | 1.9% | |||
Reynolds American, Inc. Tobacco | 1.6% | |||
Facebook, Inc. – Class A Internet Software & Services | 1.6% | |||
10.3% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29p01.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif29c01.gif)
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INTECH U.S. Managed Volatility Fund (unaudited)
Performance
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Expense Ratios – per the October 28, 2014 and | |||||||||||
Average Annual Total Return – for the periods ended December 31, 2014 | December 22, 2014 (D Shares) prospectuses | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
INTECH U.S. Managed Volatility Fund – A Shares | |||||||||||
NAV | 1.80% | 9.10% | 14.86% | 6.89% | 1.04% | ||||||
MOP | –4.03% | 2.82% | 13.49% | 6.19% | |||||||
INTECH U.S. Managed Volatility Fund – C Shares | |||||||||||
NAV | 1.31% | 8.26% | 14.01% | 6.10% | 1.75% | ||||||
CDSC | 0.55% | 7.44% | 14.01% | 6.10% | |||||||
INTECH U.S. Managed Volatility Fund – D Shares(1) | 1.79% | 9.12% | 15.02% | 6.97% | 0.83% | ||||||
INTECH U.S. Managed Volatility Fund – I Shares | 1.89% | 9.32% | 15.18% | 7.16% | 0.67% | ||||||
INTECH U.S. Managed Volatility Fund – N Shares | 1.89% | 9.32% | 15.18% | 7.16% | 0.67% | ||||||
INTECH U.S. Managed Volatility Fund – S Shares | 1.74% | 9.14% | 14.77% | 6.73% | 1.24% | ||||||
INTECH U.S. Managed Volatility Fund – T Shares | 1.82% | 9.18% | 14.96% | 6.79% | 0.91% | ||||||
Russell 1000® Index | 5.57% | 13.24% | 15.64% | 8.15% | |||||||
Russell 1000® Value Index | 4.78% | 13.45% | 15.42% | 7.33% | |||||||
Morningstar Quartile – Class I Shares | – | 3rd | 1st | 2nd | |||||||
Morningstar Ranking – based on total returns for Large Value Funds | – | 953/1,336 | 157/1,155 | 438/1,041 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
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(unaudited)
The expense ratios for Class D and Class N Shares are estimated.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 the 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 predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
Class N Shares commenced operations on October 28, 2014. Performance shown for periods prior to October 28, 2014, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class I Shares, net of any applicable fee and expense limitations or waivers.
Class D Shares commenced operations on December 22, 2014. Performance shown for periods prior to December 22, 2014, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class D Shares, without the effect of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH U.S. Value Fund changed its name to INTECH U.S. Managed Volatility Fund and changed its benchmark from the Russell 1000® Value Index to the Russell 1000® Index. The transition to the Russell 1000® Index is intended to reflect broader exposure to large cap U.S. equities than the value-focused index.
* | The predecessor Fund’s inception date – December 30, 2005 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
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INTECH U.S. Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)* | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 5.44 | $ | 1,000.00 | $ | 1,019.81 | $ | 5.45 | 1.07% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,013.10 | $ | 9.03 | $ | 1,000.00 | $ | 1,016.23 | $ | 9.05 | 1.78% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 992.10 | $ | 0.29 | $ | 1,000.00 | $ | 1,019.86 | $ | 5.40 | 1.06% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,018.90 | $ | 3.56 | $ | 1,000.00 | $ | 1,021.68 | $ | 3.57 | 0.70% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,037.10 | $ | 1.31 | $ | 1,000.00 | $ | 1,021.58 | $ | 3.67 | 0.72% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,017.40 | $ | 6.15 | $ | 1,000.00 | $ | 1,019.11 | $ | 6.16 | 1.21% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,018.20 | $ | 4.88 | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | 0.96% | |||||||||||||||||
* | Actual Expenses Paid During Period for Class D Shares reflect only the inception period for the Fund (December 22, 2014 to December 31, 2014) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 10/365 (to reflect the period). Actual Expenses Paid During Period for Class N Shares reflect only the inception period for the Fund (October 28, 2014 to December 31, 2014) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 65/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. For all other share classes the Actual Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). | |
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
INTECH U.S. Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 97.3% | ||||||||||
Aerospace & Defense – 2.2% | ||||||||||
300 | Alliant Techsystems, Inc. | $ | 34,875 | |||||||
1,600 | General Dynamics Corp. | 220,192 | ||||||||
2,900 | Lockheed Martin Corp. | 558,453 | ||||||||
700 | Northrop Grumman Corp. | 103,173 | ||||||||
3,900 | Raytheon Co. | 421,863 | ||||||||
2,800 | TransDigm Group, Inc. | 549,780 | ||||||||
| ||||||||||
1,888,336 | ||||||||||
Air Freight & Logistics – 0.4% | ||||||||||
3,600 | CH Robinson Worldwide, Inc. | 269,604 | ||||||||
400 | FedEx Corp. | 69,464 | ||||||||
| ||||||||||
339,068 | ||||||||||
Airlines – 2.3% | ||||||||||
3,200 | American Airlines Group, Inc. | 171,616 | ||||||||
3,400 | Delta Air Lines, Inc. | 167,246 | ||||||||
38,700 | Southwest Airlines Co. | 1,637,784 | ||||||||
| ||||||||||
1,976,646 | ||||||||||
Auto Components – 0.4% | ||||||||||
2,200 | TRW Automotive Holdings Corp.* | 226,270 | ||||||||
800 | Visteon Corp.* | 85,488 | ||||||||
| ||||||||||
311,758 | ||||||||||
Automobiles – 0.2% | ||||||||||
600 | Tesla Motors, Inc.*,# | 133,446 | ||||||||
Beverages – 1.0% | ||||||||||
1,000 | Coca-Cola Co. | 42,220 | ||||||||
4,500 | Constellation Brands, Inc. – Class A* | 441,765 | ||||||||
3,100 | Dr Pepper Snapple Group, Inc. | 222,208 | ||||||||
200 | Monster Beverage Corp.* | 21,670 | ||||||||
1,700 | PepsiCo, Inc. | 160,752 | ||||||||
| ||||||||||
888,615 | ||||||||||
Biotechnology – 2.6% | ||||||||||
2,800 | Alnylam Pharmaceuticals, Inc.* | 271,600 | ||||||||
1,100 | Amgen, Inc. | 175,219 | ||||||||
700 | BioMarin Pharmaceutical, Inc.* | 63,280 | ||||||||
1,200 | Celgene Corp.* | 134,232 | ||||||||
6,900 | Gilead Sciences, Inc.* | 650,394 | ||||||||
300 | Incyte Corp.* | 21,933 | ||||||||
7,000 | Medivation, Inc.* | 697,270 | ||||||||
200 | Pharmacyclics, Inc.* | 24,452 | ||||||||
400 | Regeneron Pharmaceuticals, Inc.* | 164,100 | ||||||||
| ||||||||||
2,202,480 | ||||||||||
Capital Markets – 0.5% | ||||||||||
1,000 | Bank of New York Mellon Corp. | 40,570 | ||||||||
900 | Goldman Sachs Group, Inc. | 174,447 | ||||||||
1,300 | Invesco, Ltd. | 51,376 | ||||||||
4,000 | Morgan Stanley | 155,200 | ||||||||
700 | Northern Trust Corp. | 47,180 | ||||||||
| ||||||||||
468,773 | ||||||||||
Chemicals – 1.0% | ||||||||||
200 | Ecolab, Inc. | 20,904 | ||||||||
3,100 | LyondellBasell Industries NV – Class A | 246,109 | ||||||||
300 | NewMarket Corp. | 121,059 | ||||||||
700 | Sherwin-Williams Co. | 184,128 | ||||||||
1,300 | Sigma-Aldrich Corp. | 178,451 | ||||||||
2,100 | Westlake Chemical Corp. | 128,289 | ||||||||
| ||||||||||
878,940 | ||||||||||
Commercial Banks – 0.3% | ||||||||||
9,200 | Bank of America Corp. | 164,588 | ||||||||
800 | Cullen/Frost Bankers, Inc. | 56,512 | ||||||||
| ||||||||||
221,100 | ||||||||||
Commercial Services & Supplies – 1.4% | ||||||||||
1,500 | ADT Corp. | 54,345 | ||||||||
1,300 | Cintas Corp. | 101,972 | ||||||||
10,900 | Covanta Holding Corp. | 239,909 | ||||||||
11,900 | Republic Services, Inc. | 478,975 | ||||||||
2,800 | Waste Connections, Inc. | 123,172 | ||||||||
3,100 | Waste Management, Inc. | 159,092 | ||||||||
| ||||||||||
1,157,465 | ||||||||||
Communications Equipment – 0.4% | ||||||||||
1,000 | Brocade Communications Systems, Inc. | 11,840 | ||||||||
500 | F5 Networks, Inc.* | 65,232 | ||||||||
2,200 | Palo Alto Networks, Inc.* | 269,654 | ||||||||
| ||||||||||
346,726 | ||||||||||
Construction & Engineering – 0% | ||||||||||
900 | AECOM Technology Corp.* | 27,333 | ||||||||
Consumer Finance – 0.2% | ||||||||||
800 | Discover Financial Services | 52,392 | ||||||||
6,000 | Navient Corp. | 129,660 | ||||||||
1,000 | SLM Corp.* | 10,190 | ||||||||
| ||||||||||
192,242 | ||||||||||
Containers & Packaging – 0.2% | ||||||||||
1,900 | Ball Corp. | 129,523 | ||||||||
Distributors – 0% | ||||||||||
400 | Genuine Parts Co. | 42,628 | ||||||||
Diversified Consumer Services – 0% | ||||||||||
200 | DeVry Education Group, Inc. | 9,494 | ||||||||
Diversified Financial Services – 0.9% | ||||||||||
900 | Berkshire Hathaway, Inc. – Class B* | 135,135 | ||||||||
1,700 | CBOE Holdings, Inc. | 107,814 | ||||||||
3,300 | CME Group, Inc. | 292,545 | ||||||||
100 | Intercontinental Exchange, Inc. | 21,929 | ||||||||
600 | McGraw Hill Financial, Inc. | 53,388 | ||||||||
1,100 | Moody’s Corp. | 105,391 | ||||||||
2,000 | NASDAQ OMX Group, Inc. | 95,920 | ||||||||
| ||||||||||
812,122 | ||||||||||
Diversified Telecommunication Services – 0.7% | ||||||||||
9,462 | �� | CenturyLink, Inc. | 374,506 | |||||||
2,900 | Frontier Communications Corp. | 19,343 | ||||||||
400 | Verizon Communications, Inc. | 18,712 | ||||||||
27,400 | Windstream Holdings, Inc.# | 225,776 | ||||||||
| ||||||||||
638,337 | ||||||||||
Electric Utilities – 5.1% | ||||||||||
3,000 | American Electric Power Co., Inc. | 182,160 | ||||||||
2,200 | Duke Energy Corp. | 183,788 | ||||||||
5,800 | Edison International | 379,784 | ||||||||
7,600 | Entergy Corp. | 664,848 | ||||||||
16,700 | Exelon Corp. | 619,236 | ||||||||
2,000 | FirstEnergy Corp. | 77,980 | ||||||||
5,200 | Hawaiian Electric Industries, Inc. | 174,096 | ||||||||
13,200 | ITC Holdings Corp. | 533,676 | ||||||||
2,000 | NextEra Energy, Inc. | 212,580 | ||||||||
1,600 | Northeast Utilities | 85,632 | ||||||||
16,500 | Pepco Holdings, Inc. | 444,345 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH U.S. Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Electric Utilities – (continued) | ||||||||||
600 | Pinnacle West Capital Corp. | $ | 40,986 | |||||||
7,600 | PPL Corp. | 276,108 | ||||||||
5,400 | Southern Co. | 265,194 | ||||||||
3,300 | Westar Energy, Inc. | 136,092 | ||||||||
1,900 | Xcel Energy, Inc. | 68,248 | ||||||||
| ||||||||||
4,344,753 | ||||||||||
Electronic Equipment, Instruments & Components – 0.4% | ||||||||||
100 | Amphenol Corp. – Class A | 5,381 | ||||||||
4,600 | CDW Corp. | 161,782 | ||||||||
4,400 | Jabil Circuit, Inc. | 96,052 | ||||||||
1,200 | National Instruments Corp. | 37,308 | ||||||||
| ||||||||||
300,523 | ||||||||||
Energy Equipment & Services – 0.6% | ||||||||||
1,300 | Halliburton Co. | 51,129 | ||||||||
1,000 | Helmerich & Payne, Inc. | 67,420 | ||||||||
3,600 | National Oilwell Varco, Inc. | 235,908 | ||||||||
6,300 | Superior Energy Services, Inc. | 126,945 | ||||||||
| ||||||||||
481,402 | ||||||||||
Food & Staples Retailing – 1.7% | ||||||||||
900 | Costco Wholesale Corp. | 127,575 | ||||||||
6,700 | CVS Caremark Corp. | 645,277 | ||||||||
8,900 | Kroger Co. | 571,469 | ||||||||
3,700 | Safeway, Inc. | 129,944 | ||||||||
100 | Wal-Mart Stores, Inc. | 8,588 | ||||||||
| ||||||||||
1,482,853 | ||||||||||
Food Products – 4.5% | ||||||||||
1,400 | Archer-Daniels-Midland Co. | 72,800 | ||||||||
10,000 | ConAgra Foods, Inc. | 362,800 | ||||||||
48,600 | General Mills, Inc. | 2,591,838 | ||||||||
900 | Hormel Foods Corp. | 46,890 | ||||||||
6,300 | Kellogg Co. | 412,272 | ||||||||
200 | Keurig Green Mountain, Inc. | 26,479 | ||||||||
200 | Mead Johnson Nutrition Co. | 20,108 | ||||||||
8,600 | Tyson Foods, Inc. – Class A | 344,774 | ||||||||
| ||||||||||
3,877,961 | ||||||||||
Gas Utilities – 0.8% | ||||||||||
2,600 | AGL Resources, Inc. | 141,726 | ||||||||
600 | Atmos Energy Corp. | 33,444 | ||||||||
13,550 | UGI Corp. | 514,629 | ||||||||
| ||||||||||
689,799 | ||||||||||
Health Care Equipment & Supplies – 2.1% | ||||||||||
5,100 | CareFusion Corp.* | 302,634 | ||||||||
800 | Cooper Cos., Inc. | 129,672 | ||||||||
4,500 | Edwards Lifesciences Corp.* | 573,210 | ||||||||
2,200 | Hill-Rom Holdings, Inc. | 100,364 | ||||||||
1,100 | IDEXX Laboratories, Inc.* | 163,097 | ||||||||
200 | Intuitive Surgical, Inc.* | 105,788 | ||||||||
800 | ResMed, Inc.# | 44,848 | ||||||||
1,300 | Sirona Dental Systems, Inc.* | 113,581 | ||||||||
2,400 | Teleflex, Inc. | 275,568 | ||||||||
| ||||||||||
1,808,762 | ||||||||||
Health Care Providers & Services – 9.9% | ||||||||||
4,690 | Aetna, Inc. | 416,613 | ||||||||
9,900 | AmerisourceBergen Corp. | 892,584 | ||||||||
9,400 | Anthem, Inc. | 1,181,298 | ||||||||
3,400 | Cardinal Health, Inc. | 274,482 | ||||||||
1,600 | Centene Corp.* | 166,160 | ||||||||
5,300 | Cigna Corp. | 545,423 | ||||||||
11,400 | Community Health Systems, Inc. | 614,688 | ||||||||
2,000 | DaVita HealthCare Partners, Inc.* | 151,480 | ||||||||
10,500 | HCA Holdings, Inc. | 770,595 | ||||||||
8,700 | Health Net, Inc.* | 465,711 | ||||||||
5,000 | Humana, Inc. | 718,150 | ||||||||
900 | Laboratory Corp. of America Holdings* | 97,110 | ||||||||
1,100 | LifePoint Hospitals, Inc.* | 79,101 | ||||||||
600 | McKesson Corp. | 124,548 | ||||||||
7,800 | Omnicare, Inc. | 568,854 | ||||||||
900 | Quest Diagnostics, Inc. | 60,354 | ||||||||
3,500 | Tenet Healthcare Corp.* | 177,345 | ||||||||
5,300 | UnitedHealth Group, Inc. | 535,777 | ||||||||
3,200 | Universal Health Services, Inc. – Class B | 356,032 | ||||||||
5,000 | VCA, Inc.* | 243,850 | ||||||||
| ||||||||||
8,440,155 | ||||||||||
Health Care Technology – 0.1% | ||||||||||
1,100 | Cerner Corp.* | 71,126 | ||||||||
Hotels, Restaurants & Leisure – 1.0% | ||||||||||
600 | Brinker International, Inc. | 35,214 | ||||||||
200 | Chipotle Mexican Grill, Inc.* | 136,902 | ||||||||
600 | Domino’s Pizza, Inc. | 56,502 | ||||||||
1,100 | International Game Technology | 18,975 | ||||||||
7,500 | Marriott International, Inc. – Class A | 585,225 | ||||||||
300 | Panera Bread Co. – Class A* | 52,440 | ||||||||
100 | Wyndham Worldwide Corp. | 8,576 | ||||||||
| ||||||||||
893,834 | ||||||||||
Household Durables – 0.4% | ||||||||||
600 | Jarden Corp.* | 28,728 | ||||||||
1,500 | Leggett & Platt, Inc. | 63,915 | ||||||||
4,300 | Newell Rubbermaid, Inc. | 163,787 | ||||||||
800 | Tempur Sealy International, Inc.* | 43,928 | ||||||||
100 | Whirlpool Corp. | 19,374 | ||||||||
| ||||||||||
319,732 | ||||||||||
Household Products – 1.4% | ||||||||||
800 | Church & Dwight Co., Inc. | 63,048 | ||||||||
500 | Clorox Co. | 52,105 | ||||||||
200 | Energizer Holdings, Inc. | 25,712 | ||||||||
8,100 | Kimberly-Clark Corp. | 935,874 | ||||||||
1,000 | Procter & Gamble Co. | 91,090 | ||||||||
| ||||||||||
1,167,829 | ||||||||||
Information Technology Services – 0.9% | ||||||||||
7,200 | Amdocs, Ltd. (U.S. Shares) | 335,916 | ||||||||
600 | Automatic Data Processing, Inc. | 50,022 | ||||||||
2,400 | Broadridge Financial Solutions, Inc. | 110,832 | ||||||||
600 | Fiserv, Inc.* | 42,582 | ||||||||
1,200 | FleetCor Technologies, Inc.* | 178,452 | ||||||||
200 | Gartner, Inc.* | 16,842 | ||||||||
1,600 | Paychex, Inc. | 73,872 | ||||||||
| ||||||||||
808,518 | ||||||||||
Insurance – 4.4% | ||||||||||
400 | ACE, Ltd. (U.S. Shares) | 45,952 | ||||||||
8,100 | Allied World Assurance Co. Holdings AG | 307,152 | ||||||||
1,000 | Allstate Corp. | 70,250 | ||||||||
2,000 | Arch Capital Group, Ltd.* | 118,200 | ||||||||
2,000 | Assurant, Inc. | 136,860 | ||||||||
2,900 | Axis Capital Holdings, Ltd. | 148,161 | ||||||||
1,000 | Brown & Brown, Inc. | 32,910 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Insurance – (continued) | ||||||||||
200 | Chubb Corp. | $ | 20,694 | |||||||
2,300 | Endurance Specialty Holdings, Ltd. | 137,632 | ||||||||
2,700 | Everest Re Group, Ltd. | 459,810 | ||||||||
2,200 | FNF Group | 75,790 | ||||||||
800 | Hartford Financial Services Group, Inc. | 33,352 | ||||||||
1,200 | HCC Insurance Holdings, Inc. | 64,224 | ||||||||
600 | Markel Corp.* | 409,704 | ||||||||
3,500 | PartnerRe, Ltd. | 399,455 | ||||||||
500 | ProAssurance Corp. | 22,575 | ||||||||
400 | Progressive Corp. | 10,796 | ||||||||
300 | Protective Life Corp. | 20,895 | ||||||||
3,100 | RenaissanceRe Holdings, Ltd. | 301,382 | ||||||||
1,700 | Travelers Cos., Inc. | 179,945 | ||||||||
4,500 | Validus Holdings, Ltd. | 187,020 | ||||||||
400 | White Mountains Insurance Group, Ltd. | 252,044 | ||||||||
5,500 | WR Berkley Corp. | 281,930 | ||||||||
| ||||||||||
3,716,733 | ||||||||||
Internet & Catalog Retail – 0.1% | ||||||||||
200 | Netflix, Inc.* | 68,322 | ||||||||
Internet Software & Services – 2.3% | ||||||||||
1,400 | AOL, Inc. | 64,638 | ||||||||
300 | Equinix, Inc. | 68,019 | ||||||||
17,100 | Facebook, Inc. – Class A* | 1,334,142 | ||||||||
1,200 | LinkedIn Corp. – Class A* | 275,652 | ||||||||
600 | Rackspace Hosting, Inc.* | 28,086 | ||||||||
3,600 | Twitter, Inc.* | 129,132 | ||||||||
1,800 | Yahoo!, Inc.* | 90,918 | ||||||||
| ||||||||||
1,990,587 | ||||||||||
Leisure Products – 0% | ||||||||||
400 | Hasbro, Inc. | 21,996 | ||||||||
Life Sciences Tools & Services – 0.9% | ||||||||||
400 | Bio-Techne Corp. | 36,960 | ||||||||
500 | Charles River Laboratories International, Inc.* | 31,820 | ||||||||
3,400 | Illumina, Inc.* | 627,572 | ||||||||
900 | Quintiles Transnational Holdings, Inc.* | 52,983 | ||||||||
| ||||||||||
749,335 | ||||||||||
Machinery – 0.2% | ||||||||||
5,900 | Trinity Industries, Inc. | 165,259 | ||||||||
Media – 0.9% | ||||||||||
2,600 | Cablevision Systems Corp. – Class A# | 53,664 | ||||||||
800 | Charter Communications, Inc. – Class A* | 133,296 | ||||||||
2,000 | Cinemark Holdings, Inc. | 71,160 | ||||||||
150 | Comcast Corp. – Class A | 8,701 | ||||||||
1,200 | DISH Network Corp. – Class A | 87,468 | ||||||||
100 | Liberty Broadband Corp. – Class C* | 4,982 | ||||||||
700 | Liberty Media Corp. – Class C* | 24,521 | ||||||||
4,300 | Madison Square Garden Co. – Class A* | 323,618 | ||||||||
900 | Thomson Reuters Corp. | 36,306 | ||||||||
100 | Time Warner, Inc. | 8,542 | ||||||||
| ||||||||||
752,258 | ||||||||||
Metals & Mining – 2.1% | ||||||||||
45,800 | Alcoa, Inc. | 723,182 | ||||||||
7,000 | Royal Gold, Inc. | 438,900 | ||||||||
7,600 | Steel Dynamics, Inc. | 150,024 | ||||||||
17,300 | United States Steel Corp.# | 462,602 | ||||||||
| ||||||||||
1,774,708 | ||||||||||
Multi-Utilities – 2.8% | ||||||||||
600 | Ameren Corp. | 27,678 | ||||||||
9,900 | CMS Energy Corp. | 344,025 | ||||||||
2,100 | Consolidated Edison, Inc. | 138,621 | ||||||||
3,300 | DTE Energy Co. | 285,021 | ||||||||
1,700 | Integrys Energy Group, Inc. | 132,345 | ||||||||
5,400 | NiSource, Inc. | 229,068 | ||||||||
4,500 | PG&E Corp. | 239,580 | ||||||||
1,200 | Public Service Enterprise Group, Inc. | 49,692 | ||||||||
400 | SCANA Corp. | 24,160 | ||||||||
6,500 | Sempra Energy | 723,840 | ||||||||
4,300 | TECO Energy, Inc. | 88,107 | ||||||||
1,800 | Vectren Corp. | 83,214 | ||||||||
| ||||||||||
2,365,351 | ||||||||||
Multiline Retail – 0.5% | ||||||||||
600 | Big Lots, Inc. | 24,012 | ||||||||
200 | Dillard’s, Inc. – Class A | 25,036 | ||||||||
900 | Dollar Tree, Inc.* | 63,342 | ||||||||
9,600 | JC Penney Co., Inc.*,# | 62,208 | ||||||||
1,900 | Kohl’s Corp. | 115,976 | ||||||||
600 | Nordstrom, Inc. | 47,634 | ||||||||
1,400 | Target Corp. | 106,274 | ||||||||
| ||||||||||
444,482 | ||||||||||
Oil, Gas & Consumable Fuels – 3.3% | ||||||||||
1,700 | Apache Corp. | 106,539 | ||||||||
4,100 | Cheniere Energy, Inc.* | 288,640 | ||||||||
3,093 | ConocoPhillips | 213,603 | ||||||||
1,900 | Continental Resources, Inc.* | 72,884 | ||||||||
100 | Devon Energy Corp. | 6,121 | ||||||||
7,500 | Golar LNG, Ltd. | 273,525 | ||||||||
3,600 | Hess Corp. | 265,752 | ||||||||
400 | Kinder Morgan, Inc. | 16,924 | ||||||||
5,900 | Marathon Oil Corp. | 166,911 | ||||||||
11,500 | Newfield Exploration Co.* | 311,880 | ||||||||
1,800 | ONEOK, Inc. | 89,622 | ||||||||
1,300 | Phillips 66 | 93,210 | ||||||||
4,400 | Spectra Energy Corp. | 159,720 | ||||||||
700 | Targa Resources Corp. | 74,235 | ||||||||
2,400 | Tesoro Corp. | 178,440 | ||||||||
2,100 | Whiting Petroleum Corp.* | 69,300 | ||||||||
5,700 | Williams Cos., Inc. | 256,158 | ||||||||
12,600 | WPX Energy, Inc.* | 146,538 | ||||||||
| ||||||||||
2,790,002 | ||||||||||
Pharmaceuticals – 3.3% | ||||||||||
3,500 | Actavis PLC* | 900,935 | ||||||||
900 | Allergan, Inc. | 191,331 | ||||||||
1,800 | Eli Lilly & Co. | 124,182 | ||||||||
1,300 | Hospira, Inc.* | 79,625 | ||||||||
400 | Jazz Pharmaceuticals PLC* | 65,492 | ||||||||
9,100 | Mallinckrodt PLC* | 901,173 | ||||||||
1,400 | Merck & Co., Inc. | 79,506 | ||||||||
300 | Salix Pharmaceuticals, Ltd.* | 34,482 | ||||||||
10,000 | Zoetis, Inc. | 430,300 | ||||||||
| ||||||||||
2,807,026 | ||||||||||
Professional Services – 0.3% | ||||||||||
1,000 | Dun & Bradstreet Corp. | 120,960 | ||||||||
500 | Equifax, Inc. | 40,435 | ||||||||
100 | IHS, Inc. – Class A* | 11,388 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
INTECH U.S. Managed Volatility Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Professional Services – (continued) | ||||||||||
1,700 | Nielsen NV | $ | 76,041 | |||||||
400 | Robert Half International, Inc. | 23,352 | ||||||||
| ||||||||||
272,176 | ||||||||||
Real Estate Investment Trusts (REITs) – 11.5% | ||||||||||
2,900 | Alexandria Real Estate Equities, Inc. | 257,346 | ||||||||
17,500 | American Capital Agency Corp. | 382,025 | ||||||||
1,200 | American Homes 4 Rent – Class A | 20,436 | ||||||||
900 | American Tower Corp. | 88,965 | ||||||||
54,200 | Annaly Capital Management, Inc. | 585,902 | ||||||||
11,800 | Apartment Investment & Management Co. – Class A | 438,370 | ||||||||
3,300 | AvalonBay Communities, Inc. | 539,187 | ||||||||
9,300 | BioMed Realty Trust, Inc. | 200,322 | ||||||||
1,100 | Boston Properties, Inc. | 141,559 | ||||||||
3,100 | Camden Property Trust | 228,904 | ||||||||
2,600 | Corrections Corp. of America | 94,484 | ||||||||
900 | Crown Castle International Corp. | 70,830 | ||||||||
14,500 | Digital Realty Trust, Inc. | 961,350 | ||||||||
1,300 | Equity Commonwealth* | 33,371 | ||||||||
5,700 | Equity Lifestyle Properties, Inc. | 293,835 | ||||||||
6,200 | Equity Residential | 445,408 | ||||||||
1,900 | Essex Property Trust, Inc. | 392,540 | ||||||||
2,600 | Extra Space Storage, Inc. | 152,464 | ||||||||
2,200 | Federal Realty Investment Trust | 293,612 | ||||||||
2,000 | HCP, Inc. | 88,060 | ||||||||
5,700 | Health Care REIT, Inc. | 431,319 | ||||||||
4,700 | Healthcare Trust of America, Inc. – Class A | 126,618 | ||||||||
300 | Iron Mountain, Inc. | 11,598 | ||||||||
2,500 | Kilroy Realty Corp. | 172,675 | ||||||||
44,900 | MFA Financial, Inc. | 358,751 | ||||||||
400 | Mid-America Apartment Communities, Inc. | 29,872 | ||||||||
3,600 | National Retail Properties, Inc. | 141,732 | ||||||||
8,000 | Omega Healthcare Investors, Inc.# | 312,560 | ||||||||
5,600 | Piedmont Office Realty Trust, Inc. – Class A | 105,504 | ||||||||
6,100 | Post Properties, Inc. | 358,497 | ||||||||
300 | Public Storage | 55,455 | ||||||||
2,300 | Realty Income Corp. | 109,733 | ||||||||
2,100 | Regency Centers Corp. | 133,938 | ||||||||
22,600 | Retail Properties of America, Inc. – Class A | 377,194 | ||||||||
800 | Simon Property Group, Inc. | 145,688 | ||||||||
100 | SL Green Realty Corp. | 11,902 | ||||||||
4,200 | Starwood Property Trust, Inc. | 97,608 | ||||||||
1,200 | Taubman Centers, Inc. | 91,704 | ||||||||
31,500 | Two Harbors Investment Corp. | 315,630 | ||||||||
8,600 | UDR, Inc. | 265,052 | ||||||||
600 | Ventas, Inc. | 43,020 | ||||||||
500 | Vornado Realty Trust | 58,855 | ||||||||
4,500 | Weingarten Realty Investors | 157,140 | ||||||||
600 | Weyerhaeuser Co. | 21,534 | ||||||||
2,100 | WP Carey, Inc. | 147,210 | ||||||||
| ||||||||||
9,789,759 | ||||||||||
Real Estate Management & Development – 0.3% | ||||||||||
100 | Howard Hughes Corp.* | 13,042 | ||||||||
1,700 | Jones Lang LaSalle, Inc. | 254,881 | ||||||||
| ||||||||||
267,923 | ||||||||||
Road & Rail – 2.5% | ||||||||||
1,700 | Avis Budget Group, Inc.* | 112,761 | ||||||||
2,900 | Con-way, Inc. | 142,622 | ||||||||
6,400 | CSX Corp. | 231,872 | ||||||||
2,600 | Kansas City Southern | 317,278 | ||||||||
1,900 | Landstar System, Inc. | 137,807 | ||||||||
2,000 | Norfolk Southern Corp. | 219,220 | ||||||||
6,000 | Old Dominion Freight Line, Inc.* | 465,840 | ||||||||
500 | Ryder System, Inc. | 46,425 | ||||||||
3,800 | Union Pacific Corp. | 452,694 | ||||||||
| ||||||||||
2,126,519 | ||||||||||
Semiconductor & Semiconductor Equipment – 2.6% | ||||||||||
1,700 | Avago Technologies, Ltd. | 171,003 | ||||||||
5,800 | Broadcom Corp. – Class A | 251,314 | ||||||||
5,400 | Intel Corp. | 195,966 | ||||||||
2,000 | KLA-Tencor Corp. | 140,640 | ||||||||
1,400 | Lam Research Corp. | 111,076 | ||||||||
22,100 | Micron Technology, Inc.* | 773,721 | ||||||||
7,500 | Skyworks Solutions, Inc. | 545,325 | ||||||||
| ||||||||||
2,189,045 | ||||||||||
Software – 1.3% | ||||||||||
2,400 | Citrix Systems, Inc.* | 153,120 | ||||||||
1,200 | Electronic Arts, Inc.* | 56,418 | ||||||||
1,500 | FactSet Research Systems, Inc. | 211,125 | ||||||||
100 | Intuit, Inc. | 9,219 | ||||||||
6,100 | Microsoft Corp. | 283,345 | ||||||||
300 | NetSuite, Inc.* | 32,751 | ||||||||
500 | Red Hat, Inc.* | 34,570 | ||||||||
9,600 | Symantec Corp. | 246,288 | ||||||||
1,200 | Tableau Software, Inc. – Class A* | 101,712 | ||||||||
| ||||||||||
1,128,548 | ||||||||||
Specialty Retail – 4.1% | ||||||||||
700 | AutoZone, Inc.* | 433,377 | ||||||||
7,200 | Best Buy Co., Inc. | 280,656 | ||||||||
1,200 | CST Brands, Inc. | 52,332 | ||||||||
2,000 | DSW, Inc. – Class A | 74,600 | ||||||||
10,000 | Foot Locker, Inc. | 561,800 | ||||||||
1,500 | Home Depot, Inc. | 157,455 | ||||||||
3,600 | L Brands, Inc. | 311,580 | ||||||||
3,200 | Lowe’s Cos., Inc. | 220,160 | ||||||||
4,800 | Murphy USA, Inc.* | 330,528 | ||||||||
2,800 | O’Reilly Automotive, Inc.* | 539,336 | ||||||||
1,500 | Ross Stores, Inc. | 141,390 | ||||||||
4,200 | Sally Beauty Holdings, Inc.* | 129,108 | ||||||||
1,800 | Staples, Inc. | 32,616 | ||||||||
900 | Ulta Salon Cosmetics & Fragrance, Inc. | 115,056 | ||||||||
2,600 | Urban Outfitters, Inc.* | 91,338 | ||||||||
300 | Williams-Sonoma, Inc. | 22,704 | ||||||||
| ||||||||||
3,494,036 | ||||||||||
Technology Hardware, Storage & Peripherals – 2.2% | ||||||||||
11,800 | Apple, Inc. | 1,302,484 | ||||||||
400 | EMC Corp. | 11,896 | ||||||||
200 | Hewlett-Packard Co. | 8,026 | ||||||||
3,700 | Lexmark International, Inc. – Class A | 152,699 | ||||||||
4,600 | NetApp, Inc. | 190,670 | ||||||||
1,600 | SanDisk Corp. | 156,768 | ||||||||
800 | Western Digital Corp. | 88,560 | ||||||||
| ||||||||||
1,911,103 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.2% | ||||||||||
2,300 | Deckers Outdoor Corp.* | 209,392 | ||||||||
5,000 | Hanesbrands, Inc. | 558,100 | ||||||||
400 | NIKE, Inc. – Class B | 38,460 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Textiles, Apparel & Luxury Goods – (continued) | ||||||||||
400 | Ralph Lauren Corp. | $ | 74,064 | |||||||
1,000 | Under Armour, Inc. – Class A* | 67,900 | ||||||||
1,600 | VF Corp. | 119,840 | ||||||||
| ||||||||||
1,067,756 | ||||||||||
Tobacco – 5.2% | ||||||||||
37,900 | Altria Group, Inc. | 1,867,333 | ||||||||
19,100 | Lorillard, Inc. | 1,202,154 | ||||||||
21,600 | Reynolds American, Inc. | 1,388,232 | ||||||||
| ||||||||||
4,457,719 | ||||||||||
Trading Companies & Distributors – 0.2% | ||||||||||
1,600 | United Rentals, Inc.* | 163,216 | ||||||||
Water Utilities – 0.5% | ||||||||||
7,600 | American Water Works Co., Inc. | 405,080 | ||||||||
Wireless Telecommunication Services – 1.0% | ||||||||||
7,600 | SBA Communications Corp. – Class A* | 841,776 | ||||||||
Total Common Stocks (cost $79,835,291) | 83,112,994 | |||||||||
Rights – 0% | ||||||||||
Media – 0% | ||||||||||
600 | Liberty Broadband Corp.* (cost $0) | 5,700 | ||||||||
Investment Companies – 0.9% | ||||||||||
Money Markets – 0.9% | ||||||||||
755,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $755,000) | 755,000 | ||||||||
Investments Purchased with Cash Collateral From Securities Lending – 0.8% | ||||||||||
684,300 | Janus Cash Collateral Fund LLC, 0.0984%°°,£ (cost $684,300) | 684,300 | ||||||||
Total Investments (total cost $81,274,591) – 99.0% | 84,557,994 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.0% | 845,427 | |||||||||
Net Assets – 100% | $ | 85,403,421 | ||||||||
(1) | Formerly named INTECH U.S. Value Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
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 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | |
LLC | Limited Liability Company | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
# | Loaned security; a portion of the security is on loan at December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
INTECH U.S. Managed Volatility Fund | |||||||||||||||||||||
Janus Cash Collateral Fund LLC | 852,019 | 6,117,199 | (6,284,918) | 684,300 | $ | – | $ | 2,287(1) | $ | 684,300 | |||||||||||
Janus Cash Liquidity Fund LLC | 679,570 | 23,389,192 | (23,313,762) | 755,000 | – | 326 | 755,000 | ||||||||||||||
Total | $ | – | $ | 2,613 | $ | 1,439,300 | |||||||||||||||
(1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH U.S. Managed Volatility Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 83,112,994 | $ | – | $ | – | |||||
Rights | 5,700 | – | – | ||||||||
Investment Companies | – | 755,000 | – | ||||||||
Investment Purchased with Cash Collateral From Securities Lending | – | 684,300 | – | ||||||||
Total Assets | $ | 83,118,694 | $ | 1,439,300 | $ | – | |||||
12 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
INTECH U.S. | ||||
Managed | ||||
As of December 31, 2014 (unaudited) | Volatility Fund(1) | |||
Assets: | ||||
Investments at cost | $ | 81,274,591 | ||
Unaffiliated investments at value(2) | $ | 83,118,694 | ||
Affiliated investments at value | 1,439,300 | |||
Cash | 71,637 | |||
Non-interested Trustees’ deferred compensation | 1,729 | |||
Receivables: | ||||
Investments sold | 7,233,898 | |||
Fund shares sold | 1,170,805 | |||
Dividends | 233,592 | |||
Other assets | 1,706 | |||
Total Assets | 93,271,361 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 684,300 | |||
Payables: | ||||
Investments purchased | 7,008,865 | |||
Fund shares repurchased | 98,860 | |||
Advisory fees | 47,674 | |||
Fund administration fees | 954 | |||
Transfer agent fees and expenses | 6,079 | |||
12b-1 Distribution and shareholder servicing fees | 974 | |||
Non-interested Trustees’ fees and expenses | 718 | |||
Non-interested Trustees’ deferred compensation fees | 1,729 | |||
Accrued expenses and other payables | 17,787 | |||
Total Liabilities | 7,867,940 | |||
Net Assets | $ | 85,403,421 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities (continued)
INTECH U.S. | ||||
Managed | ||||
As of December 31, 2014 (unaudited) | Volatility Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 73,111,904 | ||
Undistributed net investment income/(loss)* | (42,392) | |||
Undistributed net realized gain/(loss) from investments* | 9,050,015 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 3,283,894 | |||
Total Net Assets | $ | 85,403,421 | ||
Net Assets - Class A Shares | $ | 1,617,859 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 159,615 | |||
Net Asset Value Per Share(3) | $ | 10.14 | ||
Maximum Offering Price Per Share(4) | $ | 10.76 | ||
Net Assets - Class C Shares | $ | 1,025,560 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 102,748 | |||
Net Asset Value Per Share(3) | $ | 9.98 | ||
Net Assets - Class D Shares | $ | 103,822 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,357 | |||
Net Asset Value Per Share | $ | 10.02 | ||
Net Assets - Class I Shares | $ | 26,842,517 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,656,944 | |||
Net Asset Value Per Share | $ | 10.10 | ||
Net Assets - Class N Shares | $ | 35,342,891 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,509,659 | |||
Net Asset Value Per Share | $ | 10.07 | ||
Net Assets - Class S Shares | $ | 65,489 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,480 | |||
Net Asset Value Per Share | $ | 10.11 | ||
Net Assets - Class T Shares | $ | 20,405,283 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,036,680 | |||
Net Asset Value Per Share | $ | 10.02 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Unaffiliated investments at value includes $667,784 of securities loaned. See Note 2 in Notes to Financial Statements. | |
(3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
INTECH U.S. | ||||
Managed | ||||
For the period ended December 31, 2014 (unaudited) | Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 2,287 | ||
Dividends | 1,334,290 | |||
Dividends from affiliates | 326 | |||
Other income | 121 | |||
Foreign tax withheld | (945) | |||
Total Investment Income | 1,336,079 | |||
Expenses: | ||||
Advisory fees | 306,003 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 1,959 | |||
Class C Shares | 3,839 | |||
Class S Shares | 81 | |||
Transfer agent administrative fees and expenses: | ||||
Class S Shares | 81 | |||
Class T Shares | 25,200 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 714 | |||
Class C Shares | 231 | |||
Class I Shares | 6,823 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 121 | |||
Class C Shares | 59 | |||
Class I Shares | 2,083 | |||
Class N Shares | 14 | |||
Class T Shares | 257 | |||
Shareholder reports expense | 6,911 | |||
Registration fees | 72,562 | |||
Custodian fees | 4,060 | |||
Professional fees | 20,370 | |||
Non-interested Trustees’ fees and expenses | 1,155 | |||
Fund administration fees | 6,120 | |||
Other expenses | 5,800 | |||
Total Expenses | 464,443 | |||
Less: Excess Expense Reimbursement | (16) | |||
Net Expenses | 464,427 | |||
Net Investment Income/(Loss) | 871,652 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | 11,890,342 | |||
Total Net Realized Gain/(Loss) on Investments | 11,890,342 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (10,564,637) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (10,564,637) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,197,357 |
(1) | Formerly named INTECH U.S. Value Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
INTECH U.S. Managed Volatility | ||||||||
Fund(1) | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 871,652 | $ | 1,328,982 | ||||
Net realized gain/(loss) on investments | 11,890,342 | 23,712,016 | ||||||
Change in unrealized net appreciation/depreciation | (10,564,637) | (1,423,119) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,197,357 | 23,617,879 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (17,377) | (72,796) | ||||||
Class C Shares | (8,693) | (3,673) | ||||||
Class D Shares | – | N/A | ||||||
Class I Shares | (556,163) | (932,467) | ||||||
Class N Shares | (861,822) | N/A | ||||||
Class S Shares | (1,341) | (432) | ||||||
Class T Shares | (465,851) | (99,586) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (382,226) | (1,331,980) | ||||||
Class C Shares | (159,813) | (105,718) | ||||||
Class D Shares | – | N/A | ||||||
Class I Shares | (6,070,781) | (12,722,899) | ||||||
Class N Shares | (8,185,236) | N/A | ||||||
Class S Shares | (15,164) | (8,539) | ||||||
Class T Shares | (4,938,010) | (1,367,283) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (21,662,477) | (16,645,373) |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
INTECH U.S. Managed Volatility | ||||||||
Fund(1) | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 321,370 | 2,032,224 | ||||||
Class C Shares | 586,149 | 641,807 | ||||||
Class D Shares | 104,671 | N/A | ||||||
Class I Shares | 3,358,814 | 13,754,123 | ||||||
Class N Shares | 68,085,849 | N/A | ||||||
Class S Shares | – | 1 | ||||||
Class T Shares | 4,863,943 | 18,849,842 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 320,354 | 1,379,794 | ||||||
Class C Shares | 75,553 | 68,542 | ||||||
Class D Shares | – | N/A | ||||||
Class I Shares | 6,411,368 | 13,457,255 | ||||||
Class N Shares | 9,047,058 | N/A | ||||||
Class S Shares | 16,505 | 8,971 | ||||||
Class T Shares | 5,371,421 | 1,464,907 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (77,302) | (9,852,014) | ||||||
Class C Shares | (339,735) | (245,791) | ||||||
Class D Shares | – | N/A | ||||||
Class I Shares | (79,648,542) | (6,703,098) | ||||||
Class N Shares | (35,211,100) | N/A | ||||||
Class S Shares | – | (13,130) | ||||||
Class T Shares | (3,464,910) | (2,664,701) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (20,178,534) | 32,178,732 | ||||||
Net Increase/(Decrease) in Net Assets | (39,643,654) | 39,151,238 | ||||||
Net Assets: | ||||||||
Beginning of period | 125,047,075 | 85,895,837 | ||||||
End of period | $ | 85,403,421 | $ | 125,047,075 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (42,392) | $ | 997,203 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH U.S. Value Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the year | INTECH U.S. Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.16 | $12.45 | $10.15 | $10.03 | $7.85 | $7.36 | $9.88 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.08(3) | 0.12(3) | 0.16 | 0.15 | 0.13 | 0.10 | 0.15 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.16 | 2.78 | 2.33 | 0.11 | 2.16 | 0.43 | (2.35) | |||||||||||||||||||||||
Total from Investment Operations | 0.24 | 2.90 | 2.49 | 0.26 | 2.29 | 0.53 | (2.20) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.14) | (0.11) | (0.19) | (0.14) | (0.11) | (0.04) | (0.32) | |||||||||||||||||||||||
Distributions (from capital gains)* | (3.12) | (2.08) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (3.26) | (2.19) | (0.19) | (0.14) | (0.11) | (0.04) | (0.32) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.14 | $13.16 | $12.45 | $10.15 | $10.03 | $7.85 | $7.36 | |||||||||||||||||||||||
Total Return** | 1.80% | 24.98% | 24.86% | 2.71% | 29.23% | 7.21% | (22.01)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,618 | $1,424 | $7,348 | $5,494 | $4,980 | $3,694 | $3,440 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,546 | $8,530 | $6,373 | $5,099 | $4,598 | $3,815 | $1,762 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.07% | 1.03% | 0.97% | 0.92% | 0.95% | 1.05% | 1.33% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.07% | 1.01% | 0.97% | 0.92% | 0.95% | 1.01% | 0.74% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.21% | 0.91% | 1.37% | 1.54% | 1.38% | 1.26% | 2.28% | |||||||||||||||||||||||
Portfolio Turnover Rate | 91% | 150% | 100% | 100% | 108% | 92% | 100% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the year | INTECH U.S. Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.09 | $12.43 | $10.14 | $9.94 | $7.81 | $7.35 | $9.78 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.03(3) | 0.04(3) | (0.08) | 0.18 | 0.14 | 0.03 | 0.12 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 2.77 | 2.49 | 0.02 | 2.05 | 0.45 | (2.34) | |||||||||||||||||||||||
Total from Investment Operations | 0.18 | 2.81 | 2.41 | 0.20 | 2.19 | 0.48 | (2.22) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.17) | (0.07) | (0.12) | – | (0.06) | (0.02) | (0.21) | |||||||||||||||||||||||
Distributions (from capital gains)* | (3.12) | (2.08) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (3.29) | (2.15) | (0.12) | – | (0.06) | (0.02) | (0.21) | |||||||||||||||||||||||
Net Asset Value, End of Period | $9.98 | $13.09 | $12.43 | $10.14 | $9.94 | $7.81 | $7.35 | |||||||||||||||||||||||
Total Return** | 1.31% | 24.20% | 23.97% | 2.01% | 28.03% | 6.51% | (22.52)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,026 | $861 | $380 | $147 | $217 | $330 | $281 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $758 | $643 | $206 | $164 | $432 | $324 | $266 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.78% | 1.67% | 1.69% | 1.72% | 1.74% | 1.80% | 1.99% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.78% | 1.67% | 1.69% | 1.61% | 1.74% | 1.76% | 1.47% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.40% | 0.31% | 0.57% | 0.81% | 0.58% | 0.51% | 1.94% | |||||||||||||||||||||||
Portfolio Turnover Rate | 91% | 150% | 100% | 100% | 108% | 92% | 100% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class D Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(2) | |||||
Net Asset Value, Beginning of Period | $10.10 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(3) | 0.01 | |||||
Net gain/(loss) on investments (both realized and unrealized) | (0.09) | |||||
Total from Investment Operations | (0.08) | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | – | |||||
Distributions (from capital gains)* | – | |||||
Total Distributions | – | |||||
Net Asset Value, End of Period | $10.02 | |||||
Total Return** | (0.79)% | |||||
Net Assets, End of Period (in thousands) | $104 | |||||
Average Net Assets for the Period (in thousands) | $65 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.94% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.06% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.50% | |||||
Portfolio Turnover Rate | 91% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | INTECH U.S. Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
June 30 and the year ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.25 | $12.51 | $10.19 | $10.07 | $7.89 | $7.37 | $9.91 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.08(3) | 0.17(3) | 0.22 | 0.17 | 0.15 | 0.11 | 0.18 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.18 | 2.80 | 2.32 | 0.12 | 2.16 | 0.45 | (2.38) | |||||||||||||||||||||||
Total from Investment Operations | 0.26 | 2.97 | 2.54 | 0.29 | 2.31 | 0.56 | (2.20) | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.29) | (0.15) | (0.22) | (0.17) | (0.13) | (0.04) | (0.34) | |||||||||||||||||||||||
Distributions (from capital gains)* | (3.12) | (2.08) | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | – | –(5) | –(5) | |||||||||||||||||||||||
Total Distributions and Other | (3.41) | (2.23) | (0.22) | (0.17) | (0.13) | (0.04) | (0.34) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.10 | $13.25 | $12.51 | $10.19 | $10.07 | $7.89 | $7.37 | |||||||||||||||||||||||
Total Return** | 1.89% | 25.48% | 25.23% | 2.96% | 29.38% | 7.62% | (21.96)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $26,843 | $104,039 | $77,625 | $93,800 | $93,695 | $66,137 | $59,647 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $76,863 | $86,864 | $93,335 | $89,976 | $84,034 | $69,502 | $53,614 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.70% | 0.66% | 0.67% | 0.67% | 0.68% | 0.77% | 0.96% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.70% | 0.66% | 0.67% | 0.67% | 0.68% | 0.75% | 0.61% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.18% | 1.32% | 1.71% | 1.78% | 1.64% | 1.53% | 2.79% | |||||||||||||||||||||||
Portfolio Turnover Rate | 91% | 150% | 100% | 100% | 108% | 92% | 100% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from December 22, 2014 (inception date) through December 31, 2014 | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 19
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Financial Highlights (continued)
Class N Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) | 2014(2) | |||||
Net Asset Value, Beginning of Period | $13.03 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(3) | 0.06 | |||||
Net gain/(loss) on investments (both realized and unrealized) | 0.43 | |||||
Total from Investment Operations | 0.49 | |||||
Less Distributions: | ||||||
Dividends (from net investment income)* | (0.33) | |||||
Distributions (from capital gains)* | (3.12) | |||||
Total Distributions | (3.45) | |||||
Net Asset Value, End of Period | $10.07 | |||||
Total Return** | 3.71% | |||||
Net Assets, End of Period (in thousands) | $35,343 | |||||
Average Net Assets for the Period (in thousands) | $61,777 | |||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.72% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.72% | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.45% | |||||
Portfolio Turnover Rate | 91% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the year | INTECH U.S. Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.27 | $12.53 | $10.15 | $10.02 | $7.85 | $7.37 | $9.86 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.07(3) | 0.11(3) | 0.90 | 0.13 | 0.15 | 0.08 | 0.17 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | 2.82 | 1.63 | 0.11 | 2.11 | 0.44 | (2.38) | |||||||||||||||||||||||
Total from Investment Operations | 0.24 | 2.93 | 2.53 | 0.24 | 2.26 | 0.52 | (2.21) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.11) | (0.15) | (0.11) | (0.09) | (0.04) | (0.28) | |||||||||||||||||||||||
Distributions (from capital gains)* | (3.12) | (2.08) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (3.40) | (2.19) | (0.15) | (0.11) | (0.09) | (0.04) | (0.28) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.11 | $13.27 | $12.53 | $10.15 | $10.02 | $7.85 | $7.37 | |||||||||||||||||||||||
Total Return** | 1.74% | 25.01% | 25.12% | 2.48% | 28.81% | 7.00% | (22.15)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $65 | $64 | $64 | $221 | $216 | $214 | $200 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $64 | $63 | $132 | $208 | $254 | $225 | $192 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.21% | 1.23% | 1.16% | 1.15% | 1.17% | 1.27% | 1.44% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.21% | 1.08% | 0.97% | 1.09% | 1.17% | 1.26% | 0.97% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.05% | 0.88% | 1.41% | 1.36% | 1.16% | 1.02% | 2.43% | |||||||||||||||||||||||
Portfolio Turnover Rate | 91% | 150% | 100% | 100% | 108% | 92% | 100% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from October 28, 2014 (inception date) through December 31, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. |
See Notes to Financial Statements.
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Class T Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Managed Volatility Fund(1) | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009(3) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.19 | $12.48 | $10.18 | $10.05 | $7.87 | $7.37 | $6.63 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.08(4) | 0.14(4) | 0.19 | 0.13 | 0.15 | 0.05 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.16 | 2.80 | 2.31 | 0.13 | 2.15 | 0.49 | 0.73 | |||||||||||||||||||||||
Total from Investment Operations | 0.24 | 2.94 | 2.50 | 0.26 | 2.30 | 0.54 | 0.74 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.29) | (0.15) | (0.20) | (0.13) | (0.12) | (0.04) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (3.12) | (2.08) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (3.41) | (2.23) | (0.20) | (0.13) | (0.12) | (0.04) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.02 | $13.19 | $12.48 | $10.18 | $10.05 | $7.87 | $7.37 | |||||||||||||||||||||||
Total Return** | 1.82% | 25.27% | 24.84% | 2.73% | 29.29% | 7.31% | 11.16% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $20,405 | $18,659 | $479 | $58 | $17 | $33 | $1 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $19,883 | $9,758 | $205 | $36 | $35 | $20 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.96% | 0.90% | 0.91% | 0.89% | 0.95% | 0.99% | 1.47% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.96% | 0.90% | 0.89% | 0.89% | 0.95% | 1.00% | 1.00% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.32% | 1.09% | 1.28% | 1.54% | 1.39% | 1.20% | 2.08% | |||||||||||||||||||||||
Portfolio Turnover Rate | 91% | 150% | 100% | 100% | 108% | 92% | 100% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(4) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 21
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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 U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund) (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
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Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July
24 | DECEMBER 31, 2014
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2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable).
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Deutsche Bank AG | $ | 667,784 | $ | – | $ | (667,784) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan 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 as permitted by the SEC. 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. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. 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 on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. 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 as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management
26 | DECEMBER 31, 2014
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vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
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 on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH U.S. Managed Volatility Fund | All Asset Levels | 0.5 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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 (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH U.S. Managed Volatility Fund | 0.79 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial
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Notes to Financial Statements (unaudited) (continued)
advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred
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compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH U.S. Managed Volatility Fund | $ | 1,178 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
INTECH U.S. Managed Volatility Fund - Class A Shares | - | % | - | % | ||||||
INTECH U.S. Managed Volatility Fund - Class C Shares | - | - | ||||||||
INTECH U.S. Managed Volatility Fund - Class D Shares | 48 | 0 | ||||||||
INTECH U.S. Managed Volatility Fund - Class I Shares | - | - | ||||||||
INTECH U.S. Managed Volatility Fund - Class N Shares | 100 | 42 | ||||||||
INTECH U.S. Managed Volatility Fund - Class S Shares | 100 | 0 | ||||||||
INTECH U.S. Managed Volatility Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
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Notes to Financial Statements (unaudited) (continued)
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, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH U.S. Managed Volatility Fund | $ | 81,451,895 | $ | 4,655,192 | $ | (1,549,093) | $ | 3,106,099 | ||||||||||
5. | Capital Share Transactions |
INTECH U.S. Managed Volatility | ||||||||||
For the period ended December 31 (unaudited) | Fund | |||||||||
and the year ended June 30 | 2014(1) | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 26,024 | 157,909 | ||||||||
Reinvested dividends and distributions | 31,500 | 114,887 | ||||||||
Shares repurchased | (6,099) | (755,014) | ||||||||
Net Increase/(Decrease) in Fund Shares | 51,425 | (482,218) | ||||||||
Shares Outstanding, Beginning of Period | 108,190 | 590,408 | ||||||||
Shares Outstanding, End of Period | 159,615 | 108,190 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 57,594 | 49,224 | ||||||||
Reinvested dividends and distributions | 7,540 | 5,721 | ||||||||
Shares repurchased | (28,164) | (19,749) | ||||||||
Net Increase/(Decrease) in Fund Shares | 36,970 | 35,196 | ||||||||
Shares Outstanding, Beginning of Period | 65,778 | 30,582 | ||||||||
Shares Outstanding, End of Period | 102,748 | 65,778 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 10,357 | N/A | ||||||||
Reinvested dividends and distributions | – | N/A | ||||||||
Shares repurchased | – | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 10,357 | N/A | ||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | ||||||||
Shares Outstanding, End of Period | 10,357 | N/A | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 278,221 | 1,050,321 | ||||||||
Reinvested dividends and distributions | 632,909 | 1,114,934 | ||||||||
Shares repurchased | (6,103,388) | (520,136) | ||||||||
Net Increase/(Decrease) in Fund Shares | (5,192,258) | 1,645,119 | ||||||||
Shares Outstanding, Beginning of Period | 7,849,202 | 6,204,083 | ||||||||
Shares Outstanding, End of Period | 2,656,944 | 7,849,202 |
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INTECH U.S. Managed Volatility | ||||||||||
For the period ended December 31 (unaudited) | Fund | |||||||||
and the year ended June 30 | 2014(1) | 2014 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 5,226,197 | N/A | ||||||||
Reinvested dividends and distributions | 895,748 | N/A | ||||||||
Shares repurchased | (2,612,286) | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,509,659 | N/A | ||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | ||||||||
Shares Outstanding, End of Period | 3,509,659 | N/A | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 1,627 | 741 | ||||||||
Shares repurchased | – | (956) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,627 | (215) | ||||||||
Shares Outstanding, Beginning of Period | 4,853 | 5,068 | ||||||||
Shares Outstanding, End of Period | 6,480 | 4,853 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 378,792 | 1,466,675 | ||||||||
Reinvested dividends and distributions | 534,470 | 121,771 | ||||||||
Shares repurchased | (291,372) | (212,007) | ||||||||
Net Increase/(Decrease) in Fund Shares | 621,890 | 1,376,439 | ||||||||
Shares Outstanding, Beginning of Period | 1,414,790 | 38,351 | ||||||||
Shares Outstanding, End of Period | 2,036,680 | 1,414,790 |
(1) | Period from December 22, 2014 (inception date) through December 31, 2014 and October 28, 2014 (inception date) through December 31, 2014 for Class D Shares and Class N Shares, respectively. |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 U.S. Managed Volatility Fund | $ | 107,155,491 | $ | 149,649,872 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund��s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
40 | DECEMBER 31, 2014
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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Additional Information (unaudited) (continued)
that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
42 | DECEMBER 31, 2014
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
Janus Investment Fund | 43
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
44 | DECEMBER 31, 2014
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
Janus Investment Fund | 45
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81525 | 125-24-93016 02-15 |
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semiannual report
December 31, 2014
INTECH U.S. Managed Volatility Fund II
(formerly named INTECH U.S.
Growth Fund)
(formerly named INTECH U.S.
Growth Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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INTECH U.S. Managed Volatility Fund II
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INTECH U.S. Managed Volatility Fund II (unaudited)(closed to new investors)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, INTECH U.S. Managed Volatility Fund II returned 3.21% for its Class S Shares. This compares to the 5.57% return posted by the Russell 1000 Index, the Fund’s benchmark, and 6.34% for the Russell 1000 Growth Index, the Fund’s former benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH U.S. Growth Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
In connection with the transition to a managed volatility strategy, the benchmark for the Fund changed to the Russell 1000 Index from the Russell 1000 Growth Index. The transition to the Russell 1000 Index is expected to provide shareholders with broader exposure to large cap U.S. equities than the previous growth-focused index.
The investment process begins with the stocks in the Russell 1000 Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH U.S. Growth Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH U.S. Managed Volatility Fund II strategy focuses on seeking an excess return above the benchmark, while also reducing or managing the Fund’s standard deviation depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The U.S. equity market as measured by the Russell 1000 Index posted a positive return of 5.57% for the six-month period ending December 31, 2014. INTECH U.S. Managed Volatility Fund II Class S Shares underperformed the Russell 1000 Index over the period and generated a return of 3.21%.
The strategy’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. As compared to the Russell 1000 Growth Index, which was the Fund’s benchmark prior to the transition on December 17, 2014, the Fund was overweight, on average, the energy sector, which was the worst performing sector during the period as oil prices declined sharply. This active sector positioning was the main detractor from relative performance during the period. An overall negative selection effect, which is a residual of the investment process, also detracted from relative performance during the period.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute volatility. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the
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INTECH U.S. Managed Volatility Fund II (unaudited)(closed to new investors)
hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH U.S. Managed Volatility Fund II.
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(unaudited)
INTECH U.S. Managed Volatility Fund II At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
General Mills, Inc. Food Products | 3.1% | |||
Altria Group, Inc. Tobacco | 2.2% | |||
Southwest Airlines Co. Airlines | 2.0% | |||
Apple, Inc. Technology Hardware, Storage & Peripherals | 1.9% | |||
Reynolds American, Inc. Tobacco | 1.7% | |||
10.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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INTECH U.S. Managed Volatility Fund II (unaudited)(closed to new investors)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectus | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
INTECH U.S. Managed Volatility Fund II – Class A Shares(1) | |||||||||||||
NAV | 3.29% | 9.55% | 15.24% | 7.04% | 8.69% | 0.95% | |||||||
MOP | –2.64% | 3.24% | 13.88% | 6.41% | 8.35% | ||||||||
INTECH U.S. Managed Volatility Fund II – Class C Shares(1) | |||||||||||||
NAV | 2.99% | 8.87% | 14.35% | 6.20% | 8.07% | 1.59% | |||||||
CDSC | 1.99% | 7.87% | 14.35% | 6.20% | 8.07% | ||||||||
INTECH U.S. Managed Volatility Fund II – Class I Shares(1) | 3.44% | 9.92% | 15.57% | 6.82% | 8.69% | 0.61% | |||||||
INTECH U.S. Managed Volatility Fund II – Class S Shares(1) | 3.21% | 9.38% | 15.06% | 6.82% | 8.69% | 1.06% | |||||||
INTECH U.S. Managed Volatility Fund II – Class T Shares(1) | 3.34% | 9.68% | 15.35% | 6.82% | 8.69% | 0.81% | |||||||
Russell 1000® Index | 5.57% | 13.24% | 15.64% | 7.96% | 9.63% | ||||||||
Russell 1000® Growth Index | 6.34% | 13.05% | 15.81% | 8.49% | 9.63% | ||||||||
Morningstar Quartile – Class S Shares | – | 3rd | 2nd | 3rd | 3rd | ||||||||
Morningstar Ranking – based on total returns for Large Growth Funds | – | 1,039/1,760 | 458/1,538 | 982/1,331 | 825/1,253 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) or visit janus.com/advisor/mutual-funds.
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
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(unaudited)
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 the predecessor fund into corresponding shares of the Fund.
Performance shown for Class A Shares reflects the historical performance of the predecessor fund’s Class A Shares from September 30, 2004 to July 6, 2009 (prior to the reorganization), calculated using the fees and expenses of the predecessor fund’s Class A Shares, net of any applicable fee and expense limitations or waivers. Performance shown for certain periods prior to September 30, 2004, reflects the historical performance of the predecessor fund’s Class S Shares (formerly named Class I Shares), calculated using the fees and expenses of Class S Shares of the predecessor fund, net of any applicable fee and expense limitations or waivers.
Performance shown for Class C Shares and Class S Shares for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the predecessor fund respectively prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Performance shown for Class I Shares reflects the performance of the 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 predecessor fund’s Class I Shares, net of any applicable fee and expense limitations or waivers. Performance shown for certain periods prior to November 28, 2005, reflects the historical performance of the predecessor fund’s Class S Shares (formerly named Class I Shares), calculated using the fees and expenses of Class S Shares of the predecessor fund, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for Class T Shares for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class S Shares prior to the reorganization, calculated using the fees and expenses of Class S Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH U.S. Growth Fund changed its name to INTECH U.S. Managed Volatility Fund II and changed its benchmark from the Russell 1000® Growth Index to the Russell 1000® Index. The transition to the Russell 1000® Index is intended to reflect broader exposure to large cap U.S. equities than the growth-focused index.
* | The predecessor Fund’s inception date – January 2, 2003 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
INTECH U.S. Managed Volatility Fund II (unaudited)(closed to new investors)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectus. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,032.90 | $ | 4.82 | $ | 1,000.00 | $ | 1,020.47 | $ | 4.79 | 0.94% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,029.90 | $ | 8.14 | $ | 1,000.00 | $ | 1,017.19 | $ | 8.08 | 1.59% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,034.40 | $ | 3.08 | $ | 1,000.00 | $ | 1,022.18 | $ | 3.06 | 0.60% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,032.10 | $ | 5.48 | $ | 1,000.00 | $ | 1,019.81 | $ | 5.45 | 1.07% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,033.40 | $ | 4.20 | $ | 1,000.00 | $ | 1,021.07 | $ | 4.18 | 0.82% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectus for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
INTECH U.S. Managed Volatility Fund II(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Common Stocks – 98.7% | ||||||||||
Aerospace & Defense – 1.8% | ||||||||||
900 | Alliant Techsystems, Inc. | $ | 104,625 | |||||||
2,900 | General Dynamics Corp. | 399,098 | ||||||||
10,300 | Lockheed Martin Corp. | 1,983,471 | ||||||||
1,300 | Northrop Grumman Corp. | 191,607 | ||||||||
4,000 | Raytheon Co. | 432,680 | ||||||||
10,500 | TransDigm Group, Inc. | 2,061,675 | ||||||||
| ||||||||||
5,173,156 | ||||||||||
Air Freight & Logistics – 0.6% | ||||||||||
19,100 | CH Robinson Worldwide, Inc. | 1,430,399 | ||||||||
2,300 | FedEx Corp. | 399,418 | ||||||||
| ||||||||||
1,829,817 | ||||||||||
Airlines – 2.4% | ||||||||||
11,000 | American Airlines Group, Inc. | 589,930 | ||||||||
11,700 | Delta Air Lines, Inc. | 575,523 | ||||||||
132,400 | Southwest Airlines Co. | 5,603,168 | ||||||||
| ||||||||||
6,768,621 | ||||||||||
Auto Components – 0.2% | ||||||||||
3,700 | TRW Automotive Holdings Corp.* | 380,545 | ||||||||
1,300 | Visteon Corp.* | 138,918 | ||||||||
| ||||||||||
519,463 | ||||||||||
Automobiles – 0.2% | ||||||||||
2,500 | Tesla Motors, Inc.*,# | 556,025 | ||||||||
Beverages – 1.3% | ||||||||||
8,400 | Coca-Cola Co. | 354,648 | ||||||||
15,100 | Constellation Brands, Inc. – Class A* | 1,482,367 | ||||||||
13,000 | Dr Pepper Snapple Group, Inc. | 931,840 | ||||||||
700 | Monster Beverage Corp.* | 75,845 | ||||||||
10,500 | PepsiCo, Inc. | 992,880 | ||||||||
| ||||||||||
3,837,580 | ||||||||||
Biotechnology – 3.2% | ||||||||||
9,600 | Alnylam Pharmaceuticals, Inc.* | 931,200 | ||||||||
4,600 | Amgen, Inc. | 732,734 | ||||||||
3,700 | BioMarin Pharmaceutical, Inc.* | 334,480 | ||||||||
8,600 | Celgene Corp.* | 961,996 | ||||||||
29,400 | Gilead Sciences, Inc.* | 2,771,244 | ||||||||
1,000 | Incyte Corp.* | 73,110 | ||||||||
20,400 | Medivation, Inc.* | 2,032,044 | ||||||||
2,000 | Pharmacyclics, Inc.* | 244,520 | ||||||||
2,200 | Regeneron Pharmaceuticals, Inc.* | 902,550 | ||||||||
300 | United Therapeutics Corp.* | 38,847 | ||||||||
| ||||||||||
9,022,725 | ||||||||||
Capital Markets – 0.3% | ||||||||||
1,700 | Bank of New York Mellon Corp. | 68,969 | ||||||||
1,900 | Goldman Sachs Group, Inc. | 368,277 | ||||||||
4,600 | Invesco, Ltd. | 181,792 | ||||||||
6,100 | Morgan Stanley | 236,680 | ||||||||
1,100 | Northern Trust Corp. | 74,140 | ||||||||
| ||||||||||
929,858 | ||||||||||
Chemicals – 1.6% | ||||||||||
1,214 | Ecolab, Inc. | 126,887 | ||||||||
18,900 | LyondellBasell Industries NV – Class A | 1,500,471 | ||||||||
2,000 | NewMarket Corp. | 807,060 | ||||||||
2,500 | Sherwin-Williams Co. | 657,600 | ||||||||
6,500 | Sigma-Aldrich Corp. | 892,255 | ||||||||
8,800 | Westlake Chemical Corp. | 537,592 | ||||||||
| ||||||||||
4,521,865 | ||||||||||
Commercial Banks – 0.1% | ||||||||||
10,900 | Bank of America Corp. | 195,001 | ||||||||
1,600 | Cullen/Frost Bankers, Inc. | 113,024 | ||||||||
| ||||||||||
308,025 | ||||||||||
Commercial Services & Supplies – 1.1% | ||||||||||
4,600 | ADT Corp. | 166,658 | ||||||||
5,000 | Cintas Corp. | 392,200 | ||||||||
30,200 | Covanta Holding Corp. | 664,702 | ||||||||
23,500 | Republic Services, Inc. | 945,875 | ||||||||
9,900 | Waste Connections, Inc. | 435,501 | ||||||||
11,500 | Waste Management, Inc. | 590,180 | ||||||||
| ||||||||||
3,195,116 | ||||||||||
Communications Equipment – 0.5% | ||||||||||
3,500 | Brocade Communications Systems, Inc. | 41,440 | ||||||||
3,700 | F5 Networks, Inc.* | 482,721 | ||||||||
8,400 | Palo Alto Networks, Inc.* | 1,029,588 | ||||||||
| ||||||||||
1,553,749 | ||||||||||
Construction & Engineering – 0% | ||||||||||
3,200 | AECOM Technology Corp.* | 97,184 | ||||||||
Consumer Finance – 0.2% | ||||||||||
1,400 | Discover Financial Services | 91,686 | ||||||||
10,400 | Navient Corp. | 224,744 | ||||||||
11,200 | SLM Corp.* | 114,128 | ||||||||
| ||||||||||
430,558 | ||||||||||
Containers & Packaging – 0.3% | ||||||||||
11,400 | Ball Corp. | 777,138 | ||||||||
Distributors – 0.1% | ||||||||||
1,500 | Genuine Parts Co. | 159,855 | ||||||||
Diversified Consumer Services – 0% | ||||||||||
1,200 | DeVry Education Group, Inc. | 56,964 | ||||||||
Diversified Financial Services – 1.0% | ||||||||||
2,800 | Berkshire Hathaway, Inc. – Class B* | 420,420 | ||||||||
8,900 | CBOE Holdings, Inc. | 564,438 | ||||||||
6,400 | CME Group, Inc. | 567,360 | ||||||||
100 | Intercontinental Exchange, Inc. | 21,929 | ||||||||
5,900 | McGraw Hill Financial, Inc. | 524,982 | ||||||||
5,700 | Moody’s Corp. | 546,117 | ||||||||
3,700 | NASDAQ OMX Group, Inc. | 177,452 | ||||||||
| ||||||||||
2,822,698 | ||||||||||
Diversified Telecommunication Services – 1.0% | ||||||||||
30,800 | CenturyLink, Inc. | 1,219,064 | ||||||||
9,800 | Frontier Communications Corp. | 65,366 | ||||||||
5,800 | Verizon Communications, Inc. | 271,324 | ||||||||
139,400 | Windstream Holdings, Inc.# | 1,148,656 | ||||||||
| ||||||||||
2,704,410 | ||||||||||
Electric Utilities – 4.5% | ||||||||||
6,500 | American Electric Power Co., Inc. | 394,680 | ||||||||
6,800 | Duke Energy Corp. | 568,072 | ||||||||
12,500 | Edison International | 818,500 | ||||||||
28,100 | Entergy Corp. | 2,458,188 | ||||||||
56,500 | Exelon Corp. | 2,095,020 | ||||||||
6,800 | FirstEnergy Corp. | 265,132 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH U.S. Managed Volatility Fund II(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Electric Utilities – (continued) | ||||||||||
12,200 | Hawaiian Electric Industries, Inc. | $ | 408,456 | |||||||
40,500 | ITC Holdings Corp. | 1,637,415 | ||||||||
1,900 | NextEra Energy, Inc. | 201,951 | ||||||||
5,600 | Northeast Utilities | 299,712 | ||||||||
60,000 | Pepco Holdings, Inc. | 1,615,800 | ||||||||
2,200 | Pinnacle West Capital Corp. | 150,282 | ||||||||
20,200 | PPL Corp. | 733,866 | ||||||||
18,300 | Southern Co. | 898,713 | ||||||||
3,400 | Westar Energy, Inc. | 140,216 | ||||||||
5,700 | Xcel Energy, Inc. | 204,744 | ||||||||
| ||||||||||
12,890,747 | ||||||||||
Electronic Equipment, Instruments & Components – 0.5% | ||||||||||
1,600 | Amphenol Corp. – Class A | 86,096 | ||||||||
24,300 | CDW Corp. | 854,631 | ||||||||
8,100 | Jabil Circuit, Inc. | 176,823 | ||||||||
8,800 | National Instruments Corp. | 273,592 | ||||||||
| ||||||||||
1,391,142 | ||||||||||
Energy Equipment & Services – 0.6% | ||||||||||
9,300 | Halliburton Co. | 365,769 | ||||||||
3,500 | Helmerich & Payne, Inc. | 235,970 | ||||||||
12,700 | National Oilwell Varco, Inc. | 832,231 | ||||||||
6,700 | Superior Energy Services, Inc. | 135,005 | ||||||||
| ||||||||||
1,568,975 | ||||||||||
Food & Staples Retailing – 1.4% | ||||||||||
3,900 | Costco Wholesale Corp. | 552,825 | ||||||||
14,600 | CVS Caremark Corp. | 1,406,126 | ||||||||
26,700 | Kroger Co. | 1,714,407 | ||||||||
8,600 | Safeway, Inc. | 302,032 | ||||||||
1,700 | Wal-Mart Stores, Inc. | 145,996 | ||||||||
| ||||||||||
4,121,386 | ||||||||||
Food Products – 4.5% | ||||||||||
8,100 | Archer-Daniels-Midland Co. | 421,200 | ||||||||
27,400 | ConAgra Foods, Inc. | 994,072 | ||||||||
164,600 | General Mills, Inc. | 8,778,118 | ||||||||
7,100 | Hormel Foods Corp. | 369,910 | ||||||||
15,700 | Kellogg Co. | 1,027,408 | ||||||||
1,400 | Keurig Green Mountain, Inc. | 185,353 | ||||||||
2,600 | Mead Johnson Nutrition Co. | 261,404 | ||||||||
17,800 | Tyson Foods, Inc. – Class A | 713,602 | ||||||||
| ||||||||||
12,751,067 | ||||||||||
Gas Utilities – 0.6% | ||||||||||
7,300 | AGL Resources, Inc. | 397,923 | ||||||||
1,300 | Atmos Energy Corp. | 72,462 | ||||||||
29,300 | UGI Corp. | 1,112,814 | ||||||||
| ||||||||||
1,583,199 | ||||||||||
Health Care Equipment & Supplies – 1.9% | ||||||||||
5,900 | CareFusion Corp.* | 350,106 | ||||||||
3,300 | Cooper Cos., Inc. | 534,897 | ||||||||
16,100 | Edwards Lifesciences Corp.* | 2,050,818 | ||||||||
912 | Halyard Health, Inc.* | 41,469 | ||||||||
3,800 | Hill-Rom Holdings, Inc. | 173,356 | ||||||||
5,000 | IDEXX Laboratories, Inc.* | 741,350 | ||||||||
400 | Intuitive Surgical, Inc.* | 211,576 | ||||||||
7,000 | ResMed, Inc.# | 392,420 | ||||||||
5,700 | Sirona Dental Systems, Inc.* | 498,009 | ||||||||
4,500 | Teleflex, Inc. | 516,690 | ||||||||
| ||||||||||
5,510,691 | ||||||||||
Health Care Providers & Services – 9.7% | ||||||||||
15,900 | Aetna, Inc. | 1,412,397 | ||||||||
31,200 | AmerisourceBergen Corp. | 2,812,992 | ||||||||
32,000 | Anthem, Inc. | 4,021,440 | ||||||||
11,400 | Cardinal Health, Inc. | 920,322 | ||||||||
6,500 | Centene Corp.* | 675,025 | ||||||||
17,900 | Cigna Corp. | 1,842,089 | ||||||||
29,600 | Community Health Systems, Inc. | 1,596,032 | ||||||||
6,200 | DaVita HealthCare Partners, Inc.* | 469,588 | ||||||||
30,100 | HCA Holdings, Inc. | 2,209,039 | ||||||||
33,500 | Health Net, Inc.* | 1,793,255 | ||||||||
17,000 | Humana, Inc. | 2,441,710 | ||||||||
3,900 | Laboratory Corp. of America Holdings* | 420,810 | ||||||||
2,800 | LifePoint Hospitals, Inc.* | 201,348 | ||||||||
3,500 | McKesson Corp. | 726,530 | ||||||||
26,400 | Omnicare, Inc. | 1,925,352 | ||||||||
2,700 | Quest Diagnostics, Inc. | 181,062 | ||||||||
20,100 | Tenet Healthcare Corp.* | 1,018,467 | ||||||||
18,100 | UnitedHealth Group, Inc. | 1,829,729 | ||||||||
5,200 | Universal Health Services, Inc. – Class B | 578,552 | ||||||||
11,400 | VCA, Inc.* | 555,978 | ||||||||
| ||||||||||
27,631,717 | ||||||||||
Health Care Technology – 0.1% | ||||||||||
6,300 | Cerner Corp.* | 407,358 | ||||||||
Hotels, Restaurants & Leisure – 1.5% | ||||||||||
2,200 | Brinker International, Inc. | 129,118 | ||||||||
1,200 | Chipotle Mexican Grill, Inc.* | 821,412 | ||||||||
3,300 | Domino’s Pizza, Inc. | 310,761 | ||||||||
31,400 | Marriott International, Inc. – Class A | 2,450,142 | ||||||||
1,900 | Panera Bread Co. – Class A* | 332,120 | ||||||||
1,100 | Wyndham Worldwide Corp. | 94,336 | ||||||||
| ||||||||||
4,137,889 | ||||||||||
Household Durables – 0.5% | ||||||||||
1,100 | Jarden Corp.*,# | 52,668 | ||||||||
6,900 | Leggett & Platt, Inc. | 294,009 | ||||||||
13,400 | Newell Rubbermaid, Inc. | 510,406 | ||||||||
4,200 | Tempur Sealy International, Inc.* | 230,622 | ||||||||
1,000 | Whirlpool Corp. | 193,740 | ||||||||
| ||||||||||
1,281,445 | ||||||||||
Household Products – 1.5% | ||||||||||
4,500 | Church & Dwight Co., Inc. | 354,645 | ||||||||
2,400 | Clorox Co. | 250,104 | ||||||||
200 | Energizer Holdings, Inc. | 25,712 | ||||||||
27,300 | Kimberly-Clark Corp. | 3,154,242 | ||||||||
4,000 | Procter & Gamble Co. | 364,360 | ||||||||
| ||||||||||
4,149,063 | ||||||||||
Information Technology Services – 1.3% | ||||||||||
14,700 | Amdocs, Ltd. (U.S. Shares) | 685,828 | ||||||||
4,200 | Automatic Data Processing, Inc. | 350,154 | ||||||||
16,600 | Broadridge Financial Solutions, Inc. | 766,588 | ||||||||
4,500 | Fiserv, Inc.* | 319,365 | ||||||||
6,600 | FleetCor Technologies, Inc.* | 981,486 | ||||||||
1,800 | Gartner, Inc.* | 151,578 | ||||||||
8,500 | Paychex, Inc. | 392,445 | ||||||||
| ||||||||||
3,647,444 | ||||||||||
Insurance – 3.3% | ||||||||||
600 | ACE, Ltd. (U.S. Shares) | 68,928 | ||||||||
22,600 | Allied World Assurance Co. Holdings AG | 856,992 | ||||||||
1,800 | Allstate Corp. | 126,450 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Insurance – (continued) | ||||||||||
3,600 | Arch Capital Group, Ltd.* | $ | 212,760 | |||||||
3,700 | Assurant, Inc. | 253,191 | ||||||||
6,600 | Axis Capital Holdings, Ltd. | 337,194 | ||||||||
3,400 | Brown & Brown, Inc. | 111,894 | ||||||||
700 | Chubb Corp. | 72,429 | ||||||||
6,700 | Endurance Specialty Holdings, Ltd. | 400,928 | ||||||||
10,100 | Everest Re Group, Ltd. | 1,720,030 | ||||||||
7,400 | FNF Group | 254,930 | ||||||||
2,800 | Hartford Financial Services Group, Inc. | 116,732 | ||||||||
2,200 | HCC Insurance Holdings, Inc. | 117,744 | ||||||||
1,100 | Markel Corp.* | 751,124 | ||||||||
12,800 | PartnerRe, Ltd. | 1,460,864 | ||||||||
1,300 | Progressive Corp. | 35,087 | ||||||||
8,800 | RenaissanceRe Holdings, Ltd. | 855,536 | ||||||||
2,200 | Travelers Cos., Inc. | 232,870 | ||||||||
9,700 | Validus Holdings, Ltd. | 403,132 | ||||||||
600 | White Mountains Insurance Group, Ltd. | 378,066 | ||||||||
12,900 | WR Berkley Corp. | 661,254 | ||||||||
| ||||||||||
9,428,135 | ||||||||||
Internet & Catalog Retail – 0.1% | ||||||||||
1,100 | Netflix, Inc.* | 375,771 | ||||||||
Internet Software & Services – 2.8% | ||||||||||
3,100 | AOL, Inc. | 143,127 | ||||||||
3,852 | Equinix, Inc. | 873,364 | ||||||||
58,000 | Facebook, Inc. – Class A* | 4,525,160 | ||||||||
6,200 | LinkedIn Corp. – Class A* | 1,424,202 | ||||||||
2,000 | Rackspace Hosting, Inc.* | 93,620 | ||||||||
16,200 | Twitter, Inc.* | 581,094 | ||||||||
6,300 | Yahoo!, Inc.* | 318,213 | ||||||||
| ||||||||||
7,958,780 | ||||||||||
Leisure Products – 0% | ||||||||||
1,400 | Hasbro, Inc. | 76,986 | ||||||||
Life Sciences Tools & Services – 0.9% | ||||||||||
2,100 | Bio-Techne Corp. | 194,040 | ||||||||
3,000 | Charles River Laboratories International, Inc.* | 190,920 | ||||||||
11,400 | Illumina, Inc.* | 2,104,212 | ||||||||
3,100 | Quintiles Transnational Holdings, Inc.* | 182,497 | ||||||||
| ||||||||||
2,671,669 | ||||||||||
Machinery – 0.3% | ||||||||||
800 | Caterpillar, Inc. | 73,224 | ||||||||
900 | Pall Corp. | 91,089 | ||||||||
22,900 | Trinity Industries, Inc. | 641,429 | ||||||||
| ||||||||||
805,742 | ||||||||||
Media – 1.1% | ||||||||||
20,400 | Cablevision Systems Corp. – Class A# | 421,056 | ||||||||
4,400 | Charter Communications, Inc. – Class A* | 733,128 | ||||||||
18,600 | Cinemark Holdings, Inc. | 661,788 | ||||||||
700 | Comcast Corp. – Class A | 40,607 | ||||||||
6,000 | DISH Network Corp. – Class A | 437,340 | ||||||||
2,100 | Lions Gate Entertainment Corp. (U.S. Shares)# | 67,242 | ||||||||
8,200 | Madison Square Garden Co. – Class A* | 617,132 | ||||||||
3,200 | Thomson Reuters Corp. | 129,088 | ||||||||
| ||||||||||
3,107,381 | ||||||||||
Metals & Mining – 2.1% | ||||||||||
170,300 | Alcoa, Inc. | 2,689,037 | ||||||||
15,900 | Royal Gold, Inc. | 996,930 | ||||||||
24,400 | Steel Dynamics, Inc. | 481,656 | ||||||||
62,900 | United States Steel Corp.# | 1,681,946 | ||||||||
| ||||||||||
5,849,569 | ||||||||||
Multi-Utilities – 1.7% | ||||||||||
1,700 | Ameren Corp. | 78,421 | ||||||||
12,800 | CMS Energy Corp. | 444,800 | ||||||||
4,800 | Consolidated Edison, Inc. | 316,848 | ||||||||
4,800 | DTE Energy Co. | 414,576 | ||||||||
3,100 | Integrys Energy Group, Inc. | 241,335 | ||||||||
13,900 | NiSource, Inc. | 589,638 | ||||||||
10,800 | PG&E Corp. | 574,992 | ||||||||
4,300 | Public Service Enterprise Group, Inc. | 178,063 | ||||||||
14,500 | Sempra Energy | 1,614,720 | ||||||||
13,800 | TECO Energy, Inc. | 282,762 | ||||||||
3,800 | Vectren Corp. | 175,674 | ||||||||
| ||||||||||
4,911,829 | ||||||||||
Multiline Retail – 0.6% | ||||||||||
2,000 | Big Lots, Inc. | 80,040 | ||||||||
400 | Dillard’s, Inc. – Class A | 50,072 | ||||||||
3,300 | Dollar Tree, Inc.* | 232,254 | ||||||||
32,600 | JC Penney Co., Inc.*,# | 211,248 | ||||||||
5,500 | Kohl’s Corp. | 335,720 | ||||||||
3,100 | Nordstrom, Inc. | 246,109 | ||||||||
6,800 | Target Corp. | 516,188 | ||||||||
| ||||||||||
1,671,631 | ||||||||||
Oil, Gas & Consumable Fuels – 3.1% | ||||||||||
1,700 | Apache Corp. | 106,539 | ||||||||
24,500 | Cheniere Energy, Inc.* | 1,724,800 | ||||||||
4,300 | ConocoPhillips | 296,958 | ||||||||
10,300 | Continental Resources, Inc.* | 395,108 | ||||||||
500 | Devon Energy Corp. | 30,605 | ||||||||
22,000 | Golar LNG, Ltd. | 802,340 | ||||||||
5,200 | Hess Corp. | 383,864 | ||||||||
3,100 | Kinder Morgan, Inc. | 131,161 | ||||||||
7,400 | Marathon Oil Corp. | 209,346 | ||||||||
23,700 | Newfield Exploration Co.* | 642,744 | ||||||||
8,800 | ONEOK, Inc. | 438,152 | ||||||||
2,800 | Phillips 66 | 200,760 | ||||||||
7,500 | Spectra Energy Corp. | 272,250 | ||||||||
5,100 | Targa Resources Corp. | 540,855 | ||||||||
9,500 | Tesoro Corp. | 706,325 | ||||||||
7,600 | Whiting Petroleum Corp.* | 250,800 | ||||||||
30,800 | Williams Cos., Inc. | 1,384,152 | ||||||||
39,400 | WPX Energy, Inc.* | 458,222 | ||||||||
| ||||||||||
8,974,981 | ||||||||||
Pharmaceuticals – 3.3% | ||||||||||
10,824 | Actavis PLC* | 2,786,206 | ||||||||
4,300 | Allergan, Inc. | 914,137 | ||||||||
1,000 | Bristol-Myers Squibb Co. | 59,030 | ||||||||
2,500 | Eli Lilly & Co. | 172,475 | ||||||||
1,600 | Hospira, Inc.* | 98,000 | ||||||||
1,700 | Jazz Pharmaceuticals PLC* | 278,341 | ||||||||
30,843 | Mallinckrodt PLC* | 3,054,382 | ||||||||
6,100 | Merck & Co., Inc. | 346,419 | ||||||||
3,000 | Salix Pharmaceuticals, Ltd.* | 344,820 | ||||||||
34,300 | Zoetis, Inc. | 1,475,929 | ||||||||
| ||||||||||
9,529,739 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
INTECH U.S. Managed Volatility Fund II(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Professional Services – 0.4% | ||||||||||
3,500 | Dun & Bradstreet Corp. | $ | 423,360 | |||||||
3,000 | Equifax, Inc. | 242,610 | ||||||||
1,200 | IHS, Inc. – Class A* | 136,656 | ||||||||
3,700 | Nielsen NV | 165,501 | ||||||||
4,800 | Robert Half International, Inc. | 280,224 | ||||||||
| ||||||||||
1,248,351 | ||||||||||
Real Estate Investment Trusts (REITs) – 11.1% | ||||||||||
5,700 | Alexandria Real Estate Equities, Inc. | 505,818 | ||||||||
65,200 | American Capital Agency Corp. | 1,423,316 | ||||||||
7,800 | American Tower Corp. | 771,030 | ||||||||
183,300 | Annaly Capital Management, Inc. | 1,981,473 | ||||||||
40,200 | Apartment Investment & Management Co. – Class A | 1,493,430 | ||||||||
11,000 | AvalonBay Communities, Inc. | 1,797,290 | ||||||||
9,600 | BioMed Realty Trust, Inc. | 206,784 | ||||||||
4,700 | Boston Properties, Inc. | 604,843 | ||||||||
8,800 | Camden Property Trust | 649,792 | ||||||||
7,600 | Corrections Corp. of America | 276,184 | ||||||||
4,900 | Crown Castle International Corp. | 385,630 | ||||||||
44,200 | Digital Realty Trust, Inc. | 2,930,460 | ||||||||
4,400 | Equity Commonwealth* | 112,948 | ||||||||
23,100 | Equity Lifestyle Properties, Inc. | 1,190,805 | ||||||||
24,500 | Equity Residential | 1,760,080 | ||||||||
4,400 | Essex Property Trust, Inc. | 909,040 | ||||||||
11,900 | Extra Space Storage, Inc. | 697,816 | ||||||||
9,700 | Federal Realty Investment Trust | 1,294,562 | ||||||||
6,900 | HCP, Inc. | 303,807 | ||||||||
19,600 | Health Care REIT, Inc. | 1,483,132 | ||||||||
13,800 | Healthcare Trust of America, Inc. – Class A | 371,772 | ||||||||
3,500 | Iron Mountain, Inc. | 135,310 | ||||||||
5,400 | Kilroy Realty Corp. | 372,978 | ||||||||
107,800 | MFA Financial, Inc. | 861,322 | ||||||||
1,600 | Mid-America Apartment Communities, Inc. | 119,488 | ||||||||
11,200 | National Retail Properties, Inc. | 440,944 | ||||||||
23,200 | Omega Healthcare Investors, Inc. | 906,424 | ||||||||
17,700 | Piedmont Office Realty Trust, Inc. – Class A | 333,468 | ||||||||
14,200 | Post Properties, Inc. | 834,534 | ||||||||
1,500 | Public Storage | 277,275 | ||||||||
7,800 | Realty Income Corp.# | 372,138 | ||||||||
4,200 | Regency Centers Corp. | 267,876 | ||||||||
55,000 | Retail Properties of America, Inc. – Class A | 917,950 | ||||||||
4,600 | Simon Property Group, Inc. | 837,706 | ||||||||
500 | SL Green Realty Corp. | 59,510 | ||||||||
6,900 | Starwood Property Trust, Inc. | 160,356 | ||||||||
6,900 | Taubman Centers, Inc. | 527,298 | ||||||||
72,400 | Two Harbors Investment Corp. | 725,448 | ||||||||
24,100 | UDR, Inc. | 742,762 | ||||||||
5,300 | Ventas, Inc. | 380,010 | ||||||||
1,800 | Vornado Realty Trust | 211,878 | ||||||||
10,300 | Weingarten Realty Investors | 359,676 | ||||||||
5,600 | Weyerhaeuser Co. | 200,984 | ||||||||
4,300 | WP Carey, Inc. | 301,430 | ||||||||
| ||||||||||
31,496,777 | ||||||||||
Real Estate Management & Development – 0.2% | ||||||||||
200 | Howard Hughes Corp.* | 26,084 | ||||||||
3,400 | Jones Lang LaSalle, Inc. | 509,762 | ||||||||
| ||||||||||
535,846 | ||||||||||
Road & Rail – 2.5% | ||||||||||
11,200 | Avis Budget Group, Inc.* | 742,896 | ||||||||
4,100 | Con-way, Inc. | 201,638 | ||||||||
9,400 | CSX Corp. | 340,562 | ||||||||
6,400 | Kansas City Southern | 780,992 | ||||||||
8,200 | Landstar System, Inc. | 594,746 | ||||||||
9,800 | Norfolk Southern Corp. | 1,074,178 | ||||||||
18,400 | Old Dominion Freight Line, Inc.* | 1,428,576 | ||||||||
700 | Ryder System, Inc. | 64,995 | ||||||||
15,500 | Union Pacific Corp. | 1,846,515 | ||||||||
| ||||||||||
7,075,098 | ||||||||||
Semiconductor & Semiconductor Equipment – 2.8% | ||||||||||
8,900 | Avago Technologies, Ltd. | 895,251 | ||||||||
11,200 | Broadcom Corp. – Class A | 485,296 | ||||||||
33,600 | Intel Corp. | 1,219,344 | ||||||||
8,900 | KLA-Tencor Corp. | 625,848 | ||||||||
5,000 | Lam Research Corp. | 396,700 | ||||||||
76,300 | Micron Technology, Inc.* | 2,671,263 | ||||||||
24,700 | Skyworks Solutions, Inc. | 1,795,937 | ||||||||
| ||||||||||
8,089,639 | ||||||||||
Software – 1.9% | ||||||||||
2,300 | Cadence Design Systems, Inc.* | 43,631 | ||||||||
10,100 | Citrix Systems, Inc.* | 644,380 | ||||||||
4,800 | Electronic Arts, Inc.* | 225,672 | ||||||||
7,800 | FactSet Research Systems, Inc. | 1,097,850 | ||||||||
1,100 | Intuit, Inc. | 101,409 | ||||||||
33,900 | Microsoft Corp. | 1,574,655 | ||||||||
2,100 | NetSuite, Inc.* | 229,257 | ||||||||
3,200 | Red Hat, Inc.* | 221,248 | ||||||||
1,500 | ServiceNow, Inc.* | 101,775 | ||||||||
32,000 | Symantec Corp. | 820,960 | ||||||||
5,400 | Tableau Software, Inc. – Class A* | 457,704 | ||||||||
| ||||||||||
5,518,541 | ||||||||||
Specialty Retail – 4.3% | ||||||||||
1,900 | AutoZone, Inc.* | 1,176,309 | ||||||||
24,400 | Best Buy Co., Inc. | 951,112 | ||||||||
4,500 | CST Brands, Inc. | 196,245 | ||||||||
6,000 | DSW, Inc. – Class A | 223,800 | ||||||||
20,600 | Foot Locker, Inc. | 1,157,308 | ||||||||
11,700 | Home Depot, Inc. | 1,228,149 | ||||||||
11,800 | L Brands, Inc. | 1,021,290 | ||||||||
15,500 | Lowe’s Cos., Inc. | 1,066,400 | ||||||||
18,500 | Murphy USA, Inc.* | 1,273,910 | ||||||||
8,100 | O’Reilly Automotive, Inc.* | 1,560,222 | ||||||||
5,700 | Ross Stores, Inc. | 537,282 | ||||||||
15,100 | Sally Beauty Holdings, Inc.* | 464,174 | ||||||||
6,000 | Staples, Inc. | 108,720 | ||||||||
5,000 | Ulta Salon Cosmetics & Fragrance, Inc. | 639,200 | ||||||||
13,700 | Urban Outfitters, Inc.* | 481,281 | ||||||||
3,600 | Williams-Sonoma, Inc. | 272,448 | ||||||||
| ||||||||||
12,357,850 | ||||||||||
Technology Hardware, Storage & Peripherals – 2.6% | ||||||||||
48,600 | Apple, Inc. | 5,364,468 | ||||||||
3,600 | EMC Corp. | 107,064 | ||||||||
800 | Hewlett-Packard Co. | 32,104 | ||||||||
6,900 | Lexmark International, Inc. – Class A | 284,763 | ||||||||
16,300 | NetApp, Inc. | 675,635 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Technology Hardware, Storage & Peripherals – (continued) | ||||||||||
6,800 | SanDisk Corp. | $ | 666,264 | |||||||
1,500 | Western Digital Corp. | 166,050 | ||||||||
| ||||||||||
7,296,348 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.7% | ||||||||||
10,900 | Deckers Outdoor Corp.* | 992,336 | ||||||||
19,400 | Hanesbrands, Inc. | 2,165,428 | ||||||||
2,600 | NIKE, Inc. – Class B | 249,990 | ||||||||
1,500 | Ralph Lauren Corp. | 277,740 | ||||||||
7,500 | Under Armour, Inc. – Class A* | 509,250 | ||||||||
10,400 | VF Corp. | 778,960 | ||||||||
| ||||||||||
4,973,704 | ||||||||||
Tobacco – 5.3% | ||||||||||
128,400 | Altria Group, Inc. | 6,326,268 | ||||||||
64,700 | Lorillard, Inc. | 4,072,218 | ||||||||
73,000 | Reynolds American, Inc. | 4,691,710 | ||||||||
| ||||||||||
15,090,196 | ||||||||||
Trading Companies & Distributors – 0.4% | ||||||||||
11,700 | United Rentals, Inc.* | 1,193,517 | ||||||||
Water Utilities – 0.6% | ||||||||||
31,300 | American Water Works Co., Inc. | 1,668,290 | ||||||||
Wireless Telecommunication Services – 1.1% | ||||||||||
27,200 | SBA Communications Corp. – Class A* | 3,012,672 | ||||||||
Total Common Stocks (cost $254,101,629) | 281,255,972 | |||||||||
Investment Companies – 0.7% | ||||||||||
Money Markets – 0.7% | ||||||||||
1,937,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $1,937,000) | 1,937,000 | ||||||||
Investments Purchased with Cash Collateral From Securities Lending – 1.0% | ||||||||||
2,960,014 | Janus Cash Collateral Fund LLC, 0.0984%°°,£ (cost $2,960,014) | 2,960,014 | ||||||||
Total Investments (total cost $258,998,643) – 100.4% | 286,152,986 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.4)% | (1,118,693) | |||||||||
Net Assets – 100% | $ | 285,034,293 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 285,221,558 | 99 | .7% | ||||
Norway | 802,340 | 0 | .3 | |||||
Canada | 129,088 | 0 | .0 | |||||
Total | $ | 286,152,986 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 1.0%. |
(1) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
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® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | |
LLC | Limited Liability Company | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
# | Loaned security; a portion of the security is on loan at December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | ||||||||||
INTECH U.S. Managed Volatility Fund II | ||||||||||||||||
Janus Cash Collateral Fund LLC | 13,402,841 | 38,075,228 | (48,518,055) | 2,960,014 | $– | $32,175(1) | $2,960,014 | |||||||||
Janus Cash Liquidity Fund LLC | 1,608,052 | 26,709,328 | (26,380,380) | 1,937,000 | – | 564 | 1,937,000 | |||||||||
Total | $– | $32,739 | $4,897,014 | |||||||||||||
(1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH U.S. Managed Volatility Fund II | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 281,255,972 | $ | – | $ | – | |||||
Investment Companies | – | 1,937,000 | – | ||||||||
Investments Purchased with Cash Collateral From Securities Lending | – | 2,960,014 | – | ||||||||
Total Assets | $ | 281,255,972 | $ | 4,897,014 | $ | – | |||||
12 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
INTECH U.S. | ||||
Managed | ||||
As of December 31, 2014 (unaudited) | Volatility Fund II(1) | |||
Assets: | ||||
Investments at cost | $ | 258,998,643 | ||
Unaffiliated investments at value(2) | $ | 281,255,972 | ||
Affiliated investments at value | 4,897,014 | |||
Cash | 70,174 | |||
Receivables: | ||||
Investments sold | 18,987,144 | |||
Fund shares sold | 196,004 | |||
Dividends | 496,764 | |||
Dividends from affiliates | 16 | |||
Other assets | 4,551 | |||
Total Assets | 305,907,639 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 2,960,014 | |||
Payables: | ||||
Investments purchased | 17,530,245 | |||
Fund shares repurchased | 173,308 | |||
Advisory fees | 136,669 | |||
Fund administration fees | 2,733 | |||
Transfer agent fees and expenses | 36,729 | |||
12b-1 Distribution and shareholder servicing fees | 8,315 | |||
Non-interested Trustees’ fees and expenses | 1,990 | |||
Accrued expenses and other payables | 23,343 | |||
Total Liabilities | 20,873,346 | |||
Net Assets | $ | 285,034,293 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities (continued)
INTECH U.S. | ||||
Managed | ||||
As of December 31, 2014 (unaudited) | Volatility Fund II(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 340,895,620 | ||
Undistributed net investment income/(loss)* | 213,713 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (83,230,626) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 27,155,586 | |||
Total Net Assets | $ | 285,034,293 | ||
Net Assets - Class A Shares | $ | 10,506,975 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 483,634 | |||
Net Asset Value Per Share(3) | $ | 21.73 | ||
Maximum Offering Price Per Share(4) | $ | 23.06 | ||
Net Assets - Class C Shares | $ | 3,885,053 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 185,492 | |||
Net Asset Value Per Share(3) | $ | 20.94 | ||
Net Assets - Class I Shares | $ | 192,864,986 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,945,936 | |||
Net Asset Value Per Share | $ | 21.56 | ||
Net Assets - Class S Shares | $ | 11,864,766 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 547,255 | |||
Net Asset Value Per Share | $ | 21.68 | ||
Net Assets - Class T Shares | $ | 65,912,513 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,069,768 | |||
Net Asset Value Per Share | $ | 21.47 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH U.S. Growth Fund. | |
(2) | Unaffiliated investments at value includes $2,887,190 of securities loaned. See Note 2 in Notes to Financial Statements. | |
(3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
INTECH U.S. | ||||
Managed | ||||
For the period ended December 31, 2014 (unaudited) | Volatility Fund II(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 32,175 | ||
Dividends | 3,030,675 | |||
Dividends from affiliates | 564 | |||
Other income | 5,037 | |||
Foreign tax withheld | (1,930) | |||
Total Investment Income | 3,066,521 | |||
Expenses: | ||||
Advisory fees | 821,750 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 12,733 | |||
Class C Shares | 18,827 | |||
Class S Shares | 15,079 | |||
Transfer agent administrative fees and expenses: | ||||
Class S Shares | 15,079 | |||
Class T Shares | 79,278 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 5,378 | |||
Class C Shares | 18 | |||
Class I Shares | 45,729 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 975 | |||
Class C Shares | 296 | |||
Class I Shares | 4,790 | |||
Class S Shares | 142 | |||
Class T Shares | 345 | |||
Shareholder reports expense | 8,761 | |||
Registration fees | 36,303 | |||
Custodian fees | 3,170 | |||
Professional fees | 20,265 | |||
Non-interested Trustees’ fees and expenses | 3,085 | |||
Fund administration fees | 16,435 | |||
Other expenses | 10,942 | |||
Total Expenses | 1,119,380 | |||
Net Expenses | 1,119,380 | |||
Net Investment Income/(Loss) | 1,947,141 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 50,690,785 | |||
Total Net Realized Gain/(Loss) on Investments | 50,690,785 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (41,526,447) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (41,526,447) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 11,111,479 |
(1) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
INTECH U.S. | ||||||||
Managed | ||||||||
Volatility Fund II(1) | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 1,947,141 | $ | 2,240,242 | ||||
Net realized gain/(loss) on investments | 50,690,785 | 55,502,434 | ||||||
Change in unrealized net appreciation/depreciation | (41,526,447) | 11,394,612 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 11,111,479 | 69,137,288 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (64,626) | (28,408) | ||||||
Class C Shares | (1,450) | – | ||||||
Class I Shares | (2,038,591) | (1,751,394) | ||||||
Class S Shares | (42,198) | (64,467) | ||||||
Class T Shares | (489,539) | (204,185) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | – | – | ||||||
Class C Shares | – | – | ||||||
Class I Shares | – | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (2,636,404) | (2,048,454) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 5,015,789 | 2,367,010 | ||||||
Class C Shares | 406,108 | 299,315 | ||||||
Class I Shares | 10,294,397 | 23,374,440 | ||||||
Class S Shares | 888,908 | 2,919,449 | ||||||
Class T Shares | 9,900,098 | 48,423,406 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 55,243 | 23,453 | ||||||
Class C Shares | 930 | – | ||||||
Class I Shares | 1,345,063 | 1,431,345 | ||||||
Class S Shares | 42,131 | 64,414 | ||||||
Class T Shares | 487,476 | 202,598 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,687,929) | (1,508,457) | ||||||
Class C Shares | (394,569) | (574,200) | ||||||
Class I Shares | (69,551,244) | (52,386,589) | ||||||
Class S Shares | (1,630,118) | (13,773,253) | ||||||
Class T Shares | (5,695,466) | (12,035,194) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (51,523,183) | (1,172,263) | ||||||
Net Increase/(Decrease) in Net Assets | (43,048,108) | 65,916,571 | ||||||
Net Assets: | ||||||||
Beginning of period | 328,082,401 | 262,165,830 | ||||||
End of period | $ | 285,034,293 | $ | 328,082,401 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 213,713 | $ | 902,976 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Managed Volatility Fund II(1) | |||||||||||||||||||||||||||||
year ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.17 | $16.80 | $14.43 | $14.07 | $10.52 | $9.80 | $12.88 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.11(3) | 0.09(3) | 0.33 | 0.16 | 0.23 | 0.14 | 0.14 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.59 | 4.36 | 2.19 | 0.29 | 3.44 | 0.64 | (3.11) | |||||||||||||||||||||||
Total from Investment Operations | 0.70 | 4.45 | 2.52 | 0.45 | 3.67 | 0.78 | (2.97) | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.14) | (0.08) | (0.15) | (0.09) | (0.12) | (0.06) | (0.11) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.14) | (0.08) | (0.15) | (0.09) | (0.12) | (0.06) | (0.11) | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.73 | $21.17 | $16.80 | $14.43 | $14.07 | $10.52 | $9.80 | |||||||||||||||||||||||
Total Return** | 3.29% | 26.56% | 17.57% | 3.26% | 35.03% | 7.97% | (22.92)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $10,507 | $7,812 | $5,445 | $7,328 | $9,208 | $11,914 | $18,215 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $10,046 | $6,662 | $6,267 | $8,624 | $9,550 | $17,116 | $20,041 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.94% | 0.95% | 0.90% | 0.92% | 0.86% | 0.90% | 0.82% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.94% | 0.95% | 0.90% | 0.92% | 0.86% | 0.90% | 0.82% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.00% | 0.48% | 0.85% | 0.65% | 0.62% | 0.71% | 1.01% | |||||||||||||||||||||||
Portfolio Turnover Rate | 109% | 110% | 81% | 84% | 96% | 117% | 119% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Managed Volatility Fund II(1) | |||||||||||||||||||||||||||||
year ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $20.35 | $16.18 | $13.92 | $13.58 | $10.15 | $9.50 | $12.45 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.03(3) | (0.03)(3) | 0.04 | (0.28) | (0.22) | (0.14) | (0.05) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.57 | 4.20 | 2.28 | 0.62 | 3.65 | 0.81 | (2.88) | |||||||||||||||||||||||
Total from Investment Operations | 0.60 | 4.17 | 2.32 | 0.34 | 3.43 | 0.67 | (2.93) | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.01) | – | (0.06) | – | – | (0.02) | (0.02) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | – | – | –(4) | – | |||||||||||||||||||||||
Total Distributions and Other | (0.01) | – | (0.06) | – | – | (0.02) | (0.02) | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.94 | $20.35 | $16.18 | $13.92 | $13.58 | $10.15 | $9.50 | |||||||||||||||||||||||
Total Return** | 2.94% | 25.77% | 16.70% | 2.50% | 33.79% | 7.05% | (23.53)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,885 | $3,761 | $3,232 | $2,742 | $3,717 | $3,928 | $4,921 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,713 | $3,521 | $2,999 | $3,089 | $4,005 | $4,571 | $5,469 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.59% | 1.59% | 1.60% | 1.71% | 1.71% | 2.82% | 1.67% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.59% | 1.59% | 1.60% | 1.71% | 1.70% | 1.93% | 1.62% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.32% | (0.15)% | 0.15% | (0.15)% | (0.25)% | (0.32)% | 0.21% | |||||||||||||||||||||||
Portfolio Turnover Rate | 109% | 110% | 81% | 84% | 96% | 117% | 119% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Growth Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | INTECH U.S. Managed Volatility Fund II(1) | |||||||||||||||||||||||||||||
ended June 30 and the year ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.03 | $16.68 | $14.35 | $13.97 | $10.45 | $9.72 | $12.84 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.16(3) | 0.18 | 0.13 | 0.13 | 0.12 | 0.12 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.59 | 4.33 | 2.36 | 0.37 | 3.55 | 0.69 | (3.07) | |||||||||||||||||||||||
Total from Investment Operations | 0.72 | 4.49 | 2.54 | 0.50 | 3.68 | 0.81 | (2.95) | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.14) | (0.21) | (0.12) | (0.16) | (0.08) | (0.17) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | –(4) | |||||||||||||||||||||||
Total Distributions and Other | (0.19) | (0.14) | (0.21) | (0.12) | (0.16) | (0.08) | (0.17) | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.56 | $21.03 | $16.68 | $14.35 | $13.97 | $10.45 | $9.72 | |||||||||||||||||||||||
Total Return** | 3.44% | 27.02% | 17.89% | 3.64% | 35.31% | 8.29% | (22.76)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $192,865 | $244,747 | $218,980 | $264,411 | $323,567 | $379,401 | $807,347 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $236,255 | $232,771 | $258,682 | $287,232 | $329,686 | $768,204 | $857,115 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.60% | 0.61% | 0.58% | 0.62% | 0.63% | 0.62% | 0.55% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.60% | 0.61% | 0.58% | 0.62% | 0.63% | 0.61% | 0.55% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.25% | 0.83% | 1.20% | 0.95% | 0.84% | 1.00% | 1.30% | |||||||||||||||||||||||
Portfolio Turnover Rate | 109% | 110% | 81% | 84% | 96% | 117% | 119% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Managed Volatility Fund II(1) | |||||||||||||||||||||||||||||
year ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.08 | $16.73 | $14.39 | $14.02 | $10.48 | $9.77 | $12.81 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.09(3) | 0.08(3) | 0.15 | (0.06) | 0.33 | 0.20 | 0.33 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.59 | 4.33 | 2.33 | 0.49 | 3.31 | 0.56 | (3.30) | |||||||||||||||||||||||
Total from Investment Operations | 0.68 | 4.41 | 2.48 | 0.43 | 3.64 | 0.76 | (2.97) | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.08) | (0.06) | (0.14) | (0.06) | (0.10) | (0.05) | (0.07) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | –(4) | |||||||||||||||||||||||
Total Distributions and Other | (0.08) | (0.06) | (0.14) | (0.06) | (0.10) | (0.05) | (0.07) | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.68 | $21.08 | $16.73 | $14.39 | $14.02 | $10.48 | $9.77 | |||||||||||||||||||||||
Total Return** | 3.21% | 26.40% | 17.36% | 3.14% | 34.77% | 7.73% | (23.09)% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $11,865 | $12,212 | $18,867 | $17,270 | $13,963 | $15,629 | $20,051 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $11,899 | $18,031 | $17,704 | $15,590 | $14,606 | $18,507 | $40,058 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.07% | 1.06% | 1.06% | 1.07% | 1.07% | 1.12% | 1.04% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.07% | 1.06% | 1.06% | 1.07% | 1.07% | 1.12% | 1.04% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.83% | 0.41% | 0.70% | 0.52% | 0.40% | 0.49% | 0.77% | |||||||||||||||||||||||
Portfolio Turnover Rate | 109% | 110% | 81% | 84% | 96% | 117% | 119% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Growth Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class T Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | INTECH U.S. Managed Volatility Fund II(1) | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(2) | 2009(3) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $20.93 | $16.62 | $14.33 | $13.96 | $10.48 | $9.76 | $8.98 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.12(4) | 0.11(4) | 0.26 | 0.12 | 0.11 | 0.06 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.58 | 4.33 | 2.24 | 0.33 | 3.54 | 0.73 | 0.77 | |||||||||||||||||||||||
Total from Investment Operations | 0.70 | 4.44 | 2.50 | 0.45 | 3.65 | 0.79 | 0.78 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.16) | (0.13) | (0.21) | (0.10) | (0.17) | (0.07) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | 0.02 | – | – | – | |||||||||||||||||||||||
Total Distributions and Other | (0.16) | (0.13) | (0.21) | (0.08) | (0.17) | (0.07) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.47 | $20.93 | $16.62 | $14.33 | $13.96 | $10.48 | $9.76 | |||||||||||||||||||||||
Total Return** | 3.34% | 26.78% | 17.61% | 3.45% | 34.99% | 8.11% | 8.69% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $65,913 | $59,551 | $15,642 | $85 | $58 | $14 | $1 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $62,543 | $35,830 | $4,390 | $74 | $33 | $10 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.82% | 0.81% | 0.81% | 0.83% | 0.76% | 0.85% | 0.86% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.82% | 0.81% | 0.81% | 0.81% | 0.76% | 0.85% | 0.85% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.10% | 0.58% | 0.82% | 0.79% | 0.63% | 0.67% | 0.72% | |||||||||||||||||||||||
Portfolio Turnover Rate | 109% | 110% | 81% | 84% | 96% | 117% | 119% |
* | See “Federal Income Tax” 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) | Formerly named INTECH U.S. Growth Fund. | |
(2) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(3) | Period from July 6, 2009 (inception date) through July 31, 2009. | |
(4) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
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 U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund) (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which
20 | DECEMBER 31, 2014
Table of Contents
fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such
Janus Investment Fund | 21
Table of Contents
Notes to Financial Statements (unaudited) (continued)
distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that
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such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable).
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Deutsche Bank AG | $2,887,190 | $– | $(2,887,190) | $– | ||||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan 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 as permitted by the SEC. 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. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. 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 on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. 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 as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC.
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An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
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 on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH U.S. Managed Volatility Fund II | All Asset Levels | 0.50 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% 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 (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
INTECH U.S. Managed Volatility Fund II | 0.83 | 0.76 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
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Notes to Financial Statements (unaudited) (continued)
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred
26 | DECEMBER 31, 2014
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compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH U.S. Managed Volatility Fund II | $ | 615 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH U.S. Managed Volatility Fund II | $ | 59 | ||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
INTECH U.S. Managed Volatility Fund II | $259,451,039 | $29,911,254 | $(3,209,307) | $26,701,947 | ||||||||||||||
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Losses incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
No Expiration | Accumulated | ||||||||||||||||||
Fund | June 30, 2018 | Short-Term | Long-Term | Capital Losses | |||||||||||||||
INTECH U.S. Managed Volatility Fund II | $(133,385,703) | $– | $– | $(133,385,703) | |||||||||||||||
5. | Capital Share Transactions |
For the period ended December 31 | INTECH U.S. Managed Volatility Fund II | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 238,871 | 121,163 | ||||||||
Reinvested dividends and distributions | 2,531 | 1,207 | ||||||||
Shares repurchased | (126,853) | (77,486) | ||||||||
Net Increase/(Decrease) in Fund Shares | 114,549 | 44,884 | ||||||||
Shares Outstanding, Beginning of Period | 369,085 | 324,201 | ||||||||
Shares Outstanding, End of Period | 483,634 | 369,085 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 19,918 | 16,119 | ||||||||
Reinvested dividends and distributions | 44 | – | ||||||||
Shares repurchased | (19,230) | (31,086) | ||||||||
Net Increase/(Decrease) in Fund Shares | 732 | (14,967) | ||||||||
Shares Outstanding, Beginning of Period | 184,760 | 199,727 | ||||||||
Shares Outstanding, End of Period | 185,492 | 184,760 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 484,504 | 1,235,736 | ||||||||
Reinvested dividends and distributions | 62,070 | 74,279 | ||||||||
Shares repurchased | (3,240,088) | (2,799,162) | ||||||||
Net Increase/(Decrease) in Fund Shares | (2,693,514) | (1,489,147) | ||||||||
Shares Outstanding, Beginning of Period | 11,639,450 | 13,128,597 | ||||||||
Shares Outstanding, End of Period | 8,945,936 | 11,639,450 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 42,415 | 148,218 | ||||||||
Reinvested dividends and distributions | 1,934 | 3,326 | ||||||||
Shares repurchased | (76,393) | (700,012) | ||||||||
Net Increase/(Decrease) in Fund Shares | (32,044) | (548,468) | ||||||||
Shares Outstanding, Beginning of Period | 579,299 | 1,127,767 | ||||||||
Shares Outstanding, End of Period | 547,255 | 579,299 |
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For the period ended December 31 | INTECH U.S. Managed Volatility Fund II | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 474,284 | 2,511,404 | ||||||||
Reinvested dividends and distributions | 22,589 | 10,552 | ||||||||
Shares repurchased | (272,222) | (617,747) | ||||||||
Net Increase/(Decrease) in Fund Shares | 224,651 | 1,904,209 | ||||||||
Shares Outstanding, Beginning of Period | 2,845,117 | 940,908 | ||||||||
Shares Outstanding, End of Period | 3,069,768 | 2,845,117 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 U.S. Managed Volatility Fund II | $348,440,703 | $402,715,173 | $– | $– | ||||||
7. | Pending Reorganization |
At a meeting held on November 5, 2014, the Board of Trustees of the Fund approved an Agreement and Plan of Reorganization that provides for the merger of the Fund with and into INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund) (the “Merger”). The Merger is designed to streamline the Janus mutual funds platform and consolidate similar funds, which effective December 17, 2014, have identical investment strategies and risks, and the same benchmark index. In connection with the Merger, shareholders of each class of shares of the Fund will receive shares of a corresponding class of INTECH U.S. Managed Volatility Fund approximately equivalent in dollar value to Fund shares owned immediately prior to the Merger. The closing date of the Merger is expected to be on or about April 24, 2015. After the Merger is completed, the Fund will be liquidated. The Merger is expected to qualify as a tax-free reorganization. Shareholders should not realize taxable gain or loss as a direct result of the Merger, nor will shareholders pay expenses associated with the Merger. The Merger, however, may accelerate distributions, which may be taxable, as the tax year for the Fund will end on the date of the Merger.
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 29
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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Additional Information (unaudited) (continued)
quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Additional Information (unaudited) (continued)
Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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Additional Information (unaudited) (continued)
that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s investment personnel may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
Janus Investment Fund | 45
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81316 | 125-24-93017 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Diversified Alternatives Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Diversified Alternatives Fund
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Table of Contents
Janus Diversified Alternatives Fund (unaudited)
FUND SNAPSHOT We invest in a portfolio of traditional and nontraditional investable risk factors distilled from traditional asset classes, each a type of risk premium. We combine these independent risk premia into a liquid portfolio that seeks to deliver consistent, absolute returns with low correlation to stocks and bonds. | ![]() John Fujiwara co-portfolio manager | ![]() Andrew Weisman co-portfolio manager | ![]() Richard R Lindsey co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, Janus Diversified Alternatives Fund’s Class I Shares returned 3.34%, compared with a return of 1.96% for its primary benchmark, the Barclays U.S. Aggregate Bond Index, and 1.69% for its secondary benchmark, LIBOR + 3%.
MARKET ENVIRONMENT
A strengthening U.S. economy amid weakening foreign economies created market conditions that drove large cap equities higher and sovereign rates lower. Corporate earnings prospects remained mostly intact while a weaker global economy helped keep inflation tame. The S&P 500 Index, a broad measure of U.S. equity performance, gained while yields on eurozone sovereigns touched record lows.
With the labor market strong and U.S. gross domestic product growth gathering momentum, the Federal Reserve (Fed) remained on track to hike its benchmark interest rate in mid-2015. Major central banks abroad, however, were set to deploy aggressive monetary stimulus. Due to divergence between the U.S. and much of the world in growth and central bank policy, the U.S. dollar strengthened against most major currencies. Meanwhile, global demand for many commodities, particularly crude oil, slowed. Several commodity-producing emerging market countries were pushed into or toward recession, like Brazil and Russia. Market volatility spiked at times during the quarter amid investor anxiety about global growth.
PERFORMANCE DISCUSSION
We invest in a portfolio of traditional and nontraditional investable risk-premium strategies derived from equity, fixed income, currency and commodity investments. By targeting a broad collection of statistically independent sources of return, we believe we are in a position to create a more robust portfolio that provides, over time, a generally more stable source of return with significantly less volatility than stocks and bonds.
The Fund outperformed its primary benchmark, the Barclays U.S. Aggregate Bond Index and its secondary benchmark, LIBOR +3%, on a semiannual basis.
Our currency momentum strategy contributed the most to semiannual performance. Specifically, the strategy benefited from a sustained rally by the U.S. dollar against a basket of foreign currencies. U.S. dollar strength was mostly fueled by central bank divergence, in our view. The Fed signaled to the market that it was preparing to raise rates in 2015 as economic data during the fourth quarter showed U.S. growth was gathering momentum. In contrast, the Bank of Japan increased its quantitative easing (QE) program while the European Central Bank (ECB) President Mario Draghi hinted that the ECB may launch a QE program of its own in 2015. The upward trend of the U.S. dollar was also fueled by its historically inverse relationship to crude oil prices, which plunged toward the end of 2014.
While our three commodities strategies helped returns, the Fund mainly benefited from its commodity roll yield strategy. This strategy seeks to gain from longer-term commodity deliveries rather than shorter-term deliveries. Specifically, our positioning in natural gas helped us after harsh winter temperatures failed to materialize, and the spot price for natural gas declined.
Our rates momentum strategy, which seeks to capture a sustained directional trend in interest rates, contributed to returns amid a steady decline in long-end rates. The yield of the bellwether 10-year German bund steadily declined, especially in the fourth quarter, touching record lows beneath 0.55%. A flagging eurozone economy on top of the region’s disinflation stoked speculation that the ECB would step up monetary stimulus.
The equity emerging strategy was the largest detractor from performance. The strategy favors emerging market (EM) stocks over stocks of developed markets. Lower commodity prices sparked wholesale selling in EM companies as many of their home countries are major commodity producers, such as Russia and Brazil.
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Janus Diversified Alternatives Fund (unaudited)
Moreover, EM currencies weakened considerably against the U.S. dollar, and that hurt EM securities generally.
Our currency carry strategy was also a detractor. The strategy invests in higher-yielding currencies and sells lower-yielding ones while seeking to gain from the difference. However, higher yielding currencies like New Zealand had losses after these currencies weakened against the U.S. dollar.
DERIVATIVES
The Fund makes extensive use of derivatives because they are generally the most efficient and liquid way to gain our desired exposures. Swaps are used to take exposures in equity, fixed income and commodity indices. Futures are used to take exposures in commodities, currencies and long-end fixed income markets. Forwards are employed to take exposures in foreign currencies, generally one week in length. In aggregate, these positions contributed to performance. Please see “Notes to Consolidated Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
By targeting a broad collection of statistically independent sources of return, we believe we are in a position to create a more robust portfolio that provides, over time, a generally more stable source of return with significantly less volatility than stocks and bonds.
Since we don’t believe anyone is good at forecasting future returns, we are indifferent to asset class performances; however, we do develop forecasts of volatility and correlation (similarity of asset class movements) and build that into our portfolio construction process. These forecasts represent what we think the contributions to portfolio risk will be with respect to each of these relatively independent sources of return. Our goal is to estimate from a forward-looking standpoint what volatility and correlation are going to look like over the next quarter and to weight the portfolio so no one risk factor is allowed to dominate.
While we do not believe in forecasting a market’s particular direction, it does appear that market volatility is creeping back.
Amid greater market volatility, we intend to maintain our approach of evenly distributing risk across the Fund using our risk premia strategies. A key way to do this is to favor strategies which are less correlated to the overall market.
For example, fixed-income returns have exhibited lower correlation to the overall market, so we increased our weighting in our rates momentum and credit strategies. We increased our weightings in our commodity strategies for this reason. Equities have shown higher correlation, so we trimmed our exposure to our equity momentum strategy. Changes in strategies are made according to our risk allocation methodology, which is designed so no one risk premium contributes disproportionately to the overall risk of the portfolio.
Thank you for investing in Janus Diversified Alternatives Fund.
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(unaudited)
Janus Diversified Alternatives Fund At A Glance
Asset Allocation
As of December 31, 2014
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The allocations shown reflect absolute notional exposures to various
asset classes. The allocations are calculated net of cash segregated
for future obligations.
asset classes. The allocations are calculated net of cash segregated
for future obligations.
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Janus Diversified Alternatives Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif33m01.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Diversified Alternatives Fund – Class A Shares | |||||||||||
NAV | 3.25% | 2.62% | 0.79% | 1.50% | 1.50% | ||||||
MOP | –2.68% | –3.24% | –2.14% | ||||||||
Janus Diversified Alternatives Fund – Class C Shares | |||||||||||
NAV | 2.86% | 2.44% | 0.35% | 2.26% | 2.25% | ||||||
CDSC | 1.86% | 1.44% | 0.35% | ||||||||
Janus Diversified Alternatives Fund – Class D Shares(1) | 3.35% | 2.62% | 0.89% | 1.42% | 1.41% | ||||||
Janus Diversified Alternatives Fund – Class I Shares | 3.34% | 2.72% | 0.99% | 1.26% | 1.25% | ||||||
Janus Diversified Alternatives Fund – Class N Shares | 3.44% | 2.82% | 1.04% | 1.25% | 1.25% | ||||||
Janus Diversified Alternatives Fund – Class S Shares | 3.05% | 2.43% | 0.59% | 1.75% | 1.75% | ||||||
Janus Diversified Alternatives Fund – Class T Shares | 3.25% | 2.72% | 0.84% | 1.51% | 1.50% | ||||||
Barclays U.S. Aggregate Bond Index | 1.96% | 5.97% | 1.83% | ||||||||
London Interbank Offered Rate (LIBOR) + 3% | 1.69% | 3.52% | 3.74%** | ||||||||
Morningstar Quartile – Class I Shares | – | 2nd | 4th | ||||||||
Morningstar Ranking – based on total returns for Multialternative Funds | – | 170/383 | 233/293 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Investments in commodities, commodity-linked notes, securities derivatives, futures, foreign securities, short sales and investments through a nonregistered subsidiary provide exposure to certain special risks, including greater volatility and loss of interest and principal, and may not be appropriate for all investors. Commodities are speculative and may fluctuate widely based on a variety of factors, including market movements, economic events and supply and demand disruptions. Derivatives involve risks in addition to the risks of the underlying securities, including gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. Short sales are speculative transactions with potentially unlimited losses, and the use of leverage can magnify the effect of losses.
Janus Capital has limited experience managing a risk premia investment strategy. There is a risk that the Fund’s investments will correlate with stocks and bonds to a greater degree than anticipated, and the investment process may not achieve the desired results. The Fund may underperform during up markets and be negatively affected in down markets. Diversification does not assure a profit or eliminate the risk of loss.
Holding a meaningful portion of assets in cash or cash equivalents may negatively affect performance.
Until the earlier of three years from inception or the Fund’s assets exceeding the first fee breakpoint, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Consolidated Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 28, 2012 | |
** | The London Interbank Offered Rate (LIBOR) + 3% since inception returns are calculated from December 31, 2012. | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Diversified Alternatives Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,032.50 | $ | 7.79 | $ | 1,000.00 | $ | 1,017.54 | $ | 7.73 | 1.52% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,028.60 | $ | 11.66 | $ | 1,000.00 | $ | 1,013.71 | $ | 11.57 | 2.28% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,033.50 | $ | 7.48 | $ | 1,000.00 | $ | 1,017.85 | $ | 7.43 | 1.46% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,033.40 | $ | 6.51 | $ | 1,000.00 | $ | 1,018.80 | $ | 6.46 | 1.27% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,034.40 | $ | 6.46 | $ | 1,000.00 | $ | 1,018.85 | $ | 6.41 | 1.26% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,030.50 | $ | 9.01 | $ | 1,000.00 | $ | 1,016.33 | $ | 8.94 | 1.76% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,032.50 | $ | 7.74 | $ | 1,000.00 | $ | 1,017.59 | $ | 7.68 | 1.51% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Consolidated Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Investment Companies – 6.2% | ||||||||||
Money Markets – 6.2% | ||||||||||
4,144,867 | Janus Cash Liquidity Fund LLC, 0.1008%(a),°°,£ (cost $4,144,867) | $ | 4,144,867 | |||||||
Total Investments (total cost $4,144,867) – 6.2% | 4,144,867 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 93.8% | 62,257,044 | |||||||||
Net Assets – 100% | $ | 66,401,911 | ||||||||
Schedule of Forward Currency Contracts, Open
Currency Units | Unrealized | |||||||||||||
Sold/ | Currency | Appreciation/ | ||||||||||||
Counterparty/Currency and Settlement Date | (Purchased) | Value | (Depreciation) | |||||||||||
HSBC Securities (USA), Inc.: | ||||||||||||||
Australian Dollar 1/9/15 | (590,000) | $ | (481,400) | $ | 3,984 | |||||||||
British Pound 1/9/15 | (26,000) | (40,517) | 186 | |||||||||||
Canadian Dollar 1/9/15 | 78,000 | 67,148 | 8 | |||||||||||
Euro 1/9/15 | (239,000) | (289,180) | (1,736) | |||||||||||
Japanese Yen 1/9/15 | 46,500,000 | 388,288 | (2,791) | |||||||||||
New Zealand Dollar 1/9/15 | (455,000) | (354,639) | 4,635 | |||||||||||
Norwegian Krone 1/9/15 | (1,520,000) | (204,060) | 166 | |||||||||||
Swedish Krona 1/9/15 | 2,720,000 | 349,155 | (19) | |||||||||||
Swiss Franc 1/9/15 | 389,000 | 391,412 | 2,437 | |||||||||||
Total | $ | (173,793) | $ | 6,870 | ||||||||||
Schedule of Futures – Long
Unrealized | ||||||
Appreciation/ | ||||||
Description | (Depreciation) | |||||
10-Year U.S. Treasury Note expires March 2015 29 contracts principal amount $3,664,422 value $3,677,109 | $ | 12,687 | ||||
Copper(a) expires May 2015 11 contracts principal amount $790,138 value $776,463 | (13,675) | |||||
Euro-Bund expires March 2015 29 contracts principal amount $5,391,537 value $5,500,548 | 109,011 | |||||
Gold(a) expires April 2015 6 contracts principal amount $708,120 value $710,940 | 2,820 | |||||
Live Cattle(a) expires June 2015 12 contracts principal amount $770,811 value $743,520 | (27,291) | |||||
S&P® 500 E-mini expires March 2015 37 contracts principal amount $3,848,381 value $3,796,940 | (51,441) | |||||
Silver(a) expires May 2015 7 contracts principal amount $551,625 value $547,120 | (4,505) | |||||
Soybean(a) expires November 2015 15 contracts principal amount $735,840 value $754,125 | 18,285 | |||||
U.S. Dollar Index expires March 2015 115 contracts principal amount $10,229,836 value $10,424,405 | 194,569 | |||||
Wheat(a) expires July 2015 24 contracts principal amount $710,357 value $717,000 | 6,643 | |||||
Total Futures – Long | $ | 247,103 | ||||
Schedule of Futures – Short
Unrealized | ||||||
Appreciation/ | ||||||
Description | (Depreciation) | |||||
Brent Crude(a) expires May 2015 15 contracts principal amount $929,468 value $903,300 | $ | 26,168 | ||||
Coffee ’C’(a) expires May 2015 15 contracts principal amount $1,043,092 value $952,313 | 90,779 | |||||
Corn(a) expires May 2015 45 contracts principal amount $888,758 value $912,938 | (24,180) | |||||
Cotton(a) expires May 2015 30 contracts principal amount $915,617 value $916,050 | (433) |
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
As of December 31, 2014
Unrealized | ||||||
Appreciation/ | ||||||
Description | (Depreciation) | |||||
Soybean(a) expires May 2015 3 contracts principal amount $151,500 value $154,575 | $ | (3,075) | ||||
Sugar #11 (World)(a) expires May 2015 56 contracts principal amount $1,001,239 value $935,782 | 65,457 | |||||
WTI Crude(a) expires May 2015d 17 contracts principal amount $1,089,153 value $934,320 | 154,833 | |||||
Total Futures – Short | $ | 309,549 | ||||
Total Return Swaps outstanding at December 31, 2014
Unrealized | ||||||||||||||||
Return Paid | Return Received | Notional | Appreciation/ | |||||||||||||
Counterparty | by the Fund | by the Fund | Termination Date | Amount | (Depreciation) | |||||||||||
Barclays Capital, Inc. | 3 month USD LIBOR plus 20 basis points | Barclays U.S. Credit RBI Series-1 Index | 1/6/15 | $ | 8,900,000 | $ | 26,843 | |||||||||
BNP Paribas | 1 month USD LIBOR minus 10 basis points | Russell 2000® Total Return Index | 1/8/15 | 7,500,019 | 213,752 | |||||||||||
BNP Paribas | Russell 1000® Total Return Index | 1 month USD LIBOR plus 20 basis points | 1/8/15 | (7,500,030) | 17,469 | |||||||||||
BNP Paribas(a) | If negative, a long/short basket of commodity indexes minus 22 basis points | If positive, a long/short basket of commodity indexes minus 22 basis points | 1/5/15 | 9,500,000 | 151,576 | |||||||||||
Goldman Sachs International | 1 month USD LIBOR plus 40 basis points | S&P 500® Citigroup Pure Value | 1/9/15 | 8,299,215 | 48,529 | |||||||||||
Goldman Sachs International | 1 month USD LIBOR plus 48 basis points | MSCI Daily Total Return Net Emerging Markets | 1/9/15 | 4,199,940 | (193,424) | |||||||||||
Goldman Sachs International | MSCI Daily Total Return Gross World USD | 1 month USD LIBOR plus 25 basis points | 1/9/15 | (4,200,919) | 65,996 | |||||||||||
Goldman Sachs International | S&P 500® Citigroup Pure Growth | 1 month USD LIBOR plus 20 basis points | 1/9/15 | (8,296,198) | 69,187 | |||||||||||
Total | $ | 399,928 | ||||||||||||||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements.
8 | DECEMBER 31, 2014
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Notes to Consolidated Schedule of Investments and Other Information(unaudited)
Barclays U.S. Aggregate Bond Index | Made up of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
London Interbank Offered Rate (LIBOR) | A daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). | |
LLC | Limited Liability Company |
(a) | All or a portion of this security is owned by Janus Diversified Alternatives Subsidiary, Ltd. See Note 1 in Notes to Consolidated Financial Statements. |
°° | Rate shown is the 7-day yield as of December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Diversified Alternatives Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 10,255,772 | 22,394,022 | (28,504,927) | 4,144,867 | $ | – | $ | 2,858 | $ | 4,144,867 | |||||||||||
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, 2014. See Notes to Consolidated Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Diversified Alternatives Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Investment Companies | $ | – | $ | 4,144,867 | $ | – | |||||
Total Investments in Securities | $ | – | $ | 4,144,867 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 11,416 | $ | – | |||||
Outstanding Swap Contracts at Value | – | 593,352 | – | ||||||||
Variation Margin Receivable | 118,541 | – | – | ||||||||
Total Assets | $ | 118,541 | $ | 4,749,635 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 4,546 | $ | – | |||||
Outstanding Swap Contracts at Value | – | 193,424 | – | ||||||||
Variation Margin Payable | 121,438 | – | – | ||||||||
Total Liabilities | $ | 121,438 | $ | 197,970 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
Janus Investment Fund | 9
Table of Contents
Consolidated Statement of Assets and Liabilities
Janus Diversified | ||||
As of December 31, 2014 (unaudited) | Alternatives Fund | |||
Assets: | ||||
Investments at cost | $ | 4,144,867 | ||
Affiliated investments at value | 4,144,867 | |||
Cash | 60,514 | |||
Restricted cash (Note 1) | 61,900,000 | |||
Forward currency contracts | 11,416 | |||
Outstanding swap contracts at value | 593,352 | |||
Variation margin receivable | 118,541 | |||
Non-interested Trustees’ deferred compensation | 1,362 | |||
Receivables: | ||||
Fund shares sold | 8,117 | |||
Dividends from affiliates | 381 | |||
Foreign dividend tax reclaim | 2,609 | |||
Other assets | 1,243 | |||
Total Assets | 66,842,402 | |||
Liabilities: | ||||
Forward currency contracts | 4,546 | |||
Outstanding swap contracts at value | 193,424 | |||
Variation margin payable | 121,438 | |||
Payables: | ||||
Investments purchased | 1,362 | |||
Fund shares repurchased | 43,152 | |||
Advisory fees | 27,475 | |||
Fund administration fees | 576 | |||
Transfer agent fees and expenses | 1,330 | |||
12b-1 Distribution and shareholder servicing fees | 2,009 | |||
Non-interested Trustees’ fees and expenses | 419 | |||
Accrued expenses and other payables | 44,760 | |||
Total Liabilities | 440,491 | |||
Net Assets | $ | 66,401,911 |
See Notes to Consolidated Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Janus Diversified | ||||
As of December 31, 2014 (unaudited) | Alternatives Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 65,426,246 | ||
Undistributed net investment income/(loss)* | (1,223,639) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 1,235,690 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 963,614 | |||
Total Net Assets | $ | 66,401,911 | ||
Net Assets - Class A Shares | $ | 1,656,340 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 164,240 | |||
Net Asset Value Per Share(1) | $ | 10.08 | ||
Maximum Offering Price Per Share(2) | $ | 10.69 | ||
Net Assets - Class C Shares | $ | 1,551,061 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 155,280 | |||
Net Asset Value Per Share(1) | $ | 9.99 | ||
Net Assets - Class D Shares | $ | 3,007,761 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 297,672 | |||
Net Asset Value Per Share | $ | 10.10 | ||
Net Assets - Class I Shares | $ | 2,274,575 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 224,664 | |||
Net Asset Value Per Share | $ | 10.12 | ||
Net Assets - Class N Shares | $ | 54,970,036 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,423,817 | |||
Net Asset Value Per Share | $ | 10.13 | ||
Net Assets - Class S Shares | $ | 1,387,834 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 138,231 | |||
Net Asset Value Per Share | $ | 10.04 | ||
Net Assets - Class T Shares | $ | 1,554,304 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 154,099 | |||
Net Asset Value Per Share | $ | 10.09 |
* | See ”Federal Income Tax” in Notes to Consolidated 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 Consolidated Financial Statements.
Janus Alternative Fund | 11
Table of Contents
Consolidated Statement of Operations
Janus Diversified | ||||
For the period ended December 31, 2014 (unaudited) | Alternatives Fund | |||
Investment Income: | ||||
Dividends from affiliates | $ | 2,858 | ||
Foreign tax withheld | (182) | |||
Total Investment Income | 2,676 | |||
Expenses: | ||||
Advisory fees | 430,561 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 2,626 | |||
Class C Shares | 9,270 | |||
Class S Shares | 2,226 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 2,060 | |||
Class S Shares | 2,226 | |||
Class T Shares | 2,454 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 20 | |||
Class I Shares | 124 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 128 | |||
Class C Shares | 128 | |||
Class D Shares | 1,475 | |||
Class I Shares | 58 | |||
Class N Shares | 63 | |||
Class T Shares | 51 | |||
Shareholder reports expense | 20,405 | |||
Registration fees | 72,428 | |||
Custodian fees | 5,555 | |||
Professional fees | 25,524 | |||
Non-interested Trustees’ fees and expenses | 264 | |||
Fund administration fees | 3,479 | |||
Other expenses | 17,705 | |||
Total Expenses | 598,830 | |||
Less: Excess Expense Reimbursement | (140,838) | |||
Net Expenses | 457,992 | |||
Net Investment Income/(Loss) | (455,316) | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (103,881) | |||
Futures contracts | 1,962,156 | |||
Swap contracts | 152,138 | |||
Total Net Realized Gain/(Loss) on Investments | 2,010,413 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,989 | |||
Futures contracts | 240,669 | |||
Swap contracts | 401,963 | |||
Total Change in Unrealized Net Appreciation/Depreciation | 646,621 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,201,718 |
See Notes to Consolidated Financial Statements.
12 | DECEMBER 31, 2014
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Consolidated Statements of Changes in Net Assets
Janus Diversified | ||||||||
Alternatives Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | (455,316) | $ | (995,203) | ||||
Net realized gain/(loss) on investments | 2,010,413 | 1,720,858 | ||||||
Change in unrealized net appreciation/depreciation | 646,621 | (411,372) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,201,718 | 314,283 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | – | – | ||||||
Class C Shares | – | – | ||||||
Class D Shares | – | – | ||||||
Class I Shares | – | – | ||||||
Class N Shares | – | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (12,896) | – | ||||||
Class C Shares | (12,191) | – | ||||||
Class D Shares | (22,821) | – | ||||||
Class I Shares | (17,640) | – | ||||||
Class N Shares | (426,554) | – | ||||||
Class S Shares | (10,853) | – | ||||||
Class T Shares | (12,073) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (515,028) | – |
See footnotes at the end of the Consolidated Statements.
See Notes to Consolidated Financial Statements.
Janus Alternative Fund | 13
Table of Contents
Consolidated Statements of Changes in Net Assets (continued)
Janus Diversified | ||||||||
Alternatives Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 104,463 | 531,192 | ||||||
Class C Shares | 170,002 | 5,000 | ||||||
Class D Shares | 500,556 | 957,155 | ||||||
Class I Shares | – | 223,471 | ||||||
Class N Shares | 1,945,211 | 4,157,552 | ||||||
Class S Shares | – | – | ||||||
Class T Shares | 36,499 | 72,156 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 12,896 | – | ||||||
Class C Shares | 12,191 | – | ||||||
Class D Shares | 22,645 | – | ||||||
Class I Shares | 17,640 | – | ||||||
Class N Shares | 426,554 | – | ||||||
Class S Shares | 10,853 | – | ||||||
Class T Shares | 12,014 | – | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,556,430) | (14,965) | ||||||
Class C Shares | (2,176,227) | (62,605) | ||||||
Class D Shares | (3,754,753) | (817,979) | ||||||
Class I Shares | (3,528,571) | (999,994) | ||||||
Class N Shares | (6,011,288) | (5,109,669) | ||||||
Class S Shares | (2,160,400) | – | ||||||
Class T Shares | (2,340,785) | (53,278) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (19,256,930) | (1,111,964) | ||||||
Net Increase/(Decrease) in Net Assets | (17,570,240) | (797,681) | ||||||
Net Assets: | ||||||||
Beginning of period | 83,972,151 | 84,769,832 | ||||||
End of period | $ | 66,401,911 | $ | 83,972,151 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (1,223,639) | $ | (768,323) |
* | See ”Federal Income Tax” in Notes to Consolidated Financial Statements. |
See Notes to Consolidated Financial Statements.
14 | DECEMBER 31, 2014
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Consolidated Financial Highlights
Class A Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.84 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.08)(2) | (0.13)(2) | (0.10) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.40 | 0.15 | (0.08) | |||||||||||
Total from Investment Operations | 0.32 | 0.02 | (0.18) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.08 | $9.84 | $9.82 | |||||||||||
Total Return** | 3.25% | 0.20% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,656 | $4,055 | $3,523 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,074 | $3,752 | $3,557 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.86% | 1.70% | 3.05% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.52% | 1.46% | 1.52% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.51)% | (1.34)% | (1.36)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class C Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.79 | $9.78 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.11)(2) | (0.15)(2) | (0.14) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.39 | 0.16 | (0.08) | |||||||||||
Total from Investment Operations | 0.28 | 0.01 | (0.22) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $9.99 | $9.79 | $9.78 | |||||||||||
Total Return** | 2.86% | 0.10% | (2.20)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,551 | $3,516 | $3,566 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,830 | $3,551 | $3,578 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.62% | 1.89% | 3.92% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 2.28% | 1.64% | 2.27% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (2.27)% | (1.52)% | (2.11)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | See ”Federal Income Tax” in Notes to Consolidated Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements.
Janus Alternative Fund | 15
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Consolidated Financial Highlights (continued)
Class D Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.85 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.07)(2) | (0.13)(2) | (0.08) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.40 | 0.16 | (0.10) | |||||||||||
Total from Investment Operations | 0.33 | 0.03 | (0.18) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.10 | $9.85 | $9.82 | |||||||||||
Total Return** | 3.35% | 0.31% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $3,008 | $6,170 | $6,008 | |||||||||||
Average Net Assets for the Period (in thousands) | $3,389 | $5,964 | $4,995 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.08% | 1.66% | 3.20% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.46% | 1.41% | 1.39% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.45)% | (1.28)% | (1.23)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class I Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.87 | $9.83 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.06)(2) | (0.11)(2) | (0.08) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.39 | 0.15 | (0.09) | |||||||||||
Total from Investment Operations | 0.33 | 0.04 | (0.17) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.12 | $9.87 | $9.83 | |||||||||||
Total Return** | 3.34% | 0.41% | (1.70)% | |||||||||||
Net Assets, End of Period (in thousands) | $2,275 | $5,727 | $6,464 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,878 | $6,201 | $5,751 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.61% | 1.50% | 2.58% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.27% | 1.25% | 1.27% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.26)% | (1.13)% | (1.10)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | See ”Federal Income Tax” in Notes to Consolidated Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements.
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Class N Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.87 | $9.83 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.06)(2) | (0.11)(2) | (0.05) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.40 | 0.15 | (0.12) | |||||||||||
Total from Investment Operations | 0.34 | 0.04 | (0.17) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.13 | $9.87 | $9.83 | |||||||||||
Total Return** | 3.44% | 0.41% | (1.70)% | |||||||||||
Net Assets, End of Period (in thousands) | $54,970 | $57,190 | $57,935 | |||||||||||
Average Net Assets for the Period (in thousands) | $54,776 | $57,130 | $30,839 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.66% | 1.49% | 1.84% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.26% | 1.25% | 1.25% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.25)% | (1.13)% | (1.06)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class S Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.82 | $9.81 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.09)(2) | (0.14)(2) | (0.11) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.39 | 0.15 | (0.08) | |||||||||||
Total from Investment Operations | 0.30 | 0.01 | (0.19) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.04 | $9.82 | $9.81 | |||||||||||
Total Return** | 3.05% | 0.10% | (1.90)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,388 | $3,506 | $3,502 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,759 | $3,492 | $3,548 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.10% | 1.95% | 3.19% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.76% | 1.58% | 1.76% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.75)% | (1.46)% | (1.60)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | See ”Federal Income Tax” in Notes to Consolidated Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements.
Janus Alternative Fund | 17
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Consolidated Financial Highlights (continued)
Class T Shares
Janus Diversified | ||||||||||||||
For a share outstanding during the period ended December 31 (unaudited) and each year or period | Alternatives Fund | |||||||||||||
ended June 30 | 2014 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.85 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.08)(2) | (0.13)(2) | (0.11) | |||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.40 | 0.16 | (0.07) | |||||||||||
Total from Investment Operations | 0.32 | 0.03 | (0.18) | |||||||||||
Less Distributions: | ||||||||||||||
Dividends (from net investment income)* | – | – | – | |||||||||||
Distributions (from capital gains)* | (0.08) | – | – | |||||||||||
Total Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.09 | $9.85 | $9.82 | |||||||||||
Total Return** | 3.25% | 0.31% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,554 | $3,809 | $3,772 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,938 | $3,773 | $4,004 | |||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.85% | 1.75% | 2.94% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.51% | 1.40% | 1.51% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (1.50)% | (1.28)% | (1.36)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | See ”Federal Income Tax” in Notes to Consolidated Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements.
18 | DECEMBER 31, 2014
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Notes to Consolidated 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 Consolidated Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Diversified Alternatives Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund employs various strategies within the equity, fixed income, commodity, and currency asset classes. The Fund is classified as nondiversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
Janus Alternative Fund | 19
Table of Contents
Notes to Consolidated Financial Statements (unaudited) (continued)
Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Investment in Subsidiary
To qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”), 90% of the Fund’s income must be from certain qualified sources. Direct investment in many commodities-related investments generates income that is not from a qualifying source for purposes of meeting this 90% test. The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Janus Diversified Alternatives Subsidiary, Ltd., a wholly-owned subsidiary of the Fund (“Subsidiary”), which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary may invest without limitation in commodity index-linked swaps, commodity futures, commodity swaps, commodity-linked notes, and other commodity-linked derivative instruments. The Subsidiary may also invest in fixed-income securities and other investments which may serve as margin or collateral for the Subsidiary’s derivatives positions. The Fund may invest 25% or less of its total assets in the Subsidiary. Income or net capital gains from the Fund’s investment in the Subsidiary would be treated as ordinary income to the Fund. Janus Capital is the adviser to the Subsidiary. The Subsidiary will not be subject to U.S. laws (including securities laws) and their protections. The Subsidiary is subject to the laws of a foreign jurisdiction, which can be affected by developments in that jurisdiction.
By investing in the Subsidiary, the Fund will be indirectly exposed to the risks associated with the Subsidiary’s investments, which are generally similar to those that are permitted to be held by the Fund. The Subsidiary is not registered under the 1940 Act, and is not subject to all of the provisions of the 1940 Act. The IRS has previously issued a number of private letter rulings to mutual funds (but not the Fund) in which it ruled that income from a fund’s investment in a wholly-owned foreign subsidiary that invests in commodity-linked derivatives, such as the Subsidiary, constitutes qualifying income. The IRS has suspended issuance of any further private letter rulings pending a review of its position. A change in the IRS’ position or changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to operate and could adversely affect the Fund. In particular, unfavorable treatment of the income derived from the Fund’s investment in the Subsidiary could jeopardize the Fund’s status as a regulated investment company under the Code, which in turn may subject the Fund to higher tax rates and/or penalties.
The Subsidiary was incorporated on December 28, 2012 as a wholly-owned subsidiary of Janus Diversified Alternatives Fund. As of December 31, 2014 the Fund owns 1,382,693 shares of the Subsidiary, with a market value of $15,229,520. This represents 23% of the Fund’s net assets. The Fund’s Consolidated Schedule of Investments, Consolidated Statement of Assets and Liabilities, Consolidated Statement of Operations, Consolidated Statements of Changes in Net Assets, and Consolidated Financial Highlights include the accounts of both the Fund and the Subsidiary. All inter-company transactions and balances have been eliminated in consolidation
As of December 31, 2014, Subsidiary information included in the Consolidated Financial Statements is as follows:
Net assets | $ | 15,229,520 | ||||
Market value of investments | 2,803,770 | |||||
Net income/(loss) | 265 | |||||
Net realized gain/(loss) | 750,019 | |||||
Net change in unrealized appreciation/depreciation | 230,744 | |||||
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
20 | DECEMBER 31, 2014
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foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class. Additionally, the Fund, as a shareholder in the Subsidiary, will also indirectly bear its pro rata share of the expenses incurred by the Subsidiary.
Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the consolidated financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the consolidated financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s consolidated financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Restricted Cash
As of December 31, 2014, the Fund had restricted cash in the amount of $61,900,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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
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Notes to Consolidated 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Consolidated Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, commodities-linked derivative instruments, inflation-index swaps, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2014 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative (to earn income and seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets in which it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a
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result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including, but not limited to, counterparty risk, credit risk, currency risk, equity risk, index risk, interest rate risk, leverage risk, and liquidity risk, as described below.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC, such as options and structured notes, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs.
OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk. In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
• | Commodity Risk – Commodity risk relates to the change in value of commodities or commodity-linked investments due to changes in overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry or commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments. | |
• | Counterparty Risk – Counterparty risk is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
• | Credit Risk – Credit risk is the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
• | Currency Risk – Currency risk is the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
• | Equity Risk – Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market. | |
• | Index Risk – If the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
• | Interest Rate Risk – Interest rate risk is the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
• | Leverage Risk – Leverage risk is the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
• | Liquidity Risk – Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Commodity-Linked Investments
The Fund may invest in commodity index-linked swap agreements, commodity options and futures, and options on futures that provide exposure to the investment returns of the commodities markets. The Fund may also invest in other commodity-linked derivative instruments, such as commodity-linked notes (“structured notes”). The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Subsidiary which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary invests in commodity-linked investments and other investments which may serve as margin or collateral for the Subsidiary’s derivative positions. Such exposure may subject the Fund to greater volatility than investments in
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Notes to Consolidated Financial Statements (unaudited) (continued)
traditional securities. The value of a given commodity-linked derivative investment typically is based upon the price movements of a physical commodity (such as heating oil, livestock, or agricultural products), a commodity futures contract or commodity index, or some other readily measurable economic variable. The value of commodity-linked derivative instruments may therefore be affected by changes in overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry or commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk in the normal course of pursuing its investment objective through its 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 investments and foreign currency transactions” on the Consolidated Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to take a positive outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
The following table provides average ending monthly currency value amounts on purchased and sold forward contracts during the period ended December 31, 2014.
Fund | Purchased | Sold | ||||||||
Janus Diversified Alternatives Fund | $ | 4,700,121 | $ | 4,541,640 | ||||||
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing their investment objectives through their investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Consolidated Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Consolidated 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 that are designated as collateral for market value on futures contracts are noted on the Consolidated Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
During the period, the Fund purchased interest rate futures to increase exposure to interest rate risk.
During the period, the Fund purchased commodity futures to increase exposure to commodity risk.
During the period, the Fund sold commodity futures to decrease exposure to commodity risk.
During the period, the Fund purchased futures on equity indices to increase exposure to equity risk.
During the period, the Fund purchased futures on currency indices to increase exposure to currency risk.
During the period, the Fund sold futures on currency indices to decrease exposure to currency risk.
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The following table provides average ending monthly market value amounts on purchased and sold futures contracts during the period ended December 31, 2014.
Fund | Purchased | Sold | ||||||||
Janus Diversified Alternatives Fund | $ | 28,462,948 | $ | 7,356,626 | ||||||
Swaps
Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one year to exchange one set of cash flows for another. The most significant factor in the performance of swap agreements is the change in value of the specific index, security, or currency, or other factors that determine the amounts of payments due to and from the Fund. The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swap transactions may in some instances involve the delivery of securities or other underlying assets by the Fund or its counterparty to collateralize obligations under the swap. If the other party to a swap that is not collateralized defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. Swap agreements entail the risk that a party will default on its payment obligations to the Fund. If the other party to a swap defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If the Fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund and reduce the Fund’s total return.
Swap agreements also bear the risk that the Fund will not be able to meet its obligation to the counterparty. Swap agreements are typically privately negotiated and entered into in the over-the-counter market. However, certain swap agreements are required to be cleared through a clearinghouse and traded on an exchange or swap execution facility. Swaps that are required to be cleared are required to post initial and variation margins in accordance with the exchange requirements. Regulations recently enacted require the Fund to clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps. Swap contracts are reported as an asset or liability on the Fund’s Consolidated Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Fund’s Consolidated Statement of Operations (if applicable).
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 maximum risk of loss for 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 and the counterparty and by the posting of collateral to the Fund to cover the Fund’s exposure to the counterparty.
During the period, the Fund entered into total return swaps on equity securities or indices to increase exposure to equity risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of securities or an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same securities or index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities.
During the period, the Fund entered into total return swaps on equity securities or indices to decrease exposure to equity risk. These total return swaps require the Fund to pay an amount equal to the positive price movement of securities or an index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities. The Fund will receive payments of a floating reference interest rate and an amount equal to the negative price movement of the same securities or index multiplied by the notional amount of the contract.
During the period, the Fund entered into total return swaps on commodity indices to increase exposure to commodity risk. These total return swaps require the Fund to pay a fixed or a floating reference interest rate, and an
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Notes to Consolidated Financial Statements (unaudited) (continued)
amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
During the period, the Fund entered into total return swaps on credit indices to increase exposure to credit risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
The following table provides average ending monthly market value amounts on total return swaps which are long and short the reference asset during the period ended December 31, 2014.
Fund | Long | Short | ||||||||
Janus Diversified Alternatives Fund | $ | 269,462 | $ | 293,527 | ||||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Consolidated Statement of Assets and Liabilities as of December 31, 2014.
Fair Value of Derivative Instruments as of December 31, 2014
Asset Derivatives | Liability Derivatives | |||||||||||
Consolidated Statement | Consolidated Statement | |||||||||||
Derivatives not accounted for as hedging instruments | of Assets and Liabilities Location | Fair Value | of Assets and Liabilities Location | Fair Value | ||||||||
Janus Diversified Alternatives Fund | ||||||||||||
Commodity Contracts | Outstanding swap contracts at value | $ | 151,576 | |||||||||
Commodity Contracts | Variation margin receivable | 69,877 | Variation margin payable | $ | 76,483 | |||||||
Credit Contracts | Outstanding swap contracts at value | 26,843 | ||||||||||
Currency Contracts | Forward currency contracts | 11,416 | Forward currency contracts | 4,546 | ||||||||
Currency Contracts | Variation margin receivable | 42,320 | ||||||||||
Equity Contracts | Outstanding swap contracts at value | 414,933 | Outstanding swap contracts at value | 193,424 | ||||||||
Equity Contracts | Variation margin payable | 44,955 | ||||||||||
Interest Rate Contracts | Variation margin receivable | 6,344 | ||||||||||
Total | $ | 723,309 | $ | 319,408 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Consolidated Statement of Operations for the period ended December 31, 2014.
The effect of Derivative Instruments on the Consolidated Statement of Operations for the period ended December 31, 2014
Amount of Net Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not accounted for as | Investments and foreign | |||||||||||||||
hedging instruments | currency transactions | Futures contracts | Swap contracts | Total | ||||||||||||
Janus Diversified Alternatives Fund | ||||||||||||||||
Commodity Contracts | $ | – | $ | 237,274 | $ | 512,745 | $ | 750,019 | ||||||||
Credit Contracts | – | – | 239,472 | 239,472 | ||||||||||||
Currency Contracts | (88,912 | ) | 1,184,339 | – | 1,095,427 | |||||||||||
Equity Contracts | – | 126,973 | (600,079 | ) | (473,106 | ) | ||||||||||
Interest Rate Contracts | – | 413,570 | – | 413,570 | ||||||||||||
Total | $ | (88,912 | ) | $ | 1,962,156 | $ | 152,138 | $ | 2,025,382 | |||||||
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Change in Unrealized Net Appreciation/Depreciation on Derivatives Recognized in Income | ||||||||||||||||
Investments, foreign | ||||||||||||||||
currency translations and | ||||||||||||||||
Derivatives not accounted for as | non-interested Trustees’ | |||||||||||||||
hedging instruments | deferred compensation | Futures contracts | Swap contracts | Total | ||||||||||||
Janus Diversified Alternatives Fund | ||||||||||||||||
Commodity Contracts | $ | – | $ | 79,174 | $ | 151,570 | $ | 230,744 | ||||||||
Currency Contracts | 4,287 | 130,887 | – | 135,174 | ||||||||||||
Credit Contracts | – | – | 26,947 | 26,947 | ||||||||||||
Equity Contracts | – | (46,926 | ) | 223,446 | 176,520 | |||||||||||
Interest Rate Contracts | – | 77,534 | – | 77,534 | ||||||||||||
Total | $ | 4,287 | $ | 240,669 | $ | 401,963 | $ | 646,919 | ||||||||
Please see the Fund’s Consolidated Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its
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Notes to Consolidated Financial Statements (unaudited) (continued)
investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the consolidated financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Consolidated Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Consolidated Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of December 31, 2014” table located in Note 2 of these Notes to Consolidated Financial Statements and/or the Fund’s Consolidated Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Barclays Capital, Inc. | $ | 26,843 | $ | – | $ | – | $ | 26,843 | ||||||||||
BNP Paribas | 382,797 | – | 1,000,000(c) | 1,382,797 | ||||||||||||||
Goldman Sachs International | 183,712 | (183,712) | – | – | ||||||||||||||
HSBC Securities (USA), Inc. | 11,416 | (4,546) | – | 6,870 | ||||||||||||||
Total | $ | 604,768 | $ | (188,258) | $ | 1,000,000 | $ | 1,416,510 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Goldman Sachs International | $ | 193,424 | $ | (183,712) | $ | (9,712) | $ | – | ||||||||||
HSBC Securities (USA), Inc. | 4,546 | (4,546) | – | – | ||||||||||||||
Total | $ | 197,970 | $ | (188,258) | $ | (9,712) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Consolidated Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | |
(c) | The Fund pledged $1,000,000 for certain transactions. This amount is included in “Restricted cash” on the Consolidated Statement of Assets and Liabilities. |
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund will segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s
28 | DECEMBER 31, 2014
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commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Consolidated Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund and the Subsidiary each pay Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s and the Subsidiary’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
of the Fund | Advisory Fee (%) | |||||||||
First $ | 1 Billion | 1.00 | ||||||||
Over $ | 1 Billion | 0.95 | ||||||||
Janus Capital has contractually agreed to waive a portion of the Fund’s management fee in an amount equal to the management fee paid to Janus Capital by the Subsidiary. The management fee waiver arrangement related to the Subsidiary may not be discontinued by Janus Capital as long as its contract with the Subsidiary is in place.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses, which include the other expenses of the Subsidiary, in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
�� | ||||||
Expense | ||||||
Fund | Limit (%) | |||||
Janus Diversified Alternatives Fund | 1.25 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Consolidated Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Consolidated Statement of Operations. During the period ended December 31, 2014, Janus Capital reimbursed the Fund $140,838 of fees and expenses that are eligible for recoupment. As of December 31, 2014, the aggregate amount of recoupment that may potentially be made to Janus Capital is $631,182. The recoupment of such reimbursements expires December 28, 2015.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s and the Subsidiary’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Consolidated Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services
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Notes to Consolidated Financial Statements (unaudited) (continued)
provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Consolidated Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Consolidated Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Consolidated Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Consolidated Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Consolidated Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Consolidated Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Consolidated Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account
30 | DECEMBER 31, 2014
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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 included as of December 31, 2014 on the Consolidated Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Consolidated Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Consolidated Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Consolidated Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Diversified Alternatives Fund | $ | 66 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Diversified Alternatives Fund - Class A Shares | 66 | % | 2 | % | ||||||
Janus Diversified Alternatives Fund - Class C Shares | 88 | 2 | ||||||||
Janus Diversified Alternatives Fund - Class D Shares | - | - | ||||||||
Janus Diversified Alternatives Fund - Class I Shares | - | - | ||||||||
Janus Diversified Alternatives Fund - Class N Shares | 99 | 82 | ||||||||
Janus Diversified Alternatives Fund - Class S Shares | 100 | 2 | ||||||||
Janus Diversified Alternatives Fund - Class T Shares | 80 | 2 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Janus Alternative Fund | 31
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Notes to Consolidated Financial Statements (unaudited) (continued)
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are investments in partnerships and futures contracts.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Diversified Alternatives Fund | $ | 4,455,600 | $ | – | $ | (310,733) | $ | (310,733) | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Diversified Alternatives Fund | $ | (156,866) | $ | – | $ | (156,866) | |||||||||
6. | Capital Share Transactions |
For the period ended December 31 (unaudited) | Janus Diversified Alternative Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 10,515 | 54,802 | ||||||||
Reinvested dividends and distributions | 1,288 | – | ||||||||
Shares repurchased | (259,676) | (1,534) | ||||||||
Net Increase/(Decrease) in Fund Shares | (247,873) | 53,268 | ||||||||
Shares Outstanding, Beginning of Period | 412,113 | 358,845 | ||||||||
Shares Outstanding, End of Period | 164,240 | 412,113 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 17,219 | 513 | ||||||||
Reinvested dividends and distributions | 1,229 | – | ||||||||
Shares repurchased | (222,503) | (5,794) | ||||||||
Net Increase/(Decrease) in Fund Shares | (204,055) | (5,281) | ||||||||
Shares Outstanding, Beginning of Period | 359,335 | 364,616 | ||||||||
Shares Outstanding, End of Period | 155,280 | 359,335 |
32 | DECEMBER 31, 2014
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For the period ended December 31 (unaudited) | Janus Diversified Alternative Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 50,049 | 98,196 | ||||||||
Reinvested dividends and distributions | 2,258 | – | ||||||||
Shares repurchased | (380,906) | (83,481) | ||||||||
Net Increase/(Decrease) in Fund Shares | (328,599) | 14,715 | ||||||||
Shares Outstanding, Beginning of Period | 626,271 | 611,556 | ||||||||
Shares Outstanding, End of Period | 297,672 | 626,271 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | – | 22,808 | ||||||||
Reinvested dividends and distributions | 1,755 | – | ||||||||
Shares repurchased | (357,142) | (100,301) | ||||||||
Net Increase/(Decrease) in Fund Shares | (355,387) | (77,493) | ||||||||
Shares Outstanding, Beginning of Period | 580,051 | 657,544 | ||||||||
Shares Outstanding, End of Period | 224,664 | 580,051 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 194,717 | 419,103 | ||||||||
Reinvested dividends and distributions | 42,401 | – | ||||||||
Shares repurchased | (605,382) | (519,360) | ||||||||
Net Increase/(Decrease) in Fund Shares | (368,264) | (100,257) | ||||||||
Shares Outstanding, Beginning of Period | 5,792,081 | 5,892,338 | ||||||||
Shares Outstanding, End of Period | 5,423,817 | 5,792,081 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 1,089 | – | ||||||||
Shares repurchased | (220,001) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (218,912) | – | ||||||||
Shares Outstanding, Beginning of Period | 357,143 | 357,143 | ||||||||
Shares Outstanding, End of Period | 138,231 | 357,143 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 3,671 | 8,111 | ||||||||
Reinvested dividends and distributions | 1,200 | – | ||||||||
Shares repurchased | (237,632) | (5,420) | ||||||||
Net Increase/(Decrease) in Fund Shares | (232,761) | 2,691 | ||||||||
Shares Outstanding, Beginning of Period | 386,860 | 384,169 | ||||||||
Shares Outstanding, End of Period | 154,099 | 386,860 |
7. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Diversified Alternatives Fund | $ | – | $ | – | $ | – | $ | – | ||||||
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Notes to Consolidated Financial Statements (unaudited) (continued)
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s consolidated financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s consolidated financial statements.
34 | DECEMBER 31, 2014
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Alternative Fund | 35
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
36 | DECEMBER 31, 2014
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Consolidated Financial Highlights” in this report.
3. | Consolidated Schedule of Investments |
Following the performance overview section is the Fund’s Consolidated Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Consolidated Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Consolidated Schedule of Investments (if applicable).
4. | Consolidated Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
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The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Consolidated Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Consolidated Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Consolidated Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Consolidated Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
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Useful Information About Your Fund Report (unaudited) (continued)
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81304 | 125-24-93018 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Global Allocation Fund – Conservative
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Allocation Fund – Conservative
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Janus Global Allocation Fund - Conservative (unaudited)
FUND SNAPSHOT We believe broad global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the Fund’s overall volatility through the use of alternatives. This approach coupled with access to Janus Capital Group’s innovative investment expertise and solutions may provide superior risk-adjusted returns over the long term. | ![]() Enrique Chang co-portfolio manager | ![]() Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Conservative’s Class T Shares returned -1.43% for the six-month period ended December 31, 2014. This compares with a return of -4.14% for the Barclays Global Aggregate Bond Index, the Fund’s primary benchmark, and a return of -3.24% for its secondary benchmark, the Global Conservative Allocation Index, an internally calculated, hypothetical combination of total returns from the Barclays Global Aggregate Bond Index (60%) and the MSCI All Country World Index (40%).
MARKET REVIEW
The market environment during the back half of 2014 could best be characterized as a period of great change. After a relative calm for the better part of two years, U.S. equity market volatility spiked considerably. U.S. and non-U.S. equity markets, which had largely been moving in tandem, also decoupled over the last six months. Meanwhile U.S. crude prices, which had been in a range-bound environment between $80 to $100 a barrel for most of the last four years, suddenly collapsed, taking gasoline prices, inflation expectations, and the performance of the entire energy sector with it. The U.S. dollar also rallied during the period, as investors worldwide questioned the sustainability of a tepid global economic recovery and fretted over other geopolitical events.
For all of the big changes occurring in financial markets over the last few months, a few trends persisted. Given the relative health of the U.S. economy, investors continued to view the U.S. as the place to be, and U.S. markets generally outperformed their non-U.S. counterparts across the board. In U.S. bond markets, the long bond continued to rally, while the short end remained anchored, causing the U.S. Treasury curve to continue to flatten. Investors continued to wait for the Federal Reserve to begin tightening, but the exact timing remains uncertain.
INVESTMENT PROCESS
Janus Global Allocation Fund – Conservative invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 30% to 50% equities, 50% to 65% fixed income and 0% to 20% alternative investments that are rebalanced quarterly. Janus Global Allocation Fund – 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 Fund 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 we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Global Allocation Fund – Conservative. The Janus Global 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 represent. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time. Any portfolio risk management process we’ve discussed includes an effort to monitor and manage risk and should not be confused with nor does it imply low risk or the ability to control risk.
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Janus Global Allocation Fund - Conservative (unaudited)
PORTFOLIO REVIEW
The Fund outperformed both of its benchmarks during the six-month period. On a broad basis, our allocation to alternatives was a net contributor to performance, while both fixed income and equity allocations were net detractors.
Top contributors to the Fund’s performance during the period included the Perkins Large Cap Value Fund, Janus Triton Fund and the Janus Diversified Alternatives Fund. Due to the underperformance of international equity markets, our largest detractors included the Janus International Equity Fund and INTECH International Managed Volatility Fund. Other detractors from performance included the Janus Overseas Fund and Janus Global Bond Fund.
OUTLOOK
As we look across global markets, we agree with the general perception that the U.S. is currently “the best place to be” in terms of broad asset class exposure. With fixed income rates globally in the developed markets hovering at near unprecedented low levels that are arguably unsustainable, we believe there is real risk that rates will sell off a as they normalize to levels more consistent with equilibrium, especially in the U.S. where economic fundamentals are showing signs of revival and strength, which ultimately will benefit global economies. Against this backdrop, we continue to believe equities offer the most attractive return to risk trade-off versus other asset classes.
Despite our relatively positive outlook for equities, we are paying close attention to volatility that is creeping back into the market. There were two spikes in volatility in the fourth quarter, and such spikes are sometimes signs that the market’s mood is shifting.
In markets of increasing volatility and uncertainty the ordinarily difficult task of correctly allocating asset classes becomes even more difficult. However, we believe such environments are good tests for a strategy that is broadly allocated across multiple asset classes and risk factors.
Thank you for investing in Janus Global Allocation Fund – Conservative.
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(unaudited)
Janus Global Allocation Fund – Conservative (% of Net Assets)
As of December 31, 2014
Janus Global Bond Fund – Class N Shares | 38 | .5% | ||
Janus International Equity Fund – Class N Shares | 8 | .3 | ||
Janus Flexible Bond Fund – Class N Shares | 8 | .0 | ||
Perkins Large Cap Value Fund – Class N Shares | 7 | .4 | ||
Janus Short-Term Bond Fund – Class N Shares | 6 | .7 | ||
Janus Diversified Alternatives Fund – Class N Shares | 4 | .6 | ||
Janus Global Research Fund – Class I Shares | 4 | .3 | ||
INTECH International Managed Volatility Fund(1) – Class I Shares | 4 | .0 | ||
INTECH U.S. Managed Volatility Fund II(2) – Class I Shares | 3 | .5 | ||
INTECH U.S. Managed Volatility Fund(3) – Class N Shares | 2 | .9 | ||
Janus Triton Fund – Class N Shares | 2 | .4 | ||
Janus Global Select Fund – Class I Shares | 2 | .3 | ||
Janus Global Real Estate Fund – Class I Shares | 1 | .9 | ||
Janus Overseas Fund – Class N Shares | 1 | .8 | ||
Janus Fund – Class N Shares | 1 | .5 | ||
Perkins Small Cap Value Fund – Class N Shares | 1 | .1 | ||
Janus Forty Fund – Class N Shares | 0 | .8 | ||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Growth Fund. | |
(3) | Formerly named INTECH U.S. Value Fund. |
Janus Global Allocation Fund - Conservative At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Janus Global Allocation Fund - Conservative (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
Janus Global Allocation Fund – Conservative – Class A Shares | |||||||||||||
NAV | –1.48% | 3.86% | 7.33% | 6.68% | 1.18% | 1.18% | |||||||
MOP | –7.14% | –2.12% | 6.07% | 5.98% | |||||||||
Janus Global Allocation Fund – Conservative – Class C Shares | |||||||||||||
NAV | –1.81% | 3.20% | 6.54% | 5.90% | 1.92% | 1.91% | |||||||
CDSC | –2.75% | 2.21% | 6.54% | 5.90% | |||||||||
Janus Global Allocation Fund – Conservative – Class D Shares(1) | –1.34% | 4.14% | 7.53% | 6.90% | 0.97% | 0.97% | |||||||
Janus Global Allocation Fund – Conservative – Class I Shares | –1.33% | 4.22% | 7.60% | 6.86% | 0.93% | 0.93% | |||||||
Janus Global Allocation Fund – Conservative – Class S Shares | –1.52% | 3.75% | 7.15% | 6.44% | 1.33% | 1.33% | |||||||
Janus Global Allocation Fund – Conservative – Class T Shares | –1.43% | 4.12% | 7.46% | 6.86% | 1.08% | 1.08% | |||||||
Barclays Global Aggregate Bond Index | –4.14% | 0.59% | 2.65% | 4.54% | |||||||||
Global Conservative Allocation Index | –3.24% | 2.06% | 5.42% | 5.26% | |||||||||
Morningstar Quartile – Class T Shares | – | 1st | 2nd | 1st | |||||||||
Morningstar Ranking – based on total returns for World Allocation Funds | – | 83/547 | 142/348 | 55/290 | |||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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(unaudited)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I 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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to new investors. |
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Janus Global Allocation Fund - Conservative (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14)†† | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 985.20 | $ | 2.35 | $ | 1,000.00 | $ | 1,022.84 | $ | 2.40 | 0.47% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 981.90 | $ | 5.94 | $ | 1,000.00 | $ | 1,019.21 | $ | 6.06 | 1.19% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 986.60 | $ | 1.30 | $ | 1,000.00 | $ | 1,023.89 | $ | 1.33 | 0.26% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 986.70 | $ | 0.90 | $ | 1,000.00 | $ | 1,024.30 | $ | 0.92 | 0.18% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 984.80 | $ | 3.10 | $ | 1,000.00 | $ | 1,022.08 | $ | 3.16 | 0.62% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 985.70 | $ | 1.80 | $ | 1,000.00 | $ | 1,023.39 | $ | 1.84 | 0.36% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |
†† | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Global Allocation Fund - Conservative
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 6.5% | ||||||||||
1,320,368 | Janus Diversified Alternatives Fund – Class N Shares | $ | 13,375,328 | |||||||
504,777 | Janus Global Real Estate Fund – Class I Shares | 5,693,889 | ||||||||
| ||||||||||
19,069,217 | ||||||||||
Equity Funds – 40.3% | ||||||||||
1,580,979 | INTECH International Managed Volatility Fund(1) – Class I Shares | 11,888,966 | ||||||||
833,608 | INTECH U.S. Managed Volatility Fund(2) – Class N Shares | 8,394,428 | ||||||||
479,688 | INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 10,342,065 | ||||||||
76,322 | Janus Forty Fund – Class N Shares | 2,332,386 | ||||||||
120,164 | Janus Fund – Class N Shares | 4,447,286 | ||||||||
197,481 | Janus Global Research Fund – Class I Shares | 12,755,283 | ||||||||
499,439 | Janus Global Select Fund – Class I Shares | 6,722,449 | ||||||||
2,014,609 | Janus International Equity Fund – Class N Shares | 24,517,790 | ||||||||
164,503 | Janus Overseas Fund – Class N Shares | 5,175,271 | ||||||||
294,208 | Janus Triton Fund – Class N Shares | 6,966,842 | ||||||||
1,327,212 | Perkins Large Cap Value Fund – Class N Shares | 21,726,469 | ||||||||
153,965 | Perkins Small Cap Value Fund – Class N Shares | 3,328,720 | ||||||||
| ||||||||||
118,597,955 | ||||||||||
Fixed Income Funds – 53.2% | ||||||||||
2,224,083 | Janus Flexible Bond Fund – Class N Shares | 23,464,073 | ||||||||
11,360,763 | Janus Global Bond Fund – Class N Shares | 113,380,420 | ||||||||
6,521,717 | Janus Short-Term Bond Fund – Class N Shares | 19,826,019 | ||||||||
| ||||||||||
156,670,512 | ||||||||||
Total Investments (total cost $275,453,260) – 100.0% | 294,337,684 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (45,925) | |||||||||
Net Assets – 100% | $ | 294,291,759 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays Global Aggregate Bond Index | Provides a broad-based measure of the global investment grade fixed-rate debt markets. It is comprised of the U.S. Aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Indexes. It also includes a wide range of standard and customized subindices by liquidity constraint, sector, quality and maturity. | |
Global Conservative Allocation Index | An internally-calculated, hypothetical combination of total returns from the Barclays Global Aggregate Bond Index (60%) and the MSCI All Country World IndexSM (40%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Global Allocation Fund – Conservative | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 1,400,092 | 251,622 | (70,735) | 1,580,979 | $ | (27,762) | $ | 298,347 | $ | 11,888,966 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 1,316,108 | 25,148 | (1,341,256) | – | 142,260 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 1,457,354 | (623,746) | 833,608 | 3,163,360 | 898,631 | 8,394,428 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 542,026 | 16,008 | (78,346) | 479,688 | 487,420 | 93,034 | 10,342,065 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 1,346,064 | 51,316 | (77,012) | 1,320,368 | 401 | 6,381 | 13,375,328 | ||||||||||||||
Janus Flexible Bond Fund – Class N Shares | 2,239,943 | 93,437 | (109,297) | 2,224,083 | (5,324) | 377,746 | 23,464,073 | ||||||||||||||
Janus Forty Fund – Class N Shares | 53,323 | 26,825 | (3,826) | 76,322 | (23,778) | 39,814 | 2,332,386 | ||||||||||||||
Janus Fund – Class N Shares | 116,743 | 26,287 | (22,866) | 120,164 | 287,655 | 76,214 | 4,447,286 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 11,041,866 | 911,987 | (593,090) | 11,360,763 | (54,089) | 4,865,538 | 113,380,420 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 502,295 | 29,835 | (27,353) | 504,777 | 4,553 | 96,916 | 5,693,889 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 199,778 | 7,346 | (9,643) | 197,481 | 36,950 | 140,498 | 12,755,283 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 506,089 | 16,466 | (23,116) | 499,439 | 27,894 | 54,967 | 6,722,449 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 1,928,889 | 184,388 | (98,668) | 2,014,609 | (12,927) | 553,193 | 24,517,790 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 166,669 | 6,721 | (8,887) | 164,503 | (27,734) | 67,538 | 5,175,271 | ||||||||||||||
Janus Short-Term Bond Fund – Class N Shares | 6,023,999 | 900,777 | (403,059) | 6,521,717 | (8,068) | 156,628 | 19,826,019 | ||||||||||||||
Janus Triton Fund – Class N Shares | 284,813 | 34,661 | (25,266) | 294,208 | 101,545 | 41,923 | 6,966,842 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 793,702 | 573,333 | (39,823) | 1,327,212 | 33,332 | 401,142 | 21,726,469 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 122,971 | 37,007 | (6,013) | 153,965 | 183 | 187,875 | 3,328,720 | ||||||||||||||
Total | $ | 4,125,871 | $ | 8,356,385 | $ | 294,337,684 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
8 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Allocation Fund – Conservative | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Investment Companies | |||||||||||
Alternative Funds | $ | 19,069,217 | $ | – | $ | – | |||||
Equity Funds | 118,597,955 | – | – | ||||||||
Fixed Income Funds | 156,670,512 | – | – | ||||||||
Total Assets | $ | 294,337,684 | $ | – | $ | – | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
Janus Global | ||||
As of December 31, 2014 (unaudited) | Allocation Fund - Conservative | |||
Assets: | ||||
Investments at cost | $ | 275,453,260 | ||
Affiliated investments at value | 294,337,684 | |||
Non-interested Trustees’ deferred compensation | 6,041 | |||
Receivables: | ||||
Investments sold | 436,113 | |||
Fund shares sold | 295,903 | |||
Other assets | 3,427 | |||
Total Assets | 295,079,168 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 653,930 | |||
Advisory fees | 12,986 | |||
Transfer agent fees and expenses | 35,028 | |||
12b-1 Distribution and shareholder servicing fees | 22,454 | |||
Non-interested Trustees’ fees and expenses | 1,777 | |||
Non-interested Trustees’ deferred compensation fees | 6,041 | |||
Accrued expenses and other payables | 55,193 | |||
Total Liabilities | 787,409 | |||
Net Assets | $ | 294,291,759 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 266,225,669 | ||
Undistributed net investment income/(loss)* | 192,241 | |||
Undistributed net realized gain/(loss) from investments* | 8,988,269 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 18,885,580 | |||
Total Net Assets | $ | 294,291,759 | ||
Net Assets - Class A Shares | $ | 12,373,014 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 966,585 | |||
Net Asset Value Per Share(1) | $ | 12.80 | ||
Maximum Offering Price Per Share(2) | $ | 13.58 | ||
Net Assets - Class C Shares | $ | 21,918,524 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,738,102 | |||
Net Asset Value Per Share(1) | $ | 12.61 | ||
Net Assets - Class D Shares | $ | 224,601,339 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 17,451,045 | |||
Net Asset Value Per Share | $ | 12.87 | ||
Net Assets - Class I Shares | $ | 4,057,275 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 315,278 | |||
Net Asset Value Per Share | $ | 12.87 | ||
Net Assets - Class S Shares | $ | 2,054,117 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 160,893 | |||
Net Asset Value Per Share | $ | 12.77 | ||
Net Assets - Class T Shares | $ | 29,287,490 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,278,968 | |||
Net Asset Value Per Share | $ | 12.85 |
* | See “Federal Income Tax” 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.
10 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
Janus Global | ||||
For the period ended December 31, 2014 (unaudited) | Allocation Fund - Conservative | |||
Investment Income: | ||||
Dividends from affiliates | $ | 8,356,385 | ||
Total Investment Income | 8,356,385 | |||
Expenses: | ||||
Advisory fees | 76,137 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 16,488 | |||
Class C Shares | 112,331 | |||
Class S Shares | 2,569 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 138,993 | |||
Class S Shares | 2,569 | |||
Class T Shares | 39,020 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 6,370 | |||
Class C Shares | 6,746 | |||
Class I Shares | 1,295 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 792 | |||
Class C Shares | 1,769 | |||
Class D Shares | 17,802 | |||
Class I Shares | 137 | |||
Class S Shares | 51 | |||
Class T Shares | 610 | |||
Shareholder reports expense | 21,736 | |||
Registration fees | 59,003 | |||
Professional fees | 16,405 | |||
Non-interested Trustees’ fees and expenses | 2,750 | |||
Other expenses | 2,494 | |||
Total Expenses | 526,067 | |||
Net Expenses | 526,067 | |||
Net Investment Income/(Loss) | 7,830,318 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 4,125,871 | |||
Capital gain distributions from underlying funds | 7,473,218 | |||
Total Net Realized Gain/(Loss) on Investments | 11,599,089 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (23,675,701) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (23,675,701) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (4,246,294) |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Conservative | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 7,830,318 | $ | 5,350,342 | ||||
Net realized gain from investments in affiliates | 11,599,089 | 5,625,326 | ||||||
Change in unrealized net appreciation/depreciation | (23,675,701) | 27,549,620 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (4,246,294) | 38,525,288 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (375,593) | (224,152) | ||||||
Class C Shares | (525,552) | (243,185) | ||||||
Class D Shares | (7,061,237) | (4,616,118) | ||||||
Class I Shares | (131,261) | (74,717) | ||||||
Class S Shares | (58,683) | (30,383) | ||||||
Class T Shares | (920,542) | (578,354) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (212,373) | (701,126) | ||||||
Class C Shares | (373,971) | (1,190,448) | ||||||
Class D Shares | (3,728,522) | (13,179,672) | ||||||
Class I Shares | (67,549) | (208,328) | ||||||
Class S Shares | (34,514) | (99,764) | ||||||
Class T Shares | (489,708) | (1,639,931) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (13,979,505) | (22,786,178) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 892,303 | 3,435,818 | ||||||
Class C Shares | 2,604,795 | 6,452,384 | ||||||
Class D Shares | 12,141,250 | 35,128,294 | ||||||
Class I Shares | 900,581 | 1,876,103 | ||||||
Class S Shares | 142,576 | 615,283 | ||||||
Class T Shares | 9,936,301 | 12,507,064 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 561,301 | 889,267 | ||||||
Class C Shares | 777,880 | 1,226,707 | ||||||
Class D Shares | 10,707,220 | 17,683,750 | ||||||
Class I Shares | 188,184 | 260,218 | ||||||
Class S Shares | 92,272 | 128,254 | ||||||
Class T Shares | 1,307,134 | 2,079,578 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (1,492,605) | (3,205,127) | ||||||
Class C Shares | (2,375,373) | (4,810,023) | ||||||
Class D Shares | (18,395,484) | (49,331,977) | ||||||
Class I Shares | (648,330) | (1,770,054) | ||||||
Class S Shares | (100,924) | (148,257) | ||||||
Class T Shares | (10,094,667) | (10,164,952) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 7,144,414 | 12,852,330 | ||||||
Net Increase/(Decrease) in Net Assets | (11,081,385) | 28,591,440 | ||||||
Net Assets: | ||||||||
Beginning of period | 305,373,144 | 276,781,704 | ||||||
End of period | $ | 294,291,759 | $ | 305,373,144 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 192,241 | $ | 1,434,791 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.62 | $12.93 | $12.37 | $12.38 | $11.24 | $11.08 | $10.13 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.34(3) | 0.22(3) | 0.33 | 0.29 | 0.47 | 0.33 | 0.02 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.54) | 1.55 | 0.57 | 0.05 | 1.10 | 0.20 | 0.93 | |||||||||||||||||||||||
Total from Investment Operations | (0.20) | 1.77 | 0.90 | 0.34 | 1.57 | 0.53 | 0.95 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.40) | (0.26) | (0.34) | (0.35) | (0.43) | (0.37) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.62) | (1.08) | (0.34) | (0.35) | (0.43) | (0.37) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $12.80 | $13.62 | $12.93 | $12.37 | $12.38 | $11.24 | $11.08 | |||||||||||||||||||||||
Total Return** | (1.48)% | 14.20% | 7.36% | 2.91% | 14.08% | 4.75% | 9.38% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $12,373 | $13,197 | $11,399 | $8,064 | $4,804 | $1,173 | $235 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $13,014 | $12,167 | $10,187 | $6,495 | $2,950 | $710 | $41 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.47% | 0.48% | 0.43% | 0.44% | 0.38% | 0.39% | 0.45% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.47% | 0.48% | 0.43% | 0.44% | 0.38% | 0.39% | 0.37% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.98% | 1.69% | 2.51% | 2.36% | 3.79% | 2.67% | 2.70% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% | 21% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.39 | $12.73 | $12.19 | $12.26 | $11.17 | $11.06 | $10.13 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.29(3) | 0.13(3) | 0.25 | 0.22 | 0.40 | 0.32 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.53) | 1.52 | 0.55 | 0.03 | 1.07 | 0.14 | 0.92 | |||||||||||||||||||||||
Total from Investment Operations | (0.24) | 1.65 | 0.80 | 0.25 | 1.47 | 0.46 | 0.93 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.32) | (0.17) | (0.26) | (0.32) | (0.38) | (0.35) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.54) | (0.99) | (0.26) | (0.32) | (0.38) | (0.35) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $12.61 | $13.39 | $12.73 | $12.19 | $12.26 | $11.17 | $11.06 | |||||||||||||||||||||||
Total Return** | (1.81)% | 13.37% | 6.57% | 2.19% | 13.25% | 4.17% | 9.18% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $21,919 | $22,215 | $18,294 | $13,969 | $7,808 | $1,648 | $253 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $22,164 | $19,860 | $16,584 | $11,010 | $4,096 | $953 | $54 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 1.19% | 1.15% | 1.19% | 1.19% | 1.14% | 1.14% | 1.20% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 1.19% | 1.15% | 1.19% | 1.19% | 1.14% | 1.14% | 1.13% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.35% | 1.03% | 1.70% | 1.65% | 2.98% | 1.81% | 1.87% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% | 21% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.70 | $13.00 | $12.44 | $12.43 | $11.26 | $11.13 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.36(2) | 0.26(2) | 0.35 | 0.31 | 0.48 | 0.10 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.55) | 1.55 | 0.57 | 0.06 | 1.12 | 0.03 | ||||||||||||||||||||
Total from Investment Operations | (0.19) | 1.81 | 0.92 | 0.37 | 1.60 | 0.13 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.42) | (0.29) | (0.36) | (0.36) | (0.43) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | ||||||||||||||||||||
Total Distributions | (0.64) | (1.11) | (0.36) | (0.36) | (0.43) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $12.87 | $13.70 | $13.00 | $12.44 | $12.43 | $11.26 | ||||||||||||||||||||
Total Return** | (1.34)% | 14.41% | 7.50% | 3.14% | 14.34% | 1.17% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $224,601 | $234,052 | $218,190 | $197,198 | $177,032 | $133,056 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $228,540 | $224,649 | $215,079 | $184,437 | $158,291 | $130,396 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.26% | 0.27% | 0.25% | 0.24% | 0.25% | 0.24% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.26% | 0.27% | 0.25% | 0.24% | 0.25% | 0.24% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.27% | 1.93% | 2.69% | 2.59% | 4.07% | 2.40% | ||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% |
Class I Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.71 | $13.01 | $12.44 | $12.42 | $11.26 | $11.10 | $10.13 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.38(2) | 0.26(2) | 0.35 | 0.33 | 0.43 | 0.43 | 0.02 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.56) | 1.55 | 0.59 | 0.05 | 1.17 | 0.10 | 0.95 | |||||||||||||||||||||||
Total from Investment Operations | (0.18) | 1.81 | 0.94 | 0.38 | 1.60 | 0.53 | 0.97 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.44) | (0.29) | (0.37) | (0.36) | (0.44) | (0.37) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.66) | (1.11) | (0.37) | (0.36) | (0.44) | (0.37) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $12.87 | $13.71 | $13.01 | $12.44 | $12.42 | $11.26 | $11.10 | |||||||||||||||||||||||
Total Return** | (1.33)% | 14.46% | 7.61% | 3.22% | 14.34% | 4.78% | 9.58% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,057 | $3,855 | $3,319 | $2,354 | $2,505 | $545 | $11 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,910 | $3,465 | $2,902 | $2,250 | $1,411 | $265 | $2 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.18% | 0.23% | 0.20% | 0.20% | 0.18% | 0.15% | 0.20% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.18% | 0.23% | 0.20% | 0.20% | 0.18% | 0.14% | 0.13% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.61% | 1.98% | 2.72% | 2.65% | 3.84% | 2.53% | 2.98% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% | 21% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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.
14 | DECEMBER 31, 2014
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Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.58 | $12.91 | $12.35 | $12.37 | $11.24 | $11.07 | $10.13 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.34(3) | 0.20(3) | 0.31 | 0.26 | 0.41 | 0.30 | 0.06 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.55) | 1.54 | 0.57 | 0.06 | 1.13 | 0.20 | 0.88 | |||||||||||||||||||||||
Total from Investment Operations | (0.21) | 1.74 | 0.88 | 0.32 | 1.54 | 0.50 | 0.94 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.38) | (0.25) | (0.32) | (0.34) | (0.41) | (0.33) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.60) | (1.07) | (0.32) | (0.34) | (0.41) | (0.33) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $12.77 | $13.58 | $12.91 | $12.35 | $12.37 | $11.24 | $11.07 | |||||||||||||||||||||||
Total Return** | (1.52)% | 13.96% | 7.21% | 2.77% | 13.82% | 4.48% | 9.28% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,054 | $2,043 | $1,357 | $1,160 | $520 | $125 | $164 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,027 | $1,713 | $1,335 | $967 | $336 | $126 | $127 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.62% | 0.63% | 0.61% | 0.59% | 0.62% | 0.64% | 0.67% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.62% | 0.62% | 0.59% | 0.59% | 0.62% | 0.64% | 0.65% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.00% | 1.54% | 2.36% | 2.28% | 3.84% | 2.47% | 2.22% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% | 21% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Janus Global Allocation Fund - Conservative | |||||||||||||||||||||||||||||
June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.69 | $13.00 | $12.42 | $12.42 | $11.26 | $11.09 | $9.52 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.34(3) | 0.26(3) | 0.38 | 0.15 | 0.26 | 0.72 | 0.38 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.54) | 1.54 | 0.55 | 0.21 | 1.32 | (0.20) | 1.52 | |||||||||||||||||||||||
Total from Investment Operations | (0.20) | 1.80 | 0.93 | 0.36 | 1.58 | 0.52 | 1.90 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.42) | (0.29) | (0.35) | (0.36) | (0.42) | (0.35) | (0.33) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.22) | (0.82) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.64) | (1.11) | (0.35) | (0.36) | (0.42) | (0.35) | (0.33) | |||||||||||||||||||||||
Net Asset Value, End of Period | $12.85 | $13.69 | $13.00 | $12.42 | $12.42 | $11.26 | $11.09 | |||||||||||||||||||||||
Total Return | (1.43)% | 14.35% | 7.60% | 3.03% | 14.15% | 4.70% | 20.71% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $29,287 | $30,011 | $24,223 | $28,323 | $16,648 | $9,999 | $114,544 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $30,803 | $26,955 | $27,679 | $22,198 | $12,762 | $60,927 | $90,262 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.36% | 0.38% | 0.36% | 0.34% | 0.36% | 0.31% | 0.33% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.36% | 0.29% | 0.26% | 0.31% | 0.36% | 0.31% | 0.30% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.03% | 1.92% | 2.87% | 2.37% | 3.77% | 3.62% | 4.14% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 69% | 10% | 12% | 12% | 21% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Conservative (the “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”). 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven 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 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.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments 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, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 40% to equity investments, 55% to fixed-income securities and money market instruments, and 5% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for
16 | DECEMBER 31, 2014
Table of Contents
each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
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 fundswill 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. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as
Janus Investment Fund | 17
Table of Contents
Notes to Financial Statements (unaudited) (continued)
to the classification level of the specific investments held by the underlying funds.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Conservative | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
New | ||||||||||
Expense Limit (%) | Previous | |||||||||
(November 1, | Expense Limit (%) | |||||||||
Fund | 2014 to present) | (until November 1, 2014) | ||||||||
Janus Global Allocation Fund - Conservative | 0.14 | 0.19 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Conservative | $ | 1,982 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Conservative | $ | 643 | ||||
3. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Global Allocation Fund - Conservative | $ | 277,027,933 | $ | 22,126,283 | $ | (4,816,532) | $ | 17,309,751 | ||||||||||
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4. | Capital Share Transactions |
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
For the period ended December 31 (unaudited) | Conservative | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 66,457 | 259,608 | ||||||||
Reinvested dividends and distributions | 43,681 | 69,096 | ||||||||
Shares repurchased | (112,822) | (240,756) | ||||||||
Net Increase/(Decrease) in Fund Shares | (2,684) | 87,948 | ||||||||
Shares Outstanding, Beginning of Period | 969,269 | 881,321 | ||||||||
Shares Outstanding, End of Period | 966,585 | 969,269 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 198,094 | 493,715 | ||||||||
Reinvested dividends and distributions | 61,444 | 96,591 | ||||||||
Shares repurchased | (180,557) | (368,286) | ||||||||
Net Increase/(Decrease) in Fund Shares | 78,981 | 222,020 | ||||||||
Shares Outstanding, Beginning of Period | 1,659,121 | 1,437,101 | ||||||||
Shares Outstanding, End of Period | 1,738,102 | 1,659,121 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 899,883 | 2,627,714 | ||||||||
Reinvested dividends and distributions | 828,732 | 1,366,596 | ||||||||
Shares repurchased | (1,361,337) | (3,688,025) | ||||||||
Net Increase/(Decrease) in Fund Shares | 367,278 | 306,285 | ||||||||
Shares Outstanding, Beginning of Period | 17,083,767 | 16,777,482 | ||||||||
Shares Outstanding, End of Period | 17,451,045 | 17,083,767 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 67,358 | 139,869 | ||||||||
Reinvested dividends and distributions | 14,565 | 20,110 | ||||||||
Shares repurchased | (47,939) | (133,774) | ||||||||
Net Increase/(Decrease) in Fund Shares | 33,984 | 26,205 | ||||||||
Shares Outstanding, Beginning of Period | 281,294 | 255,089 | ||||||||
Shares Outstanding, End of Period | 315,278 | 281,294 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 10,703 | 46,585 | ||||||||
Reinvested dividends and distributions | 7,198 | 9,989 | ||||||||
Shares repurchased | (7,497) | (11,243) | ||||||||
Net Increase/(Decrease) in Fund Shares | 10,404 | 45,331 | ||||||||
Shares Outstanding, Beginning of Period | 150,489 | 105,158 | ||||||||
Shares Outstanding, End of Period | 160,893 | 150,489 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 736,596 | 932,096 | ||||||||
Reinvested dividends and distributions | 101,328 | 160,958 | ||||||||
Shares repurchased | (751,821) | (763,985) | ||||||||
Net Increase/(Decrease) in Fund Shares | 86,103 | 329,069 | ||||||||
Shares Outstanding, Beginning of Period | 2,192,865 | 1,863,796 | ||||||||
Shares Outstanding, End of Period | 2,278,968 | 2,192,865 |
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
5. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Allocation Fund - Conservative | $ | 35,381,390 | $ | 26,789,684 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 23
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
Janus Investment Fund | 25
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
34 | DECEMBER 31, 2014
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
Janus Investment Fund | 35
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
Janus Investment Fund | 37
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81311 | 125-24-93020 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Global Allocation Fund – Growth
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Allocation Fund – Growth
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Janus Global Allocation Fund - Growth (unaudited)
FUND SNAPSHOT We believe broad global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the Fund’s overall volatility through the use of alternatives. This coupled with access to Janus Capital Group’s innovative investment expertise and solutions may provide superior risk-adjusted returns over the long term. | ![]() Enrique Chang co-portfolio manager | ![]() Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Growth’s Class T Shares returned -2.34% for the six-month period ended December 31, 2014. This compares with a return of -1.90% for the MSCI All Country World Index, the Fund’s primary benchmark, and a return of -2.35% for its secondary benchmark, the Global Growth Allocation Index, an internally calculated, hypothetical combination of total returns from the MSCI All Country World Index (80%) and the Barclays Global Aggregate Bond Index (20%).
MARKET REVIEW
The market environment during the back half of 2014 could best be characterized as a period of great change. After a relative calm for the better part of two years, U.S. equity market volatility spiked considerably. U.S. and non-U.S. equity markets, which had largely been moving in tandem, also decoupled over the last six months. Meanwhile U.S. crude prices, which had been in a range-bound environment between $80 to $100 a barrel for most of the last four years, suddenly collapsed, taking gasoline prices, inflation expectations, and the performance of the entire energy sector with it. The U.S. dollar also rallied during the period, as investors worldwide questioned the sustainability of a tepid global economic recovery and fretted over other geopolitical events.
For all of the big changes occurring in financial markets over the last few months, a few trends persisted. Given the relative health of the U.S. economy, investors continued to view the U.S. as the place to be, and U.S. markets generally outperformed their non-U.S. counterparts across the board. In U.S. bond markets, the long bond continued to rally, while the short end remained anchored, causing the U.S. Treasury curve to continue to flatten. Investors continued to wait for the Federal Reserve to begin tightening, but the exact timing remains uncertain.
INVESTMENT PROCESS
Janus Global Allocation Fund – Growth invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 70% to 85% equity investments, 10% to 25% fixed income investments and 5% to 20% alternative investments that are rebalanced quarterly. The Fund 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 Fund 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 we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Global Allocation Fund – Growth. The Janus Global 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 represent. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time. Any portfolio risk management process we’ve discussed includes an effort to monitor and manage risk and should not be confused with nor does it imply low risk or the ability to control risk.
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Janus Global Allocation Fund - Growth (unaudited)
PORTFOLIO REVIEW
The Fund underperformed its primary benchmark but outperformed its secondary benchmark during the six-month period. On a broad basis, our allocation to alternatives was a net contributor to performance, while both fixed income and equity allocations were net detractors.
Top contributors to the Fund’s performance included the Janus Forty Fund, Perkins Large Cap Value Fund and the INTECH U.S. Managed Volatility Fund II. Due to the underperformance of international equity markets, our largest detractors included the Janus International Equity Fund and INTECH International Managed Volatility Fund. Other detractors from performance included the Janus Emerging Markets Fund and Janus Global Bond Fund.
OUTLOOK
As we look across global markets, we agree with the general perception that the U.S. is currently “the best place to be” in terms of broad asset class exposure. With fixed income rates globally in the developed markets hovering at near unprecedented low levels that are arguably unsustainable, we believe there is real risk that rates will sell off a as they normalize to levels more consistent with equilibrium, especially in the U.S. where economic fundamentals are showing signs of revival and strength, which ultimately will benefit global economies. Against this backdrop, we continue to believe equities offer the most attractive return to risk trade-off versus other asset classes.
Despite our relatively positive outlook for equities, we are paying close attention to volatility that is creeping back into the market. There were two spikes in volatility in the fourth quarter, and such spikes are sometimes signs that the market’s mood is shifting.
In markets of increasing volatility and uncertainty the ordinarily difficult task of correctly allocating asset classes becomes even more difficult. However, we believe such environments are good tests for a strategy that is broadly allocated across multiple asset classes and risk factors.
Thank you for investing in Janus Global Allocation Fund – Growth.
2 | DECEMBER 31, 2014
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(unaudited)
Janus Global Allocation Fund – Growth (% of Net Assets)
As of December 31, 2014
Janus International Equity Fund – Class N Shares | 15 | .3% | ||
Janus Global Bond Fund – Class N Shares | 15 | .1 | ||
Perkins Large Cap Value Fund – Class N Shares | 10 | .0 | ||
INTECH International Managed Volatility Fund(1) – Class I Shares | 9 | .1 | ||
Janus Diversified Alternatives Fund – Class N Shares | 5 | .2 | ||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | 4 | .7 | ||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 4 | .6 | ||
Janus Global Real Estate Fund – Class I Shares | 4 | .5 | ||
Janus Overseas Fund – Class N Shares | 4 | .5 | ||
Janus Global Research Fund – Class I Shares | 4 | .3 | ||
Janus Emerging Markets Fund – Class I Shares | 3 | .7 | ||
Janus Global Select Fund – Class I Shares | 3 | .3 | ||
Janus Forty Fund – Class N Shares | 2 | .7 | ||
Janus Contrarian Fund – Class I Shares | 2 | .5 | ||
Janus Enterprise Fund – Class N Shares | 2 | .3 | ||
Janus Triton Fund – Class N Shares | 2 | .3 | ||
Perkins Small Cap Value Fund – Class N Shares | 2 | .2 | ||
Perkins Mid Cap Value Fund – Class N Shares | 2 | .0 | ||
Janus Twenty Fund – Class D Shares | 1 | .2 | ||
Janus Asia Equity Fund – Class I Shares | 0 | .5 | ||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
Janus Global Allocation Fund - Growth At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Janus Global Allocation Fund - Growth (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
Janus Global Allocation Fund – Growth – Class A Shares | |||||||||||||
NAV | –2.40% | 2.92% | 8.35% | 6.72% | 1.17% | 1.17% | |||||||
MOP | –8.00% | –2.97% | 7.08% | 6.02% | |||||||||
Janus Global Allocation Fund – Growth – Class C Shares | |||||||||||||
NAV | –2.78% | 2.18% | 7.50% | 5.91% | 1.96% | 1.95% | |||||||
CDSC | –3.71% | 1.20% | 7.50% | 5.91% | |||||||||
Janus Global Allocation Fund – Growth – Class D Shares(1) | –2.37% | 3.06% | 8.51% | 6.90% | 1.00% | 1.00% | |||||||
Janus Global Allocation Fund – Growth – Class I Shares | –2.29% | 3.15% | 8.60% | 6.86% | 0.94% | 0.94% | |||||||
Janus Global Allocation Fund – Growth – Class S Shares | –2.48% | 2.73% | 8.17% | 6.51% | 1.34% | 1.34% | |||||||
Janus Global Allocation Fund – Growth – Class T Shares | –2.34% | 3.04% | 8.44% | 6.86% | 1.09% | 1.09% | |||||||
MSCI All Country World IndexSM | –1.90% | 4.16% | 9.17% | 5.58% | |||||||||
Global Growth Allocation Index | –2.35% | 3.48% | 7.98% | 5.58% | |||||||||
Morningstar Quartile – Class T Shares | – | 2nd | 1st | 1st | |||||||||
Morningstar Ranking – based on total returns for World Allocation Funds | – | 171/547 | 64/348 | 54/290 | |||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
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(unaudited)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
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Janus Global Allocation Fund - Growth (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14)†† | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 976.00 | $ | 2.24 | $ | 1,000.00 | $ | 1,022.94 | $ | 2.29 | 0.45% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 972.20 | $ | 6.16 | $ | 1,000.00 | $ | 1,018.95 | $ | 6.31 | 1.24% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 976.30 | $ | 1.39 | $ | 1,000.00 | $ | 1,023.79 | $ | 1.43 | 0.28% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 977.10 | $ | 1.10 | $ | 1,000.00 | $ | 1,024.10 | $ | 1.12 | 0.22% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 975.20 | $ | 3.09 | $ | 1,000.00 | $ | 1,022.08 | $ | 3.16 | 0.62% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 976.60 | $ | 1.84 | $ | 1,000.00 | $ | 1,023.34 | $ | 1.89 | 0.37% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |
†† | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
6 | DECEMBER 31, 2014
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Janus Global Allocation Fund - Growth
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 9.8% | ||||||||||
1,418,935 | Janus Diversified Alternatives Fund – Class N Shares | $ | 14,373,815 | |||||||
1,098,419 | Janus Global Real Estate Fund – Class I Shares | 12,390,162 | ||||||||
| ||||||||||
26,763,977 | ||||||||||
Equity Funds – 75.1% | ||||||||||
3,302,552 | INTECH International Managed Volatility Fund(1) – Class I Shares | 24,835,189 | ||||||||
1,285,505 | INTECH U.S. Managed Volatility Fund(2) – Class N Shares | 12,945,039 | ||||||||
588,574 | INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 12,689,644 | ||||||||
156,610 | Janus Asia Equity Fund – Class I Shares | 1,497,190 | ||||||||
310,208 | Janus Contrarian Fund – Class I Shares | 6,849,384 | ||||||||
1,223,949 | Janus Emerging Markets Fund – Class I Shares | 10,048,620 | ||||||||
72,581 | Janus Enterprise Fund – Class N Shares | 6,321,837 | ||||||||
237,878 | Janus Forty Fund – Class N Shares | 7,269,564 | ||||||||
183,562 | Janus Global Research Fund – Class I Shares | 11,856,246 | ||||||||
662,005 | Janus Global Select Fund – Class I Shares | 8,910,588 | ||||||||
3,436,718 | Janus International Equity Fund – Class N Shares | 41,824,859 | ||||||||
390,925 | Janus Overseas Fund – Class N Shares | 12,298,508 | ||||||||
271,677 | Janus Triton Fund – Class N Shares | 6,433,322 | ||||||||
54,872 | Janus Twenty Fund – Class D Shares | 3,207,796 | ||||||||
1,664,371 | Perkins Large Cap Value Fund – Class N Shares | 27,245,756 | ||||||||
277,985 | Perkins Mid Cap Value Fund – Class N Shares | 5,545,796 | ||||||||
273,465 | Perkins Small Cap Value Fund – Class N Shares | 5,912,314 | ||||||||
| ||||||||||
205,691,652 | ||||||||||
Fixed Income Funds – 15.1% | ||||||||||
4,145,932 | Janus Global Bond Fund – Class N Shares | 41,376,407 | ||||||||
Total Investments (total cost $242,054,792) – 100.0% | 273,832,036 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (70,093) | |||||||||
Net Assets – 100% | $ | 273,761,943 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays Global Aggregate Bond Index | Provides a broad-based measure of the global investment grade fixed-rate debt markets. It is comprised of the U.S. Aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Indexes. It also includes a wide range of standard and customized subindices by liquidity constraint, sector, quality and maturity. | |
Global Growth Allocation Index | An internally-calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (80%) and the Barclays Global Aggregate Bond Index (20%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Global Allocation Fund – Growth | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 2,912,258 | 498,409 | (108,115) | 3,302,552 | $ | (22,791) | $ | 620,734 | $ | 24,835,189 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 1,969,517 | 26,176 | (1,995,693) | – | 132,761 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 2,246,084 | (960,579) | 1,285,505 | 4,476,265 | 1,380,795 | 12,945,039 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 652,232 | 14,236 | (77,894) | 588,574 | 523,675 | 113,749 | 12,689,644 | ||||||||||||||
Janus Asia Equity Fund | 152,892 | 13,876 | (10,158) | 156,610 | 3,985 | 84,130 | 1,497,190 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 283,411 | 35,571 | (8,774) | 310,208 | 21,735 | 57,434 | 6,849,384 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 1,440,103 | 39,378 | (60,546) | 1,418,935 | 488 | 6,826 | 14,373,815 | ||||||||||||||
Janus Emerging Markets Fund – Class I Shares | 1,160,557 | 109,976 | (46,584) | 1,223,949 | (11,824) | 184,752 | 10,048,620 | ||||||||||||||
Janus Enterprise Fund – Class I Shares | 69,726 | 5,165 | (2,310) | 72,581 | 15,437 | 6,325 | 6,321,837 | ||||||||||||||
Janus Forty Fund – Class N Shares | 158,324 | 86,863 | (7,309) | 237,878 | (41,942) | 123,347 | 7,269,564 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 3,847,447 | 453,690 | (155,205) | 4,145,932 | (13,825) | 1,744,886 | 41,376,407 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 1,085,957 | 52,219 | (39,757) | 1,098,419 | 17,928 | 209,554 | 12,390,162 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 184,835 | 5,017 | (6,290) | 183,562 | 31,024 | 130,057 | 11,856,246 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 668,442 | 16,155 | (22,592) | 662,005 | 30,793 | 72,583 | 8,910,588 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 3,274,565 | 282,553 | (120,400) | 3,436,718 | (1,444) | 939,482 | 41,824,859 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 400,993 | 11,790 | (21,858) | 390,925 | (79,433) | 159,667 | 12,298,508 | ||||||||||||||
Janus Triton Fund – Class N Shares | 250,424 | 29,536 | (8,283) | 271,677 | 14,697 | 38,567 | 6,433,322 | ||||||||||||||
Janus Twenty Fund – Class D Shares | 51,292 | 9,270 | (5,690) | 54,872 | 90,666 | 46,994 | 3,207,796 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 873,885 | 838,352 | (47,866) | 1,664,371 | 92,566 | 501,264 | 27,245,756 | ||||||||||||||
Perkins Mid Cap Value Fund – Class N Shares | 232,788 | 63,554 | (18,357) | 277,985 | 95,880 | 248,064 | 5,545,796 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 217,586 | 63,572 | (7,693) | 273,465 | 12,347 | 332,494 | 5,912,314 | ||||||||||||||
Total | $ | 5,388,988 | $ | 7,001,704 | $ | 273,832,036 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
8 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||
Janus Global Allocation Fund – Growth | |||||||||
Assets | |||||||||
Investments in Securities: | |||||||||
Investment Companies | |||||||||
Alternative Funds | $ | 26,763,977 | $– | $– | |||||
Equity Funds | 205,691,652 | – | – | ||||||
Fixed Income Funds | 41,376,407 | – | – | ||||||
Total Assets | $ | 273,832,036 | $– | $– | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
Janus Global | ||||
As of December 31, 2014 (unaudited) | Allocation Fund - Growth | |||
Assets: | ||||
Investments at cost | $ | 242,054,792 | ||
Affiliated investments at value | 273,832,036 | |||
Non-interested Trustees’ deferred compensation | 5,613 | |||
Receivables: | ||||
Investments sold | 40,686 | |||
Fund shares sold | 332,589 | |||
Other assets | 3,502 | |||
Total Assets | 274,214,426 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 326,122 | |||
Advisory fees | 12,035 | |||
Transfer agent fees and expenses | 31,535 | |||
12b-1 Distribution and shareholder servicing fees | 6,327 | |||
Non-interested Trustees’ fees and expenses | 1,639 | |||
Non-interested Trustees’ deferred compensation fees | 5,613 | |||
Accrued expenses and other payables | 69,212 | |||
Total Liabilities | 452,483 | |||
Net Assets | $ | 273,761,943 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 225,468,590 | ||
Undistributed net investment income/(loss)* | 931,584 | |||
Undistributed net realized gain/(loss) from investments* | 15,583,443 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 31,778,326 | |||
Total Net Assets | $ | 273,761,943 | ||
Net Assets - Class A Shares | $ | 4,281,463 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 302,552 | |||
Net Asset Value Per Share(1) | $ | 14.15 | ||
Maximum Offering Price Per Share(2) | $ | 15.01 | ||
Net Assets - Class C Shares | $ | 5,562,319 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 398,468 | |||
Net Asset Value Per Share(1) | $ | 13.96 | ||
Net Assets - Class D Shares | $ | 237,002,413 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 16,662,012 | |||
Net Asset Value Per Share | $ | 14.22 | ||
Net Assets - Class I Shares | $ | 6,114,306 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 429,848 | |||
Net Asset Value Per Share | $ | 14.22 | ||
Net Assets - Class S Shares | $ | 2,068,901 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 146,821 | |||
Net Asset Value Per Share | $ | 14.09 | ||
Net Assets - Class T Shares | $ | 18,732,541 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,318,217 | |||
Net Asset Value Per Share | $ | 14.21 |
* | See “Federal Income Tax” 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.
10 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
Janus Global | ||||
For the period ended December 31, 2014 (unaudited) | Allocation Fund - Growth | |||
Investment Income: | ||||
Dividends from affiliates | $ | 7,001,704 | ||
Total Investment Income | 7,001,704 | |||
Expenses: | ||||
Advisory fees | 70,504 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 5,599 | |||
Class C Shares | 27,859 | |||
Class S Shares | 2,814 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 146,845 | |||
Class S Shares | 2,814 | |||
Class T Shares | 23,618 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 1,452 | |||
Class C Shares | 2,697 | |||
Class I Shares | 2,933 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 296 | |||
Class C Shares | 482 | |||
Class D Shares | 30,684 | |||
Class I Shares | 196 | |||
Class S Shares | 39 | |||
Class T Shares | 489 | |||
Shareholder reports expense | 33,658 | |||
Registration fees | 56,373 | |||
Professional fees | 16,342 | |||
Non-interested Trustees’ fees and expenses | 2,527 | |||
Other expenses | 2,296 | |||
Total Expenses | 430,517 | |||
Net Expenses | 430,517 | |||
Net Investment Income/(Loss) | 6,571,187 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 5,388,988 | |||
Capital gain distributions from underlying funds | 14,061,751 | |||
Total Net Realized Gain/(Loss) on Investments | 19,450,739 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (32,744,094) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (32,744,094) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (6,722,168) |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Growth | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 6,571,187 | $ | 4,463,278 | ||||
Net realized gain from investments in affiliates | 19,450,739 | 11,924,088 | ||||||
Change in unrealized net appreciation/depreciation | (32,744,094) | 31,164,240 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (6,722,168) | 47,551,606 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (84,356) | (56,037) | ||||||
Class C Shares | (72,735) | (46,840) | ||||||
Class D Shares | (4,981,947) | (4,176,004) | ||||||
Class I Shares | (132,038) | (104,445) | ||||||
Class S Shares | (39,489) | (26,402) | ||||||
Class T Shares | (389,917) | (236,452) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (134,645) | (58,731) | ||||||
Class C Shares | (178,768) | (86,580) | ||||||
Class D Shares | (7,389,286) | (4,049,832) | ||||||
Class I Shares | (188,533) | (97,315) | ||||||
Class S Shares | (67,736) | (31,401) | ||||||
Class T Shares | (585,872) | (233,355) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (14,245,322) | (9,203,394) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 554,210 | 1,975,296 | ||||||
Class C Shares | 658,506 | 1,485,435 | ||||||
Class D Shares | 9,827,709 | 27,691,886 | ||||||
Class I Shares | 714,380 | 2,136,869 | ||||||
Class S Shares | 746,370 | 390,819 | ||||||
Class T Shares | 4,840,053 | 10,029,284 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 214,745 | 113,474 | ||||||
Class C Shares | 229,569 | 123,951 | ||||||
Class D Shares | 12,283,765 | 8,162,485 | ||||||
Class I Shares | 300,436 | 186,288 | ||||||
Class S Shares | 107,225 | 57,803 | ||||||
Class T Shares | 931,728 | 451,938 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (584,711) | (1,358,287) | ||||||
Class C Shares | (422,497) | (1,135,553) | ||||||
Class D Shares | (16,172,155) | (36,360,911) | ||||||
Class I Shares | (384,473) | (1,788,960) | ||||||
Class S Shares | (424,685) | (682,164) | ||||||
Class T Shares | (4,123,107) | (5,941,854) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 9,297,068 | 5,537,799 | ||||||
Net Increase/(Decrease) in Net Assets | (11,670,422) | 43,886,011 | ||||||
Net Assets: | ||||||||
Beginning of period | 285,432,365 | 241,546,354 | ||||||
End of period | $ | 273,761,943 | $ | 285,432,365 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 931,584 | $ | 60,879 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.28 | $13.19 | $11.78 | $12.49 | $10.47 | $10.35 | $9.16 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.34(3) | 0.20(3) | 0.23 | 0.16 | 0.19 | 0.17 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.72) | 2.38 | 1.41 | (0.68) | 2.04 | 0.14 | 1.18 | |||||||||||||||||||||||
Total from Investment Operations | (0.38) | 2.58 | 1.64 | (0.52) | 2.23 | 0.31 | 1.19 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.29) | (0.24) | (0.23) | (0.19) | (0.21) | (0.19) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.75) | (0.49) | (0.23) | (0.19) | (0.21) | (0.19) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $14.15 | $15.28 | $13.19 | $11.78 | $12.49 | $10.47 | $10.35 | |||||||||||||||||||||||
Total Return** | (2.48)% | 19.82% | 14.08% | (4.04)% | 21.38% | 2.96% | 12.99% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,281 | $4,437 | $3,182 | $2,683 | $2,768 | $628 | $149 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,420 | $3,583 | $2,912 | $2,684 | $1,640 | $343 | $99 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.45% | 0.46% | 0.41% | 0.48% | 0.44% | 0.39% | 0.50% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.45% | 0.46% | 0.41% | 0.48% | 0.44% | 0.37% | 0.47% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.45% | 1.41% | 1.72% | 1.34% | 1.61% | 0.92% | 0.56% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% | 23% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.03 | $13.00 | $11.60 | $12.37 | $10.40 | $10.33 | $9.16 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.29(3) | 0.11(3) | 0.12 | 0.08 | 0.16 | 0.13 | –(5) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.71) | 2.31 | 1.41 | (0.69) | 1.96 | 0.13 | 1.17 | |||||||||||||||||||||||
Total from Investment Operations | (0.42) | 2.42 | 1.53 | (0.61) | 2.12 | 0.26 | 1.17 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.14) | (0.13) | (0.16) | (0.15) | (0.19) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.65) | (0.39) | (0.13) | (0.16) | (0.15) | (0.19) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.96 | $15.03 | $13.00 | $11.60 | $12.37 | $10.40 | $10.33 | |||||||||||||||||||||||
Total Return** | (2.80)% | 18.79% | 13.30% | (4.82)% | 20.39% | 2.41% | 12.77% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,562 | $5,508 | $4,325 | $3,791 | $2,736 | $706 | $110 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,496 | $4,944 | $4,126 | $3,325 | $1,446 | $398 | $20 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 1.24% | 1.21% | 1.21% | 1.34% | 1.21% | 1.14% | 1.37% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 1.24% | 1.21% | 1.21% | 1.34% | 1.21% | 1.13% | 1.26% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.94% | 0.80% | 0.93% | 0.46% | 0.51% | 0.27% | (0.18)% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% | 23% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. | |
(5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.36 | $13.26 | $11.85 | $12.54 | $10.49 | $10.66 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.36(2) | 0.25(2) | 0.25 | 0.18 | 0.21 | 0.03 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.73) | 2.36 | 1.42 | (0.67) | 2.05 | (0.20) | ||||||||||||||||||||
Total from Investment Operations | (0.37) | 2.61 | 1.67 | (0.49) | 2.26 | (0.17) | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.31) | (0.26) | (0.26) | (0.20) | (0.21) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | ||||||||||||||||||||
Total Distributions | (0.77) | (0.51) | (0.26) | (0.20) | (0.21) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $14.22 | $15.36 | $13.26 | $11.85 | $12.54 | $10.49 | ||||||||||||||||||||
Total Return** | (2.39)% | 19.95% | 14.21% | (3.77)% | 21.56% | (1.59)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $237,002 | $249,215 | $215,671 | $205,107 | $227,179 | $187,128 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $241,451 | $234,801 | $213,579 | $207,366 | $214,398 | $199,596 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.28% | 0.29% | 0.28% | 0.28% | 0.28% | 0.27% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.28% | 0.29% | 0.28% | 0.28% | 0.28% | 0.27% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.70% | 1.72% | 1.89% | 1.52% | 1.74% | 0.71% | ||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% |
Class I Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.37 | $13.27 | $11.86 | $12.53 | $10.49 | $10.37 | $9.16 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.37(2) | 0.27(2) | 0.25 | 0.20 | 0.22 | 0.23 | –(6) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.73) | 2.35 | 1.43 | (0.67) | 2.04 | 0.09 | 1.21 | |||||||||||||||||||||||
Total from Investment Operations | (0.36) | 2.62 | 1.68 | (0.47) | 2.26 | 0.32 | 1.21 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.33) | (0.27) | (0.27) | (0.20) | (0.22) | (0.20) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.79) | (0.52) | (0.27) | (0.20) | (0.22) | (0.20) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $14.22 | $15.37 | $13.27 | $11.86 | $12.53 | $10.49 | $10.37 | |||||||||||||||||||||||
Total Return** | (2.37)% | 20.03% | 14.32% | (3.62)% | 21.58% | 3.03% | 13.21% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $6,114 | $5,944 | $4,648 | $3,647 | $2,316 | $1,938 | $11 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,993 | $5,413 | $4,349 | $2,587 | $2,178 | $1,065 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.22% | 0.23% | 0.20% | 0.21% | 0.25% | 0.14% | 0.49% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.22% | 0.23% | 0.20% | 0.21% | 0.25% | 0.13% | 0.29% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.82% | 1.86% | 1.97% | 1.44% | 1.72% | 0.86% | 1.04% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% | 23% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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. | |
(6) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
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Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.21 | $13.13 | $11.74 | $12.45 | $10.45 | $10.35 | $9.16 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.35(3) | 0.20(3) | 0.20 | 0.18 | 0.21 | 0.15 | –(4) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.74) | 2.34 | 1.41 | (0.70) | 2.00 | 0.14 | 1.19 | |||||||||||||||||||||||
Total from Investment Operations | (0.39) | 2.54 | 1.61 | (0.52) | 2.21 | 0.29 | 1.19 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.21) | (0.22) | (0.19) | (0.21) | (0.19) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.73) | (0.46) | (0.22) | (0.19) | (0.21) | (0.19) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $14.09 | $15.21 | $13.13 | $11.74 | $12.45 | $10.45 | $10.35 | |||||||||||||||||||||||
Total Return** | (2.56)% | 19.60% | 13.84% | (4.10)% | 21.15% | 2.73% | 12.99% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,069 | $1,807 | $1,785 | $1,613 | $753 | $30 | $11 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,222 | $1,763 | $1,902 | $1,268 | $558 | $19 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(5) | 0.62% | 0.63% | 0.58% | 0.60% | 0.67% | 0.65% | 0.91% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(5) | 0.62% | 0.63% | 0.58% | 0.60% | 0.67% | 0.65% | 0.67% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.66% | 1.42% | 1.51% | 1.11% | 1.61% | 0.68% | 0.66% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% | 23% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Janus Global Allocation Fund - Growth | |||||||||||||||||||||||||||||
June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $15.35 | $13.25 | $11.84 | $12.54 | $10.48 | $10.36 | $8.62 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.36(3) | 0.22(3) | 0.29 | 0.15 | 0.21 | 0.29 | 0.26 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.73) | 2.39 | 1.37 | (0.65) | 2.04 | 0.01 | 1.69 | |||||||||||||||||||||||
Total from Investment Operations | (0.37) | 2.61 | 1.66 | (0.50) | 2.25 | 0.30 | 1.95 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.31) | (0.26) | (0.25) | (0.20) | (0.19) | (0.18) | (0.21) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.46) | (0.25) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.77) | (0.51) | (0.25) | (0.20) | (0.19) | (0.18) | (0.21) | |||||||||||||||||||||||
Net Asset Value, End of Period | $14.21 | $15.35 | $13.25 | $11.84 | $12.54 | $10.48 | $10.36 | |||||||||||||||||||||||
Total Return** | (2.42)% | 19.93% | 14.18% | (3.90)% | 21.55% | 2.86% | 23.32% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $18,733 | $18,521 | $11,935 | $12,992 | $12,451 | $10,459 | $190,737 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $18,638 | $14,295 | $13,567 | $12,693 | $11,585 | $96,998 | $154,899 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(5) | 0.37% | 0.38% | 0.36% | 0.38% | 0.35% | 0.33% | 0.37% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(5) | 0.37% | 0.33% | 0.30% | 0.34% | 0.35% | 0.33% | 0.36% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.77% | 1.52% | 1.88% | 1.46% | 1.62% | 1.84% | 2.90% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 13% | 45% | 18% | 26% | 13% | 23% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Growth (the “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”). 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven 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 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.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments 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, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 75% to equity investments, 15% to fixed-income securities and money market instruments, and 10% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for
16 | DECEMBER 31, 2014
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each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
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 fundswill 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. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as
Janus Investment Fund | 17
Table of Contents
Notes to Financial Statements (unaudited) (continued)
to the classification level of the specific investments held by the underlying funds.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Growth | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
New Expense | Previous Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, 2014 | (until November 1, | |||||||||
Fund | to present) | 2014) | ||||||||
Janus Global Allocation Fund - Growth | 0.14 | 0.19 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
18 | DECEMBER 31, 2014
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Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Growth | $ | 1,254 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Growth | $ | 319 | ||||
3. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Global Allocation Fund - Growth | $ | 244,199,046 | $ | 33,553,148 | $ | (3,920,158) | $ | 29,632,990 | ||||||||||
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4. | Capital Share Transactions |
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
For the period ended December 31 (unaudited) | Growth | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 36,765 | 136,813 | ||||||||
Reinvested dividends and distributions | 15,049 | 7,869 | ||||||||
Shares repurchased | (39,754) | (95,401) | ||||||||
Net Increase/(Decrease) in Fund Shares | 12,060 | 49,281 | ||||||||
Shares Outstanding, Beginning of Period | 290,492 | 241,211 | ||||||||
Shares Outstanding, End of Period | 302,552 | 290,492 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 44,823 | 105,041 | ||||||||
Reinvested dividends and distributions | 16,304 | 8,704 | ||||||||
Shares repurchased | (29,020) | (80,190) | ||||||||
Net Increase/(Decrease) in Fund Shares | 32,107 | 33,555 | ||||||||
Shares Outstanding, Beginning of Period | 366,361 | 332,806 | ||||||||
Shares Outstanding, End of Period | 398,468 | 366,361 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 656,153 | 1,917,281 | ||||||||
Reinvested dividends and distributions | 856,608 | 563,319 | ||||||||
Shares repurchased | (1,075,490) | (2,520,624) | ||||||||
Net Increase/(Decrease) in Fund Shares | 437,271 | (40,024) | ||||||||
Shares Outstanding, Beginning of Period | 16,224,741 | 16,264,765 | ||||||||
Shares Outstanding, End of Period | 16,662,012 | 16,224,741 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 47,858 | 148,301 | ||||||||
Reinvested dividends and distributions | 20,951 | 12,856 | ||||||||
Shares repurchased | (25,716) | (124,698) | ||||||||
Net Increase/(Decrease) in Fund Shares | 43,093 | 36,459 | ||||||||
Shares Outstanding, Beginning of Period | 386,755 | 350,296 | ||||||||
Shares Outstanding, End of Period | 429,848 | 386,755 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 49,197 | 27,372 | ||||||||
Reinvested dividends and distributions | 7,546 | 4,022 | ||||||||
Shares repurchased | (28,780) | (48,432) | ||||||||
Net Increase/(Decrease) in Fund Shares | 27,963 | (17,038) | ||||||||
Shares Outstanding, Beginning of Period | 118,858 | 135,896 | ||||||||
Shares Outstanding, End of Period | 146,821 | 118,858 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 322,153 | 688,523 | ||||||||
Reinvested dividends and distributions | 65,020 | 31,211 | ||||||||
Shares repurchased | (275,605) | (413,727) | ||||||||
Net Increase/(Decrease) in Fund Shares | 111,568 | 306,007 | ||||||||
Shares Outstanding, Beginning of Period | 1,206,649 | 900,642 | ||||||||
Shares Outstanding, End of Period | 1,318,217 | 1,206,649 |
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
5. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Allocation Fund - Growth | $ | 41,384,219 | $ | 25,667,041 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
22 | DECEMBER 31, 2014
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 23
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
24 | DECEMBER 31, 2014
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
Janus Investment Fund | 25
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
26 | DECEMBER 31, 2014
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
Janus Investment Fund | 27
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81313 | 125-24-93021 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Global Allocation Fund – Moderate
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Allocation Fund – Moderate
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Janus Global Allocation Fund - Moderate (unaudited)
FUND SNAPSHOT We believe broad global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the Fund’s overall volatility through the use of alternatives. This approach coupled with access to Janus Capital Group’s innovative investment expertise and solutions may provide superior risk-adjusted returns over the long term. | ![]() Enrique Chang co-portfolio manager | ![]() Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Moderate’s Class T Shares returned -1.90% for the six-month period ended December 31, 2014. This compares with a return of -1.90% for its primary benchmark, the MSCI All Country World Index, and a -2.79% return for its secondary benchmark, the Global Moderate Allocation Index, an internally calculated, hypothetical combination of total returns from the MSCI All Country World Index (60%) and the Barclays Global Aggregate Bond Index (40%).
MARKET REVIEW
The market environment during the back half of 2014 could best be characterized as a period of great change. After a relative calm for the better part of two years, U.S. equity market volatility spiked considerably. U.S. and non-U.S. equity markets, which had largely been moving in tandem, also decoupled over the last six months. Meanwhile U.S. crude prices, which had been in a range-bound environment between $80 to $100 a barrel for most of the last four years, suddenly collapsed, taking gasoline prices, inflation expectations, and the performance of the entire energy sector with it. The U.S. dollar also rallied during the period, as investors worldwide questioned the sustainability of a tepid global economic recovery and fretted over other geopolitical events.
For all of the big changes occurring in financial markets over the last few months, a few trends persisted. Given the relative health of the U.S. economy, investors continued to view the U.S. as the place to be, and U.S. markets generally outperformed their non-U.S. counterparts across the board. In U.S. bond markets, the long bond continued to rally, while the short end remained anchored, causing the U.S. Treasury curve to continue to flatten. Investors continued to wait for the Federal Reserve to begin tightening, but the exact timing remains uncertain.
INVESTMENT PROCESS
Janus Global Allocation Fund – Moderate invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 45% to 65% equity investments, 30% to 45% fixed income investments and 5% to 20% alternative investments that are rebalanced quarterly. The Fund 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 Fund 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 we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Global Allocation Fund – Moderate. The Janus Global 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 represent. 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.
PORTFOLIO REVIEW
The Fund performed in-line with its primary benchmark, the MSCI All Country World Index, and outperformed its secondary benchmark, the Global Moderate Allocation Index. On a broad basis, our allocation to alternatives was
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Janus Global Allocation Fund - Moderate (unaudited)
a net contributor to performance, while both fixed income and equity allocations were net detractors.
Top contributors to the Fund’s performance included the Perkins Large Cap Value Fund, Janus Triton Fund and the Janus Diversified Alternatives Fund. Due to the underperformance of international equity markets, our largest detractors included the Janus International Equity Fund and INTECH International Managed Volatility Fund. Other detractors from performance included the Janus Emerging Markets Fund and Janus Global Bond Fund.
OUTLOOK
As we look across global markets, we agree with the general perception that the U.S. is currently “the best place to be” in terms of broad asset class exposure. With fixed income rates globally in the developed markets hovering at near unprecedented low levels that are arguably unsustainable, we believe there is real risk that rates will sell off a as they normalize to levels more consistent with equilibrium, especially in the U.S. where economic fundamentals are showing signs of revival and strength, which ultimately will benefit global economies. Against this backdrop, we continue to believe equities offer the most attractive return to risk trade-off versus other asset classes.
Despite our relatively positive outlook for equities, we are paying close attention to volatility that is creeping back into the market. There were two spikes in volatility in the fourth quarter, and such spikes are sometimes signs that the market’s mood is shifting.
In markets of increasing volatility and uncertainty the ordinarily difficult task of correctly allocating asset classes becomes even more difficult. However, we believe such environments are good tests for a strategy that is broadly allocated across multiple asset classes and risk factors.
Thank you for investing in Janus Global Allocation Fund – Moderate.
2 | DECEMBER 31, 2014
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(unaudited)
Janus Global Allocation Fund – Moderate (% of Net Assets)
As of December 31, 2014
Janus Global Bond Fund – Class N Shares | 27 | .2% | ||
Janus International Equity Fund – Class N Shares | 11 | .7 | ||
Perkins Large Cap Value Fund – Class N Shares | 9 | .2 | ||
Janus Diversified Alternatives Fund – Class N Shares | 7 | .9 | ||
INTECH International Managed Volatility Fund(1) – Class I Shares | 6 | .9 | ||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | 4 | .2 | ||
Janus Short-Term Bond Fund – Class N Shares | 4 | .2 | ||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 4 | .0 | ||
Janus Global Research Fund – Class I Shares | 3 | .3 | ||
Janus Overseas Fund – Class N Shares | 3 | .2 | ||
Janus Global Real Estate Fund – Class I Shares | 2 | .8 | ||
Janus Triton Fund – Class N Shares | 2 | .4 | ||
Janus Global Select Fund – Class I Shares | 2 | .4 | ||
Janus Emerging Markets Fund – Class I Shares | 2 | .3 | ||
Perkins Small Cap Value Fund – Class N Shares | 2 | .2 | ||
Janus Fund – Class N Shares | 1 | .7 | ||
Janus Forty Fund – Class N Shares | 1 | .5 | ||
Janus Twenty Fund – Class D Shares | 1 | .3 | ||
Janus Contrarian Fund – Class I Shares | 1 | .3 | ||
Janus Asia Equity Fund – Class I Shares | 0 | .3 | ||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
Janus Global Allocation Fund - Moderate At A Glance
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Janus Global Allocation Fund - Moderate (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Global Allocation Fund – Moderate – Class A Shares | |||||||||||
NAV | –1.90% | 3.23% | 7.84% | 6.86% | 1.16% | ||||||
MOP | –7.53% | –2.71% | 6.57% | 6.16% | |||||||
Janus Global Allocation Fund – Moderate – Class C Shares | |||||||||||
NAV | –2.32% | 2.49% | 7.03% | 6.05% | 1.95% | ||||||
CDSC | –3.25% | 1.50% | 7.03% | 6.05% | |||||||
Janus Global Allocation Fund – Moderate – Class D Shares(1) | –1.88% | 3.37% | 8.02% | 7.04% | 0.99% | ||||||
Janus Global Allocation Fund – Moderate – Class I Shares | –1.82% | 3.44% | 8.10% | 6.99% | 0.95% | ||||||
Janus Global Allocation Fund – Moderate – Class S Shares | –1.99% | 3.10% | 7.65% | 6.61% | 1.34% | ||||||
Janus Global Allocation Fund – Moderate – Class T Shares | –1.90% | 3.36% | 7.94% | 6.99% | 1.09% | ||||||
MSCI All Country World IndexSM | –1.90% | 4.16% | 9.17% | 5.58% | |||||||
Global Moderate Allocation Index | –2.79% | 2.78% | 6.73% | 5.47% | |||||||
Morningstar Quartile – Class T Shares | – | 2nd | 2nd | 1st | |||||||
Morningstar Ranking – based on total returns for World Allocation Funds | – | 144/547 | 98/348 | 49/290 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
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Janus Global Allocation Fund - Moderate (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14)†† | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 981.00 | $ | 2.15 | $ | 1,000.00 | $ | 1,023.04 | $ | 2.19 | 0.43% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 976.80 | $ | 5.98 | $ | 1,000.00 | $ | 1,019.16 | $ | 6.11 | 1.20% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 981.20 | $ | 1.30 | $ | 1,000.00 | $ | 1,023.89 | $ | 1.33 | 0.26% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 981.80 | $ | 1.00 | $ | 1,000.00 | $ | 1,024.20 | $ | 1.02 | 0.20% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 980.10 | $ | 3.04 | $ | 1,000.00 | $ | 1,022.13 | $ | 3.11 | 0.61% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 981.00 | $ | 1.80 | $ | 1,000.00 | $ | 1,023.39 | $ | 1.84 | 0.36% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |
†† | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
6 | DECEMBER 31, 2014
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Janus Global Allocation Fund - Moderate
Schedule of Investments (unaudited)
As of December 31, 2014
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 10.7% | ||||||||||
2,534,512 | Janus Diversified Alternatives Fund – Class N Shares | $ | 25,674,614 | |||||||
808,709 | Janus Global Real Estate Fund – Class I Shares | 9,122,236 | ||||||||
| ||||||||||
34,796,850 | ||||||||||
Equity Funds – 57.9% | ||||||||||
2,998,746 | INTECH International Managed Volatility Fund(1) – Class I Shares | 22,550,570 | ||||||||
1,342,425 | INTECH U.S. Managed Volatility Fund(2) – Class N Shares | 13,518,217 | ||||||||
602,431 | INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 12,988,416 | ||||||||
92,149 | Janus Asia Equity Fund – Class I Shares | 880,944 | ||||||||
187,763 | Janus Contrarian Fund – Class I Shares | 4,145,817 | ||||||||
899,323 | Janus Emerging Markets Fund – Class I Shares | 7,383,441 | ||||||||
159,365 | Janus Forty Fund – Class N Shares | 4,870,205 | ||||||||
147,607 | Janus Fund – Class N Shares | 5,462,936 | ||||||||
165,839 | Janus Global Research Fund – Class I Shares | 10,711,530 | ||||||||
573,141 | Janus Global Select Fund – Class I Shares | 7,714,473 | ||||||||
3,111,289 | Janus International Equity Fund – Class N Shares | 37,864,385 | ||||||||
329,862 | Janus Overseas Fund – Class N Shares | 10,377,445 | ||||||||
335,998 | Janus Triton Fund – Class N Shares | 7,956,438 | ||||||||
74,673 | Janus Twenty Fund – Class D Shares | 4,365,376 | ||||||||
1,829,235 | Perkins Large Cap Value Fund – Class N Shares | 29,944,585 | ||||||||
329,593 | Perkins Small Cap Value Fund – Class N Shares | 7,125,796 | ||||||||
| ||||||||||
187,860,574 | ||||||||||
Fixed Income Funds – 31.4% | ||||||||||
8,830,908 | Janus Global Bond Fund – Class N Shares | 88,132,457 | ||||||||
4,527,341 | Janus Short-Term Bond Fund – Class N Shares | 13,763,117 | ||||||||
| ||||||||||
101,895,574 | ||||||||||
Total Investments (total cost $296,159,293) – 100.0% | 324,552,998 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (86,036) | |||||||||
Net Assets – 100% | $ | 324,466,962 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
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Notes to Schedule of Investments and Other Information (unaudited)
Barclays Global Aggregate Bond Index | Provides a broad-based measure of the global investment grade fixed-rate debt markets. It is comprised of the U.S. Aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Indexes. It also includes a wide range of standard and customized subindices by liquidity constraint, sector, quality and maturity. | |
Global Moderate Allocation Index | An internally calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (60%) and Barclays Global Aggregate Bond Index (40%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Global Allocation Fund – Moderate | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 2,592,091 | 490,218 | (83,563) | 2,998,746 | $ | (25,512) | $ | 561,410 | $ | 22,550,570 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 2,064,085 | 22,025 | (2,086,110) | – | 187,480 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 2,333,529 | (991,104) | 1,342,425 | 5,257,274 | 1,436,997 | 13,518,217 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 667,891 | 22,433 | (87,893) | 602,431 | 582,245 | 116,042 | 12,988,416 | ||||||||||||||
Janus Asia Equity Fund | 86,786 | 10,639 | (5,276) | 92,149 | 566 | 49,163 | 880,944 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 168,789 | 23,542 | (4,568) | 187,763 | 8,948 | 34,661 | 4,145,817 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 2,514,382 | 113,809 | (93,679) | 2,534,512 | 599 | 12,140 | 25,674,614 | ||||||||||||||
Janus Emerging Markets Fund- Class I Shares | 774,837 | 154,740 | (30,254) | 899,323 | (9,691) | 135,195 | 7,383,441 | ||||||||||||||
Janus Forty Fund – Class N Shares | 100,365 | 64,250 | (5,250) | 159,365 | (37,611) | 82,274 | 4,870,205 | ||||||||||||||
Janus Fund – Class N Shares | 125,171 | 32,258 | (9,822) | 147,607 | 96,713 | 93,116 | 5,462,936 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 8,263,367 | 847,682 | (280,141) | 8,830,908 | (22,909) | 3,747,642 | 88,132,457 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 784,130 | 52,074 | (27,495) | 808,709 | 6,422 | 153,776 | 9,122,236 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 164,028 | 6,701 | (4,890) | 165,839 | 12,270 | 117,097 | 10,711,530 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 568,505 | 20,267 | (15,631) | 573,141 | 9,143 | 62,628 | 7,714,473 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 2,906,246 | 299,156 | (94,113) | 3,111,289 | (9,860) | 847,201 | 37,864,385 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 343,169 | 14,946 | (28,253) | 329,862 | (106,946) | 134,164 | 10,377,445 | ||||||||||||||
Janus Short-Term Bond Fund – Class N Shares | 3,874,419 | 823,165 | (170,243) | 4,527,341 | (3,407) | 103,837 | 13,763,117 | ||||||||||||||
Janus Triton Fund – Class N Shares | 304,490 | 40,153 | (8,645) | 335,998 | 5,751 | 47,548 | 7,956,438 | ||||||||||||||
Janus Twenty Fund – Class D Shares | 67,990 | 13,207 | (6,524) | 74,673 | 81,773 | 63,755 | 4,365,376 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 1,033,000 | 898,488 | (102,253) | 1,829,235 | 217,410 | 548,992 | 29,944,585 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 257,500 | 80,234 | (8,141) | 329,593 | (1,386) | 399,332 | 7,125,796 | ||||||||||||||
Total | $ | 6,249,272 | $ | 8,746,970 | $ | 324,552,998 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
8 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||
Janus Global Allocation Fund – Moderate | |||||||||
Assets | |||||||||
Investments in Securities: | |||||||||
Investment Companies | |||||||||
Alternative Funds | $ | 34,796,850 | $– | $– | |||||
Equity Funds | 187,860,574 | – | – | ||||||
Fixed Income Funds | 101,895,574 | – | – | ||||||
Total Assets | $ | 324,552,998 | $– | $– | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
Janus Global | ||||
As of December 31, 2014 (unaudited) | Allocation Fund - Moderate | |||
Assets: | ||||
Investments at cost | $ | 296,159,293 | ||
Affiliated investments at value | 324,552,998 | |||
Non-interested Trustees’ deferred compensation | 6,655 | |||
Receivables: | ||||
Investments sold | 191,105 | |||
Fund shares sold | 157,460 | |||
Other assets | 3,681 | |||
Total Assets | 324,911,899 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 307,705 | |||
Advisory fees | 14,202 | |||
Transfer agent fees and expenses | 36,528 | |||
12b-1 Distribution and shareholder servicing fees | 13,494 | |||
Non-interested Trustees’ fees and expenses | 1,913 | |||
Non-interested Trustees’ deferred compensation fees | 6,655 | |||
Accrued expenses and other payables | 64,440 | |||
Total Liabilities | 444,937 | |||
Net Assets | $ | 324,466,962 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 279,500,158 | ||
Undistributed net investment income/(loss)* | 996,762 | |||
Undistributed net realized gain/(loss) from investments* | 15,575,088 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 28,394,954 | |||
Total Net Assets | $ | 324,466,962 | ||
Net Assets - Class A Shares | $ | 15,068,064 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,128,926 | |||
Net Asset Value Per Share(1) | $ | 13.35 | ||
Maximum Offering Price Per Share(2) | $ | 14.16 | ||
Net Assets - Class C Shares | $ | 10,761,711 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 815,685 | |||
Net Asset Value Per Share(1) | $ | 13.19 | ||
Net Assets - Class D Shares | $ | 262,470,696 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 19,567,195 | |||
Net Asset Value Per Share | $ | 13.41 | ||
Net Assets - Class I Shares | $ | 5,695,812 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 424,736 | |||
Net Asset Value Per Share | $ | 13.41 | ||
Net Assets - Class S Shares | $ | 2,926,658 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 220,561 | |||
Net Asset Value Per Share | $ | 13.27 | ||
Net Assets - Class T Shares | $ | 27,544,021 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,058,099 | |||
Net Asset Value Per Share | $ | 13.38 |
* | See “Federal Income Tax” 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.
10 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
Janus Global | ||||
For the period ended December 31, 2014 (unaudited) | Allocation Fund - Moderate | |||
Investment Income: | ||||
Dividends from affiliates | $ | 8,746,970 | ||
Total Investment Income | 8,746,970 | |||
Expenses: | ||||
Advisory fees | 82,179 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 16,063 | |||
Class C Shares | 56,054 | |||
Class S Shares | 3,705 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 163,315 | |||
Class S Shares | 3,705 | |||
Class T Shares | 29,890 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 3,557 | |||
Class C Shares | 4,016 | |||
Class I Shares | 2,412 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 780 | |||
Class C Shares | 899 | |||
Class D Shares | 25,937 | |||
Class I Shares | 122 | |||
Class S Shares | 13 | |||
Class T Shares | 323 | |||
Shareholder reports expense | 28,663 | |||
Registration fees | 57,211 | |||
Professional fees | 19,414 | |||
Non-interested Trustees’ fees and expenses | 2,913 | |||
Other expenses | 2,679 | |||
Total Expenses | 503,850 | |||
Net Expenses | 503,850 | |||
Net Investment Income/(Loss) | 8,243,120 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 6,249,272 | |||
Capital gain distributions from underlying funds | 13,053,106 | |||
Total Net Realized Gain/(Loss) on Investments | 19,302,378 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (33,746,088) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (33,746,088) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (6,200,590) |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Moderate | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 8,243,120 | $ | 5,357,493 | ||||
Net realized gain from investments in affiliates | 19,302,378 | 9,214,193 | ||||||
Change in unrealized net appreciation/depreciation | (33,746,088) | 33,691,035 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (6,200,590) | 48,262,721 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (366,391) | (157,062) | ||||||
Class C Shares | (183,738) | (91,118) | ||||||
Class D Shares | (6,542,960) | (4,641,655) | ||||||
Class I Shares | (145,598) | (107,987) | ||||||
Class S Shares | (64,777) | (38,709) | ||||||
Class T Shares | (626,732) | (360,310) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (359,972) | (106,353) | ||||||
Class C Shares | (262,309) | (111,526) | ||||||
Class D Shares | (6,226,887) | (2,907,792) | ||||||
Class I Shares | (135,007) | (65,839) | ||||||
Class S Shares | (70,021) | (30,951) | ||||||
Class T Shares | (601,152) | (228,916) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (15,585,544) | (8,848,218) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 4,389,465 | 3,708,140 | ||||||
Class C Shares | 915,256 | 2,564,930 | ||||||
Class D Shares | 9,626,242 | 29,937,398 | ||||||
Class I Shares | 866,420 | 1,616,228 | ||||||
Class S Shares | 627,043 | 706,319 | ||||||
Class T Shares | 8,953,949 | 10,004,788 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 617,695 | 254,958 | ||||||
Class C Shares | 400,307 | 183,001 | ||||||
Class D Shares | 12,666,586 | 7,494,648 | ||||||
Class I Shares | 276,081 | 169,055 | ||||||
Class S Shares | 134,798 | 69,660 | ||||||
Class T Shares | 1,199,717 | 579,642 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (573,531) | (2,545,907) | ||||||
Class C Shares | (965,966) | (2,392,841) | ||||||
Class D Shares | (18,126,244) | (41,693,706) | ||||||
Class I Shares | (449,022) | (2,537,755) | ||||||
Class S Shares | (219,725) | (1,703,313) | ||||||
Class T Shares | (4,134,134) | (7,221,950) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 16,204,937 | (806,705) | ||||||
Net Increase/(Decrease) in Net Assets | (5,581,197) | 38,607,798 | ||||||
Net Assets: | ||||||||
Beginning of period | 330,048,159 | 291,440,361 | ||||||
End of period | $ | 324,466,962 | $ | 330,048,159 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 996,762 | $ | 683,838 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.29 | $12.58 | $12.21 | $12.57 | $10.95 | $10.80 | $9.68 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.41(3) | 0.21(3) | 0.32 | 0.24 | 0.34 | 0.18 | 0.02 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.68) | 1.88 | 0.97 | (0.31) | 1.58 | 0.24 | 1.10 | |||||||||||||||||||||||
Total from Investment Operations | (0.27) | 2.09 | 1.29 | (0.07) | 1.92 | 0.42 | 1.12 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.34) | (0.23) | (0.31) | (0.29) | (0.30) | (0.27) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.67) | (0.38) | (0.92) | (0.29) | (0.30) | (0.27) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.35 | $14.29 | $12.58 | $12.21 | $12.57 | $10.95 | $10.80 | |||||||||||||||||||||||
Total Return** | (1.90)% | 16.79% | 10.67% | (0.41)% | 17.59% | 3.81% | 11.57% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $15,068 | $11,593 | $8,913 | $5,720 | $5,498 | $1,844 | $1,145 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $12,664 | $9,885 | $6,850 | $5,484 | $3,818 | $1,676 | $424 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.43% | 0.43% | 0.41% | 0.42% | 0.50% | 0.40% | 0.48% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.43% | 0.43% | 0.41% | 0.42% | 0.50% | 0.40% | 0.44% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.81% | 1.53% | 1.97% | 1.98% | 2.88% | 1.82% | 1.43% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% | 19% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.08 | $12.40 | $12.02 | $12.46 | $10.88 | $10.77 | $9.68 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.28(3) | 0.11(3) | 0.18 | 0.15 | 0.26 | 0.21 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.61) | 1.85 | 0.99 | (0.32) | 1.57 | 0.15 | 1.08 | |||||||||||||||||||||||
Total from Investment Operations | (0.33) | 1.96 | 1.17 | (0.17) | 1.83 | 0.36 | 1.09 | |||||||||||||||||||||||
Less Distributions: | �� | |||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.23) | (0.13) | (0.18) | (0.27) | (0.25) | (0.25) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.56) | (0.28) | (0.79) | (0.27) | (0.25) | (0.25) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.19 | $14.08 | $12.40 | $12.02 | $12.46 | $10.88 | $10.77 | |||||||||||||||||||||||
Total Return** | (2.32)% | 15.92% | 9.78% | (1.27)% | 16.86% | 3.33% | 11.26% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $10,762 | $11,120 | $9,480 | $8,397 | $7,572 | $2,509 | $406 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $11,061 | $10,017 | $8,442 | $7,945 | $5,021 | $1,469 | $113 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 1.20% | 1.14% | 1.18% | 1.26% | 1.16% | 1.16% | 1.26% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 1.20% | 1.14% | 1.18% | 1.26% | 1.16% | 1.16% | 1.20% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.08% | 0.86% | 1.23% | 1.10% | 1.85% | 0.87% | 0.71% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% | 19% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.36 | $12.63 | $12.27 | $12.62 | $10.96 | $10.98 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.36(2) | 0.24(2) | 0.30 | 0.26 | 0.34 | 0.06 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.63) | 1.89 | 1.00 | (0.31) | 1.62 | (0.08) | ||||||||||||||||||||
Total from Investment Operations | (0.27) | 2.13 | 1.30 | (0.05) | 1.96 | (0.02) | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.35) | (0.25) | (0.33) | (0.30) | (0.30) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | ||||||||||||||||||||
Total Distributions | (0.68) | (0.40) | (0.94) | (0.30) | (0.30) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $13.41 | $14.36 | $12.63 | $12.27 | $12.62 | $10.96 | ||||||||||||||||||||
Total Return** | (1.88)% | 17.04% | 10.71% | (0.27)% | 18.00% | (0.18)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $262,471 | $276,135 | $247,153 | $228,415 | $238,030 | $180,261 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $268,539 | $261,560 | $241,398 | $224,382 | $216,280 | $184,405 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.26% | 0.26% | 0.25% | 0.26% | 0.25% | 0.27% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.26% | 0.26% | 0.25% | 0.26% | 0.25% | 0.27% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.02% | 1.77% | 2.24% | 2.10% | 2.83% | 1.43% | ||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% |
Class I Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.36 | $12.63 | $12.27 | $12.60 | $10.96 | $10.80 | $9.68 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.38(2) | 0.26(2) | 0.31 | 0.26 | 0.34 | 0.26 | 0.05 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.64) | 1.87 | 1.00 | (0.29) | 1.61 | 0.17 | 1.07 | |||||||||||||||||||||||
Total from Investment Operations | (0.26) | 2.13 | 1.31 | (0.03) | 1.95 | 0.43 | 1.12 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.36) | (0.25) | (0.34) | (0.30) | (0.31) | (0.27) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.69) | (0.40) | (0.95) | (0.30) | (0.31) | (0.27) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.41 | $14.36 | $12.63 | $12.27 | $12.60 | $10.96 | $10.80 | |||||||||||||||||||||||
Total Return** | (1.82)% | 17.10% | 10.80% | (0.12)% | 17.91% | 3.96% | 11.57% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,696 | $5,384 | $5,441 | $5,640 | $4,510 | $1,625 | $36 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,512 | $5,595 | $5,730 | $5,003 | $3,130 | $757 | $29 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(3) | 0.20% | 0.22% | 0.18% | 0.17% | 0.17% | 0.16% | 0.19% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(3) | 0.20% | 0.22% | 0.18% | 0.17% | 0.17% | 0.16% | 0.18% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.30% | 1.89% | 2.38% | 2.18% | 2.56% | 1.70% | 1.72% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% | 19% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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.
14 | DECEMBER 31, 2014
Table of Contents
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.19 | $12.49 | $12.14 | $12.52 | $10.91 | $10.78 | $9.68 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.33(3) | 0.19(3) | 0.29 | 0.24 | 0.29 | 0.25 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.61) | 1.85 | 0.97 | (0.34) | 1.62 | 0.14 | 1.09 | |||||||||||||||||||||||
Total from Investment Operations | (0.28) | 2.04 | 1.26 | (0.10) | 1.91 | 0.39 | 1.10 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.31) | (0.19) | (0.30) | (0.28) | (0.30) | (0.26) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.64) | (0.34) | (0.91) | (0.28) | (0.30) | (0.26) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.27 | $14.19 | $12.49 | $12.14 | $12.52 | $10.91 | $10.78 | |||||||||||||||||||||||
Total Return** | (1.99)% | 16.53% | 10.44% | (0.64)% | 17.56% | 3.57% | 11.36% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,927 | $2,580 | $3,139 | $1,595 | $416 | $58 | $11 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,924 | $2,839 | $2,429 | $1,042 | $374 | $26 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.61% | 0.61% | 0.60% | 0.60% | 0.64% | 0.66% | 0.92% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.61% | 0.60% | 0.60% | 0.60% | 0.64% | 0.66% | 0.77% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.75% | 1.40% | 1.88% | 1.88% | 2.92% | 1.35% | 1.59% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% | 19% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Janus Global Allocation Fund - Moderate | |||||||||||||||||||||||||||||
June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $14.33 | $12.61 | $12.25 | $12.60 | $10.95 | $10.79 | $9.05 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.38(3) | 0.23(3) | 0.27 | 0.32 | 0.11 | 0.56 | 0.32 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.65) | 1.88 | 1.03 | (0.38) | 1.84 | (0.14) | 1.17 | |||||||||||||||||||||||
Total from Investment Operations | (0.27) | 2.11 | 1.30 | (0.06) | 1.95 | 0.42 | 2.03 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.35) | (0.24) | (0.33) | (0.29) | (0.30) | (0.26) | (0.29) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.33) | (0.15) | (0.61) | – | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.68) | (0.39) | (0.94) | (0.29) | (0.30) | (0.26) | (0.29) | |||||||||||||||||||||||
Net Asset Value, End of Period | $13.38 | $14.33 | $12.61 | $12.25 | $12.60 | $10.95 | $10.79 | |||||||||||||||||||||||
Total Return** | (1.90)% | 16.96% | 10.67% | (0.33)% | 17.89% | 3.80% | 23.19% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $27,544 | $23,236 | $17,314 | $15,651 | $20,254 | $10,268 | $160,742 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $23,580 | $20,305 | $15,843 | $19,099 | $16,051 | $83,813 | $124,910 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets***(4) | 0.36% | 0.36% | 0.35% | 0.36% | 0.35% | 0.30% | 0.33% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets***(4) | 0.36% | 0.30% | 0.30% | 0.31% | 0.35% | 0.30% | 0.32% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.32% | 1.72% | 2.15% | 2.12% | 2.88% | 2.63% | 3.48% | |||||||||||||||||||||||
Portfolio Turnover Rate | 9% | 11% | 64% | 18% | 15% | 11% | 19% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Moderate (the “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”). 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven 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 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.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments 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, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 55% to equity investments, 35% to fixed-income securities and money market instruments, and 10% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for
16 | DECEMBER 31, 2014
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each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
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 fundswill 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. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as
Janus Investment Fund | 17
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Notes to Financial Statements (unaudited) (continued)
to the classification level of the specific investments held by the underlying funds.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Moderate | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Global Allocation Fund - Moderate | 0.19 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net
18 | DECEMBER 31, 2014
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assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Moderate | $ | 5,332 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Moderate | $ | 362 | ||||
3. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Global Allocation Fund - Moderate | $ | 298,039,261 | $ | 30,964,369 | $ | (4,450,632) | $ | 26,513,737 | ||||||||||
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4. | Capital Share Transactions |
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
For the period ended December 31 (unaudited) | Moderate | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 312,644 | 274,412 | ||||||||
Reinvested dividends and distributions | 45,994 | 18,858 | ||||||||
Shares repurchased | (40,948) | (190,575) | ||||||||
Net Increase/(Decrease) in Fund Shares | 317,690 | 102,695 | ||||||||
Shares Outstanding, Beginning of Period | 811,236 | 708,541 | ||||||||
Shares Outstanding, End of Period | 1,128,926 | 811,236 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 66,116 | 192,519 | ||||||||
Reinvested dividends and distributions | 30,166 | 13,687 | ||||||||
Shares repurchased | (70,303) | (181,255) | ||||||||
Net Increase/(Decrease) in Fund Shares | 25,979 | 24,951 | ||||||||
Shares Outstanding, Beginning of Period | 789,706 | 764,755 | ||||||||
Shares Outstanding, End of Period | 815,685 | 789,706 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 683,948 | 2,204,196 | ||||||||
Reinvested dividends and distributions | 938,961 | 551,889 | ||||||||
Shares repurchased | (1,288,214) | (3,087,529) | ||||||||
Net Increase/(Decrease) in Fund Shares | 334,695 | (331,444) | ||||||||
Shares Outstanding, Beginning of Period | 19,232,500 | 19,563,944 | ||||||||
Shares Outstanding, End of Period | 19,567,195 | 19,232,500 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 61,149 | 119,773 | ||||||||
Reinvested dividends and distributions | 20,466 | 12,458 | ||||||||
Shares repurchased | (31,868) | (187,869) | ||||||||
Net Increase/(Decrease) in Fund Shares | 49,747 | (55,638) | ||||||||
Shares Outstanding, Beginning of Period | 374,989 | 430,627 | ||||||||
Shares Outstanding, End of Period | 424,736 | 374,989 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 44,402 | 52,535 | ||||||||
Reinvested dividends and distributions | 10,097 | 5,183 | ||||||||
Shares repurchased | (15,701) | (127,344) | ||||||||
Net Increase/(Decrease) in Fund Shares | 38,798 | (69,626) | ||||||||
Shares Outstanding, Beginning of Period | 181,763 | 251,389 | ||||||||
Shares Outstanding, End of Period | 220,561 | 181,763 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 644,219 | 737,969 | ||||||||
Reinvested dividends and distributions | 89,132 | 42,778 | ||||||||
Shares repurchased | (296,542) | (532,129) | ||||||||
Net Increase/(Decrease) in Fund Shares | 436,809 | 248,618 | ||||||||
Shares Outstanding, Beginning of Period | 1,621,290 | 1,372,672 | ||||||||
Shares Outstanding, End of Period | 2,058,099 | 1,621,290 |
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
5. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Allocation Fund - Moderate | $ | 50,597,295 | $ | 28,711,761 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 33
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
Janus Investment Fund | 37
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81314 | 125-24-93022 02-15 |
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semiannual report
December 31, 2014
Janus Flexible Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Flexible Bond Fund
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Janus Flexible Bond Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process that focuses on credit-oriented investments can generate risk-adjusted outperformance and capital preservation 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 six-month period ended December 31, 2014, Janus Flexible Bond Fund’s Class T Shares returned 0.71%, compared with 1.96% for the Fund’s benchmark, the Barclays U.S. Aggregate Bond Index.
INVESTMENT ENVIRONMENT
After the U.S. economy kicked off 2014 with a winter-related slowdown, the U.S. economy recovered and gathered momentum in the second half of the year. Economic growth abroad deteriorated, however. Uneven global growth created a push and pull within the U.S. fixed income market. Prices on fixed income risk assets, like high yield, fell. Long-end Treasurys (those with maturities of 10 years or more) benefited from safe-haven purchases, especially from foreign investors. Yields on the 10-year and 30-year Treasurys declined materially during the period.
A risk-averse mentality grew in the second half of the year as the global economic outlook darkened and plummeting oil prices fueled overall volatility in the fixed income market. However, with U.S. growth bucking the global trend, the Federal Reserve (Fed) remained on track to hike rates in the second half of 2015. This pushed yields on the short-end of the curve upward. With long-end yields contained and front-end yields higher, the U.S. yield curve flattened. The flattening curve signaled concern that slowing global growth will create headwinds for the U.S. economy.
PERFORMANCE DISCUSSION
Our corporate credit allocation drove Fund underperformance compared with the benchmark, the Barclays U.S. Aggregate Bond Index, in the six months ended December 31, 2014.
Specifically, our yield curve positioning in our corporate credit exposure also drove underperformance of our credit allocation. We had greater exposure to shorter duration credit when the market favored longer duration credit during the year as rates declined.
Our corporate credit overweight and our security selection within the asset class were relative detractors as well. In particular, our security selection within the independent energy sector as well as our sector overweight detracted. The sector, which includes oil producers, was directly impacted by the sell-off in crude oil prices during the period. Our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, in our view. However, we believe individual company fundamentals were eclipsed by the sharp decline in oil prices, particularly in the fourth quarter.
Our Treasury allocation was also a relative detractor. Our underweight of the asset class versus the benchmark, generally on the longer end of the curve, hurt us as the longer-end Treasurys rallied during the period.
Spread carry, or the excess income generated over similar securities in the benchmark, was a relative contributor partly due to our out-of index exposure to high yield securities.
Our small allocations to government-related securities as well as preferred securities were also relative contributors.
OUTLOOK
We believe that U.S. economic growth has established a strong foundation and that unprecedented monetary stimulus measures abroad could eventually spark the beginnings of a global economic recovery over the next year. In the near term, however, the global economy faces headwinds, such as the threat of deflation and China’s slowing growth. Uncertainty created by the diverging growth and monetary policy trajectories of the U.S. and its major trading partners could drive volatility in the fixed income markets.
First and foremost, we invest according to our two core tenets of seeking capital preservation and risk-adjusted returns. Consequently, we have sought to reduce risk within our Fund by reducing our exposure to corporate
Janus Investment Fund | 1
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Janus Flexible Bond Fund (unaudited)
credit, though we remain overweight the benchmark. Specifically, we have reduced our weighting within the energy credit sector as we believe crude oil prices could remain at lower levels. Within energy, we are focused on less leveraged credits, those cost efficient producers that are hedging their output and, in our view, are solid capital stewards. Depending on market conditions, we may reduce our energy sector exposure in the future and boost exposure to more defensive sectors.
While the Fed has signaled that it is preparing to exit loose monetary policy, we believe near-term global growth concerns and tame inflation trends may contain long-end Treasury rates. We are also mindful of stepped up Treasury purchases by foreign investors hungry for yield. As part of our defensive positioning, we have increased our Treasury exposure to be more in line with the benchmark’s. We also believe it is prudent at this juncture for the Fund’s overall duration to be more in line with the benchmark’s and allow for flexibility to adjust upward or downward as conditions warrant.
On the securitized front, the Mortgage-Backed Securities (MBS) sector’s favorable supply/demand profile should keep spread levels tight, in our view. However, we also believe that the fixed income market is vulnerable to increased volatility over the near term. Our MBS allocation is defensively positioned to weather volatility and for the current flattening yield curve through the use of higher coupon MBS, in our view. MBS generally does better in a market with lower volatility, so we have decreased our MBS allocation overall. We remain underweight MBS versus the benchmark.
Meanwhile, solid U.S. economic growth bodes well for corporate prospects. Moreover, with yields low, corporate credit will continue to be in demand. Nevertheless, at this stage in the credit cycle, companies are re-leveraging their balance sheets through share repurchases and expensive acquisitions. Selectivity is key, and that plays to our bottom-up, fundamental process of focusing on strong balance sheets and managements.
Not taking on excessive risk, being diversified and defensive in one’s positioning does not require giving up solid risk-adjusted returns. When the U.S. fixed income market begins to register signs of a global economic recovery, a portfolio that didn’t take excessive bets and instead, focused on capital preservation and risk-adjusted returns should have the flexibility to take advantage of the opportunities that arise.
Thank you for investing in Janus Flexible Bond Fund.
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(unaudited)
Janus Flexible Bond Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 9.7 Years | |
Average Effective Duration* | 5.4 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 2.25% | |
With Reimbursement | 2.25% | |
Class A Shares at MOP | ||
Without Reimbursement | 2.15% | |
With Reimbursement | 2.15% | |
Class C Shares*** | ||
Without Reimbursement | 1.52% | |
With Reimbursement | 1.52% | |
Class D Shares | ||
Without Reimbursement | 2.44% | |
With Reimbursement | 2.44% | |
Class I Shares | ||
Without Reimbursement | 2.49% | |
With Reimbursement | 2.49% | |
Class N Shares | ||
Without Reimbursement | 2.60% | |
With Reimbursement | 2.60% | |
Class R Shares | ||
Without Reimbursement | 1.85% | |
With Reimbursement | 1.85% | |
Class S Shares | ||
Without Reimbursement | 2.10% | |
With Reimbursement | 2.10% | |
Class T Shares | ||
Without Reimbursement | 2.35% | |
With Reimbursement | 2.35% | |
Number of Bonds/Notes | 363 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AAA | 0.1% | |
AA | 54.3% | |
A | 4.8% | |
BBB | 23.1% | |
BB | 13.6% | |
B | 1.1% | |
Not Rated | 1.0% | |
Other | 2.0% |
† | Credit ratings provided by Standard & Poor���s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18b07.gif)
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18p07.gif)
Janus Investment Fund | 3
Table of Contents
Janus Flexible Bond Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18m07.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Flexible Bond Fund – Class A Shares | |||||||||||||
NAV | 0.66% | 4.72% | 5.18% | 5.64% | 7.14% | 0.80% | |||||||
MOP | –4.11% | –0.28% | 4.16% | 5.13% | 6.95% | ||||||||
Janus Flexible Bond Fund – Class C Shares | |||||||||||||
NAV | 0.28% | 3.94% | 4.38% | 4.88% | 6.45% | 1.58% | |||||||
CDSC | –0.71% | 2.94% | 4.38% | 4.88% | 6.45% | ||||||||
Janus Flexible Bond Fund – Class D Shares(1) | 0.76% | 4.91% | 5.36% | 5.74% | 7.18% | 0.61% | |||||||
Janus Flexible Bond Fund – Class I Shares | 0.77% | 4.93% | 5.40% | 5.68% | 7.16% | 0.61% | |||||||
Janus Flexible Bond Fund – Class N Shares | 0.84% | 4.97% | 5.24% | 5.68% | 7.16% | 0.45% | |||||||
Janus Flexible Bond Fund – Class R Shares | 0.45% | 4.29% | 4.74% | 5.19% | 6.74% | 1.21% | |||||||
Janus Flexible Bond Fund – Class S Shares | 0.58% | 4.55% | 5.00% | 5.44% | 6.99% | 0.95% | |||||||
Janus Flexible Bond Fund – Class T Shares | 0.71% | 4.72% | 5.24% | 5.68% | 7.16% | 0.70% | |||||||
Barclays U.S. Aggregate Bond Index | 1.96% | 5.97% | 4.45% | 4.71% | 6.82%** | ||||||||
Morningstar Quartile – Class T Shares | – | 3rd | 2nd | 1st | 1st | ||||||||
Morningstar Ranking – based on total returns for Intermediate-Term Bond Funds | – | 751/1,066 | 331/937 | 60/824 | 23/200 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than investment grade bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R 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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – July 7, 1987 | |
** | The Barclays U.S. Aggregate Bond Index’s since inception returns are calculated from June 30, 1987. | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Flexible Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,006.60 | $ | 4.00 | $ | 1,000.00 | $ | 1,021.22 | $ | 4.02 | 0.79% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,002.80 | $ | 7.77 | $ | 1,000.00 | $ | 1,017.44 | $ | 7.83 | 1.54% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,007.60 | $ | 3.04 | $ | 1,000.00 | $ | 1,022.18 | $ | 3.06 | 0.60% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,007.70 | $ | 2.88 | $ | 1,000.00 | $ | 1,022.33 | $ | 2.91 | 0.57% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,008.40 | $ | 2.28 | $ | 1,000.00 | $ | 1,022.94 | $ | 2.29 | 0.45% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,004.50 | $ | 6.06 | $ | 1,000.00 | $ | 1,019.16 | $ | 6.11 | 1.20% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,005.80 | $ | 4.80 | $ | 1,000.00 | $ | 1,020.42 | $ | 4.84 | 0.95% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,007.10 | $ | 3.54 | $ | 1,000.00 | $ | 1,021.68 | $ | 3.57 | 0.70% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 4.7% | ||||||||||
$13,404,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 13,511,393 | |||||||
5,741,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 5,834,613 | ||||||||
53,239,000 | Applebee’s/IHOP Funding LLC 4.2770%, 9/5/21 (144A) | 53,413,251 | ||||||||
11,143,000 | Aventura Mall Trust 2013-AVM 3.7427%, 12/5/20 (144A),‡ | 10,854,664 | ||||||||
2,520,000 | Banc of America Commercial Mortgage Trust 2006-6 5.4210%, 10/10/45 | 2,599,279 | ||||||||
4,104,109 | Banc of America Commercial Mortgage Trust 2007-5 5.7720%, 2/10/51‡ | 4,340,867 | ||||||||
8,933,000 | Boca Hotel Portfolio Trust 2013-BOCA 3.2108%, 8/15/26 (144A),‡ | 8,927,587 | ||||||||
22,876,309 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 23,197,950 | ||||||||
10,116,856 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49 | 10,741,926 | ||||||||
27,724,766 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 30,049,626 | ||||||||
16,217,540 | Domino’s Pizza Master Issuer LLC 5.2160%, 1/25/42 (144A) | 17,001,707 | ||||||||
4,296,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.5553%, 10/25/24‡ | 4,282,648 | ||||||||
3,884,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.8053%, 10/25/24‡ | 3,862,370 | ||||||||
18,897,479 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20 (144A),§ | 16,385,683 | ||||||||
15,857,786 | GS Mortgage Securities Corp. II 3.4350%, 12/10/27 (144A),‡ | 14,920,068 | ||||||||
7,245,000 | GS Mortgage Securities Corp. Trust 2013-NYC5 3.6490%, 1/10/18 (144A),‡ | 7,336,446 | ||||||||
6,479,000 | Hilton USA Trust 2013-HLT 4.4065%, 11/5/30 (144A) | 6,626,643 | ||||||||
13,555,000 | Hilton USA Trust 2013-HLT 5.2216%, 11/5/30 (144A),‡ | 13,887,951 | ||||||||
10,884,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.1508%, 4/15/30 (144A),‡ | 10,888,082 | ||||||||
5,317,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.9008%, 4/15/30 (144A),‡ | 5,323,641 | ||||||||
11,267,287 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 2.8044%, 2/16/25 (144A) | 11,371,509 | ||||||||
9,864,382 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 4.8447%, 2/16/25 (144A) | 10,092,831 | ||||||||
4,067,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 3.6610%, 12/15/28 (144A),‡ | 4,066,044 | ||||||||
18,957,554 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 19,979,783 | ||||||||
7,142,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 7,175,560 | ||||||||
7,064,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 7,275,447 | ||||||||
16,948,000 | Starwood Retail Property Trust 2014-STAR 3.4108%, 11/15/27 (144A),‡ | 17,019,995 | ||||||||
11,117,000 | Starwood Retail Property Trust 2014-STAR 4.3108%, 11/15/27 (144A),‡ | 11,162,580 | ||||||||
24,253,091 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.3830%, 12/15/43 | 25,730,031 | ||||||||
1,151,645 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.5910%, 4/15/47‡ | 1,229,094 | ||||||||
16,064,702 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47 | 16,638,678 | ||||||||
7,707,439 | Wachovia Bank Commercial Mortgage Trust Series 2007-C33 5.9413%, 2/15/51‡ | 8,075,654 | ||||||||
4,942,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.9050%, 1/15/27 (144A),‡ | 4,939,173 | ||||||||
1,815,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.4050%, 2/15/27 (144A),‡ | 1,813,877 | ||||||||
1,994,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 3.4050%, 2/15/27 (144A),‡ | 1,991,657 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $412,679,633) | 412,548,308 | |||||||||
Bank Loans and Mezzanine Loans – 1.4% | ||||||||||
Communications – 0.2% | ||||||||||
13,886,110 | Tribune Media Co. 4.0000%, 12/27/20‡ | 13,651,852 | ||||||||
Consumer Cyclical – 0.2% | ||||||||||
22,699,740 | MGM Resorts International 3.5000%, 12/20/19‡ | 22,061,423 | ||||||||
Consumer Non-Cyclical – 0.3% | ||||||||||
3,303,630 | CHS/Community Health Systems, Inc. 4.2500%, 1/27/21‡ | 3,291,935 | ||||||||
14,336,663 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 13,978,246 | ||||||||
11,219,682 | Quintiles Transnational Corp. 3.7500%, 6/8/18‡ | 11,070,124 | ||||||||
| ||||||||||
28,340,305 | ||||||||||
Technology – 0.7% | ||||||||||
61,565,625 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 61,283,654 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $126,882,281) | 125,337,234 | |||||||||
Corporate Bonds – 38.0% | ||||||||||
Asset-Backed Securities – 0.3% | ||||||||||
21,926,000 | American Tower Trust I 1.5510%, 3/15/18 (144A) | 21,666,396 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Banking – 6.3% | ||||||||||
$10,723,000 | Ally Financial, Inc. 8.0000%, 3/15/20 | $ | 12,653,140 | |||||||
10,612,000 | Ally Financial, Inc. 7.5000%, 9/15/20 | 12,442,570 | ||||||||
15,520,000 | American Express Co. 6.8000%, 9/1/66‡ | 16,257,200 | ||||||||
7,899,000 | American Express Co. 5.2000%µ | 8,022,161 | ||||||||
9,448,000 | Bank of America Corp. 1.5000%, 10/9/15 | 9,486,746 | ||||||||
32,893,000 | Bank of America Corp. 8.0000%µ | 35,318,859 | ||||||||
19,302,000 | Citigroup, Inc. 5.9000%, 12/29/49 | 18,819,450 | ||||||||
34,883,000 | Citigroup, Inc. 5.8000%µ | 34,883,000 | ||||||||
6,224,000 | Credit Suisse, New York 3.6250%, 9/9/24 | 6,331,295 | ||||||||
19,921,000 | Discover Financial Services 3.9500%, 11/6/24 | 20,025,446 | ||||||||
30,305,000 | Goldman Sachs Capital I 6.3450%, 2/15/34 | 36,050,979 | ||||||||
9,167,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 9,832,497 | ||||||||
4,167,000 | Goldman Sachs Group, Inc. 5.7000%µ | 4,214,920 | ||||||||
10,937,000 | HBOS PLC 6.7500%, 5/21/18 (144A) | 12,189,243 | ||||||||
18,164,000 | Intesa Sanpaolo SpA 5.0170%, 6/26/24 (144A) | 17,628,434 | ||||||||
33,912,000 | Morgan Stanley 1.8750%, 1/5/18 | 33,787,882 | ||||||||
10,024,000 | Morgan Stanley 5.0000%, 11/24/25 | 10,696,761 | ||||||||
4,393,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 4,436,983 | ||||||||
34,447,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 37,361,044 | ||||||||
32,627,000 | Royal Bank of Scotland Group PLC 6.0000%, 12/19/23 | 35,315,400 | ||||||||
56,323,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 57,291,249 | ||||||||
16,567,000 | Santander UK PLC 5.0000%, 11/7/23 (144A) | 17,497,999 | ||||||||
17,006,000 | SVB Financial Group 5.3750%, 9/15/20 | 19,122,601 | ||||||||
21,251,000 | Synchrony Financial 3.0000%, 8/15/19 | 21,483,550 | ||||||||
26,898,000 | Synchrony Financial 4.2500%, 8/15/24 | 27,600,818 | ||||||||
32,310,000 | Zions Bancorporation 5.8000%µ | 30,500,640 | ||||||||
| ||||||||||
549,250,867 | ||||||||||
Basic Industry – 1.9% | ||||||||||
28,044,000 | Albemarle Corp. 4.1500%, 12/1/24 | 28,492,872 | ||||||||
23,144,000 | Albemarle Corp. 5.4500%, 12/1/44 | 24,904,055 | ||||||||
12,051,000 | Ashland, Inc. 3.8750%, 4/15/18 | 12,171,510 | ||||||||
15,856,000 | Ashland, Inc. 6.8750%, 5/15/43 | 16,886,640 | ||||||||
34,198,000 | Georgia-Pacific LLC 3.1630%, 11/15/21 (144A) | 34,402,367 | ||||||||
32,061,000 | Georgia-Pacific LLC 3.6000%, 3/1/25 (144A) | 32,197,869 | ||||||||
17,406,000 | Reliance Steel & Aluminum Co. 4.5000%, 4/15/23 | 17,058,855 | ||||||||
| ||||||||||
166,114,168 | ||||||||||
Brokerage – 3.3% | ||||||||||
15,728,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 16,828,960 | ||||||||
14,394,000 | Carlyle Holdings Finance LLC 3.8750%, 2/1/23 (144A) | 14,746,048 | ||||||||
16,737,000 | Charles Schwab Corp. 7.0000%µ | 19,341,779 | ||||||||
22,310,000 | E*TRADE Financial Corp. 6.3750%, 11/15/19 | 23,648,600 | ||||||||
14,391,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 14,714,798 | ||||||||
2,653,000 | Lazard Group LLC 6.8500%, 6/15/17 | 2,953,320 | ||||||||
21,383,000 | Lazard Group LLC 4.2500%, 11/14/20 | 22,536,613 | ||||||||
36,437,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.6250%, 3/15/20 (144A) | 38,076,665 | ||||||||
21,772,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 22,915,030 | ||||||||
49,837,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 56,763,446 | ||||||||
14,670,000 | Stifel Financial Corp. 4.2500%, 7/18/24 | 14,756,934 | ||||||||
41,383,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 41,942,209 | ||||||||
| ||||||||||
289,224,402 | ||||||||||
Capital Goods – 1.2% | ||||||||||
12,952,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 12,757,720 | ||||||||
13,470,000 | Exelis, Inc. 4.2500%, 10/1/16 | 13,930,809 | ||||||||
5,821,000 | Exelis, Inc. 5.5500%, 10/1/21 | 6,282,250 | ||||||||
18,993,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 19,687,004 | ||||||||
13,134,000 | Hanson, Ltd. 6.1250%, 8/15/16 | 13,922,040 | ||||||||
13,195,000 | KLX, Inc. 5.8750%, 12/1/22 (144A) | 13,326,950 | ||||||||
10,078,000 | Martin Marietta Materials, Inc. 4.2500%, 7/2/24 | 10,330,998 | ||||||||
8,329,000 | Owens Corning 4.2000%, 12/1/24 | 8,219,607 | ||||||||
3,672,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 4,039,200 | ||||||||
| ||||||||||
102,496,578 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Communications – 0.6% | ||||||||||
$7,637,000 | Nielsen Finance LLC / Nielsen Finance Co. 4.5000%, 10/1/20 | $ | 7,675,185 | |||||||
8,586,000 | Nielsen Finance LLC / Nielsen Finance Co. 5.0000%, 4/15/22 (144A) | 8,628,930 | ||||||||
12,130,000 | SBA Tower Trust 2.9330%, 12/15/17 (144A) | 12,284,973 | ||||||||
18,425,000 | UBM PLC 5.7500%, 11/3/20 (144A) | 20,099,132 | ||||||||
| ||||||||||
48,688,220 | ||||||||||
Consumer Cyclical – 3.1% | ||||||||||
34,426,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 34,330,124 | ||||||||
4,909,000 | Continental Rubber of America Corp. 4.5000%, 9/15/19 (144A) | 5,085,351 | ||||||||
7,420,000 | DR Horton, Inc. 4.7500%, 5/15/17 | 7,753,900 | ||||||||
13,062,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 12,931,380 | ||||||||
17,061,000 | General Motors Co. 3.5000%, 10/2/18 | 17,402,220 | ||||||||
56,866,000 | General Motors Co. 4.8750%, 10/2/23 | 60,846,620 | ||||||||
17,787,000 | General Motors Co. 6.2500%, 10/2/43 | 21,248,350 | ||||||||
16,348,000 | General Motors Co. 5.2000%, 4/1/45 | 17,247,140 | ||||||||
7,602,000 | General Motors Financial Co., Inc. 3.2500%, 5/15/18 | 7,611,502 | ||||||||
4,605,000 | General Motors Financial Co., Inc. 4.2500%, 5/15/23 | 4,696,593 | ||||||||
5,248,000 | Macy’s Retail Holdings, Inc. 5.9000%, 12/1/16 | 5,694,201 | ||||||||
14,856,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 14,373,180 | ||||||||
7,325,000 | MGM Resorts International 8.6250%, 2/1/19 | 8,304,719 | ||||||||
13,814,000 | Schaeffler Finance BV 4.2500%, 5/15/21 (144A) | 13,468,650 | ||||||||
11,848,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.1500%, 12/1/19 | 13,963,686 | ||||||||
6,384,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 6,415,920 | ||||||||
5,196,000 | Toll Brothers Finance Corp. 5.8750%, 2/15/22 | 5,546,730 | ||||||||
3,554,000 | Toll Brothers Finance Corp. 4.3750%, 4/15/23 | 3,482,920 | ||||||||
11,026,000 | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 4.2500%, 5/30/23 (144A) | 10,474,700 | ||||||||
| ||||||||||
270,877,886 | ||||||||||
Consumer Non-Cyclical – 2.5% | ||||||||||
5,860,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 5,889,939 | ||||||||
5,207,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 5,283,730 | ||||||||
19,097,000 | Becton Dickinson and Co. 1.8000%, 12/15/17 | 19,167,430 | ||||||||
25,338,000 | Fresenius Medical Care U.S. Finance II, Inc. 5.8750%, 1/31/22 (144A) | 27,491,730 | ||||||||
9,371,000 | HCA, Inc. 3.7500%, 3/15/19 | 9,382,714 | ||||||||
21,198,000 | Life Technologies Corp. 6.0000%, 3/1/20 | 24,217,973 | ||||||||
4,524,000 | Life Technologies Corp. 5.0000%, 1/15/21 | 4,999,902 | ||||||||
9,023,000 | Omnicare, Inc. 4.7500%, 12/1/22 | 9,135,787 | ||||||||
11,145,000 | Omnicare, Inc. 5.0000%, 12/1/24 | 11,423,625 | ||||||||
14,810,000 | Safeway, Inc. 4.7500%, 12/1/21 | 14,995,066 | ||||||||
5,276,000 | Smithfield Foods, Inc. 5.2500%, 8/1/18 (144A) | 5,368,330 | ||||||||
10,639,000 | Thermo Fisher Scientific, Inc. 3.3000%, 2/15/22 | 10,656,586 | ||||||||
9,129,000 | Tyson Foods, Inc. 6.6000%, 4/1/16 | 9,731,550 | ||||||||
29,383,000 | Wm Wrigley Jr Co. 2.4000%, 10/21/18 (144A) | 29,589,886 | ||||||||
31,620,000 | Wm Wrigley Jr Co. 3.3750%, 10/21/20 (144A) | 32,319,656 | ||||||||
| ||||||||||
219,653,904 | ||||||||||
Electric – 0.4% | ||||||||||
8,486,000 | IPALCO Enterprises, Inc. 5.0000%, 5/1/18 | 8,952,730 | ||||||||
11,356,000 | PPL WEM Holdings, Ltd. 3.9000%, 5/1/16 (144A) | 11,691,048 | ||||||||
15,694,000 | PPL WEM Holdings, Ltd. 5.3750%, 5/1/21 (144A) | 17,638,141 | ||||||||
| ||||||||||
38,281,919 | ||||||||||
Energy – 7.4% | ||||||||||
26,574,000 | California Resources Corp. 5.5000%, 9/15/21 (144A) | 22,720,770 | ||||||||
26,765,000 | California Resources Corp. 6.0000%, 11/15/24 (144A) | 22,616,425 | ||||||||
30,164,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 30,145,147 | ||||||||
30,389,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 29,553,303 | ||||||||
41,159,000 | Chevron Corp. 1.3450%, 11/15/17 | 41,192,339 | ||||||||
36,123,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 37,567,920 | ||||||||
27,420,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 26,186,100 | ||||||||
22,938,000 | Continental Resources, Inc. 5.0000%, 9/15/22 | 22,192,515 | ||||||||
24,918,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 7.7500%, 4/1/19 | 25,540,950 | ||||||||
27,504,000 | DCP Midstream Operating LP 4.9500%, 4/1/22 | 29,193,818 | ||||||||
11,757,000 | DCP Midstream Operating LP 3.8750%, 3/15/23 | 11,250,697 | ||||||||
12,112,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 12,382,982 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$14,621,000 | Devon Energy Corp. 2.2500%, 12/15/18 | $ | 14,568,306 | |||||||
8,659,000 | El Paso Pipeline Partners Operating Co. LLC 5.0000%, 10/1/21 | 9,106,930 | ||||||||
8,947,000 | El Paso Pipeline Partners Operating Co. LLC 4.3000%, 5/1/24 | 8,964,321 | ||||||||
9,698,000 | Energy Transfer Partners LP 4.1500%, 10/1/20 | 9,942,196 | ||||||||
12,936,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 13,104,698 | ||||||||
9,911,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 10,353,011 | ||||||||
7,391,000 | Ensco PLC 4.5000%, 10/1/24 | 7,183,882 | ||||||||
16,341,000 | Forum Energy Technologies, Inc. 6.2500%, 10/1/21 | 15,360,540 | ||||||||
3,564,000 | Frontier Oil Corp. 6.8750%, 11/15/18 | 3,635,280 | ||||||||
999,000 | Kinder Morgan, Inc. 6.5000%, 9/15/20 | 1,130,358 | ||||||||
10,692,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 13,151,160 | ||||||||
8,570,000 | Motiva Enterprises LLC 5.7500%, 1/15/20 (144A) | 9,562,312 | ||||||||
1,990,000 | Nabors Industries, Inc. 6.1500%, 2/15/18 | 2,072,718 | ||||||||
20,344,000 | Nabors Industries, Inc. 5.0000%, 9/15/20 | 19,981,266 | ||||||||
19,055,000 | NGL Energy Partners LP / NGL Energy Finance Corp. 5.1250%, 7/15/19 (144A) | 18,292,800 | ||||||||
42,529,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 41,642,398 | ||||||||
2,117,000 | Southern Star Central Gas Pipeline, Inc. 6.0000%, 6/1/16 (144A) | 2,225,536 | ||||||||
23,636,000 | Spectra Energy Partners LP 4.7500%, 3/15/24 | 25,335,901 | ||||||||
37,889,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 4.1250%, 11/15/19 (144A) | 36,468,162 | ||||||||
37,150,000 | Western Gas Partners LP 5.3750%, 6/1/21 | 40,758,677 | ||||||||
6,715,000 | Whiting Petroleum Corp. 6.5000%, 10/1/18 | 6,479,975 | ||||||||
31,444,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 29,400,140 | ||||||||
| ||||||||||
649,263,533 | ||||||||||
Finance Companies – 1.7% | ||||||||||
44,979,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 45,878,580 | ||||||||
1,969,000 | CIT Group, Inc. 6.6250%, 4/1/18 (144A) | 2,136,365 | ||||||||
29,938,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 31,584,590 | ||||||||
9,194,000 | CIT Group, Inc. 3.8750%, 2/19/19 | 9,171,015 | ||||||||
8,589,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 9,250,808 | ||||||||
5,126,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 5,497,635 | ||||||||
30,205,000 | General Electric Capital Corp. 6.2500%µ | 32,885,694 | ||||||||
11,900,000 | General Electric Capital Corp. 7.1250%µ | 13,848,625 | ||||||||
| ||||||||||
150,253,312 | ||||||||||
Financial – 0.8% | ||||||||||
26,058,000 | Jones Lang LaSalle, Inc. 4.4000%, 11/15/22 | 27,043,435 | ||||||||
44,785,000 | LeasePlan Corp. NV 2.5000%, 5/16/18 (144A) | 44,804,213 | ||||||||
| ||||||||||
71,847,648 | ||||||||||
Industrial – 0.2% | ||||||||||
6,573,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 6,739,106 | ||||||||
7,027,000 | Cintas Corp. No 2 4.3000%, 6/1/21 | 7,572,872 | ||||||||
| ||||||||||
14,311,978 | ||||||||||
Insurance – 0.6% | ||||||||||
36,820,000 | Primerica, Inc. 4.7500%, 7/15/22 | 40,162,336 | ||||||||
14,701,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 14,553,990 | ||||||||
| ||||||||||
54,716,326 | ||||||||||
Owned No Guarantee – 0.1% | ||||||||||
11,534,000 | Korea National Oil Corp. 4.0000%, 10/27/16 (144A) | 12,031,115 | ||||||||
Real Estate Investment Trusts (REITs) – 2.4% | ||||||||||
14,448,000 | Alexandria Real Estate Equities, Inc. 2.7500%, 1/15/20 | 14,309,848 | ||||||||
26,321,000 | Alexandria Real Estate Equities, Inc. 4.6000%, 4/1/22 | 27,996,621 | ||||||||
13,937,000 | Alexandria Real Estate Equities, Inc. 4.5000%, 7/30/29 | 14,271,948 | ||||||||
10,560,000 | Goodman Funding Pty, Ltd. 6.3750%, 11/12/20 (144A) | 12,161,952 | ||||||||
27,936,000 | Goodman Funding Pty, Ltd. 6.3750%, 4/15/21 (144A) | 32,145,648 | ||||||||
25,966,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 26,030,915 | ||||||||
12,233,000 | Post Apartment Homes LP 4.7500%, 10/15/17 | 13,153,240 | ||||||||
3,673,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 3,871,827 | ||||||||
3,732,000 | Retail Opportunity Investments Partnership LP 5.0000%, 12/15/23 | 4,045,458 | ||||||||
8,258,000 | Retail Opportunity Investments Partnership LP 4.0000%, 12/15/24 | 8,275,152 | ||||||||
5,421,000 | Senior Housing Properties Trust 6.7500%, 4/15/20 | 6,125,687 | ||||||||
6,338,000 | Senior Housing Properties Trust 6.7500%, 12/15/21 | 7,317,544 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Real Estate Investment Trusts (REITs) – (continued) | ||||||||||
$11,701,000 | SL Green Realty Corp. 5.0000%, 8/15/18 | $ | 12,550,223 | |||||||
20,818,000 | SL Green Realty Corp. 7.7500%, 3/15/20 | 24,869,578 | ||||||||
| ||||||||||
207,125,641 | ||||||||||
Technology – 4.2% | ||||||||||
15,566,000 | Autodesk, Inc. 3.6000%, 12/15/22 | 15,392,050 | ||||||||
34,038,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 34,584,106 | ||||||||
3,664,000 | Fidelity National Information Services, Inc. 5.0000%, 3/15/22 | 3,885,873 | ||||||||
14,439,000 | Fidelity National Information Services, Inc. 3.8750%, 6/5/24 | 14,584,863 | ||||||||
12,303,000 | Fiserv, Inc. 3.1250%, 10/1/15 | 12,514,895 | ||||||||
6,265,000 | Motorola Solutions, Inc. 4.0000%, 9/1/24 | 6,302,722 | ||||||||
8,916,000 | MSCI, Inc. 5.2500%, 11/15/24 (144A) | 9,228,060 | ||||||||
8,843,000 | Samsung Electronics America, Inc. 1.7500%, 4/10/17 (144A) | 8,869,803 | ||||||||
6,735,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 6,995,294 | ||||||||
63,673,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 65,593,696 | ||||||||
4,290,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 4,524,380 | ||||||||
40,609,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 41,607,778 | ||||||||
59,633,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 58,530,982 | ||||||||
11,198,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 12,021,400 | ||||||||
44,282,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 49,891,732 | ||||||||
21,277,000 | Verisk Analytics, Inc. 4.1250%, 9/12/22 | 21,927,991 | ||||||||
| ||||||||||
366,455,625 | ||||||||||
Transportation – 1.0% | ||||||||||
2,559,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 2,588,894 | ||||||||
18,410,000 | JB Hunt Transport Services, Inc. 3.3750%, 9/15/15 | 18,725,897 | ||||||||
23,512,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 3.3750%, 3/15/18 (144A) | 24,273,765 | ||||||||
10,829,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 6/15/19 (144A) | 10,762,965 | ||||||||
1,643,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.8750%, 7/11/22 (144A) | 1,769,871 | ||||||||
11,904,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.2500%, 1/17/23 (144A) | 12,356,126 | ||||||||
2,821,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 2,859,823 | ||||||||
11,555,000 | Southwest Airlines Co. 5.1250%, 3/1/17 | 12,378,051 | ||||||||
| ||||||||||
85,715,392 | ||||||||||
Total Corporate Bonds (cost $3,255,422,714) | 3,317,974,910 | |||||||||
Mortgage-Backed Securities – 17.2% | ||||||||||
Fannie Mae Pool: | ||||||||||
2,631,164 | 5.5000%, 1/1/25 | 2,891,459 | ||||||||
9,577,055 | 5.0000%, 9/1/29 | 10,611,462 | ||||||||
56,213,969 | 3.5000%, 10/1/29 | 59,470,408 | ||||||||
3,646,604 | 5.0000%, 1/1/30 | 4,040,109 | ||||||||
1,850,097 | 5.5000%, 1/1/33 | 2,086,875 | ||||||||
9,211,025 | 6.0000%, 10/1/35 | 10,518,022 | ||||||||
8,198,861 | 6.0000%, 12/1/35 | 9,362,983 | ||||||||
3,216,109 | 6.0000%, 2/1/37 | 3,717,709 | ||||||||
9,989,142 | 6.0000%, 9/1/37 | 10,960,870 | ||||||||
9,103,810 | 6.0000%, 10/1/38 | 10,610,287 | ||||||||
3,008,577 | 7.0000%, 2/1/39 | 3,357,470 | ||||||||
10,036,900 | 5.5000%, 3/1/40 | 11,444,780 | ||||||||
27,747,640 | 5.5000%, 4/1/40 | 31,158,175 | ||||||||
2,441,804 | 4.5000%, 10/1/40 | 2,679,672 | ||||||||
28,256,021 | 5.0000%, 2/1/41 | 31,391,404 | ||||||||
5,611,433 | 5.5000%, 2/1/41 | 6,398,708 | ||||||||
4,486,353 | 5.0000%, 4/1/41 | 4,983,588 | ||||||||
4,317,668 | 5.0000%, 5/1/41 | 4,795,849 | ||||||||
9,420,071 | 5.5000%, 5/1/41 | 10,529,894 | ||||||||
4,322,363 | 5.5000%, 6/1/41 | 4,846,294 | ||||||||
11,650,817 | 5.0000%, 7/1/41 | 12,942,443 | ||||||||
33,736,668 | 5.5000%, 7/1/41 | 37,781,932 | ||||||||
10,721,114 | 4.5000%, 8/1/41 | 11,713,800 | ||||||||
4,979,170 | 5.0000%, 10/1/41 | 5,536,921 | ||||||||
16,626,604 | 5.5000%, 12/1/41 | 18,686,372 | ||||||||
15,143,920 | 4.0000%, 6/1/42 | 16,335,836 | ||||||||
36,791,537 | 3.5000%, 7/1/42 | 38,538,741 | ||||||||
11,733,872 | 4.0000%, 7/1/42 | 12,655,593 | ||||||||
6,566,720 | 4.0000%, 8/1/42 | 7,083,222 | ||||||||
7,941,049 | 4.0000%, 9/1/42 | 8,562,012 | ||||||||
8,809,080 | 4.0000%, 9/1/42 | 9,502,169 | ||||||||
9,679,838 | 4.0000%, 11/1/42 | 10,443,854 | ||||||||
54,007,709 | 4.5000%, 2/1/43 | 59,327,252 | ||||||||
25,213,923 | 4.0000%, 5/1/43 | 27,196,771 | ||||||||
27,830,865 | 4.0000%, 7/1/43 | 30,022,794 | ||||||||
23,445,714 | 4.0000%, 8/1/43 | 25,295,677 | ||||||||
7,150,900 | 4.0000%, 9/1/43 | 7,715,126 | ||||||||
23,021,214 | 4.0000%, 9/1/43 | 24,832,332 | ||||||||
12,928,132 | 3.5000%, 1/1/44 | 13,558,765 | ||||||||
27,841,615 | 3.5000%, 1/1/44 | 29,199,786 | ||||||||
14,287,310 | 4.0000%, 2/1/44 | 15,410,237 | ||||||||
15,922,514 | 3.5000%, 4/1/44 | 16,679,948 | ||||||||
47,141,059 | 3.5000%, 5/1/44 | 49,441,218 | ||||||||
42,929,913 | 4.0000%, 7/1/44 | 46,398,793 | ||||||||
10,268,129 | 4.0000%, 8/1/44 | 11,098,749 | ||||||||
27,502,328 | 4.0000%, 8/1/44 | 29,724,518 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
1,964,832 | 5.0000%, 1/1/19 | 2,065,067 | ||||||||
1,835,110 | 5.5000%, 8/1/19 | 1,940,962 | ||||||||
3,550,370 | 5.0000%, 6/1/20 | 3,782,985 | ||||||||
7,406,170 | 5.5000%, 12/1/28 | 8,279,411 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Mortgage-Backed Securities – (continued) | ||||||||||
Freddie Mac Gold Pool: (continued) | ||||||||||
$9,855,089 | 3.5000%, 2/1/29 | $ | 10,400,875 | |||||||
6,439,265 | 5.5000%, 10/1/36 | 7,257,723 | ||||||||
20,218,800 | 5.5000%, 4/1/40 | 22,837,728 | ||||||||
35,827,486 | 6.0000%, 4/1/40 | 40,827,772 | ||||||||
6,014,926 | 4.5000%, 1/1/41 | 6,584,131 | ||||||||
12,502,167 | 5.0000%, 5/1/41 | 13,949,710 | ||||||||
9,328,073 | 5.5000%, 5/1/41 | 10,434,933 | ||||||||
131,933,296 | 4.5000%, 9/1/44 | 146,099,134 | ||||||||
Ginnie Mae I Pool: | ||||||||||
4,841,728 | 4.0000%, 8/15/24 | 5,145,878 | ||||||||
9,513,747 | 5.1000%, 1/15/32 | 10,835,886 | ||||||||
11,176,741 | 4.9000%, 10/15/34 | 12,408,071 | ||||||||
2,859,713 | 5.5000%, 9/15/35 | 3,282,855 | ||||||||
4,704,285 | 5.5000%, 3/15/36 | 5,307,891 | ||||||||
32,537,382 | 5.5000%, 6/15/39 | 37,352,983 | ||||||||
8,381,772 | 5.5000%, 8/15/39 | 9,952,738 | ||||||||
12,478,400 | 5.5000%, 8/15/39 | 14,399,370 | ||||||||
8,067,808 | 5.0000%, 9/15/39 | 9,117,236 | ||||||||
17,191,102 | 5.0000%, 9/15/39 | 19,440,455 | ||||||||
4,914,583 | 5.0000%, 10/15/39 | 5,453,818 | ||||||||
8,428,131 | 5.0000%, 11/15/39 | 9,331,798 | ||||||||
2,678,738 | 5.0000%, 1/15/40 | 2,965,242 | ||||||||
737,813 | 5.0000%, 5/15/40 | 822,427 | ||||||||
2,910,190 | 5.0000%, 5/15/40 | 3,233,399 | ||||||||
15,471,879 | 5.0000%, 5/15/40 | 17,207,946 | ||||||||
2,452,720 | 5.0000%, 7/15/40 | 2,709,928 | ||||||||
8,572,010 | 5.0000%, 7/15/40 | 9,489,881 | ||||||||
11,626,253 | 4.5000%, 9/15/40 | 12,877,550 | ||||||||
8,306,293 | 5.0000%, 2/15/41 | 9,239,146 | ||||||||
3,622,649 | 5.0000%, 4/15/41 | 4,003,976 | ||||||||
11,398,505 | 4.5000%, 5/15/41 | 12,619,335 | ||||||||
3,276,765 | 5.0000%, 5/15/41 | 3,693,269 | ||||||||
2,590,538 | 4.5000%, 7/15/41 | 2,850,137 | ||||||||
9,857,902 | 4.5000%, 7/15/41 | 10,805,223 | ||||||||
22,674,324 | 4.5000%, 8/15/41 | 25,304,604 | ||||||||
3,964,745 | 5.0000%, 9/15/41 | 4,426,559 | ||||||||
Ginnie Mae II Pool: | ||||||||||
4,353,769 | 6.0000%, 11/20/34 | 4,992,094 | ||||||||
19,349,083 | 5.5000%, 3/20/35 | 21,843,178 | ||||||||
5,238,406 | 5.5000%, 3/20/36 | 5,914,372 | ||||||||
5,910,733 | 5.5000%, 11/20/37 | 6,591,103 | ||||||||
2,607,883 | 6.0000%, 1/20/39 | 2,928,744 | ||||||||
1,372,497 | 7.0000%, 5/20/39 | 1,590,577 | ||||||||
2,343,343 | 5.0000%, 6/20/41 | 2,594,505 | ||||||||
9,860,101 | 5.0000%, 6/20/41 | 10,921,121 | ||||||||
963,802 | 6.0000%, 10/20/41 | 1,100,508 | ||||||||
3,468,487 | 6.0000%, 12/20/41 | 3,950,829 | ||||||||
7,198,120 | 5.5000%, 1/20/42 | 8,131,556 | ||||||||
3,349,813 | 6.0000%, 1/20/42 | 3,825,273 | ||||||||
3,567,470 | 6.0000%, 2/20/42 | 4,069,615 | ||||||||
2,915,587 | 6.0000%, 3/20/42 | 3,328,940 | ||||||||
10,333,816 | 6.0000%, 4/20/42 | 11,783,704 | ||||||||
4,927,409 | 3.5000%, 5/20/42 | 5,203,913 | ||||||||
8,226,360 | 5.5000%, 5/20/42 | 9,280,503 | ||||||||
7,358,742 | 6.0000%, 5/20/42 | 8,276,880 | ||||||||
12,594,648 | 5.5000%, 7/20/42 | 14,037,701 | ||||||||
2,913,849 | 6.0000%, 7/20/42 | 3,322,598 | ||||||||
2,926,982 | 6.0000%, 8/20/42 | 3,339,488 | ||||||||
3,436,488 | 6.0000%, 9/20/42 | 3,922,109 | ||||||||
2,977,733 | 6.0000%, 11/20/42 | 3,388,878 | ||||||||
3,611,445 | 6.0000%, 2/20/43 | 4,117,153 | ||||||||
Total Mortgage-Backed Securities (cost $1,478,994,693) | 1,498,734,253 | |||||||||
Preferred Stocks – 1.7% | ||||||||||
Capital Markets – 0.6% | ||||||||||
621,875 | Morgan Stanley, 6.8750% | $ | 16,548,094 | |||||||
895,900 | Morgan Stanley, 7.1250% | 24,664,127 | ||||||||
394,700 | State Street Corp., 5.9000% | 10,206,942 | ||||||||
| ||||||||||
51,419,163 | ||||||||||
Commercial Banks – 0.3% | ||||||||||
921,325 | Wells Fargo & Co., 6.6250% | 25,557,555 | ||||||||
Construction & Engineering – 0.2% | ||||||||||
436,675 | Citigroup Capital XIII, 7.8750% | 11,606,822 | ||||||||
Consumer Finance – 0.6% | ||||||||||
29,503 | Ally Financial, Inc., 7.0000% (144A) | 29,491,016 | ||||||||
983,945 | Discover Financial Services, 6.5000% | 24,933,166 | ||||||||
| ||||||||||
54,424,182 | ||||||||||
Total Preferred Stocks (cost $137,252,302) | 143,007,722 | |||||||||
U.S. Treasury Notes/Bonds – 36.5% | ||||||||||
$244,265,000 | 0.3750%, 5/31/16 | 244,112,334 | ||||||||
197,799,000 | 0.5000%, 8/31/16 | 197,721,661 | ||||||||
92,006,000 | 0.3750%, 10/31/16 | 91,625,003 | ||||||||
338,948,000 | 0.5000%, 11/30/16 | 338,100,630 | ||||||||
174,696,000 | 0.6250%, 12/31/16 | 174,464,004 | ||||||||
152,965,500 | 0.8750%, 1/31/17 | 153,407,723 | ||||||||
17,908,000 | 0.8750%, 2/28/17 | 17,951,373 | ||||||||
28,415,000 | 0.7500%, 6/30/17 | 28,308,444 | ||||||||
8,890,000 | 0.8750%, 7/15/17 | 8,879,581 | ||||||||
960,000 | 1.0000%, 9/15/17 | 960,525 | ||||||||
1,642,000 | 0.8750%, 10/15/17 | 1,635,714 | ||||||||
9,545,000 | 0.7500%, 10/31/17 | 9,468,936 | ||||||||
190,346,000 | 1.0000%, 12/15/17 | 189,899,829 | ||||||||
11,750,000 | 0.7500%, 12/31/17 | 11,626,073 | ||||||||
18,691,000 | 0.8750%, 1/31/18 | 18,540,594 | ||||||||
14,010,000 | 0.7500%, 3/31/18 | 13,794,372 | ||||||||
18,746,100 | 2.3750%, 5/31/18 | 19,431,495 | ||||||||
61,465,000 | 1.3750%, 7/31/18 | 61,527,448 | ||||||||
214,932,000 | 1.5000%, 8/31/18 | 215,973,131 | ||||||||
117,211,000 | 1.6250%, 7/31/19 | 117,394,084 | ||||||||
70,751,000 | 1.7500%, 9/30/19 | 71,165,530 | ||||||||
99,876,000 | 1.5000%, 10/31/19 | 99,267,356 | ||||||||
286,901,000 | 1.5000%, 11/30/19 | 285,085,490 | ||||||||
61,738,000 | 2.1250%, 9/30/21 | 62,432,552 | ||||||||
409,624,000 | 2.2500%, 11/15/24 | 412,555,389 | ||||||||
11,711,000 | 3.7500%, 11/15/43 | 14,077,899 | ||||||||
85,092,000 | 3.6250%, 2/15/44 | 100,136,010 | ||||||||
4,900,000 | 3.3750%, 5/15/44 | 5,516,327 | ||||||||
116,174,000 | 3.1250%, 8/15/44 | 125,068,514 | ||||||||
88,284,000 | 3.0000%, 11/15/44 | 92,781,010 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $3,155,849,224) | 3,182,909,031 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Investment Companies – 0.4% | ||||||||||
Money Markets – 0.4% | ||||||||||
34,814,801 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $34,814,801) | $ | 34,814,801 | |||||||
Total Investments (total cost $8,601,895,648) – 99.9% | 8,715,326,259 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 9,664,861 | |||||||||
Net Assets – 100% | $ | 8,724,991,120 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 8,214,791,448 | 94 | .3% | ||||
United Kingdom | 198,113,090 | 2 | .3 | |||||
Singapore | 61,283,654 | 0 | .7 | |||||
Taiwan | 58,530,982 | 0 | .7 | |||||
Australia | 46,896,494 | 0 | .5 | |||||
Germany | 46,045,731 | 0 | .5 | |||||
Netherlands | 44,804,213 | 0 | .5 | |||||
South Korea | 20,900,918 | 0 | .2 | |||||
Italy | 17,628,434 | 0 | .2 | |||||
Switzerland | 6,331,295 | 0 | .1 | |||||
Total | $ | 8,715,326,259 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays U.S. Aggregate Bond Index | Made up of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Flexible Bond Fund | $ | 1,147,608,136 | 13.2 | % | ||||||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Flexible Bond Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust, 2.000%, 1/25/20 | 4/29/13 | $ | 16,040,712 | $ | 16,385,683 | 0.2 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Flexible Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 89,490,320 | 3,367,492,667 | (3,422,168,186) | 34,814,801 | $ | – | $ | 74,190 | $ | 34,814,801 | |||||||||||
14 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Flexible Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 412,548,308 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 125,337,234 | – | ||||||||
Corporate Bonds | – | 3,317,974,910 | – | ||||||||
Mortgage-Backed Securities | – | 1,498,734,253 | – | ||||||||
Preferred Stocks | – | 143,007,722 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 3,182,909,031 | – | ||||||||
Investment Companies | – | 34,814,801 | – | ||||||||
Total Assets | $ | – | $ | 8,715,326,259 | $ | – | |||||
Janus Investment Fund | 15
Table of Contents
Statement of Assets and Liabilities
Janus Flexible | ||||
As of December 31, 2014 (unaudited) | Bond Fund | |||
Assets: | ||||
Investments at cost | $ | 8,601,895,648 | ||
Unaffiliated investments at value | $ | 8,680,511,458 | ||
Affiliated investments at value | 34,814,801 | |||
Cash | 626,744 | |||
Non-interested Trustees’ deferred compensation | 179,520 | |||
Receivables: | ||||
Investments sold | 33,704,075 | |||
Fund shares sold | 22,072,460 | |||
Dividends | 666,167 | |||
Dividends from affiliates | 10,838 | |||
Interest | 51,858,070 | |||
Other assets | 98,226 | |||
Total Assets | 8,824,542,359 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 21,874,230 | |||
Fund shares repurchased | 70,860,848 | |||
Dividends | 1,537,085 | |||
Advisory fees | 3,051,215 | |||
Fund administration fees | 75,624 | |||
Transfer agent fees and expenses | 899,894 | |||
12b-1 Distribution and shareholder servicing fees | 475,973 | |||
Non-interested Trustees’ fees and expenses | 41,372 | |||
Non-interested Trustees’ deferred compensation fees | 179,520 | |||
Accrued expenses and other payables | 555,478 | |||
Total Liabilities | 99,551,239 | |||
Net Assets | $ | 8,724,991,120 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Janus Flexible | ||||
As of December 31, 2014 (unaudited) | Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 8,666,676,261 | ||
Undistributed net investment income/(loss)* | (11,489,284) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (43,651,463) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 113,455,606 | |||
Total Net Assets | $ | 8,724,991,120 | ||
Net Assets - Class A Shares | $ | 668,247,176 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 63,304,799 | |||
Net Asset Value Per Share(1) | $ | 10.56 | ||
Maximum Offering Price Per Share(2) | $ | 11.09 | ||
Net Assets - Class C Shares | $ | 341,373,716 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 32,336,655 | |||
Net Asset Value Per Share(1) | $ | 10.56 | ||
Net Assets - Class D Shares | $ | 657,440,621 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 62,282,360 | |||
Net Asset Value Per Share | $ | 10.56 | ||
Net Assets - Class I Shares | $ | 5,183,703,472 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 491,061,682 | |||
Net Asset Value Per Share | $ | 10.56 | ||
Net Assets - Class N Shares | $ | 483,927,096 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 45,858,921 | |||
Net Asset Value Per Share | $ | 10.55 | ||
Net Assets - Class R Shares | $ | 28,342,144 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,684,801 | |||
Net Asset Value Per Share | $ | 10.56 | ||
Net Assets - Class S Shares | $ | 61,032,125 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,781,045 | |||
Net Asset Value Per Share | $ | 10.56 | ||
Net Assets - Class T Shares | $ | 1,300,924,770 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 123,268,335 | |||
Net Asset Value Per Share | $ | 10.55 |
* | See “Federal Income Tax” 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 Investment Fund | 17
Table of Contents
Statement of Operations
Janus Flexible | ||||
For the period ended December 31, 2014 (unaudited) | Bond Fund | |||
Investment Income: | ||||
Interest | $ | 121,062,579 | ||
Dividends | 4,251,088 | |||
Dividends from affiliates | 74,190 | |||
Other income | 2,900,200 | |||
Total Investment Income | 128,288,057 | |||
Expenses: | ||||
Advisory fees | 15,781,326 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 787,308 | |||
Class C Shares | 1,595,455 | |||
Class R Shares | 64,254 | |||
Class S Shares | 149,216 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 401,045 | |||
Class R Shares | 32,127 | |||
Class S Shares | 149,216 | |||
Class T Shares | 1,539,486 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 267,587 | |||
Class C Shares | 119,184 | |||
Class I Shares | 2,678,599 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 37,710 | |||
Class C Shares | 25,245 | |||
Class D Shares | 72,345 | |||
Class I Shares | 108,828 | |||
Class N Shares | 2,061 | |||
Class R Shares | 702 | |||
Class S Shares | 1,106 | |||
Class T Shares | 9,741 | |||
Shareholder reports expense | 306,254 | |||
Registration fees | 182,077 | |||
Custodian fees | 19,778 | |||
Professional fees | 47,275 | |||
Non-interested Trustees’ fees and expenses | 71,705 | |||
Fund administration fees | 390,732 | |||
Other expenses | 462,156 | |||
Total Expenses | 25,302,518 | |||
Net Expenses | 25,302,518 | |||
Net Investment Income/(Loss) | 102,985,539 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 24,934,019 | |||
Total Net Realized Gain/(Loss) on Investments | 24,934,019 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (67,861,639) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (67,861,639) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 60,057,919 |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Janus Flexible | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 102,985,539 | $ | 150,566,870 | ||||
Net realized gain/(loss) on investments | 24,934,019 | 4,096,147 | ||||||
Change in unrealized net appreciation/depreciation | (67,861,639) | 174,621,931 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 60,057,919 | 329,284,948 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (8,796,235) | (18,687,971) | ||||||
Class C Shares | (3,268,795) | (7,225,157) | ||||||
Class D Shares | (9,974,562) | (20,775,921) | ||||||
Class I Shares | (67,109,109) | (92,746,091) | ||||||
Class N Shares | (5,812,924) | (5,189,190) | ||||||
Class R Shares | (306,336) | (603,757) | ||||||
Class S Shares | (1,574,689) | (2,246,393) | ||||||
Class T Shares | (17,779,327) | (32,666,608) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | – | (6,945,488) | ||||||
Class C Shares | – | (3,644,330) | ||||||
Class D Shares | – | (7,501,917) | ||||||
Class I Shares | – | (32,008,112) | ||||||
Class N Shares | – | (1,900,026) | ||||||
Class R Shares | – | (239,002) | ||||||
Class S Shares | – | (788,025) | ||||||
Class T Shares | – | (12,097,580) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (114,621,977) | (245,265,568) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 175,048,050 | 242,685,762 | ||||||
Class C Shares | 74,018,147 | 50,491,990 | ||||||
Class D Shares | 38,233,886 | 56,595,486 | ||||||
Class I Shares | 2,076,832,572 | 1,854,537,608 | ||||||
Class N Shares | 321,844,269 | 189,062,496 | ||||||
Class R Shares | 11,819,388 | 13,161,118 | ||||||
Class S Shares | 21,168,153 | 65,805,067 | ||||||
Class T Shares | 305,848,038 | 356,358,442 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 8,023,753 | 24,377,671 | ||||||
Class C Shares | 2,425,925 | 8,209,565 | ||||||
Class D Shares | 9,307,912 | 26,512,389 | ||||||
Class I Shares | 62,037,380 | 113,490,048 | ||||||
Class N Shares | 5,519,143 | 7,089,211 | ||||||
Class R Shares | 229,838 | 674,258 | ||||||
Class S Shares | 1,571,469 | 3,027,087 | ||||||
Class T Shares | 17,626,875 | 44,336,263 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (176,350,332) | (329,263,101) | ||||||
Class C Shares | (36,892,648) | (191,078,168) | ||||||
Class D Shares | (47,125,237) | (180,241,961) | ||||||
Class I Shares | (411,408,409) | (1,442,167,900) | ||||||
Class N Shares | (67,392,608) | (39,265,369) | ||||||
Class R Shares | (6,559,160) | (21,231,798) | ||||||
Class S Shares | (77,090,832) | (29,319,188) | ||||||
Class T Shares | (148,864,393) | (445,611,055) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Flexible | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 2,159,871,179 | 378,235,921 | ||||||
Net Increase/(Decrease) in Net Assets | 2,105,307,121 | 462,255,301 | ||||||
Net Assets: | ||||||||
Beginning of period | 6,619,683,999 | 6,157,428,698 | ||||||
End of period | $ | 8,724,991,120 | $ | 6,619,683,999 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (11,489,284) | $ | 147,154 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | $9.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.25(3) | 0.30 | 0.35 | 0.37 | 0.28 | 0.14 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.31 | (0.14) | 0.46 | 0.19 | 0.35 | 0.44 | |||||||||||||||||||||||
Total from Investment Operations | 0.07 | 0.56 | 0.16 | 0.81 | 0.56 | 0.63 | 0.58 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.15) | (0.30) | (0.30) | (0.35) | (0.38) | (0.28) | (0.14) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.15) | (0.42) | (0.51) | (0.50) | (0.72) | (0.34) | (0.14) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | |||||||||||||||||||||||
Total Return** | 0.66% | 5.47% | 1.45% | 7.97% | 5.41% | 6.16% | 5.87% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $668,247 | $666,272 | $719,932 | $697,880 | $400,706 | $324,085 | $231,112 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $621,121 | $649,984 | $786,291 | $539,788 | $371,462 | $265,798 | $218,408 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.79% | 0.80% | 0.75% | 0.77% | 0.76% | 0.76% | 0.80% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.79% | 0.79% | 0.75% | 0.77% | 0.76% | 0.76% | 0.80% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.51% | 2.38% | 2.09% | 3.06% | 3.51% | 4.04% | 4.28% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
Class C Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | $9.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.09(3) | 0.17(3) | 0.21 | 0.27 | 0.29 | 0.23 | 0.12 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.31 | (0.14) | 0.46 | 0.19 | 0.35 | 0.44 | |||||||||||||||||||||||
Total from Investment Operations | 0.03 | 0.48 | 0.07 | 0.73 | 0.48 | 0.58 | 0.56 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.11) | (0.22) | (0.21) | (0.27) | (0.30) | (0.23) | (0.12) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.11) | (0.34) | (0.42) | (0.42) | (0.64) | (0.29) | (0.12) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | |||||||||||||||||||||||
Total Return** | 0.28% | 4.68% | 0.65% | 7.14% | 4.62% | 5.63% | 5.61% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $341,374 | $304,253 | $432,713 | $425,830 | $268,575 | $236,850 | $161,218 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $314,641 | $341,462 | $470,325 | $336,150 | $264,522 | $195,825 | $137,244 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.54% | 1.58% | 1.55% | 1.55% | 1.51% | 1.51% | 1.58% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.54% | 1.56% | 1.55% | 1.55% | 1.51% | 1.51% | 1.57% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.76% | 1.60% | 1.30% | 2.29% | 2.75% | 3.29% | 3.51% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Flexible Bond Fund | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.43 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.14(2) | 0.27(2) | 0.32 | 0.37 | 0.39 | 0.16 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.31 | (0.14) | 0.46 | 0.18 | 0.27 | ||||||||||||||||||||
Total from Investment Operations | 0.08 | 0.58 | 0.18 | 0.83 | 0.57 | 0.43 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.16) | (0.32) | (0.32) | (0.37) | (0.39) | (0.16) | ||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | – | ||||||||||||||||||||
Total Distributions | (0.16) | (0.44) | (0.53) | (0.52) | (0.73) | (0.16) | ||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | ||||||||||||||||||||
Total Return** | 0.76% | 5.67% | 1.61% | 8.17% | 5.59% | 4.13% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $657,441 | $662,074 | $750,690 | $802,674 | $686,500 | $665,736 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $659,397 | $677,831 | $825,062 | $747,701 | $691,039 | $632,441 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.60% | 0.61% | 0.60% | 0.59% | 0.59% | 0.60% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.60% | 0.61% | 0.60% | 0.59% | 0.59% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.70% | 2.57% | 2.25% | 3.28% | 3.68% | 4.09% | ||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or | ||||||||||||||||||||||||||||||
period ended June 30 and the period ended | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | $9.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.15(2) | 0.27(2) | 0.32 | 0.38 | 0.40 | 0.30 | 0.15 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.07) | 0.31 | (0.14) | 0.46 | 0.18 | 0.35 | 0.44 | |||||||||||||||||||||||
Total from Investment Operations | 0.08 | 0.58 | 0.18 | 0.84 | 0.58 | 0.65 | 0.59 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.16) | (0.32) | (0.32) | (0.38) | (0.40) | (0.30) | (0.15) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.16) | (0.44) | (0.53) | (0.53) | (0.74) | (0.36) | (0.15) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.41 | |||||||||||||||||||||||
Total Return** | 0.77% | 5.69% | 1.66% | 8.21% | 5.62% | 6.32% | 5.96% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,183,703 | $3,486,670 | $2,918,160 | $1,691,809 | $1,230,115 | $767,784 | $453,037 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,396,995 | $3,017,072 | $2,181,783 | $1,567,379 | $1,067,665 | $609,814 | $202,602 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.57% | 0.62% | 0.56% | 0.55% | 0.58% | 0.59% | 0.48% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.57% | 0.59% | 0.55% | 0.55% | 0.56% | 0.55% | 0.48% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.73% | 2.59% | 2.28% | 3.29% | 3.72% | 4.24% | 4.55% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. |
See Notes to Financial Statements.
22 | DECEMBER 31, 2014
Table of Contents
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) | Janus Flexible Bond Fund | |||||||||||||||||
and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.63 | $10.50 | $10.85 | $10.82 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.15(2) | 0.29(2) | 0.39 | 0.05 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.30 | (0.19) | 0.01 | ||||||||||||||
Total from Investment Operations | 0.09 | 0.59 | 0.20 | 0.06 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.17) | (0.34) | (0.34) | (0.03) | ||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | – | ||||||||||||||
Total Distributions | (0.17) | (0.46) | (0.55) | (0.03) | ||||||||||||||
Net Asset Value, End of Period | $10.55 | $10.63 | $10.50 | $10.85 | ||||||||||||||
Total Return** | 0.84% | 5.74% | 1.77% | 0.57% | ||||||||||||||
Net Assets, End of Period (in thousands) | $483,927 | $225,650 | $64,760 | $253,638 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $365,993 | $161,478 | $210,599 | $196,727 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.45% | 0.45% | 0.44% | 0.46% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.45% | 0.45% | 0.44% | 0.46% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.87% | 2.78% | 2.45% | 2.78% | ||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% |
Class R Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.42 | $9.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.11(2) | 0.20(2) | 0.26 | 0.31 | 0.33 | 0.25 | 0.13 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.32 | (0.14) | 0.46 | 0.18 | 0.34 | 0.45 | |||||||||||||||||||||||
Total from Investment Operations | 0.05 | 0.52 | 0.12 | 0.77 | 0.51 | 0.59 | 0.58 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.13) | (0.26) | (0.26) | (0.31) | (0.33) | (0.25) | (0.13) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.13) | (0.38) | (0.47) | (0.46) | (0.67) | (0.31) | (0.13) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | $10.42 | |||||||||||||||||||||||
Total Return** | 0.45% | 5.05% | 1.02% | 7.54% | 4.94% | 5.76% | 5.81% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $28,342 | $23,049 | $30,080 | $26,212 | $9,585 | $5,582 | $3,120 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $25,339 | $24,473 | $29,460 | $13,660 | $7,906 | $4,675 | $2,700 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.20% | 1.20% | 1.17% | 1.18% | 1.20% | 1.20% | 1.25% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.20% | 1.20% | 1.17% | 1.18% | 1.20% | 1.20% | 1.24% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.10% | 1.95% | 1.67% | 2.63% | 3.06% | 3.59% | 3.83% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
* | See “Federal Income Tax” 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 May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. |
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Financial Highlights (continued)
Class S Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.55 | $10.71 | $10.42 | $9.97 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | �� | |||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.23(3) | 0.28 | 0.34 | 0.35 | 0.27 | 0.14 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.07) | 0.32 | (0.14) | 0.45 | 0.19 | 0.35 | 0.45 | |||||||||||||||||||||||
Total from Investment Operations | 0.06 | 0.55 | 0.14 | 0.79 | 0.54 | 0.62 | 0.59 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.14) | (0.29) | (0.28) | (0.34) | (0.36) | (0.27) | (0.14) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.14) | (0.41) | (0.49) | (0.49) | (0.70) | (0.33) | (0.14) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.56 | $10.64 | $10.50 | $10.85 | $10.55 | $10.71 | $10.42 | |||||||||||||||||||||||
Total Return** | 0.58% | 5.31% | 1.26% | 7.69% | 5.21% | 6.04% | 5.89% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $61,032 | $116,274 | $75,202 | $74,154 | $57,799 | $61,541 | $70,553 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $117,746 | $83,118 | $78,304 | $66,641 | $60,614 | $66,480 | $67,591 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% | 0.99% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.95% | 0.95% | 0.94% | 0.94% | 0.95% | 0.95% | 0.99% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.35% | 2.23% | 1.91% | 2.92% | 3.31% | 3.87% | 4.10% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or | ||||||||||||||||||||||||||||||
period ended June 30 and the year ended | Janus Flexible Bond Fund | |||||||||||||||||||||||||||||
October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.63 | $10.49 | $10.85 | $10.54 | $10.70 | $10.42 | $9.09 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.14(3) | 0.26(3) | 0.31 | 0.36 | 0.38 | 0.29 | 0.43 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.06) | 0.31 | (0.15) | 0.46 | 0.18 | 0.34 | 1.33 | |||||||||||||||||||||||
Total from Investment Operations | 0.08 | 0.57 | 0.16 | 0.82 | 0.56 | 0.63 | 1.76 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.16) | (0.31) | (0.31) | (0.36) | (0.38) | (0.29) | (0.43) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | (0.12) | (0.21) | (0.15) | (0.34) | (0.06) | – | |||||||||||||||||||||||
Total Distributions | (0.16) | (0.43) | (0.52) | (0.51) | (0.72) | (0.35) | (0.43) | |||||||||||||||||||||||
Net Asset Value, End of Period | $10.55 | $10.63 | $10.49 | $10.85 | $10.54 | $10.70 | $10.42 | |||||||||||||||||||||||
Total Return** | 0.71% | 5.58% | 1.42% | 8.05% | 5.47% | 6.13% | 19.74% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,300,925 | $1,135,441 | $1,165,892 | $1,286,847 | $794,629 | $641,811 | $1,086,604 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,214,496 | $1,096,557 | $1,333,891 | $1,033,338 | $727,010 | $831,851 | $915,900 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.70% | 0.70% | 0.70% | 0.70% | 0.70% | 0.66% | 0.73% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.70% | 0.69% | 0.69% | 0.69% | 0.70% | 0.66% | 0.73% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.60% | 2.49% | 2.16% | 3.14% | 3.56% | 4.19% | 4.34% | |||||||||||||||||||||||
Portfolio Turnover Rate | 69% | 118% | 118% | 126% | 147% | 86% | 215% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
24 | DECEMBER 31, 2014
Table of Contents
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 (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted
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Notes to Financial Statements (unaudited) (continued)
to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity risk. Risks may
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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 Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
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Notes to Financial Statements (unaudited) (continued)
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 |
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certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
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Notes to Financial Statements (unaudited) (continued)
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | 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 Assets | Advisory | |||||||||
Fund | of the Fund | Fee (%) | ||||||||
Janus Flexible Bond Fund | First $ | 300 Million | 0.50 | |||||||
Over $ | 300 Million | 0.40 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Flexible Bond Fund | 0.51 | |||||
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If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, 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. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
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Notes to Financial Statements (unaudited) (continued)
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Flexible Bond Fund | $ | 33,137 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Flexible Bond Fund | $ | 33 | ||||
32 | DECEMBER 31, 2014
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A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Flexible Bond Fund | $ | 11,289 | ||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Flexible Bond Fund | $ | 8,607,142,285 | $ | 153,749,493 | $ | (45,565,519) | $ | 108,183,974 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Flexible Bond Fund | $ | (51,941,850) | $ | – | $ | (51,941,850) | |||||||||
5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | Janus Flexible Bond Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 16,542,982 | 23,078,594 | ||||||||
Reinvested dividends and distributions | 757,906 | 2,327,063 | ||||||||
Shares repurchased | (16,634,782) | (31,350,775) | ||||||||
Net Increase/(Decrease) in Fund Shares | 666,106 | (5,945,118) | ||||||||
Shares Outstanding, Beginning of Period | 62,638,693 | 68,583,811 | ||||||||
Shares Outstanding, End of Period | 63,304,799 | 62,638,693 |
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Notes to Financial Statements (unaudited) (continued)
For the period ended December 31 (unaudited) | Janus Flexible Bond Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 6,990,048 | 4,803,012 | ||||||||
Reinvested dividends and distributions | 229,147 | 784,533 | ||||||||
Shares repurchased | (3,484,596) | (18,205,625) | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,734,599 | (12,618,080) | ||||||||
Shares Outstanding, Beginning of Period | 28,602,056 | 41,220,136 | ||||||||
Shares Outstanding, End of Period | 32,336,655 | 28,602,056 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 3,610,452 | 5,385,467 | ||||||||
Reinvested dividends and distributions | 879,186 | 2,530,832 | ||||||||
Shares repurchased | (4,453,081) | (17,185,766) | ||||||||
Net Increase/(Decrease) in Fund Shares | 36,557 | (9,269,467) | ||||||||
Shares Outstanding, Beginning of Period | 62,245,803 | 71,515,270 | ||||||||
Shares Outstanding, End of Period | 62,282,360 | 62,245,803 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 196,234,870 | 176,359,574 | ||||||||
Reinvested dividends and distributions | 5,859,875 | 10,828,299 | ||||||||
Shares repurchased | (38,845,023) | (137,388,121) | ||||||||
Net Increase/(Decrease) in Fund Shares | 163,249,722 | 49,799,752 | ||||||||
Shares Outstanding, Beginning of Period | 327,811,960 | 278,012,208 | ||||||||
Shares Outstanding, End of Period | 491,061,682 | 327,811,960 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 30,488,353 | 18,117,292 | ||||||||
Reinvested dividends and distributions | 521,559 | 676,180 | ||||||||
Shares repurchased | (6,370,391) | (3,743,660) | ||||||||
Net Increase/(Decrease) in Fund Shares | 24,639,521 | 15,049,812 | ||||||||
Shares Outstanding, Beginning of Period | 21,219,400 | 6,169,588 | ||||||||
Shares Outstanding, End of Period | 45,858,921 | 21,219,400 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 1,115,866 | 1,253,275 | ||||||||
Reinvested dividends and distributions | 21,710 | 64,386 | ||||||||
Shares repurchased | (619,690) | (2,016,550) | ||||||||
Net Increase/(Decrease) in Fund Shares | 517,886 | (698,889) | ||||||||
Shares Outstanding, Beginning of Period | 2,166,915 | 2,865,804 | ||||||||
Shares Outstanding, End of Period | 2,684,801 | 2,166,915 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 2,000,205 | 6,265,720 | ||||||||
Reinvested dividends and distributions | 148,392 | 288,636 | ||||||||
Shares repurchased | (7,296,249) | (2,788,773) | ||||||||
Net Increase/(Decrease) in Fund Shares | (5,147,652) | 3,765,583 | ||||||||
Shares Outstanding, Beginning of Period | 10,928,697 | 7,163,114 | ||||||||
Shares Outstanding, End of Period | 5,781,045 | 10,928,697 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 28,895,990 | 33,924,267 | ||||||||
Reinvested dividends and distributions | 1,665,535 | 4,232,641 | ||||||||
Shares repurchased | (14,065,212) | (42,477,906) | ||||||||
Net Increase/(Decrease) in Fund Shares | 16,496,313 | (4,320,998) | ||||||||
Shares Outstanding, Beginning of Period | 106,772,022 | 111,093,020 | ||||||||
Shares Outstanding, End of Period | 123,268,335 | 106,772,022 |
34 | DECEMBER 31, 2014
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6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Flexible Bond Fund | $ | 3,017,492,651 | $ | 2,432,257,719 | $ | 4,392,538,380 | $ | 2,783,703,052 | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 35
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
36 | DECEMBER 31, 2014
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 37
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
38 | DECEMBER 31, 2014
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
Janus Investment Fund | 39
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Additional Information (unaudited) (continued)
quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
48 | DECEMBER 31, 2014
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81203 | 125-24-93019 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Global Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Bond Fund
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Janus Global Bond Fund (unaudited)
FUND SNAPSHOT We believe a fundamentally driven corporate and sovereign credit-oriented investment process can generate risk-adjusted outperformance and capital preservation over time. Our comprehensive, bottom-up view complements traditional top-down decision making, seeking to provide a sustainable competitive advantage. | ![]() Chris Diaz co-portfolio manager | ![]() Gibson Smith co-portfolio manager | ![]() Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
During the six-month period ended December 31, 2014, Janus Global Bond Fund’s Class I Shares returned -1.67% compared with -4.14% for the Fund’s primary benchmark, the Barclays Global Aggregate Bond Index, and -2.08% for the Fund’s secondary benchmark, the Barclays Global Aggregate Corporate Bond Index.
MARKET ENVIRONMENT
The divergence in growth between the U.S. and the rest of the world widened as a dramatic decline in crude oil prices heightened disinflation concerns and sent emerging market (EM) economies reeling. There was a general rotation into safe-haven sovereigns, and the yield on the bellwether 10-year German bund declined to record lows as did yields on Japanese government bonds. The yields on the Treasury curve significantly declined on the long end while the yield on two-year Treasurys rose as the market began anticipating a rate hike by the Federal Reserve (Fed) sometime in 2015.
Meanwhile, the Bank of Japan (BOJ) launched new quantitative easing (QE) measures as Japan entered recession. The European Central Bank (ECB) signaled that it may launch a QE program in the first half of 2015 as the eurozone economy stalled and disinflation worsened. Meanwhile, major oil-producing EM countries showed signs of a recession. The high-yield market experienced a sell-off prompted by the preponderance of energy-related issuance in the market. With the U.S. practically alone in its economic strength, the U.S. dollar rose against most currencies. The crosscurrents of economic growth and weakness created greater volatility in the fixed income market; however, the market temporarily settled down as the period drew to a close.
PERFORMANCE DISCUSSION
Janus Global Bond Fund outperformed its primary benchmark, the Barclays Global Aggregate Bond Index, during the period.
Outperformance by the Fund versus its primary benchmark was driven primarily by its currency exposures. Our positioning in the Japanese yen and the euro, where we were underweight, was particularly additive on a relative basis. The positioning was informed by our view that diverging economic growth and monetary policies between the U.S. and its major trading partners will drive U.S. dollar strength against major currencies, including EM currencies. This led the Fund to be underweight most currencies and overweight the U.S. dollar.
Government-related debt, which includes government agency debt as well as debt issued by state-owned firms, was also a relative contributor, partly because of yield curve positioning within the debt.
Our Treasury allocation was a relative contributor as several overweight positions in eurozone sovereign debt were leading individual contributors on a relative basis.
The Fund’s out-of-index exposure to high yield debt helped make spread carry, or the extra income generated by the Fund’s securities versus those in the index, a relative contributor as well.
The corporate credit allocation was the leading asset class detractor on a relative basis, however. We had a material overweight in several energy-related sectors, and the sharp decline in crude oil prices sparked indiscriminate selling in energy-related corporate credit, primarily within the high-yield market.
Our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, in our view. But, wholesale selling of energy credits, especially in high yield, meant individual company fundamentals were ignored, in our view. We would add that a significant portion of crude oil’s decline occurred during the fourth quarter holiday season. That is a low volume period in the high yield market, and we believe the lower trading volume exacerbated price declines.
The Fund’s commercial mortgage-backed securities (CMBS) allocation, where we were overweight, was a relative detractor due in part to its exposure to securities
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Janus Global Bond Fund (unaudited)
backed by German multifamily properties. Moreover, the floating rate on the CMBS translated into limited duration, which made its yield curve positioning a detractor when rates were falling.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
We expect global economic growth to remain challenged, with growth and monetary policy crosscurrents between the U.S. and the rest of the world having the potential to create increased volatility in the fixed income markets.
Given our focus on capital preservation and risk-adjusted returns, we have reduced our corporate credit exposure, specifically within the energy sector. Moreover, we have increased our allocation to U.S. Treasurys, and lengthened our duration within the allocation given the possibility of rates staying low in the first part of the year.
Meanwhile, we expect slower growth in China, lower commodity prices and the anticipation of a rate hike by the Fed to continue to challenge EM markets and currencies. Consequently, we have minimal EM exposure, though we will remain vigilant for opportunities upon signs of greater stability in these markets.
We are maintaining our overweight in the U.S. dollar and underweights in most other currencies in the benchmark, particularly the eurozone and Japan. The ECB may very well launch a QE program in the first part of the year that could involve sovereign purchases (and possibly corporate bonds). Monetary policy divergence between the Fed and other central banks should continue to drive U.S. dollar strength, in our view.
While we expect further monetary stimulus by the ECB may weaken the euro, we believe it may help create attractive risk-adjusted returns in select eurozone bonds. Though we have decreased our corporate credit exposure overall, we favor lower-rated investment-grade and higher-rated high-yield European bonds. Companies in this area of the market remain in their early stages of restructuring, which could eventually lead to ratings upgrades, in our view.
We also favor longer-dated German bunds as additional ECB measures could continue to drive down their yields. In contrast, despite aggressive stimulus by the BOJ, we continue to believe that Japanese government bonds do not sufficiently compensate investors for the uncertainty surrounding Japan’s proposed structural reforms.
On behalf of each member of our investment team, thank you for your investment in Janus Global Bond Fund. We appreciate you entrusting us with your assets and look forward to continuing to serve your investment needs.
2 | DECEMBER 31, 2014
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(unaudited)
Janus Global Bond Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 8.4 Years | |
Average Effective Duration* | 5.0 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 0.30% | |
With Reimbursement | 0.40% | |
Class A Shares at MOP | ||
Without Reimbursement | 0.28% | |
With Reimbursement | 0.38% | |
Class C Shares*** | ||
Without Reimbursement | -0.47% | |
With Reimbursement | -0.37% | |
Class D Shares | ||
Without Reimbursement | 0.45% | |
With Reimbursement | 0.56% | |
Class I Shares | ||
Without Reimbursement | 0.59% | |
With Reimbursement | 0.69% | |
Class N Shares | ||
Without Reimbursement | 0.63% | |
With Reimbursement | 0.73% | |
Class S Shares | ||
Without Reimbursement | 0.13% | |
With Reimbursement | 0.22% | |
Class T Shares | ||
Without Reimbursement | 0.38% | |
With Reimbursement | 0.48% | |
Number of Bonds/Notes | 149 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AAA | 0.5% | |
AA | 25.8% | |
A | 12.0% | |
BBB | 23.1% | |
BB | 9.7% | |
B | 1.5% | |
Not Rated | 25.8% | |
Other | 1.6% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18b08.gif)
Asset Allocation – (% of Net Assets)
As of December 31,2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18p08.gif)
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Janus Global Bond Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18m08.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Global Bond Fund – Class A Shares | |||||||||||
NAV | –1.89% | 5.45% | 4.36% | 1.02% | 0.96% | ||||||
MOP | –6.55% | 0.44% | 3.10% | ||||||||
Janus Global Bond Fund – Class C Shares | |||||||||||
NAV | –2.26% | 4.63% | 3.59% | 1.80% | 1.74% | ||||||
CDSC | –3.21% | 3.63% | 3.59% | ||||||||
Janus Global Bond Fund – Class D Shares(1) | –1.82% | 5.58% | 4.47% | 0.92% | 0.84% | ||||||
Janus Global Bond Fund – Class I Shares | –1.67% | 5.81% | 4.62% | 0.75% | 0.66% | ||||||
Janus Global Bond Fund – Class N Shares | –1.73% | 5.77% | 4.41% | 0.71% | 0.66% | ||||||
Janus Global Bond Fund – Class S Shares | –1.98% | 5.51% | 4.26% | 1.25% | 1.17% | ||||||
Janus Global Bond Fund – Class T Shares | –1.86% | 5.52% | 4.39% | 0.99% | 0.92% | ||||||
Barclays Global Aggregate Bond Index | –4.14% | 0.59% | 2.31% | ||||||||
Barclays Global Aggregate Corporate Bond Index | –2.08% | 3.15% | 5.11% | ||||||||
Morningstar Quartile – Class I Shares | – | 1st | 1st | ||||||||
Morningstar Ranking – based on total returns for World Bond Funds | – | 56/389 | 67/297 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
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(unaudited)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” 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.
Sovereign debt securities are subject to the additional risk that, under some political, diplomatic, social or economic circumstances, some developing countries that issue lower quality debt securities may be unable or unwilling to make principal or interest payments as they come due.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class N Shares commenced operations on October 28, 2013. Performance shown for periods prior to October 28, 2013, reflects the performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class N Shares, without the effect of any fee and expense limitations or waivers.
If Class N Shares of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class N Shares reflects the fees and expenses of Class N Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectus for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return and yield, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 28, 2010 | |
(1) | Closed to new investors. |
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Janus Global Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 981.10 | $ | 4.99 | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 977.40 | $ | 8.82 | $ | 1,000.00 | $ | 1,016.28 | $ | 9.00 | 1.77% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 981.80 | $ | 4.30 | $ | 1,000.00 | $ | 1,020.87 | $ | 4.38 | 0.86% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 983.30 | $ | 3.75 | $ | 1,000.00 | $ | 1,021.42 | $ | 3.82 | 0.75% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 982.70 | $ | 3.40 | $ | 1,000.00 | $ | 1,021.78 | $ | 3.47 | 0.68% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 980.20 | $ | 5.89 | $ | 1,000.00 | $ | 1,019.26 | $ | 6.01 | 1.18% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 981.40 | $ | 4.69 | $ | 1,000.00 | $ | 1,020.47 | $ | 4.79 | 0.94% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
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Janus Global Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 11.8% | ||||||||||
$ | 665,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 670,328 | ||||||
221,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 224,604 | ||||||||
440,000 | Aventura Mall Trust 2013-AVM 3.7427%, 12/5/20 (144A),‡ | 428,615 | ||||||||
98,300 | Banc of America Commercial Mortgage Trust 2007-5 5.7720%, 2/10/51‡ | 103,971 | ||||||||
350,000 | Boca Hotel Portfolio Trust 2013-BOCA 3.2108%, 8/15/26 (144A),‡ | 349,788 | ||||||||
GBP | 1,012,813 | Broadgate Financing PLC 1.5228%, 1/5/22‡ | 1,549,094 | |||||||
158,000 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49 | 167,762 | ||||||||
982,000 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 1,064,346 | ||||||||
GBP | 1,080,000 | DECO 2012-MHILL, Ltd. 2.8271%, 7/28/21‡ | 1,676,350 | |||||||
GBP | 1,950,000 | DECO 2012-MHILL, Ltd. 2.8271%, 7/28/21‡ | 3,040,256 | |||||||
EUR | 1,100,000 | Deco 2014-BONN, Ltd. 0.3650%, 11/7/24 (144A) | 1,332,228 | |||||||
GBP | 1,132,907 | Eddystone Finance PLC 1.0828%, 4/19/21‡ | 1,734,635 | |||||||
807,081 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20 (144A),§ | 699,807 | ||||||||
EUR | 5,046,131 | German Residential Funding 2013-2, Ltd. 3.5810%, 8/27/24‡ | 6,412,478 | |||||||
EUR | 931,003 | German Residential Funding 2013-2, Ltd. 3.0810%, 11/27/24‡ | 1,159,387 | |||||||
205,000 | Gracechurch Card Funding PLC 0.8608%, 6/15/17 (144A),‡ | 205,340 | ||||||||
680,000 | GS Mortgage Securities Corp. II 3.4350%, 12/10/27 (144A),‡ | 639,789 | ||||||||
221,000 | Hilton USA Trust 2013-HLT 4.4065%, 11/5/30 (144A) | 226,036 | ||||||||
200,000 | Hilton USA Trust 2013-HLT 5.2216%, 11/5/30 (144A),‡ | 204,913 | ||||||||
430,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.1508%, 4/15/30 (144A),‡ | 430,161 | ||||||||
205,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.9008%, 4/15/30 (144A),‡ | 205,256 | ||||||||
163,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 3.6610%, 12/15/28 (144A),‡ | 162,962 | ||||||||
519,000 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 546,985 | ||||||||
GBP | 1,530,283 | London & Regional Debt Securitisation No 2 PLC 5.8596%, 10/15/15‡ | 2,414,618 | |||||||
GBP | 833,024 | Morpheus European Loan Conduit No 19 PLC 0.9846%, 11/1/29‡ | 1,278,719 | |||||||
GBP | 2,827,263 | Nemus II Arden PLC 0.7853%, 2/15/20‡ | 4,333,333 | |||||||
EUR | 763,881 | Rivoli Pan Europe PLC 0.2660%, 8/3/18‡ | 911,285 | |||||||
276,000 | Santander Drive Auto ReceivablesTrust 2.5200%, 9/17/18 | 277,297 | ||||||||
293,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 301,770 | ||||||||
NOK | 16,100,000 | Scandinavian Consumer Loans No. 4, Ltd. 4.2100%, 1/15/37‡ | 2,194,108 | |||||||
699,000 | Starwood Retail Property Trust 2014-STAR 3.4108%, 11/15/27 (144A),‡ | 701,969 | ||||||||
439,000 | Starwood Retail Property Trust 2014-STAR 4.3108%, 11/15/27 (144A),‡ | 440,800 | ||||||||
EUR | 617,698 | Taurus 2013 GMF1 PLC 2.0810%, 5/21/24‡ | 762,903 | |||||||
EUR | 2,266,516 | Taurus 2013 GMF1 PLC 2.8310%, 5/21/24‡ | 2,790,262 | |||||||
949,700 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.3830%, 12/15/43 | 1,007,534 | ||||||||
269,700 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.5910%, 4/15/47‡ | 287,838 | ||||||||
CAD | 1,354,713 | West Edmonton Mall Property, Inc. 4.0560%, 2/13/24 | 1,227,709 | |||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $44,214,532) | 42,165,236 | |||||||||
Bank Loans and Mezzanine Loans – 2.4% | ||||||||||
Consumer Non-Cyclical – 0.2% | ||||||||||
610,930 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 595,656 | ||||||||
71,586 | Quintiles Transnational Corp. 3.7500%, 6/8/18‡ | 70,632 | ||||||||
| ||||||||||
666,288 | ||||||||||
Industrial – 0.7% | ||||||||||
2,474,010 | American Builders & Contractors Supply Co., Inc. 3.5000%, 4/16/20‡ | 2,392,838 | ||||||||
Technology – 1.5% | ||||||||||
5,485,435 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 5,460,312 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $8,655,028) | 8,519,438 | |||||||||
Corporate Bonds – 29.1% | ||||||||||
Banking – 7.5% | ||||||||||
EUR | 1,645,000 | Abbey National Treasury Services PLC 0.8750%, 1/13/20 | 1,998,536 | |||||||
780,000 | Bank of America Corp. 8.0000%µ | 837,525 | ||||||||
EUR | 1,386,000 | Bank of Ireland 2.7500%, 6/5/16 | 1,716,159 | |||||||
EUR | 656,000 | Bank of Ireland 3.2500%, 1/15/19 | 851,029 | |||||||
EUR | 1,499,000 | Bank of Ireland 4.2500%, 6/11/24 | 1,790,980 | |||||||
EUR | 1,400,000 | Bankia SA 3.5000%, 1/17/19 | 1,824,604 | |||||||
169,000 | Goldman Sachs Group, Inc. 5.7000%µ | 170,944 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Global Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Banking – (continued) | ||||||||||
EUR | 1,435,000 | HSBC Holdings PLC 3.3750%, 1/10/24‡ | $ | 1,845,851 | ||||||
EUR | 1,188,000 | HSBC Holdings PLC 5.2500%µ | 1,437,369 | |||||||
EUR | 1,402,000 | Intesa Sanpaolo SpA 3.9280%, 9/15/26 | 1,731,318 | |||||||
EUR | 1,166,000 | Lloyds Bank PLC 6.5000%, 3/24/20 | 1,737,828 | |||||||
AUD | 3,744,000 | Morgan Stanley 5.0000%, 9/30/21 | 3,208,440 | |||||||
$ | 831,000 | Morgan Stanley 4.1000%, 5/22/23 | 841,336 | |||||||
EUR | 3,377,000 | Royal Bank of Scotland Group PLC 3.6250%, 3/25/24‡ | 4,121,680 | |||||||
EUR | 1,310,000 | UBS AG 4.7500%, 2/12/26‡ | 1,697,907 | |||||||
1,225,000 | Zions Bancorporation 5.8000%µ | 1,156,400 | ||||||||
| ||||||||||
26,967,906 | ||||||||||
Basic Industry – 1.4% | ||||||||||
EUR | 2,850,000 | Albemarle Corp. 1.8750%, 12/8/21 | 3,460,117 | |||||||
430,000 | Albemarle Corp. 4.1500%, 12/1/24 | 436,882 | ||||||||
433,000 | Albemarle Corp. 5.4500%, 12/1/44 | 465,929 | ||||||||
658,000 | Ashland, Inc. 6.8750%, 5/15/43 | 700,770 | ||||||||
| ||||||||||
5,063,698 | ||||||||||
Brokerage – 2.2% | ||||||||||
815,000 | Lazard Group LLC 4.2500%, 11/14/20 | 858,969 | ||||||||
1,804,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.6250%, 3/15/20 (144A) | 1,885,180 | ||||||||
851,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 895,678 | ||||||||
2,092,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 2,382,750 | ||||||||
1,795,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 1,819,256 | ||||||||
| ||||||||||
7,841,833 | ||||||||||
Capital Goods – 1.5% | ||||||||||
1,016,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 1,000,760 | ||||||||
948,000 | Exelis, Inc. 5.5500%, 10/1/21 | 1,023,118 | ||||||||
CAD | 2,753,000 | Holcim Finance Canada, Inc. 3.6500%, 4/10/18 | 2,460,943 | |||||||
860,000 | Martin Marietta Materials, Inc. 1.3331%, 6/30/17‡ | 869,429 | ||||||||
| ||||||||||
5,354,250 | ||||||||||
Communications – 2.8% | ||||||||||
EUR | 952,000 | Discovery Communications LLC 2.3750%, 3/7/22 | 1,230,543 | |||||||
EUR | 115,000 | Numericable-SFR 5.3750%, 5/15/22 (144A) | 143,592 | |||||||
EUR | 1,316,000 | Numericable-SFR 5.3750%, 5/15/22 | 1,643,189 | |||||||
EUR | 1,868,000 | O2 Telefonica Deutschland Finanzierungs GmbH 2.3750%, 2/10/21 | 2,426,599 | |||||||
EUR | 555,000 | Priceline Group, Inc. 2.3750%, 9/23/24 | 711,647 | |||||||
CAD | 1,240,000 | Rogers Communications, Inc. 5.3800%, 11/4/19 | 1,202,869 | |||||||
EUR | 1,156,000 | Verizon Communications, Inc. 2.3750%, 2/17/22 | 1,523,882 | |||||||
EUR | 743,000 | Verizon Communications, Inc. 3.2500%, 2/17/26 | 1,039,108 | |||||||
| ||||||||||
9,921,429 | ||||||||||
Consumer Cyclical – 4.0% | ||||||||||
526,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 520,740 | ||||||||
EUR | 1,110,000 | FCE Bank PLC 1.8750%, 4/18/19 | 1,398,528 | |||||||
EUR | 1,042,000 | FCE Bank PLC 1.8750%, 6/24/21 | 1,307,829 | |||||||
843,000 | General Motors Co. 4.8750%, 10/2/23 | 902,010 | ||||||||
GBP | 2,029,000 | Jaguar Land Rover Automotive PLC 8.2500%, 3/15/20 | 3,478,226 | |||||||
EUR | 1,317,000 | Renault SA 3.1250%, 3/5/21 | 1,749,047 | |||||||
EUR | 714,000 | Schaeffler Finance BV 3.2500%, 5/15/19 | 871,432 | |||||||
EUR | 698,000 | Schaeffler Finance BV 3.5000%, 5/15/22 | 859,378 | |||||||
EUR | 2,070,000 | Volkswagen International Finance NV 3.7500%µ | 2,666,549 | |||||||
EUR | 385,000 | Volkswagen International Finance NV 4.6250%µ | 508,902 | |||||||
| ||||||||||
14,262,641 | ||||||||||
Consumer Non-Cyclical – 1.2% | ||||||||||
241,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 242,231 | ||||||||
EUR | 1,400,000 | Bayer AG 3.0000%, 7/1/75 | 1,742,907 | |||||||
EUR | 592,000 | FMC Finance VIII SA 5.2500%, 7/31/19 | 823,561 | |||||||
839,000 | Fresenius Medical Care U.S. Finance II, Inc. 5.8750%, 1/31/22 (144A) | 910,315 | ||||||||
592,000 | Safeway, Inc. 4.7500%, 12/1/21 | 599,398 | ||||||||
| ||||||||||
4,318,412 | ||||||||||
Energy – 1.3% | ||||||||||
1,247,000 | California Resources Corp. 5.5000%, 9/15/21 (144A) | 1,066,185 | ||||||||
54,000 | California Resources Corp. 6.0000%, 11/15/24 (144A) | 45,630 | ||||||||
873,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 872,454 | ||||||||
516,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 501,810 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$ | 312,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | $ | 297,960 | ||||||
1,288,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 1,316,816 | ||||||||
327,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 341,584 | ||||||||
328,000 | Ensco PLC 4.5000%, 10/1/24 | 318,809 | ||||||||
| ||||||||||
4,761,248 | ||||||||||
Finance Companies – 1.6% | ||||||||||
EUR | 290,000 | Baggot Securities, Ltd. 10.2400% (144A),µ | 367,539 | |||||||
1,100,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 1,122,000 | ||||||||
78,000 | CIT Group, Inc. 6.6250%, 4/1/18 (144A) | 84,630 | ||||||||
1,359,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 1,433,745 | ||||||||
265,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 284,213 | ||||||||
1,400,000 | General Electric Capital Corp. 6.2500%µ | 1,524,250 | ||||||||
700,000 | General Electric Capital Corp. 7.1250%µ | 814,625 | ||||||||
| ||||||||||
5,631,002 | ||||||||||
Insurance – 0.8% | ||||||||||
919,000 | Primerica, Inc. 4.7500%, 7/15/22 | 1,002,422 | ||||||||
1,846,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 1,827,540 | ||||||||
| ||||||||||
2,829,962 | ||||||||||
Owned No Guarantee – 0.8% | ||||||||||
EUR | 1,876,000 | DAA Finance PLC 6.5872%, 7/9/18 | 2,713,265 | |||||||
EUR | 280,000 | Emirates Telecommunications Corp. 1.7500%, 6/18/21 | 347,243 | |||||||
| ||||||||||
3,060,508 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.2% | ||||||||||
EUR | 1,528,000 | GELF Bond Issuer I SA 1.7500%, 11/22/21 | 1,862,198 | |||||||
EUR | 1,860,000 | Prologis International Funding II SA 2.7500%, 10/23/18 | 2,389,233 | |||||||
| ||||||||||
4,251,431 | ||||||||||
Technology – 2.8% | ||||||||||
1,543,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 1,567,756 | ||||||||
279,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 289,783 | ||||||||
2,621,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 2,700,062 | ||||||||
1,610,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 1,649,598 | ||||||||
2,355,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 2,311,480 | ||||||||
522,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 560,383 | ||||||||
746,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 840,505 | ||||||||
| ||||||||||
9,919,567 | ||||||||||
Total Corporate Bonds (cost $107,117,876) | 104,183,887 | |||||||||
Foreign Government Bonds – 37.2% | ||||||||||
EUR | 2,169,000 | Bundesobligation 1.0000%, 2/22/19 | 2,738,628 | |||||||
EUR | 4,016,000 | Bundesrepublik Deutschland 1.0000%, 8/15/24 | 5,066,999 | |||||||
EUR | 1,583,000 | Bundesrepublik Deutschland 2.5000%, 7/4/44 | 2,442,349 | |||||||
EUR | 6,520,000 | Ireland Government Bond 3.9000%, 3/20/23 | 9,622,867 | |||||||
EUR | 2,501,000 | Ireland Government Bond 3.4000%, 3/18/24 | 3,585,298 | |||||||
EUR | 2,769,000 | Ireland Government Bond 2.4000%, 5/15/30 | 3,604,628 | |||||||
NZD | 12,793,000 | New Zealand Government Bond 6.0000%, 4/15/15 | 10,045,315 | |||||||
NZD | 6,410,000 | New Zealand Government Bond 5.0000%, 3/15/19 | 5,273,237 | |||||||
NZD | 2,429,000 | New Zealand Government Bond 3.0000%, 4/15/20 | 1,839,792 | |||||||
NZD | 14,320,000 | New Zealand Government Bond 5.5000%, 4/15/23 | 12,597,977 | |||||||
EUR | 3,877,000 | Portugal Obrigacoes do Tesouro OT 3.8500%, 4/15/21 (144A) | 5,200,831 | |||||||
EUR | 2,094,000 | Portugal Obrigacoes do Tesouro OT 3.8750%, 2/15/30 (144A) | 2,653,255 | |||||||
EUR | 6,971,000 | Spain Government Bond 4.3000%, 10/31/19 | 9,838,733 | |||||||
EUR | 2,034,000 | Spain Government Bond 4.8500%, 10/31/20 | 2,994,509 | |||||||
EUR | 3,426,000 | Spain Government Bond 4.4000%, 10/31/23 (144A) | 5,127,787 | |||||||
SEK | 42,940,000 | Sweden Government Bond 4.2500%, 3/12/19 | 6,460,595 | |||||||
SEK | 48,500,000 | Sweden Government Bond 1.5000%, 11/13/23 | 6,595,804 | |||||||
SEK | 22,800,000 | Sweden Government Bond 2.5000%, 5/12/25 | 3,377,847 | |||||||
GBP | 12,501,000 | United Kingdom Gilt 1.7500%, 7/22/19 | 19,981,378 | |||||||
GBP | 4,988,961 | United Kingdom Gilt 2.2500%, 9/7/23† | 8,146,480 | |||||||
GBP | 3,246,000 | United Kingdom Gilt 3.2500%, 1/22/44 | 5,835,920 | |||||||
Total Foreign Government Bonds (cost $134,758,162) | 133,030,229 | |||||||||
Preferred Stocks – 0.5% | ||||||||||
Capital Markets – 0.2% | ||||||||||
25,875 | Morgan Stanley, 6.8750% | 688,534 | ||||||||
Commercial Banks – 0.3% | ||||||||||
37,525 | Wells Fargo & Co., 6.6250% | 1,040,943 | ||||||||
Total Preferred Stocks (cost $1,585,000) | 1,729,477 | |||||||||
U.S. Treasury Notes/Bonds��– 17.1% | ||||||||||
$ | 39,617,000 | 0.3750%, 1/31/16 | 39,635,580 | |||||||
6,475,000 | 0.3750%, 4/30/16 | 6,473,990 | ||||||||
93,000 | 1.0000%, 9/15/17 | 93,051 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
U.S. Treasury Notes/Bonds – (continued) | ||||||||||
$ | 221,000 | 1.5000%, 11/30/19 | $ | 219,602 | ||||||
12,359,000 | 2.2500%, 11/15/24 | 12,442,040 | ||||||||
485,000 | 3.1250%, 8/15/44 | 522,133 | ||||||||
1,722,000 | 3.0000%, 11/15/44 | 1,809,715 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $61,226,894) | 61,196,111 | |||||||||
Investment Companies – 0.4% | ||||||||||
Money Markets – 0.4% | ||||||||||
1,435,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $1,435,000) | 1,435,000 | ||||||||
Total Investments (total cost $358,992,492) – 98.5% | 352,259,378 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.5% | 5,198,055 | |||||||||
Net Assets – 100% | $ | 357,457,433 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 128,197,280 | 36 | .4% | ||||
United Kingdom | 66,358,529 | 18 | .8 | |||||
Ireland | 38,783,749 | 11 | .0 | |||||
New Zealand | 29,756,321 | 8 | .4 | |||||
Germany | 21,057,619 | 6 | .0 | |||||
Spain | 19,785,633 | 5 | .6 | |||||
Sweden | 18,628,354 | 5 | .3 | |||||
Portugal | 7,854,086 | 2 | .2 | |||||
Singapore | 5,460,312 | 1 | .6 | |||||
France | 5,398,026 | 1 | .5 | |||||
Canada | 4,891,521 | 1 | .4 | |||||
Taiwan | 2,311,480 | 0 | .7 | |||||
Italy | 1,731,318 | 0 | .5 | |||||
Switzerland | 1,697,907 | 0 | .5 | |||||
United Arab Emirates | 347,243 | 0 | .1 | |||||
Total | $ | 352,259,378 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Currency Units | Unrealized | |||||||||||
Sold/ | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | (Purchased) | Value | (Depreciation) | |||||||||
JPMorgan Chase & Co.: | ||||||||||||
British Pound 1/22/15 | 9,184,000 | $ | 14,310,264 | $ | 105,558 | |||||||
Canadian Dollar 1/22/15 | (23,059,000) | (19,844,895) | (106,056) | |||||||||
Euro 1/22/15 | 99,620,000 | 120,553,049 | 520,617 | |||||||||
New Zealand Dollar 1/22/15 | 29,360,000 | 22,848,260 | (45,464) | |||||||||
Norwegian Krone 1/22/15 | (8,677,000) | (1,164,430) | (23,264) | |||||||||
Philippine Peso 1/22/15 | (146,995,000) | (3,283,745) | (19,514) | |||||||||
South Korean Won 1/22/15 | (3,742,008,000) | (3,403,417) | 12,724 | |||||||||
Swedish Krona 1/22/15 | 128,112,000 | 16,446,240 | 497,327 | |||||||||
Total | $ | 146,461,326 | $ | 941,928 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays Global Aggregate Bond Index | Provides a broad-based measure of the global investment grade fixed-rate debt markets. It is comprised of the U.S. Aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Indexes. It also includes a wide range of standard and customized subindices by liquidity constraint, sector, quality and maturity. | |
Barclays Global Aggregate Corporate Bond Index | The corporate component of the Barclays Global Aggregate Bond Index. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Global Bond Fund | $ | 30,853,573 | 8.6 | % | ||||||
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2014, is noted below. |
Fund | Aggregate Value | ||||
Janus Global Bond Fund | $ | 3,265,802 | |||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Bond Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 | 4/29/2013 | $ | 685,073 | $ | 699,807 | 0.2 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Global Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 4,995,762 | 187,847,426 | (191,408,188) | 1,435,000 | $ | – | $ | 3,900 | $ | 1,435,000 | |||||||||||
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 42,165,236 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 8,519,438 | – | ||||||||
Corporate Bonds | – | 104,183,887 | – | ||||||||
Foreign Government Bonds | – | 133,030,229 | – | ||||||||
Preferred Stocks | – | 1,729,477 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 61,196,111 | – | ||||||||
Investment Companies | – | 1,435,000 | – | ||||||||
Total Investments in Securities | $ | – | $ | 352,259,378 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,136,226 | $ | – | |||||
Total Assets | $ | – | $ | 353,395,604 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 194,298 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
12 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Janus Global Bond Fund | |||
Assets: | ||||
Investments at cost | $ | 358,992,492 | ||
Unaffiliated investments at value | $ | 350,824,378 | ||
Affiliated investments at value | 1,435,000 | |||
Cash | 583,905 | |||
Forward currency contracts | 1,136,226 | |||
Closed foreign currency contracts | 1,666,245 | |||
Non-interested Trustees’ deferred compensation | 7,339 | |||
Receivables: | ||||
Investments sold | 465,819 | |||
Fund shares sold | 1,107,551 | |||
Dividends | 11,118 | |||
Dividends from affiliates | 301 | |||
Interest | 3,394,359 | |||
Other assets | 4,267 | |||
Total Assets | 360,636,508 | |||
Liabilities: | ||||
Forward currency contracts | 194,298 | |||
Closed foreign currency contracts | 115,518 | |||
Payables: | ||||
Fund shares repurchased | 2,358,939 | |||
Dividends | 299,257 | |||
Advisory fees | 150,708 | |||
Fund administration fees | 3,103 | |||
Transfer agent fees and expenses | 9,407 | |||
12b-1 Distribution and shareholder servicing fees | 11,760 | |||
Non-interested Trustees’ fees and expenses | 1,846 | |||
Non-interested Trustees’ deferred compensation fees | 7,339 | |||
Accrued expenses and other payables | 26,900 | |||
Total Liabilities | 3,179,075 | |||
Net Assets | $ | 357,457,433 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities (continued)
As of December 31, 2014 (unaudited) | Janus Global Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 368,980,714 | ||
Undistributed net investment income/(loss)* | (11,234,622) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 5,501,461 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (5,790,120) | |||
Total Net Assets | $ | 357,457,433 | ||
Net Assets - Class A Shares | $ | 30,733,523 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,075,408 | |||
Net Asset Value Per Share(1) | $ | 9.99 | ||
Maximum Offering Price Per Share(2) | $ | 10.49 | ||
Net Assets - Class C Shares | $ | 6,443,529 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 644,228 | |||
Net Asset Value Per Share(1) | $ | 10.00 | ||
Net Assets - Class D Shares | $ | 12,394,569 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,240,891 | |||
Net Asset Value Per Share | $ | 9.99 | ||
Net Assets - Class I Shares | $ | 42,906,785 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,297,088 | |||
Net Asset Value Per Share | $ | 9.99 | ||
Net Assets - Class N Shares | $ | 246,971,759 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 24,748,672 | |||
Net Asset Value Per Share | $ | 9.98 | ||
Net Assets - Class S Shares | $ | 156,584 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,659 | |||
Net Asset Value Per Share | $ | 10.00 | ||
Net Assets - Class T Shares | $ | 17,850,684 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,786,187 | |||
Net Asset Value Per Share | $ | 9.99 |
* | See “Federal Income Tax” 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.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | Janus Global Bond Fund | |||
Investment Income: | ||||
Interest | $ | 4,203,748 | ||
Dividends | 62,360 | |||
Dividends from affiliates | 3,900 | |||
Other income | 90,579 | |||
Total Investment Income | 4,360,587 | |||
Expenses: | ||||
Advisory fees | 992,839 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 20,906 | |||
Class C Shares | 21,909 | |||
Class S Shares | 279 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 8,095 | |||
Class S Shares | 279 | |||
Class T Shares | 21,700 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 4,710 | |||
Class C Shares | 1,457 | |||
Class I Shares | 8,116 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 877 | |||
Class C Shares | 323 | |||
Class D Shares | 3,074 | |||
Class I Shares | 537 | |||
Class N Shares | 151 | |||
Class T Shares | 164 | |||
Shareholder reports expense | 2,437 | |||
Registration fees | 76,483 | |||
Custodian fees | 13,854 | |||
Professional fees | 31,555 | |||
Non-interested Trustees’ fees and expenses | 3,293 | |||
Fund administration fees | 16,547 | |||
Other expenses | 32,514 | |||
Total Expenses | 1,262,099 | |||
Less: Excess Expense Reimbursement | (44,339) | |||
Net Expenses | 1,217,760 | |||
Net Investment Income/(Loss) | 3,142,827 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 10,486,258 | |||
Total Net Realized Gain/(Loss) on Investments | 10,486,258 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (19,630,254) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (19,630,254) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (6,001,169) |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014(1) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 3,142,827 | $ | 7,310,416 | ||||
Net realized gain/(loss) on investments | 10,486,258 | 3,059,076 | ||||||
Change in unrealized net appreciation/depreciation | (19,630,254) | 17,455,656 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (6,001,169) | 27,825,148 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | �� | |||||||
Class A Shares | (1,114,238) | (109,129) | ||||||
Class C Shares | (223,361) | (19,784) | ||||||
Class D Shares | (521,663) | (269,437) | ||||||
Class I Shares | (1,630,949) | (2,196,835) | ||||||
Class N Shares | (10,450,936) | (5,568,649) | ||||||
Class S Shares | (6,930) | (16,069) | ||||||
Class T Shares | (722,475) | (219,944) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | – | – | ||||||
Class C Shares | – | – | ||||||
Class D Shares | – | – | ||||||
Class I Shares | – | – | ||||||
Class N Shares | – | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (14,670,552) | (8,399,847) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 26,916,056 | 4,639,840 | ||||||
Class C Shares | 5,922,248 | 914,509 | ||||||
Class D Shares | 4,604,705 | 7,934,979 | ||||||
Class I Shares | 69,019,563 | 7,884,807 | ||||||
Class N Shares | 13,300,705 | 244,694,972 | ||||||
Class S Shares | 799 | 4,080 | ||||||
Class T Shares | 12,429,867 | 11,655,097 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 1,013,327 | 79,014 | ||||||
Class C Shares | 189,778 | 18,304 | ||||||
Class D Shares | 506,108 | 256,549 | ||||||
Class I Shares | 1,434,416 | 1,669,053 | ||||||
Class N Shares | 10,450,879 | 5,568,649 | ||||||
Class S Shares | 6,928 | 16,069 | ||||||
Class T Shares | 721,123 | 217,123 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,043,016) | (3,433,603) | ||||||
Class C Shares | (666,206) | (1,334,184) | ||||||
Class D Shares | (5,036,839) | (5,639,748) | ||||||
Class I Shares | (28,355,016) | (247,099,912) | ||||||
Class N Shares | (11,224,863) | (12,283,121) | ||||||
Class S Shares | (257,585) | (549,450) | ||||||
Class T Shares | (6,062,089) | (7,563,732) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Janus Global | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014(1) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 92,870,888 | 7,649,295 | ||||||
Net Increase/(Decrease) in Net Assets | 72,199,167 | 27,074,596 | ||||||
Net Assets: | ||||||||
Beginning of period | 285,258,266 | 258,183,670 | ||||||
End of period | $ | 357,457,433 | $ | 285,258,266 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (11,234,622) | $ | 293,103 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Period from October 28, 2013 (inception date) through June 30, 2014 for Class N Shares. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.85 | $10.48 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.08(2) | 0.26(2) | 0.27 | 0.23 | 0.19 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.28) | 0.80 | (0.35) | 0.27 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.20) | 1.06 | (0.08) | 0.50 | 0.50 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.42) | (0.30) | (0.12) | (0.29) | (0.15) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.18) | – | – | |||||||||||||||||
Total Distributions and Other | (0.42) | (0.30) | (0.55) | (0.37) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.99 | $10.61 | $9.85 | $10.48 | $10.35 | |||||||||||||||||
Total Return** | (1.89)% | 10.96% | (1.04)% | 4.89% | 4.99% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $30,734 | $6,247 | $4,649 | $5,113 | $1,190 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $16,421 | $3,737 | $5,017 | $3,309 | $958 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.04% | 1.02% | 1.28% | 1.46% | 3.50% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.00% | 1.02% | 1.01% | 1.02% | 0.79% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.57% | 2.53% | 2.32% | 2.48% | 3.03% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
Class C Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.62 | $9.86 | $10.49 | $10.36 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(2) | 0.16(2) | 0.19 | 0.18 | 0.16 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.28) | 0.82 | (0.35) | 0.24 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.24) | 0.98 | (0.16) | 0.42 | 0.47 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.38) | (0.22) | (0.08) | (0.21) | (0.11) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.14) | – | – | |||||||||||||||||
Total Distributions and Other | (0.38) | (0.22) | (0.47) | (0.29) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $10.00 | $10.62 | $9.86 | $10.49 | $10.36 | |||||||||||||||||
Total Return** | (2.26)% | 10.09% | (1.78)% | 4.10% | 4.70% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $6,444 | $1,325 | $1,654 | $1,884 | $1,293 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,311 | $963 | $2,016 | $1,634 | $908 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.81% | 1.80% | 2.05% | 2.21% | 4.22% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.77% | 1.79% | 1.76% | 1.76% | 1.36%(3) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.77% | 1.54% | 1.58% | 1.77% | 2.45% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would be 1.77% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class D Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.85 | $10.47 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.10(2) | 0.27(2) | 0.28 | 0.26 | 0.18 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.29) | 0.80 | (0.34) | 0.24 | 0.32 | |||||||||||||||||
Total from Investment Operations | (0.19) | 1.07 | (0.06) | 0.50 | 0.50 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.43) | (0.31) | (0.12) | (0.30) | (0.15) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.19) | – | – | |||||||||||||||||
Total Distributions and Other | (0.43) | (0.31) | (0.56) | (0.38) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.99 | $10.61 | $9.85 | $10.47 | $10.35 | |||||||||||||||||
Total Return** | (1.82)% | 11.07% | (0.84)% | 4.90% | 5.06% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $12,395 | $13,098 | $9,875 | $10,240 | $4,876 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $13,314 | $8,833 | $11,610 | $10,566 | $2,296 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.88% | 0.92% | 1.16% | 1.31% | 2.92% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.86% | 0.92% | 0.90% | 0.91% | 0.72% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.82% | 2.63% | 2.43% | 2.64% | 3.08% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
Class I Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.60 | $9.84 | $10.47 | $10.34 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.21(2) | 0.31 | 0.29 | 0.19 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.27) | 0.88 | (0.37) | 0.24 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.18) | 1.09 | (0.06) | 0.53 | 0.50 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.43) | (0.33) | (0.12) | (0.32) | (0.16) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.20) | – | – | |||||||||||||||||
Total Distributions and Other | (0.43) | (0.33) | (0.57) | (0.40) | (0.16) | |||||||||||||||||
Net Asset Value, End of Period | $9.99 | $10.60 | $9.84 | $10.47 | $10.34 | |||||||||||||||||
Total Return** | (1.67)% | 11.24% | (0.79)% | 5.15% | 5.02% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $42,907 | $2,990 | $234,166 | $14,810 | $10,464 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $26,588 | $77,450 | $74,492 | $12,500 | $7,863 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.79% | 0.75% | 0.75% | 1.13% | 3.13% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.75% | 0.75% | 0.75% | 0.76% | 0.77% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.71% | 2.13% | 2.27% | 2.77% | 3.06% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class N Shares
Janus Global Bond Fund | ||||||||||
For a share outstanding during each period ended December 31, 2014 (unaudited) and June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.60 | $10.12 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.10 | 0.22 | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.28) | 0.50 | ||||||||
Total from Investment Operations | (0.18) | 0.72 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.44) | (0.24) | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.44) | (0.24) | ||||||||
Net Asset Value, End of Period | $9.98 | $10.60 | ||||||||
Total Return** | (1.73)% | 7.22% | ||||||||
Net Assets, End of Period (in thousands) | $246,972 | $249,350 | ||||||||
Average Net Assets for the Period (in thousands) | $248,649 | $237,653 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.71% | 0.71% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.68% | 0.71% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.99% | 3.19% | ||||||||
Portfolio Turnover Rate | 73% | 171% |
Class S Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(3) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.62 | $9.87 | $10.49 | $10.36 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.23(2) | 0.26 | 0.25 | 0.20 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.30) | 0.83 | (0.35) | 0.23 | 0.29 | |||||||||||||||||
Total from Investment Operations | (0.21) | 1.06 | (0.09) | 0.48 | 0.49 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.41) | (0.31) | (0.11) | (0.27) | (0.13) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.17) | – | – | |||||||||||||||||
Total Distributions and Other | (0.41) | (0.31) | (0.53) | (0.35) | (0.13) | |||||||||||||||||
Net Asset Value, End of Period | $10.00 | $10.62 | $9.87 | $10.49 | $10.36 | |||||||||||||||||
Total Return** | (1.98)% | 10.90% | (1.06)% | 4.69% | 4.96% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $157 | $418 | $905 | $915 | $875 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $220 | $571 | $943 | $895 | $851 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.20% | 1.25% | 1.49% | 1.62% | 3.84% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.18% | 1.06% | 1.13% | 1.20% | 0.86%(4) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.71% | 2.29% | 2.20% | 2.33% | 2.97% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
* | See “Federal Income Tax” 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 October 28, 2013 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(4) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would be 1.27% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
Table of Contents
Class T Shares
For a share outstanding during the period ended December 31, 2014 | Janus Global Bond Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.86 | $10.48 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.26(2) | 0.27 | 0.31 | 0.16 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.29) | 0.80 | (0.34) | 0.19 | 0.34 | |||||||||||||||||
Total from Investment Operations | (0.20) | 1.06 | (0.07) | 0.50 | 0.50 | |||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.42) | (0.31) | (0.12) | (0.29) | (0.15) | |||||||||||||||||
Distributions (from capital gains)* | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | – | – | (0.18) | – | – | |||||||||||||||||
Total Distributions and Other | (0.42) | (0.31) | (0.55) | (0.37) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.99 | $10.61 | $9.86 | $10.48 | $10.35 | |||||||||||||||||
Total Return** | (1.86)% | 10.91% | (0.91)% | 4.90% | 4.99% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $17,851 | $11,830 | $6,935 | $2,317 | $8,808 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $17,121 | $7,406 | $4,055 | $4,904 | $1,739 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.96% | 0.99% | 1.19% | 1.38% | 2.33% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.94% | 0.97% | 0.98% | 1.00% | 0.68%(3) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.67% | 2.60% | 2.29% | 2.44% | 2.92% | |||||||||||||||||
Portfolio Turnover Rate | 73% | 171% | 182% | 222% | 173% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would be 1.01% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Bond Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is
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intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
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Notes to Financial Statements (unaudited) (continued)
Dividend Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2014 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative (to earn income and seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets in which it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including, but not limited to, counterparty risk, credit risk, currency risk, equity risk, index risk, interest rate risk, leverage risk, and liquidity risk, as described below.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC, such as options and structured notes, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs.
OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk. In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
• | Counterparty Risk – Counterparty risk is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
• | Credit Risk – Credit risk is the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
• | Currency Risk – Currency risk is the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
• | Equity Risk – Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market. | |
• | Index Risk – If the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
• | Interest Rate Risk – Interest rate risk is the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
• | Leverage Risk – Leverage risk is the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short |
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Notes to Financial Statements (unaudited) (continued)
sales, that involve leverage can result in losses that greatly exceed the amount originally invested. |
• | Liquidity Risk – Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk in the normal course of pursuing its investment objective through its 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 investments and foreign currency transactions” on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to take a positive outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the period, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on purchased and sold forward contracts during the period ended December 31, 2014.
Fund | Purchased | Sold | ||||||||
Janus Global Bond Fund | $ | 39,223,684 | $ | 145,436,578 | ||||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2014.
Fair Value of Derivative Instruments as of December 31, 2014
Derivatives not accounted for as | Asset Derivatives | Liability Derivatives | ||||||||||
hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Janus Global Bond Fund | ||||||||||||
Currency Contracts | Forward currency contracts | �� | $ | 1,136,226 | Forward currency contracts | $ | 194,298 | |||||
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The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2014.
The effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2014
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as | Investments and foreign | |||
hedging instruments | currency transactions | |||
Janus Global Bond Fund | ||||
Currency Contracts | $ | 9,491,567 | ||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||
Investments, foreign | ||||
currency translations and | ||||
Derivatives not accounted for as | non-interested Trustees’ | |||
hedging instruments | deferred compensation | |||
Janus Global Bond Fund | ||||
Currency Contracts | $ | 1,173,778 | ||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions.
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Notes to Financial Statements (unaudited) (continued)
Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Emerging Market Investing
Within the parameters of its specific investment policies, the Fund, may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” Investing in emerging markets may involve certain risks and considerations not typically associated with investing in the United States and imposes risks greater than, or in addition to, the risks associated with investing in securities of more developed foreign countries. Emerging markets securities are exposed to a number of additional risks, which may result from less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 |
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specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of December 31, 2014” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Assest or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
JPMorgan Chase & Co. | $ | 1,136,226 | $ | (194,298) | $ | – | $ | 941,928 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
JPMorgan Chase & Co. | $ | 194,298 | $ | (194,298) | $ | – | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund will segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its
30 | DECEMBER 31, 2014
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cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s 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).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Bond Fund | First $ | 1 Billion | 0.60 | |||||||
Next $ | 1 Billion | 0.55 | ||||||||
Over $ | 2 Billion | 0.50 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
Janus Global Bond Fund | 0.66 | 0.75 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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Notes to Financial Statements (unaudited) (continued)
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014
32 | DECEMBER 31, 2014
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on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Bond Fund | $ | 4,798 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Bond Fund | $ | 231 | ||||
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Global Bond Fund - Class A Shares | - | % | - | % | ||||||
Janus Global Bond Fund - Class C Shares | - | - | ||||||||
Janus Global Bond Fund - Class D Shares | - | - | ||||||||
Janus Global Bond Fund - Class I Shares | - | - | ||||||||
Janus Global Bond Fund - Class N Shares | 96 | 67 | ||||||||
Janus Global Bond Fund - Class S Shares | 99 | 0 | ||||||||
Janus Global Bond Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ
Janus Investment Fund | 33
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Notes to Financial Statements (unaudited) (continued)
from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships, and investments in passive foreign investment companies.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Global Bond Fund | $ | 365,086,020 | $ | 2,559,649 | $ | (15,386,291) | $ | (12,826,642) | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Global Bond Fund | $ | (3,446,416) | $ | (1,773,994) | $ | (5,220,410) | |||||||||
6. | Capital Share Transactions |
Janus Global | ||||||||||
Bond Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 2,583,403 | 451,408 | ||||||||
Reinvested dividends and distributions | 101,084 | 7,785 | ||||||||
Shares repurchased | (197,862) | (342,260) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,486,625 | 116,933 | ||||||||
Shares Outstanding, Beginning of Period | 588,783 | 471,850 | ||||||||
Shares Outstanding, End of Period | 3,075,408 | 588,783 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 564,888 | 87,881 | ||||||||
Reinvested dividends and distributions | 18,920 | 1,804 | ||||||||
Shares repurchased | (64,313) | (132,585) | ||||||||
Net Increase/(Decrease) in Fund Shares | 519,495 | (42,900) | ||||||||
Shares Outstanding, Beginning of Period | 124,733 | 167,633 | ||||||||
Shares Outstanding, End of Period | 644,228 | 124,733 |
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Janus Global | ||||||||||
Bond Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 438,568 | 765,775 | ||||||||
Reinvested dividends and distributions | 50,180 | 25,162 | ||||||||
Shares repurchased | (482,818) | (558,517) | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,930 | 232,420 | ||||||||
Shares Outstanding, Beginning of Period | 1,234,961 | 1,002,541 | ||||||||
Shares Outstanding, End of Period | 1,240,891 | 1,234,961 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 6,597,629 | 780,117 | ||||||||
Reinvested dividends and distributions | 142,958 | 168,526 | ||||||||
Shares repurchased | (2,725,533) | (24,465,266) | ||||||||
Net Increase/(Decrease) in Fund Shares | 4,015,054 | (23,516,623) | ||||||||
Shares Outstanding, Beginning of Period | 282,034 | 23,798,657 | ||||||||
Shares Outstanding, End of Period | 4,297,088 | 282,034 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 1,258,975 | 24,192,805 | ||||||||
Reinvested dividends and distributions | 1,037,130 | 542,989 | ||||||||
Shares repurchased | (1,079,439) | (1,203,788) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,216,666 | 23,532,006 | ||||||||
Shares Outstanding, Beginning of Period | 23,532,006 | N/A | ||||||||
Shares Outstanding, End of Period | 24,748,672 | 23,532,006 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 64 | 394 | ||||||||
Reinvested dividends and distributions | 684 | 1,585 | �� | |||||||
Shares repurchased | (24,442) | (54,401) | ||||||||
Net Increase/(Decrease) in Fund Shares | (23,694) | (52,422) | ||||||||
Shares Outstanding, Beginning of Period | 39,353 | 91,775 | ||||||||
Shares Outstanding, End of Period | 15,659 | 39,353 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,182,365 | 1,119,082 | ||||||||
Reinvested dividends and distributions | 71,617 | 21,213 | ||||||||
Shares repurchased | (582,605) | (729,190) | ||||||||
Net Increase/(Decrease) in Fund Shares | 671,377 | 411,105 | ||||||||
Shares Outstanding, Beginning of Period | 1,114,810 | 703,705 | ||||||||
Shares Outstanding, End of Period | 1,786,187 | 1,114,810 |
(1) | Period from October 28, 2013 (inception date) through June 30, 2014 for Class N Shares. |
7. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Bond Fund | $ | 199,091,667 | $ | 169,979,300 | $ | 118,815,612 | $ | 57,475,690 | ||||||
Janus Investment Fund | 35
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Notes to Financial Statements (unaudited) (continued)
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
36 | DECEMBER 31, 2014
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 47
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
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Notes
Janus Investment Fund | 53
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81308 | 125-24-93023 02-15 |
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semiannual report
December 31, 2014
Janus Global Unconstrained Bond Fund (formerly named Janus Unconstrained Bond Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Unconstrained Bond Fund
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Janus Global Unconstrained Bond Fund (unaudited)
FUND SNAPSHOT This dynamic, opportunistic bond fund seeks to achieve long-term positive returns in diverse market environments over full market cycles. The Fund invests broadly across global fixed income markets and is not constrained by benchmark-specific guidelines. The unconstrained nature of the strategy allows us to fully express our high-conviction active views and avoid areas of the market where we see greater downside risk. |
PERFORMANCE OVERVIEW
For the semi-annual period ending December 31, 2014, the Janus Global Unconstrained Bond Fund’s Class I Shares returned -1.46% compared with 0.11% for its benchmark, the 3-Month USD LIBOR.
MARKET ENVIRONMENT
Global market trends – tumbling crude oil prices, falling sovereign rates and a strengthening U.S. dollar – built into a crescendo as the last three months of the year progressed. The decline in crude oil prices was the most dramatic. The price of the light sweet crude contract nearest to delivery on the New York Mercantile Exchange fell 42% during the fourth quarter. Amid slower global growth, oil demand has softened just when the U.S. shale oil boom has elevated supply. The plunge in oil prices hit major oil-producing economies within emerging markets (EM) as well as their currencies, like those of Russia and Brazil. That further weakened a fragile global economy and heightened volatility in the equity and fixed income markets at times during the period.
However, U.S. growth remained steady, and by period end, the Federal Reserve (Fed) signaled it was on track to increase its benchmark lending rate in 2015. In contrast, key central banks in developed economies like the eurozone and Japan were loosening monetary policy to boost growth and combat the decline in inflation. Central bank policy and economic growth divergence fueled U.S. dollar strength against most major currencies. Even amid stronger U.S. growth and the Fed on track to raise rates, long-end Treasury yields declined. Foreign investors have stepped up Treasury purchases, attracted to their higher U.S. dollar-denominated yields versus those of sovereigns abroad. Moreover, long-end yields of developed market sovereigns fell globally, reflecting investor expectations that global growth would remain challenged and inflation tame.
PERFORMANCE DISCUSSION
During the first half of the semi-annual period, the Fund employed a different investment approach and was managed by a different team than it has currently.
Underperformance was driven by its corporate credit exposure, specifically the Fund’s exposure to certain high-yield credits that struggled during the period’s first half.
On October 6, 2014, a new portfolio manager took the helm, and the Fund adopted its current investment approach. For this reason, the remainder of the performance discussion will focus on the second part of the semi-annual period.
Without traditional benchmark constraints, the Fund’s new investment approach seeks to achieve long-term positive returns regardless of market conditions. To this end, it invests broadly across asset classes and global financial markets.
During the period’s second half, the Fund’s largest exposure was within corporate credit, both investment grade and high yield, with shorter-dated maturities of one to three years. These cash bonds create the Fund’s yield foundation, which is above that offered by Treasurys with similar maturities. They also account for nearly all of the duration exposure of the portfolio. The shorter duration is intended to provide some protection against the interest rate and volatility risk associated with longer-dated credit.
Much of the corporate credit allocation is in the “crossover” area of the asset class, with ratings just above or just beneath investment grade. We believe select companies in the “crossover” area are transforming their balance sheets to boost their ratings, though their efforts have yet to be recognized in the prices of their bonds.
The Fund was diversified across credit sectors and geographical regions. Its energy sector exposure detracted the most from the Fund’s performance. Its exposure to U.S. dollar-denominated Russian and Brazilian corporate bonds also detracted. The sharp decline in crude oil prices during the period as well as the declines
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Janus Global Unconstrained Bond Fund (unaudited)
of those countries’ currencies against the U.S. dollar drove underperformance here. Both Russia and Brazil are major oil producers, and that affected both the Fund’s energy and non-energy related names of those countries. Several of the Fund’s other credit sector allocations contributed to positive returns, namely telecommunications, media, technology, financials and retail.
Elsewhere, the strategy employed its “Structural Alpha” approach, which is intended to help provide excess returns regardless of prevailing market conditions. Given the relatively recent incorporation of our Structural Alpha approach, this portion has played a relatively smaller role in the Fund, thus far.
The Fund’s Structural Alpha had three components with varying weightings: Credit default swaps (CDS), volatility sales and relative value trades. Our strategy of selling volatility across multiple markets, such as fixed income, equities, and foreign exchange, was a positive contributor. We believe concerns about market volatility are inflated, and consequently, volatility options are mispriced. The strategy mainly has consisted of selling short-dated out-of-the money options. While returns on volatility sales in equity and foreign exchange were generally flat during the period, our returns from Treasury options were additive.
Our CDS positions were a detractor from performance overall. In simple terms, CDS can be considered insurance against the credit issuer defaulting. As in the case with volatility, we believe this insurance tends to be overpriced, and we sell the default protection on sovereign debt, broad market sectors and on investment-grade companies. CDS comes with limited duration risk and the premiums collected when selling CDS are one of the primary components of Structural Alpha. The CDS exposure to the sovereign debt of Russia, China, Mexico, and Brazil underperformed while the CDS on the corporate credit of U.S. financials slightly contributed to performance.
Lastly, relative value trades are also an important component of the Structural Alpha approach. Relative value trades attempt to take advantage of mispriced relationships on a sovereign yield curve and are opportunities to generate positive cash flows over the life of the trades. The Fund purchased medium-term interest-rate futures and sold longer-term interest rate futures with the expectation that the long end of the yield curve would steepen while the short end of the curve would remain anchored. These positions were detractors to performance.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Thank you for your investment in Janus Global Unconstrained Bond Fund.
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(unaudited)
Janus Global Unconstrained Bond Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 1.3 Years | |
Average Effective Duration* | 2.0 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 1.37% | |
With Reimbursement | 1.25% | |
Class A Shares at MOP | ||
Without Reimbursement | 1.30% | |
With Reimbursement | 1.19% | |
Class C Shares*** | ||
Without Reimbursement | 0.66% | |
With Reimbursement | 0.66% | |
Class D Shares | ||
Without Reimbursement | 0.93% | |
With Reimbursement | 1.34% | |
Class I Shares | ||
Without Reimbursement | 1.50% | |
With Reimbursement | 1.50% | |
Class N Shares | ||
Without Reimbursement | 1.61% | |
With Reimbursement | 1.53% | |
Class S Shares | ||
Without Reimbursement | 1.11% | |
With Reimbursement | 0.99% | |
Class T Shares | ||
Without Reimbursement | 1.36% | |
With Reimbursement | 1.28% | |
Number of Bonds/Notes | 154 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AAA | 0.4% | |
AA | 9.2% | |
A | 5.8% | |
BBB | 16.4% | |
BB | 10.8% | |
B | 0.9% | |
CCC | 0.1% | |
D | 0.6% | |
Not Rated | 52.3% | |
Other | 3.5% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18b11.gif)
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18p11.gif)
Emerging markets comprised 12.1% of total net assets.
Janus Investment Fund | 3
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18m11.gif)
Expense Ratios – per the October 28, 2014 | |||||||
Cumulative Total Return – for the periods ended December 31, 2014 | prospectuses (estimated for the fiscal year) | ||||||
Fiscal | Since | Total Annual Fund | |||||
Year-to-date | Inception* | Operating Expenses | |||||
Janus Global Unconstrained Bond Fund – Class A Shares | |||||||
NAV | –1.60% | –1.50% | 1.01% | ||||
MOP | –6.28% | –6.19% | |||||
Janus Global Unconstrained Bond Fund – Class C Shares | |||||||
NAV | –1.98% | –1.88% | 1.77% | ||||
CDSC | –2.96% | –2.86% | |||||
Janus Global Unconstrained Bond Fund – Class D Shares(1) | –1.55% | –1.45% | 0.96% | ||||
Janus Global Unconstrained Bond Fund – Class I Shares | –1.46% | –1.36% | 0.76% | ||||
Janus Global Unconstrained Bond Fund – Class N Shares | –1.47% | –1.37% | 0.75% | ||||
Janus Global Unconstrained Bond Fund – Class S Shares | –1.74% | –1.64% | 1.25% | ||||
Janus Global Unconstrained Bond Fund – Class T Shares | –1.68% | –1.58% | 1.00% | ||||
3-Month USD LIBOR | 0.11% | 0.14% | |||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
Performance for very short time periods may not be indicative of future performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details
Fixed income securities are subject to interest rate, inflation, credit and default risk. As interest rates rise, bond prices usually fall, and vice versa. High-yield bonds, or “junk” bonds, involve a greater risk of default and price volatility. Foreign securities, including sovereign debt, are subject to currency fluctuations, political and economic uncertainty and increased volatility, all of which are magnified in emerging markets.
Derivatives involve risks in addition to the risks of the underlying securities, including gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. Short sales are speculative transactions with potentially unlimited losses, and the use of leverage can magnify the effect of losses. No investment strategy can ensure a profit or protect against loss.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Until the earlier of three years from inception or the Fund’s assets exceeding the first fee breakpoint, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Rankings are not provided for Funds that are less than one year old.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective October 6, 2014, the name of the Fund changed from Janus Unconstrained Bond Fund to Janus Global Unconstrained Bond Fund, and Bill Gross is Portfolio Manager of the Fund.
* | The Fund’s inception date – May 27, 2014 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | �� | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | |||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 984.00 | $ | 5.65 | $ | 1,000.00 | $ | 1,019.51 | $ | 5.75 | 1.13% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 980.20 | $ | 9.03 | $ | 1,000.00 | $ | 1,016.08 | $ | 9.20 | 1.81% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 984.50 | $ | 5.05 | $ | 1,000.00 | $ | 1,020.11 | $ | 5.14 | 1.01% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 985.40 | $ | 4.30 | $ | 1,000.00 | $ | 1,020.87 | $ | 4.38 | 0.86% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 985.30 | $ | 4.25 | $ | 1,000.00 | $ | 1,020.92 | $ | 4.33 | 0.85% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 982.60 | $ | 7.05 | $ | 1,000.00 | $ | 1,018.10 | $ | 7.17 | 1.41% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 983.20 | $ | 5.55 | $ | 1,000.00 | $ | 1,019.61 | $ | 5.65 | 1.11% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 4.6% | ||||||||||
$ | 1,300,493 | Alternative Loan Trust 2006-14CB 6.0000%, 6/25/36† | $ | 1,151,061 | ||||||
886,673 | Alternative Loan Trust 2006-45T1 5.5000%, 2/25/37 | 722,468 | ||||||||
4,142,762 | Alternative Loan Trust 2006-45T1 6.0000%, 2/25/37† | 3,500,779 | ||||||||
2,962,862 | Alternative Loan Trust 2006-5T2 6.0000%, 4/25/36† | 2,480,357 | ||||||||
1,348,855 | Alternative Loan Trust 2007-9T1 5.5000%, 5/25/22† | 1,243,803 | ||||||||
10,987,690 | Banc of America Alternative Loan Trust 2003-5 5.5000%, 7/25/33 | 11,166,350 | ||||||||
3,828,619 | Bear Stearns ALT-A Trust 2005-4 2.7161%, 5/25/35†,‡ | 3,164,438 | ||||||||
11,302,191 | CSMC Mortgage-Backed Trust 2006-9 6.0000%, 11/25/36† | 11,400,757 | ||||||||
348,193 | Equity One Mortgage Pass-Through Trust 2003-4 5.2434%, 10/25/34‡ | 315,939 | ||||||||
661,114 | GMACM Mortgage Loan Trust 2005-J1 5.5000%, 12/25/35† | 667,399 | ||||||||
1,127,535 | GSR Mortgage Loan Trust 2005-9F 6.0000%, 1/25/36† | 1,013,743 | ||||||||
1,408,722 | GSR Mortgage Loan Trust 2006-7F 6.2500%, 8/25/36† | 1,090,287 | ||||||||
1,748,075 | IndyMac INDA Mortgage Loan Trust 2006-AR1 4.9496%, 8/25/36‡ | 1,730,729 | ||||||||
5,749,482 | JP Morgan Mortgage Trust 2005-S3 5.7500%, 1/25/36† | 5,377,117 | ||||||||
2,822,247 | JP Morgan Mortgage Trust 2007-S1 6.0000%, 3/25/37† | 2,478,859 | ||||||||
982,444 | Residential Asset Securitization Trust 2005-A15 6.0000%, 2/25/36† | 775,435 | ||||||||
6,753,621 | Residential Asset Securitization Trust 2007-A1 6.0000%, 3/25/37† | 4,843,501 | ||||||||
3,359,173 | WaMu Mortgage Pass-Through Certificates Series 2006-AR6 Trust 4.5673%, 8/25/36†,‡ | 3,056,156 | ||||||||
8,678,601 | WaMu Mortgage Pass-Through Certificates Series 2007-HY5 Trust 2.1481%, 5/25/37†,‡ | 7,474,237 | ||||||||
1,931,380 | Wells Fargo Mortgage Backed Securities 2007-8 Trust 6.0000%, 7/25/37† | 1,426,282 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $65,448,153) | 65,079,697 | |||||||||
Common Stocks – 6.3% | ||||||||||
Auto Components – 2.3% | ||||||||||
313,963 | TRW Automotive Holdings Corp.* | 32,291,095 | ||||||||
Chemicals – 3.5% | ||||||||||
366,929 | Sigma-Aldrich Corp. | 50,368,344 | ||||||||
Real Estate Investment Trusts (REITs) – 0.5% | ||||||||||
190,447 | American Capital Agency Corp.† | 4,157,458 | ||||||||
280,893 | Annaly Capital Management, Inc.† | 3,036,453 | ||||||||
| ||||||||||
7,193,911 | ||||||||||
Total Common Stocks (cost $89,881,190) | 89,853,350 | |||||||||
Corporate Bonds – 68.3% | ||||||||||
Banking – 9.3% | ||||||||||
$ | 13,433,000 | Ally Financial, Inc. 8.3000%, 2/12/15† | 13,500,165 | |||||||
35,206,000 | Ally Financial, Inc. 4.6250%, 6/26/15† | 35,458,950 | ||||||||
18,000,000 | Ally Financial, Inc. 3.1250%, 1/15/16† | 18,045,000 | ||||||||
7,980,000 | Ally Financial, Inc. 3.5000%, 7/18/16† | 8,069,775 | ||||||||
4,497,000 | Ally Financial, Inc. 5.5000%, 2/15/17† | 4,721,850 | ||||||||
2,098,000 | Ally Financial, Inc. 3.2500%, 9/29/17 | 2,098,000 | ||||||||
514,000 | Bank of America Corp. 5.2500%, 12/1/15 | 532,474 | ||||||||
2,906,000 | Bank of America Corp. 6.0500%, 5/16/16† | 3,077,239 | ||||||||
11,275,000 | Bank of America Corp. 5.7500%, 8/15/16† | 12,003,252 | ||||||||
1,553,000 | Bank of America Corp. 5.7000%, 5/2/17† | 1,678,802 | ||||||||
6,000,000 | Capital One Financial Corp. 1.0000%, 11/6/15† | 5,994,288 | ||||||||
3,000,000 | China Merchants Bank Co., Ltd., Hong Kong 2.3750%, 6/12/17† | 2,984,793 | ||||||||
7,769,000 | Citigroup, Inc. 4.8750%, 5/7/15 | 7,872,056 | ||||||||
2,848,000 | Citigroup, Inc. 1.7000%, 7/25/16† | 2,867,506 | ||||||||
3,765,000 | Countrywide Financial Corp. 6.2500%, 5/15/16† | 3,995,953 | ||||||||
500,000 | HSBC Bank Brasil SA – Banco Multiplo 4.0000%, 5/11/16 (144A) | 507,750 | ||||||||
1,283,000 | Royal Bank of Scotland Group PLC 5.0500%, 1/8/15† | 1,283,257 | ||||||||
1,560,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15† | 1,575,619 | ||||||||
2,660,000 | Royal Bank of Scotland PLC 3.9500%, 9/21/15† | 2,714,753 | ||||||||
1,424,000 | Santander Holdings USA, Inc. 4.6250%, 4/19/16† | 1,483,382 | ||||||||
2,700,000 | Wells Fargo & Co. 5.1250%, 9/15/16† | 2,879,825 | ||||||||
| ||||||||||
133,344,689 | ||||||||||
Basic Industry – 2.7% | ||||||||||
3,771,000 | ArcelorMittal 4.2500%, 8/5/15 | 3,827,565 | ||||||||
1,267,000 | ArcelorMittal 4.2500%, 3/1/16† | 1,298,675 | ||||||||
18,397,000 | Ashland, Inc. 3.0000%, 3/15/16† | 18,488,985 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Basic Industry – (continued) | ||||||||||
$ | 8,325,000 | Ashland, Inc. 3.8750%, 4/15/18† | $ | 8,408,250 | ||||||
6,000,000 | Eastman Chemical Co. 3.0000%, 12/15/15 | 6,113,718 | ||||||||
| ||||||||||
38,137,193 | ||||||||||
Brokerage – 0.3% | ||||||||||
3,814,000 | Jefferies Group LLC 3.8750%, 11/9/15 | 3,894,594 | ||||||||
Capital Goods – 2.8% | ||||||||||
5,283,000 | CNH Industrial America LLC 7.2500%, 1/15/16† | 5,481,113 | ||||||||
12,000,000 | CNH Industrial Capital LLC 3.8750%, 11/1/15† | 12,060,000 | ||||||||
3,300,000 | Hanson, Ltd. 6.1250%, 8/15/16† | 3,498,000 | ||||||||
3,289,000 | Masco Corp. 4.8000%, 6/15/15† | 3,339,677 | ||||||||
11,315,000 | Owens-Brockway Glass Container, Inc. 7.3750%, 5/15/16† | 11,965,612 | ||||||||
3,798,000 | SPX Corp. 6.8750%, 9/1/17† | 4,149,315 | ||||||||
| ||||||||||
40,493,717 | ||||||||||
Communications – 8.5% | ||||||||||
3,000,000 | CBS Corp. 7.6250%, 1/15/16† | 3,201,771 | ||||||||
6,000,000 | CenturyLink, Inc. 6.0000%, 4/1/17† | 6,375,000 | ||||||||
7,465,000 | CenturyLink, Inc. 5.1500%, 6/15/17† | 7,819,587 | ||||||||
12,000,000 | DIRECTV Holdings LLC / DIRECTV Financing Co., Inc. 3.1250%, 2/15/16† | 12,272,376 | ||||||||
9,757,000 | DIRECTV Holdings LLC / DIRECTV Financing Co., Inc. 3.5000%, 3/1/16† | 10,011,502 | ||||||||
37,533,000 | DISH DBS Corp. 7.7500%, 5/31/15† | 38,507,147 | ||||||||
29,893,000 | DISH DBS Corp. 7.1250%, 2/1/16† | 31,413,922 | ||||||||
3,189,000 | Gannett Co., Inc. 6.3750%, 9/1/15† | 3,284,670 | ||||||||
4,090,000 | PCCW-HKT Capital No 4, Ltd. 4.2500%, 2/24/16 | 4,214,295 | ||||||||
3,720,000 | Verizon Communications, Inc. 2.5000%, 9/15/16† | 3,802,491 | ||||||||
| ||||||||||
120,902,761 | ||||||||||
Consumer Cyclical – 12.7% | ||||||||||
56,246,000 | Alibaba Group Holding, Ltd. 3.6000%, 11/28/24 (144A) | 55,776,163 | ||||||||
26,233,000 | Amazon.com, Inc. 0.6500%, 11/27/15 | 26,214,768 | ||||||||
6,905,000 | Amazon.com, Inc. 3.3000%, 12/5/21 | 6,999,536 | ||||||||
5,081,000 | Carnival Corp. 1.2000%, 2/5/16† | 5,078,048 | ||||||||
2,000,000 | Dillard’s, Inc. 6.6250%, 1/15/18† | 2,190,000 | ||||||||
3,768,000 | Dillard’s, Inc. 7.1300%, 8/1/18† | 4,220,160 | ||||||||
1,267,000 | DR Horton, Inc. 4.7500%, 5/15/17† | 1,324,015 | ||||||||
4,000,000 | Ford Motor Credit Co. LLC 7.0000%, 4/15/15† | 4,068,828 | ||||||||
2,487,000 | Ford Motor Credit Co. LLC 2.7500%, 5/15/15 | 2,503,640 | ||||||||
17,095,000 | Ford Motor Credit Co. LLC 2.5000%, 1/15/16† | 17,286,225 | ||||||||
4,000,000 | Ford Motor Credit Co. LLC 3.9840%, 6/15/16† | 4,141,608 | ||||||||
1,425,000 | Ford Motor Credit Co. LLC 8.0000%, 12/15/16† | 1,594,792 | ||||||||
15,291,000 | General Motors Financial Co., Inc. 2.7500%, 5/15/16† | 15,539,479 | ||||||||
1,267,000 | Lennar Corp. 4.7500%, 12/15/17† | 1,298,675 | ||||||||
24,799,000 | MGM Resorts International 6.6250%, 7/15/15† | 25,232,982 | ||||||||
1,000,000 | MGM Resorts International 10.0000%, 11/1/16† | 1,112,500 | ||||||||
2,000,000 | Service Corp. International 6.7500%, 4/1/16† | 2,085,000 | ||||||||
1,641,000 | Western Union Co. 2.3750%, 12/10/15 | 1,656,058 | ||||||||
2,650,000 | Wyndham Worldwide Corp. 2.9500%, 3/1/17† | 2,706,270 | ||||||||
| ||||||||||
181,028,747 | ||||||||||
Consumer Non-Cyclical – 3.0% | ||||||||||
6,912,000 | Becton Dickinson and Co. 0.6906%, 6/15/16‡ | 6,913,645 | ||||||||
1,424,000 | Boston Scientific Corp. 6.4000%, 6/15/16† | 1,523,660 | ||||||||
6,162,000 | Constellation Brands, Inc. 7.2500%, 9/1/16† | 6,654,960 | ||||||||
1,267,000 | Constellation Brands, Inc. 7.2500%, 5/15/17† | 1,400,035 | ||||||||
1,283,000 | Fresenius Medical Care U.S. Finance, Inc. 6.8750%, 7/15/17† | 1,401,678 | ||||||||
1,000,000 | HCA, Inc. 6.3750%, 1/15/15† | 1,000,000 | ||||||||
6,000,000 | Quest Diagnostics, Inc. 3.2000%, 4/1/16† | 6,147,510 | ||||||||
3,664,000 | Reynolds American, Inc. 1.0500%, 10/30/15† | 3,667,990 | ||||||||
4,000,000 | Safeway, Inc. 3.4000%, 12/1/16† | 4,063,616 | ||||||||
4,133,000 | Safeway, Inc. 6.3500%, 8/15/17† | 4,392,073 | ||||||||
6,285,000 | Zoetis, Inc. 1.1500%, 2/1/16† | 6,279,387 | ||||||||
| ||||||||||
43,444,554 | ||||||||||
Electric – 1.7% | ||||||||||
1,989,000 | AES Corp. 7.7500%, 10/15/15 | 2,073,533 | ||||||||
673,000 | Duquesne Light Holdings, Inc. 5.5000%, 8/15/15† | 691,133 | ||||||||
2,000,000 | PPL Energy Supply LLC 5.7000%, 10/15/15† | 2,043,552 | ||||||||
4,000,000 | PPL Energy Supply LLC 6.5000%, 5/1/18† | 4,201,032 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Electric – (continued) | ||||||||||
$ | 6,820,000 | PPL WEM Holdings, Ltd. 3.9000%, 5/1/16 (144A)† | $ | 7,021,217 | ||||||
3,225,000 | PSEG Power LLC 5.5000%, 12/1/15† | 3,358,318 | ||||||||
5,382,000 | TECO Finance, Inc. 4.0000%, 3/15/16† | 5,570,628 | ||||||||
| ||||||||||
24,959,413 | ||||||||||
Energy – 9.3% | ||||||||||
1,424,000 | Anadarko Petroleum Corp. 5.9500%, 9/15/16† | 1,522,797 | ||||||||
1,918,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16† | 1,913,205 | ||||||||
12,000,000 | Gazprom OAO Via Gaz Capital SA 4.3000%, 11/12/15 (144A)† | 11,700,000 | ||||||||
20,732,000 | Gazprom OAO Via Gaz Capital SA 5.0920%, 11/29/15 (144A)† | 20,317,360 | ||||||||
6,630,000 | Kinder Morgan Energy Partners LP 3.5000%, 3/1/16† | 6,766,346 | ||||||||
13,156,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16† | 13,657,507 | ||||||||
4,000,000 | Lukoil International Finance BV 6.3560%, 6/7/17 (144A)† | 3,792,360 | ||||||||
11,505,000 | Marathon Petroleum Corp. 3.5000%, 3/1/16† | 11,789,680 | ||||||||
7,346,000 | ONEOK Partners LP 3.2500%, 2/1/16† | 7,493,089 | ||||||||
3,044,000 | Pioneer Natural Resources Co. 5.8750%, 7/15/16† | 3,232,971 | ||||||||
1,500,000 | Pioneer Natural Resources Co. 6.6500%, 3/15/17† | 1,643,322 | ||||||||
9,125,000 | Rockies Express Pipeline LLC 3.9000%, 4/15/15 (144A)† | 9,079,375 | ||||||||
13,500,000 | Sabine Pass LNG LP 7.5000%, 11/30/16† | 14,040,000 | ||||||||
1,424,000 | Tennessee Gas Pipeline Co. LLC 8.0000%, 2/1/16† | 1,517,719 | ||||||||
4,000,000 | Tennessee Gas Pipeline Co. LLC 7.5000%, 4/1/17† | 4,468,952 | ||||||||
4,722,000 | Transocean, Inc. 4.9500%, 11/15/15 | 4,733,829 | ||||||||
14,429,000 | Transocean, Inc. 5.0500%, 12/15/16† | 14,498,086 | ||||||||
| ||||||||||
132,166,598 | ||||||||||
Finance Companies – 7.2% | ||||||||||
3,121,000 | Air Lease Corp. 4.5000%, 1/15/16 | 3,206,827 | ||||||||
1,283,000 | Aircastle, Ltd. 6.7500%, 4/15/17† | 1,369,603 | ||||||||
37,165,000 | CIT Group, Inc. 4.7500%, 2/15/15 (144A)† | 37,181,779 | ||||||||
1,267,000 | CIT Group, Inc. 5.0000%, 5/15/17† | 1,314,513 | ||||||||
7,058,000 | CIT Group, Inc. 4.2500%, 8/15/17† | 7,199,160 | ||||||||
1,424,000 | GATX Corp. 3.5000%, 7/15/16† | 1,469,175 | ||||||||
6,000,000 | International Lease Finance Corp. 4.8750%, 4/1/15† | 6,043,500 | ||||||||
8,213,000 | International Lease Finance Corp. 8.6250%, 9/15/15† | 8,562,052 | ||||||||
4,000,000 | iStar Financial, Inc. 6.0500%, 4/15/15† | 4,040,000 | ||||||||
3,850,000 | Navient Corp. 5.0000%, 4/15/15† | 3,878,875 | ||||||||
1,261,000 | Navient Corp. 3.8750%, 9/10/15 | 1,270,458 | ||||||||
26,278,000 | Navient Corp. 6.2500%, 1/25/16† | 27,318,025 | ||||||||
| ||||||||||
102,853,967 | ||||||||||
Financial – 0.3% | ||||||||||
4,000,000 | Icahn Enterprises LP / Icahn Enterprises Finance Corp. 3.5000%, 3/15/17† | 4,000,000 | ||||||||
Government Sponsored – 1.3% | ||||||||||
5,710,000 | Eksportfinans ASA 2.0000%, 9/15/15 | 5,716,681 | ||||||||
2,700,000 | Eksportfinans ASA 2.3750%, 5/25/16† | 2,706,318 | ||||||||
5,371,000 | Eksportfinans ASA 5.5000%, 5/25/16† | 5,611,889 | ||||||||
4,050,000 | Eksportfinans ASA 5.5000%, 6/26/17† | 4,315,721 | ||||||||
| ||||||||||
18,350,609 | ||||||||||
Insurance – 0.5% | ||||||||||
6,000,000 | Kemper Corp. 6.0000%, 5/15/17† | 6,481,986 | ||||||||
Owned No Guarantee – 5.1% | ||||||||||
13,307,000 | Petrobras Global Finance BV 2.0000%, 5/20/16† | 12,710,181 | ||||||||
29,000,000 | Petrobras International Finance Co. SA 3.8750%, 1/27/16† | 28,446,605 | ||||||||
6,807,000 | Petrobras International Finance Co. SA 6.1250%, 10/6/16 | 6,828,170 | ||||||||
5,615,000 | Petrobras International Finance Co. SA 3.5000%, 2/6/17† | 5,361,820 | ||||||||
1,283,000 | Rosneft Finance SA 6.2500%, 2/2/15 (144A)† | 1,278,509 | ||||||||
6,000,000 | Sberbank of Russia Via SB Capital SA 5.4990%, 7/7/15† | 5,940,000 | ||||||||
12,000,000 | VTB Bank OJSC Via VTB Capital SA 6.4650%, 3/4/15 (144A)† | 11,916,984 | ||||||||
| ||||||||||
72,482,269 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.9% | ||||||||||
3,743,000 | HCP, Inc. 3.7500%, 2/1/16† | 3,846,842 | ||||||||
3,153,000 | Kimco Realty Corp. 5.5840%, 11/23/15† | 3,278,240 | ||||||||
6,000,000 | Realty Income Corp. 5.5000%, 11/15/15 | 6,228,624 | ||||||||
| ||||||||||
13,353,706 | ||||||||||
Technology – 2.0% | ||||||||||
787,000 | Dell, Inc. 2.3000%, 9/10/15 | 787,748 | ||||||||
5,615,000 | Hewlett-Packard Co. 2.2000%, 12/1/15† | 5,670,426 | ||||||||
5,413,000 | Hewlett-Packard Co. 2.6500%, 6/1/16† | 5,515,641 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Technology – (continued) | ||||||||||
$ | 8,748,000 | Hewlett-Packard Co. 3.0000%, 9/15/16 | $ | 8,982,245 | ||||||
1,425,000 | Hewlett-Packard Co. 3.3000%, 12/9/16† | 1,471,633 | ||||||||
889,000 | Juniper Networks, Inc. 3.1000%, 3/15/16 | 906,574 | ||||||||
4,841,000 | Pitney Bowes, Inc. 4.7500%, 1/15/16† | 5,006,194 | ||||||||
| ||||||||||
28,340,461 | ||||||||||
Transportation – 0.7% | ||||||||||
10,139,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A)† | 10,278,533 | ||||||||
Total Corporate Bonds (cost $981,769,079) | 974,513,797 | |||||||||
U.S. Treasury Notes/Bonds – 7.0% | ||||||||||
85,761,738 | 2.3750%, 1/15/25†,ÇÇ (cost $101,034,117) | 100,689,597 | ||||||||
Investment Companies – 10.4% | ||||||||||
Closed-End Funds – 0.9% | ||||||||||
385,239 | BlackRock Build America Bond Trust† | 8,536,896 | ||||||||
104,936 | PIMCO Corporate & Income Opportunity Fund | 1,668,483 | ||||||||
12,584 | PIMCO Corporate & Income Strategy Fund | 190,144 | ||||||||
79,500 | PIMCO Dynamic Income Fund | 2,443,830 | ||||||||
| ||||||||||
12,839,353 | ||||||||||
Exchange-Traded Funds (ETFs) – 0.2% | ||||||||||
100,000 | PowerShares Build America Bond Portfolio† | 3,044,000 | ||||||||
Money Markets – 9.3% | ||||||||||
131,958,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ | 131,958,000 | ||||||||
Total Investment Companies (cost $147,875,061) | 147,841,353 | |||||||||
Total Investments (total cost $1,386,007,600) – 96.6% | 1,377,977,794 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 3.4% | 48,317,977 | |||||||||
Net Assets – 100% | $ | 1,426,295,771 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||||
Country | Value | Securities | ||||||||
United States | $ | 1,172,252,648 | 85 | .1% | ||||||
China | 58,760,956 | 4 | .3 | |||||||
Russia | 54,945,213 | 4 | .0 | |||||||
Brazil | 53,854,526 | 3 | .9 | |||||||
Norway | 18,350,609 | 1 | .3 | |||||||
United Kingdom | 9,071,629 | 0 | .6 | |||||||
Luxembourg | 5,126,240 | 0 | .4 | |||||||
Hong Kong | 4,214,295 | 0 | .3 | |||||||
Germany | 1,401,678 | 0 | .1 | |||||||
Total | $ | 1,377,977,794 | 100 | .0% | ||||||
Schedule of Futures – Long
Unrealized | ||||||
Appreciation/ | ||||||
Description | (Depreciation) | |||||
10-Year U.S. Treasury Note expires March 2015 645 contracts principal amount $81,319,140 value $81,783,984 | $ | 464,844 | ||||
90-Day Eurodollar expires December 2015 690 contracts principal amount $170,964,750 value $170,921,625 | (43,125) | |||||
90-Day Eurodollar expires March 2016 943 contracts principal amount $233,251,050 value $232,968,150 | (282,900) | |||||
U.S. Treasury Long Bond expires March 2015 4,009 contracts principal amount $561,972,281 value $579,551,062 | 17,578,781 | |||||
Total Futures – Long | $ | 17,717,600 | ||||
Schedule of Futures – Short
Unrealized | ||||||
Appreciation/ | ||||||
Description | (Depreciation) | |||||
Euro-Bund expires March 2015 323 contracts principal amount $59,729,085 value $60,936,616 | $ | (1,207,531) | ||||
U.S. Treasury Ultra Bond expires March 2015 686 contracts principal amount $107,778,844 value $113,318,625 | (5,539,781) | |||||
Total Futures – Short | $ | (6,747,312) | ||||
Schedule of Exchange-Traded Written Options – Calls
Description | Value | |||||
10-Year U.S. Treasury Note Future expires February 2015 179 contracts exercise price $127.00 | $ | (151,031) | ||||
10-Year U.S. Treasury Note Future expires February 2015 873 contracts exercise price $128.00 | (422,859) | |||||
10-Year U.S. Treasury Note Future expires February 2015 373 contracts exercise price $128.50 | (139,875) |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Description | Value | |||||
10-Year U.S. Treasury Note Future expires February 2015 3,804 contracts exercise price $129.00 | $ | (1,069,875) | ||||
10-Year U.S. Treasury Note Future expires February 2015 358 contracts exercise price $130.00 | (61,531) | |||||
10-Year U.S. Treasury Note Future expires February 2015 165 contracts exercise price $131.00 | (18,047) | |||||
S&P 500® Future expires March 2015 66 contracts exercise price $2,100.00 | (456,542) | |||||
U.S. Treasury Long Bond Future expires February 2015 1,698 contracts exercise price $150.00 | (583,688) | |||||
U.S. Treasury Note Future expires February 2015 688 contracts exercise price $120.00 | (139,750) | |||||
U.S. Treasury Note Future expires February 2015 179 contracts exercise price $120.50 | (36,359) | |||||
Total Exchange-Traded Written Options – Calls (premiums received $4,507,343) | $ | (3,079,557) | ||||
Schedule of Exchange-Traded Written Options – Puts
Description | Value | |||||
10-Year U.S. Treasury Note Future expires February 2015 2,234 contracts exercise price $123.00 | $ | (209,438) | ||||
10-Year U.S. Treasury Note Future expires February 2015 373 contracts exercise price $123.50 | (40,797) | |||||
10-Year U.S. Treasury Note Future expires February 2015 3,890 contracts exercise price $124.00 | (607,813) | |||||
10-Year U.S. Treasury Note Future expires February 2015 685 contracts exercise price $125.00 | (203,359) | |||||
S&P 500® Future expires March 2015 168 contracts exercise price $1900.00 | (826,161) | |||||
U.S. Treasury Long Bond Future expires February 2015 1,954 contracts exercise price $140.00 | (732,750) | |||||
U.S. Treasury Note Future expires February 2015 1,367 contracts exercise price $117.00 | (128,156) | |||||
Total Exchange-Traded Written Options – Puts (premiums received $5,460,695) | $ | (2,748,474) | ||||
Schedule of OTC Written Options – Calls
Counterparty/Reference Asset | Value | |||||
JPMorgan Chase & Co.: | ||||||
EUR Currency expires March 2015 34,995,078 contracts exercise price EUR 1.28 | $ | (84,303) | ||||
EUR Currency expires March 2015 35,838,713 contracts exercise price EUR 1.28 | (45,193) | |||||
JPY Currency expires March 2015 69,798,038 contracts exercise price JPY 126.00 | (412,506) | |||||
Total OTC Written Options – Calls (premiums received $551,924) | $ | (542,002) | ||||
Schedule of OTC Written Options – Puts
Counterparty/Reference Asset | Value | |||||
JPMorgan Chase & Co.: | ||||||
EUR Currency expires March 2015 69,798,038 contracts exercise price EUR 1.16 | $ | (363,857) | ||||
JPY Currency expires February 2015 19,067,724 contracts exercise price JPY 110.00 | (16,856) | |||||
JPY Currency expires February 2015 20,000,000 contracts exercise price JPY 110.00 | (11,020) | |||||
JPY Currency expires February 2015 28,304,872 contracts exercise price JPY 110.00 | (21,625) | |||||
JPY Currency expires April 2015 34,995,078 contracts exercise price JPY 112.00 | (142,885) | |||||
Total OTC Written Options – Puts (premiums received $792,183) | $ | (556,243) | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments (unaudited)
As of December 31, 2014
Centrally Cleared Interest Rate Swaps outstanding at December 31, 2014
Unrealized | ||||||||||||||||||||
Pay/Receive | Floating | Fixed | Maturity | Notional | Appreciation/ | Variation Margin | ||||||||||||||
Floating Rate | Rate | Rate | Date | Amount | (Depreciation) | Asset/(Liability) | ||||||||||||||
Receive | 3-month USD LIBOR | 3.0580 | % | 11/10/44 | $ | 55,700,000 | $ | (4,481,389) | $ | (90,424) | ||||||||||
Receive | 3-month USD LIBOR | 3.0650 | 11/12/44 | 55,700,000 | (4,557,515) | (90,659) | ||||||||||||||
Receive | 3-month USD LIBOR | 3.0585 | 11/7/44 | 55,800,000 | (4,507,827) | (90,571) | ||||||||||||||
Receive | 3-month USD LIBOR | 3.0180 | 11/6/44 | 55,800,000 | (4,022,239) | (89,425) | ||||||||||||||
Total | $ | (17,568,970) | $ | (361,079) | ||||||||||||||||
OTC Credit Default Swaps outstanding at December 31, 2014
Outstanding | |||||||||||||||||||||||
Premiums | Unrealized | Swap Contracts, | |||||||||||||||||||||
Reference | Buy/Sell | Fixed | Maturity | Notional | Paid/ | Appreciation/ | at Value | ||||||||||||||||
Counterparty | Asset | Protection(2) | Rate | Date | Amount(3) | (Received) | (Depreciation) | Asset/(Liability) | |||||||||||||||
Barclays Capital, Inc. | Bank of America Corp.(4) | Sell | 1.0000 | % | 12/20/15 | $ | 18,867,000 | $ | 153,481 | $ | (2,267) | $ | 151,214 | ||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 223,150 | (9,538) | 213,612 | |||||||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 103,511 | (527) | 102,984 | |||||||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 3/20/20 | 23,610,000 | 554,663 | (18,769) | 535,894 | |||||||||||||||
Barclays Capital, Inc. | Federative Republic of Brazil(5) | Sell | 1.0000 | 12/20/19 | 9,534,000 | (388,563) | (22,198) | (410,761) | |||||||||||||||
Barclays Capital, Inc. | Federative Republic of Brazil(5) | Sell | 1.0000 | 12/20/19 | 9,358,000 | (317,878) | (85,300) | (403,178) | |||||||||||||||
Barclays Capital, Inc. | General Electric Capital Corp.(4) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 157,658 | (21,289) | 136,369 | |||||||||||||||
Barclays Capital, Inc. | General Electric Capital Corp.(4) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 99,023 | (17,947) | 81,076 | |||||||||||||||
Barclays Capital, Inc. | Goldman Sachs Group, Inc.(4) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 149,305 | (14,927) | 134,378 | |||||||||||||||
Barclays Capital, Inc. | JPMorgan Chase & Co.(4) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 155,569 | (130) | 155,439 | |||||||||||||||
Barclays Capital, Inc. | MetLife, Inc.(4) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 71,140 | 6,790 | 77,930 | |||||||||||||||
Barclays Capital, Inc. | Morgan Stanley(4) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 149,305 | (11,878) | 137,427 | |||||||||||||||
Barclays Capital, Inc. | Prudential Financial, Inc.(4) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 94,542 | 4,729 | 99,271 | |||||||||||||||
Barclays Capital, Inc. | Russian Federation(5) | Sell | 1.0000 | 12/20/15 | 8,946,000 | (98,208) | (248,010) | (346,218) | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(5) | Sell | 1.0000 | 12/20/19 | 20,000,000 | (580,692) | (280,984) | (861,676) | |||||||||||||||
BNP Paribas | Goldman Sachs Group, Inc.(4) | Sell | 1.0000 | 9/20/19 | 17,958,000 | 171,781 | (23,023) | 148,758 | |||||||||||||||
BNP Paribas | Goldman Sachs Group, Inc.(4) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 87,710 | (10,854) | 76,856 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,946,000 | 93,688 | (14,633) | 79,055 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 76,086 | 12,284 | 88,370 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 4,126,000 | 12,117 | 24,344 | 36,461 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,427,000 | 59,803 | 14,666 | 74,469 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 6,710,000 | 12,672 | 46,624 | 59,296 | |||||||||||||||
BNP Paribas | Republic of Indonesia(5) | Sell | 1.0000 | 12/20/19 | 8,427,000 | (212,454) | 11,501 | (200,953) | |||||||||||||||
BNP Paribas | Republic of Indonesia(5) | Sell | 1.0000 | 12/20/19 | 8,946,000 | (169,866) | (43,463) | (213,329) | |||||||||||||||
BNP Paribas | Russian Federation(5) | Sell | 1.0000 | 12/20/15 | 8,645,000 | (113,036) | (221,533) | (334,569) | |||||||||||||||
BNP Paribas | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 8,946,000 | 98,730 | (94,276) | 4,454 | |||||||||||||||
BNP Paribas | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 9,386,000 | 77,709 | (73,036) | 4,673 | |||||||||||||||
BNP Paribas | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 9,600,000 | 80,599 | (75,819) | 4,780 | |||||||||||||||
BNP Paribas | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 66,555 | (61,576) | 4,979 | |||||||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 9,386,000 | 220,746 | (4,647) | 216,099 | |||||||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 8,427,000 | 175,255 | 18,764 | 194,019 | |||||||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 3/20/20 | 10,790,000 | 253,487 | (8,578) | 244,909 | |||||||||||||||
Citigroup Global Markets | Federative Republic of Brazil(5) | Sell | 1.0000 | 12/20/19 | 9,386,000 | (306,467) | (97,917) | (404,384) | |||||||||||||||
Citigroup Global Markets | General Electric Capital Corp.(4) | Sell | 1.0000 | 12/20/19 | 8,426,000 | 177,357 | (24,630) | 152,727 | |||||||||||||||
Citigroup Global Markets | General Electric Capital Corp.(4) | Sell | 1.0000 | 12/20/19 | 8,662,000 | 184,427 | (27,423) | 157,004 | |||||||||||||||
Citigroup Global Markets | JPMorgan Chase & Co.(4) | Sell | 1.0000 | 12/20/15 | 5,000,000 | 48,889 | (7,696) | 41,193 | |||||||||||||||
Citigroup Global Markets | Markit MCDX.NA.23(7) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 103,465 | (31,075) | 72,390 | |||||||||||||||
Citigroup Global Markets | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,731,000 | 74,666 | 2,489 | 77,155 | |||||||||||||||
Citigroup Global Markets | Prudential Financial, Inc.(4) | Sell | 1.0000 | 12/20/19 | 5,000,000 | 96,685 | 14,282 | 110,967 | |||||||||||||||
Citigroup Global Markets | Republic of Colombia(5) | Sell | 1.0000 | 12/20/19 | 19,068,000 | (20,672) | (293,642) | (314,314) | |||||||||||||||
Citigroup Global Markets | Republic of Colombia(5) | Sell | 1.0000 | 12/20/19 | 17,246,000 | (244,028) | (40,253) | (284,281) | |||||||||||||||
Citigroup Global Markets | Republic of Indonesia(5) | Sell | 1.0000 | 9/22/19 | 6,723,000 | (209,899) | 49,581 | (160,318) | |||||||||||||||
Citigroup Global Markets | Russian Federation(5) | Sell | 1.0000 | 12/20/15 | 6,577,000 | (88,163) | (166,372) | (254,535) | |||||||||||||||
Goldman Sachs International | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 13,348,000 | 294,129 | 13,189 | 307,318 | |||||||||||||||
Goldman Sachs International | Markit MCDX.NA.23(7) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 81,754 | (3,730) | 78,024 | |||||||||||||||
Goldman Sachs International | MetLife, Inc.(4) | Sell | 1.0000 | 12/20/19 | 20,000,000 | 285,562 | 62,883 | 348,445 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Outstanding | |||||||||||||||||||||||
Premiums | Unrealized | Swap Contracts, | |||||||||||||||||||||
Reference | Buy/Sell | Fixed | Maturity | Notional | Paid/ | Appreciation/ | at Value | ||||||||||||||||
Counterparty | Asset | Protection(2) | Rate | Date | Amount(3) | (Received) | (Depreciation) | Asset/(Liability) | |||||||||||||||
Goldman Sachs International | MetLife, Inc.(4) | Sell | 1.0000 | % | 12/20/19 | $ | 13,348,000 | $ | 222,783 | $ | 9,769 | $ | 232,552 | ||||||||||
Goldman Sachs International | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 6,577,000 | 59,640 | (1,519) | 58,121 | |||||||||||||||
Goldman Sachs International | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 13,419,000 | 18,998 | 99,585 | 118,583 | |||||||||||||||
Goldman Sachs International | Republic of Colombia(5) | Sell | 1.0000 | 12/20/19 | 14,284,000 | 3,434 | (238,890) | (235,456) | |||||||||||||||
Goldman Sachs International | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 6,577,000 | 45,378 | (42,103) | 3,275 | |||||||||||||||
JPMorgan Chase & Co. | Berkshire Hathaway, Inc.(4) | Sell | 1.0000 | 12/20/19 | 17,904,000 | 451,668 | 5,803 | 457,471 | |||||||||||||||
JPMorgan Chase & Co. | MetLife, Inc.(4) | Sell | 1.0000 | 12/20/19 | 5,000,000 | 91,649 | 8,101 | 99,750 | |||||||||||||||
JPMorgan Chase & Co. | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 13,419,000 | 31,690 | 120,813 | 152,503 | |||||||||||||||
JPMorgan Chase & Co. | United Mexican States(5) | Sell | 1.0000 | 12/20/19 | 8,731,000 | 73,028 | (46,611) | 26,417 | |||||||||||||||
Total | $ | 2,993,561 | $ | (1,860,866) | $ | 1,132,695 | |||||||||||||||||
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | If a credit event occurs, the seller of protection will pay a net settlement amount equal to the notional amount of the swap less the recovery value of the reference asset from related offsetting purchase protection. | |
(3) | If a credit event occurs, the notional amount represents the maximum potential amount the Fund could be required to make as a seller of credit protection or receive as a buyer of credit protection. | |
(4) | Corporate Bond – S&P Rating AA+ to A- | |
(5) | Foreign Government Bond – S&P Rating BBB+ to BBB- | |
(6) | Foreign Government Bond – S&P Rating AA- | |
(7) | For those index credit default swaps entered into by the Fund to sell protection, “Outstanding Swap Contracts, at Value” serves as an indicator of the current status of payment and performance risk and represents the likelihood of an expected gain or loss should the notional amount of the swap be closed or sold at period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the reference asset’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the swap agreement. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
London Interbank Offered Rate (LIBOR) | A daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). | |
S&P 500® Index | A commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
OTC | Over-the-Counter | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Global Unconstrained Bond Fund | $ | 168,850,030 | 11.8 | % | ||||||
* | Non-income producing security. | |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2014, is noted below. |
Fund | Aggregate Value | ||||
Janus Global Unconstrained Bond Fund | $ | 780,236,222 | |||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
ÇÇ | Security is a U.S. Treasury Inflation-Protected Security (TIPS). | |
°° | Rate shown is the 7-day yield as of December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Global Unconstrained Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 7,375,101 | 910,722,631 | (786,139,732) | 131,958,000 | $ | – | $ | 25,091 | $ | 131,958,000 | |||||||||||
14 | DECEMBER 31, 2014
Table of Contents
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Unconstrained Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 65,079,697 | $ | – | |||||
Common Stocks | 89,853,350 | – | – | ||||||||
Corporate Bonds | – | 974,513,797 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 100,689,597 | – | ||||||||
Investment Companies | 15,883,353 | 131,958,000 | – | ||||||||
Total Investments in Securities | $ | 105,736,703 | $ | 1,272,241,091 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Outstanding Swap Contracts at Value | $ | – | $ | 5,556,667 | $ | – | |||||
Variation Margin Receivable | 1,289,037 | – | – | ||||||||
Total Assets | $ | 107,025,740 | $ | 1,277,797,758 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Options Written, at Value | $ | – | $ | 6,926,276 | $ | – | |||||
Outstanding Swap Contracts at Value | – | 4,423,972 | – | ||||||||
Variation Margin Payable | 596,892 | – | – | ||||||||
Total Liabilities | $ | 596,892 | $ | 11,350,248 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures and centrally cleared swap contracts are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and OTC swap contracts are reported at their market value at measurement date. |
Janus Investment Fund | 15
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Janus Global Unconstrained Bond Fund(1) | |||
Assets: | ||||
Investments at cost | $ | 1,386,007,600 | ||
Unaffiliated investments at value | $ | 1,246,019,794 | ||
Affiliated investments at value | 131,958,000 | |||
Cash | 22,184,472 | |||
Restricted cash (Note 1) | 7,690,000 | |||
Closed foreign currency contracts | 377 | |||
Outstanding swap contracts at value | 5,556,667 | |||
Variation margin receivable | 1,289,037 | |||
Non-interested Trustees’ deferred compensation | 28,193 | |||
Receivables: | ||||
Investments sold | 238,316 | |||
Fund shares sold | 52,823,322 | |||
Dividends | 369,826 | |||
Dividends from affiliates | 3,664 | |||
Interest | 13,071,968 | |||
Other assets | 33,775 | |||
Total Assets | 1,481,267,411 | |||
Liabilities: | ||||
Due to custodian | 17,020,378 | |||
Closed foreign currency contracts | 305,865 | |||
Options written, at value(2) | 6,926,276 | |||
Outstanding swap contracts at value | 4,423,972 | |||
Variation margin payable | 596,892 | |||
Payables: | ||||
Investments purchased | 22,275,023 | |||
Fund shares repurchased | 2,344,711 | |||
Dividends | 53,352 | |||
Advisory fees | 748,105 | |||
Fund administration fees | 11,320 | |||
Transfer agent fees and expenses | 180,469 | |||
12b-1 Distribution and shareholder servicing fees | 34,268 | |||
Non-interested Trustees’ fees and expenses | 279 | |||
Non-interested Trustees’ deferred compensation fees | 28,193 | |||
Accrued expenses and other payables | 22,537 | |||
Total Liabilities | 54,971,640 | |||
Net Assets | $ | 1,426,295,771 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | Janus Global Unconstrained Bond Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 1,436,546,486 | ||
Undistributed net investment income/(loss)* | (164,642) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 2,017,412 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (12,103,485) | |||
Total Net Assets | $ | 1,426,295,771 | ||
Net Assets - Class A Shares | $ | 50,500,493 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,142,668 | |||
Net Asset Value Per Share(3) | $ | 9.82 | ||
Maximum Offering Price Per Share(4) | $ | 10.31 | ||
Net Assets - Class C Shares | $ | 31,233,131 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,183,787 | |||
Net Asset Value Per Share(3) | $ | 9.81 | ||
Net Assets - Class D Shares | $ | 8,885,471 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 904,652 | |||
Net Asset Value Per Share | $ | 9.82 | ||
Net Assets - Class I Shares | $ | 1,177,558,936 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 119,913,547 | |||
Net Asset Value Per Share | $ | 9.82 | ||
Net Assets - Class N Shares | $ | 1,978,342 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 201,444 | |||
Net Asset Value Per Share | $ | 9.82 | ||
Net Assets - Class S Shares | $ | 288,851 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 29,422 | |||
Net Asset Value Per Share | $ | 9.82 | ||
Net Assets - Class T Shares | $ | 155,850,547 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,884,006 | |||
Net Asset Value Per Share | $ | 9.81 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Premiums received 11,312,145. | |
(3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(4) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | Janus Global Unconstrained Bond Fund(1) | |||
Investment Income: | ||||
Interest | $ | 3,243,218 | ||
Dividends | 563,733 | |||
Dividends from affiliates | 25,091 | |||
Other income | 20,208 | |||
Total Investment Income | 3,852,250 | |||
Expenses: | ||||
Advisory fees | 1,362,789 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 25,809 | |||
Class C Shares | 45,296 | |||
Class S Shares | 169 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 2,295 | |||
Class S Shares | 169 | |||
Class T Shares | 71,396 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 392 | |||
Class C Shares | 461 | |||
Class I Shares | 154,734 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 985 | |||
Class C Shares | 544 | |||
Class D Shares | 510 | |||
Class I Shares | 4,233 | |||
Class N Shares | 14 | |||
Class S Shares | 18 | |||
Class T Shares | 239 | |||
Shareholder reports expense | 12,514 | |||
Registration fees | 119,323 | |||
Custodian fees | 4,880 | |||
Professional fees | 23,628 | |||
Non-interested Trustees’ fees and expenses | 759 | |||
Fund administration fees | 20,966 | |||
Other expenses | 42,878 | |||
Total Expenses | 1,895,001 | |||
Less: Excess Expense Reimbursement | (19,067) | |||
Net Expenses | 1,875,934 | |||
Net Investment Income/(Loss) | 1,976,316 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 1,597,876 | |||
Futures contracts | 1,192,734 | |||
Swap contracts | 172,212 | |||
Written options contracts | (940,848) | |||
Total Net Realized Gain/(Loss) on Investments | 2,021,974 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (8,038,808) | |||
Futures contracts | 10,970,288 | |||
Swap contracts | (19,429,836) | |||
Written options contracts | 4,385,869 | |||
Total Change in Unrealized Net Appreciation/Depreciation | (12,112,487) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (8,114,197) |
(1) | Formerly named Janus Unconstrained Bond Fund. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Unconstrained Bond Fund(1) | ||||||||
For each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 1,976,316 | $ | (3,266) | ||||
Net realized gain/(loss) on investments | 2,021,974 | (1,549) | ||||||
Change in unrealized net appreciation/depreciation | (12,112,487) | 9,002 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (8,114,197) | 4,187 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (70,039) | – | ||||||
Class C Shares | (5,909) | – | ||||||
Class D Shares | (15,646) | – | ||||||
Class I Shares | (1,824,801) | – | ||||||
Class N Shares | (4,118) | – | ||||||
Class S Shares | (304) | – | ||||||
Class T Shares | (220,061) | – | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | – | – | ||||||
Class C Shares | – | – | ||||||
Class D Shares | – | – | ||||||
Class I Shares | – | – | ||||||
Class N Shares | – | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (2,140,878) | – | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 53,030,256 | 3,933,333 | ||||||
Class C Shares | 36,490,103 | 271,601 | ||||||
Class D Shares | 9,436,630 | 253,838 | ||||||
Class I Shares | 1,207,326,580 | 3,933,333 | ||||||
Class N Shares | 1,947,506 | 50,001 | ||||||
Class S Shares | 241,478 | 50,001 | ||||||
Class T Shares | 164,395,662 | 3,948,333 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 64,538 | – | ||||||
Class C Shares | 4,942 | – | ||||||
Class D Shares | 14,402 | – | ||||||
Class I Shares | 1,749,519 | – | ||||||
Class N Shares | 4,006 | – | ||||||
Class S Shares | 263 | – | ||||||
Class T Shares | 217,393 | – | ||||||
Shares Repurchased | ||||||||
Class A Shares | (6,089,373) | – | ||||||
Class C Shares | (5,301,279) | – | ||||||
Class D Shares | (751,651) | – | ||||||
Class I Shares | (27,134,496) | – | ||||||
Class N Shares | (7,102) | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | (11,533,158) | – |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Global | ||||||||
Unconstrained Bond Fund(1) | ||||||||
For each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,424,106,219 | 12,440,440 | ||||||
Net Increase/(Decrease) in Net Assets | 1,413,851,144 | 12,444,627 | ||||||
Net Assets: | ||||||||
Beginning of period | 12,444,627 | – | ||||||
End of period | $ | 1,426,295,771 | $ | 12,444,627 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (164,642) | $ | (80) |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.03 | –(4) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.19) | 0.01 | ||||||||
Total from Investment Operations | (0.16) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.03) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.03) | – | ||||||||
Net Asset Value, End of Period | $9.82 | $10.01 | ||||||||
Total Return** | (1.60)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $50,500 | $3,934 | ||||||||
Average Net Assets for the Period (in thousands) | $20,060 | $3,934 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.25% | 5.73% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.13% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.63% | (0.36)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
Class C Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | –(4) | (0.01) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.20) | 0.02 | ||||||||
Total from Investment Operations | (0.20) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | –(4) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | – | – | ||||||||
Net Asset Value, End of Period | $9.81 | $10.01 | ||||||||
Total Return** | (1.98)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $31,233 | $272 | ||||||||
Average Net Assets for the Period (in thousands) | $8,903 | $126 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.81% | 6.43% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.81% | 1.83% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.04% | (0.97)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
* | See “Federal Income Tax” 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) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.04 | –(4) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.19) | 0.01 | ||||||||
Total from Investment Operations | (0.15) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.04) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.04) | – | ||||||||
Net Asset Value, End of Period | $9.82 | $10.01 | ||||||||
Total Return** | (1.55)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $8,885 | $254 | ||||||||
Average Net Assets for the Period (in thousands) | $3,688 | $118 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.34% | 5.97% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.01% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.78% | (0.25)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
Class I Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.05 | –(4) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.20) | 0.01 | ||||||||
Total from Investment Operations | (0.15) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.04) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.04) | – | ||||||||
Net Asset Value, End of Period | $9.82 | $10.01 | ||||||||
Total Return** | (1.46)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $1,177,559 | $3,935 | ||||||||
Average Net Assets for the Period (in thousands) | $320,169 | $3,934 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.86% | 5.47% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.86% | 0.83% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.03% | (0.11)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
* | See “Federal Income Tax” 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) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
22 | DECEMBER 31, 2014
Table of Contents
Class N Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.05 | –(4) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.20) | 0.01 | ||||||||
Total from Investment Operations | (0.15) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.04) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.04) | – | ||||||||
Net Asset Value, End of Period | $9.82 | $10.01 | ||||||||
Total Return** | (1.47)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $1,978 | $50 | ||||||||
Average Net Assets for the Period (in thousands) | $813 | $50 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.85% | 5.47% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.85% | 0.83% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.94% | (0.11)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
Class S Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.02 | (0.01) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.19) | 0.02 | ||||||||
Total from Investment Operations | (0.17) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.02) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.02) | – | ||||||||
Net Asset Value, End of Period | $9.82 | $10.01 | ||||||||
Total Return** | (1.74)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $289 | $50 | ||||||||
Average Net Assets for the Period (in thousands) | $130 | $50 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.74% | 5.97% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.41% | 1.33% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.40% | (0.61)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
* | See “Federal Income Tax” 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) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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Financial Highlights (continued)
Class T Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each period ended December 31 (unaudited) and June 30 | 2014 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.03 | –(4) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.20) | 0.01 | ||||||||
Total from Investment Operations | (0.17) | 0.01 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.03) | – | ||||||||
Distributions (from capital gains)* | – | – | ||||||||
Total Distributions | (0.03) | – | ||||||||
Net Asset Value, End of Period | $9.81 | $10.01 | ||||||||
Total Return** | (1.68)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $155,851 | $3,949 | ||||||||
Average Net Assets for the Period (in thousands) | $54,688 | $3,938 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.11% | 5.72% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.11% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.72% | (0.36)% | ||||||||
Portfolio Turnover Rate | 41% | 15% |
* | See “Federal Income Tax” 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) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Unconstrained Bond Fund (formerly named Janus Unconstrained Bond Fund) (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
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Notes to Financial Statements (unaudited) (continued)
Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
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Dividend Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Restricted Cash
As of December 31, 2014, the Fund had restricted cash in the amount of $7,690,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
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Notes to Financial Statements (unaudited) (continued)
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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2014 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative (to earn income and seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets in which it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including, but not limited to, counterparty risk, credit risk, currency risk, equity risk, index risk, interest rate risk, leverage risk, and liquidity risk, as described below.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC, such as options and structured notes, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs.
OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk. In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
• | Counterparty Risk – Counterparty risk is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
• | Credit Risk – Credit risk is the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
• | Currency Risk – Currency risk is the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
• | Equity Risk – Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market. | |
• | Index Risk – If the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
• | Interest Rate Risk – Interest rate risk is the risk that the value of fixed-income securities will |
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generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. |
• | Leverage Risk – Leverage risk is the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
• | Liquidity Risk – Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk in the normal course of pursuing its investment objective through its 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 investments and foreign currency transactions” on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on sold forward contracts during the period ended December 31, 2014.
Fund | Sold | |||||
Janus Global Unconstrained Bond Fund | $ | 15,427,776 | ||||
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts 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 that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
During the period, the Fund purchased interest rate futures to increase exposure to interest rate risk.
During the period, the Fund sold interest rate futures to decrease exposure to interest rate risk.
During the period, the Fund purchased futures on currency indices to increase exposure to currency risk.
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Notes to Financial Statements (unaudited) (continued)
During the period, the Fund purchased futures on equity indices to increase exposure to equity risk.
During the period, the Fund sold futures on equity indices to decrease exposure to equity risk.
The following table provides average ending monthly market value amounts on purchased and sold futures contracts during the period ended December 31, 2014.
Fund | Purchased | Sold | ||||||||
Janus Global Unconstrained Bond Fund | $ | 259,893,930 | $ | 35,796,895 | ||||||
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 is subject to interest rate risk, liquidity risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts. The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund 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 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 generally invests in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
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 Fund may also purchase and write exchange-listed and OTC 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 OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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 written options contracts” on the Statement of Operations (if applicable).
The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Fund may recognize due to written call options.
During the period, the Fund wrote call options on bond futures in order to reduce interest rate risk where
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reducing this exposure via other markets such as the cash bond market was less attractive.
During the period, the Fund wrote put options on bond futures in order to increase interest rate risk where increasing this exposure via other markets such as the cash bond market was less attractive.
During the period, the Fund wrote call options on various equity index futures for the purpose of decreasing exposure to broad equity risk and/or generating carry.
During the period, the Fund wrote put options on various equity index futures for the purpose of increasing exposure to broad equity risk and/or generating carry.
During the period, the Fund wrote call options on foreign exchanges rates vs. the U.S. dollar in order to reduce currency risk where reducing this exposure via the foreign exchange forward markets was less attractive.
During the period, the Fund wrote put options on foreign exchanges rates vs. the U.S. dollar in order to increase currency risk where increasing this exposure via the foreign exchange forward markets was less attractive.
The following table provides average ending monthly market value amounts on written call and put options during the period ended December 31, 2014.
Written Call | Written Put | |||||||||
Fund | Options | Options | ||||||||
Janus Global Unconstrained Bond Fund | $ | 1,041,966 | $ | 943,368 | ||||||
Written option activity for the period ended December 31, 2014 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Global Unconstrained Bond Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 140,643,499 | 9,720,615 | ||||||
Options closed | (1,500) | (3,051,594) | ||||||
Options expired | (1,787) | (1,609,754) | ||||||
Options exercised | – | – | ||||||
Options outstanding at December 31, 2014 | 140,640,212 | $ | 5,059,267 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Global Unconstrained Bond Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 172,180,002 | 12,156,596 | ||||||
Options closed | (1,648) | (2,332,496) | ||||||
Options expired | (1,871) | (3,541,819) | ||||||
Options exercised | (100) | (29,403) | ||||||
Options outstanding at December 31, 2014 | 172,176,383 | $ | 6,252,878 | |||||
Swaps
Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one year to exchange one set of cash flows for another. The most significant factor in the performance of swap agreements is the change in value of the specific index, security, or currency, or other factors that determine the amounts of payments due to and from the Fund. The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swap transactions may in some instances involve the delivery of securities or other underlying assets by the Fund or its counterparty to collateralize obligations under the swap. If the other party to a swap that is not collateralized defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. Swap agreements entail the risk that a party will default on its payment obligations to the Fund. If the other party to a swap defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If the Fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund and reduce the Fund’s total return.
Swap agreements also bear the risk that the Fund will not be able to meet its obligation to the counterparty. Swap agreements are typically privately negotiated and entered into in the over-the-counter market. However, certain swap agreements are required to be cleared through a clearinghouse and traded on an exchange or swap execution facility. Swaps that are required to be cleared are required to post initial and variation margins in accordance with the exchange requirements. Regulations recently enacted require the Fund to clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps. Swap contracts are reported as an asset or liability on the Fund’s Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Fund’s Statement of Operations (if applicable).
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Notes to Financial Statements (unaudited) (continued)
The Fund may enter into various types of credit default swap agreements, including OTC credit default swap agreements, for investment purposes and to add leverage to its portfolio. Credit default swaps are a specific kind of counterparty agreement that allow the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments. Credit default swaps could result in losses if the Fund does not correctly evaluate the creditworthiness of the company or companies on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk, and credit risk. The Fund will generally incur a greater degree of risk when it sells a credit default swap than when it purchases a credit default swap. As a buyer of a credit default swap, the Fund may lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event were to occur, the value of any deliverable obligation received by the Fund, coupled with the upfront or periodic payments previously received, may be less than what it pays to the buyer, resulting in a loss of value to the Fund.
If the Fund is the seller of credit protection against a particular security, the Fund would receive an up-front or periodic payment to compensate against potential credit events. As the seller in a credit default swap contract, the Fund would be required to pay the par value (the “notional value”) (or other agreed-upon value) of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or foreign corporate issuer, on the debt obligation. In return, the Fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Fund would keep the stream of payments and would have no payment obligations. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional value of the swap. The maximum potential amount of future payments (undiscounted) that the Fund as a seller could be required to make in a credit default transaction would be the notional amount of the agreement.
As a buyer of credit protection, the Fund is entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract in the event of a default or other credit event by a third party, such as a U.S. or foreign issuer, on the debt obligation. In return, the Fund as buyer would pay to the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no credit event occurs, the Fund would have spent the stream of payments and potentially received no benefit from the contract.
The Fund may invest in single-name credit default swaps (“CDS”) to buy or sell credit protection to hedge its credit exposure, gain issuer exposure without owning the underlying security, or increase the Fund’s total return. Single-name CDS enable the Fund to buy or sell protection against a credit event of a specific issuer. When the Fund buys a single-name CDS, the Fund will receive a return on its investment only in the event of a credit event, such as default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). If a single-name CDS transaction is particularly large, or if the relevant market is illiquid, it may not be possible for the Fund to initiate a single-name CDS transaction or to liquidate its position at an advantageous time or price, which may result in significant losses. Moreover, the Fund bears the risk of loss of the amount expected to be received under a single-name CDS in the event of the default or bankruptcy of the counterparty. The risks associated with cleared single-name CDS may be lower than that for uncleared single-name CDS because for cleared single-name CDS, the counterparty is a clearinghouse (to the extent such a trading market is available). However, there can be no assurance that a clearinghouse or its members will satisfy their obligations to the Fund.
The Fund may invest in index credit default swaps (“CDX”). A CDX is a swap on an index of credit default swaps. CDXs allow an investor to manage credit risk or take a position on a basket of credit entities (such as credit default swaps or commercial mortgage-backed securities) in a more efficient manner than transacting in a single-name CDS. If a credit event occurs in one of the underlying companies, the protection is paid out via the delivery of the defaulted bond by the buyer of protection in return for a payment of notional value of the defaulted bond by the seller of protection or it may be settled through a cash settlement between the two parties. The underlying company is then removed from the index. If the Fund holds a long position in a CDX, the Fund would indirectly bear its proportionate share of any expenses paid by a CDX. By investing in CDXs, the Fund could be exposed to illiquidity risk, counterparty risk, and credit risk of the issuers of the underlying loan obligations and of the CDX markets. If there is a default by the CDX counterparty, the Fund will have contractual remedies pursuant to the agreements related to the transaction.
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CDXs also bear the risk that the Fund will not be able to meet its obligation to the counterparty.
During the period, the Fund sold protection via the credit default swap market in order to gain credit risk exposure to individual corporates, countries and/or credit indices where gaining this exposure via the cash bond market was less attractive.
The following table provides average ending monthly market value amounts on credit default swaps which are long the reference asset during the period ended December 31, 2014.
Fund | Long | |||||
Janus Global Unconstrained Bond Fund | $ | 1,024,318 | ||||
The Fund’s use of interest rate swaps involves investment techniques and risks different from those associated with ordinary portfolio security transactions. Interest rate swaps do not involve the delivery of securities, other underlying assets, or principal. 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). Interest rate swaps may result in potential losses if interest rates do not move as expected or if the counterparties are unable to satisfy their obligations. Interest rate swaps are generally entered into on a net basis. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that the Fund is contractually obligated to make.
During the period, the Fund entered into interest rate swaps paying a fixed interest rate and receiving a floating interest rate in order to decrease interest rate risk (duration) exposure. As interest rates rise, the Fund benefits by receiving a higher expected future floating rate, while paying a fixed rate that has not increased.
The following table provides average ending monthly market value amounts on interest rate swaps which are long the reference asset during the period ended December 31, 2014.
Fund | Long | |||||
Janus Global Unconstrained Bond Fund | $ | (3,592,063) | ||||
The Fund’s maximum risk of loss for credit default swaps and interest rate 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 and the counterparty and by the posting of collateral to the Fund to cover the Fund’s exposure to the counterparty.
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2014.
Fair Value of Derivative Instruments as of December 31, 2014
Derivatives not accounted for | Asset Derivatives | Liability Derivatives | ||||||||||
as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||
Credit Contracts | Outstanding swap contracts at value | $ | 5,556,667 | Outstanding swap contracts at value | $ | 4,423,972 | ||||||
Currency Contracts | Variation margin receivable | 20,412 | Options written, at Value | 1,098,245 | ||||||||
Equity Contracts | Options written, at Value | 1,282,703 | ||||||||||
Interest Rate Contracts | Options written, at Value | 4,545,328 | ||||||||||
Interest Rate Contracts | Variation margin receivable | 1,268,625 | Variation margin payable | 596,892 | ||||||||
Total | $ | 6,845,704 | $ | 11,947,140 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2014.
The effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2014
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Written | ||||||||||||||||||||
Derivatives not accounted for | Investments and foreign | options | ||||||||||||||||||
as hedging instruments | currency transactions | Futures contracts | Swap contracts | contracts | Total | |||||||||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | 172,212 | $ | – | $ | 172,212 | ||||||||||
Currency Contracts | 2,045,270 | 324,360 | – | – | 2,369,630 | |||||||||||||||
Equity Contracts | – | (802,506 | ) | – | (346,746 | ) | (1,149,252 | ) | ||||||||||||
Interest Rate Contracts | – | 1,670,880 | – | (594,102 | ) | 1,076,778 | ||||||||||||||
Total | $ | 2,045,270 | $ | 1,192,734 | $ | 172,212 | $ | (940,848 | ) | $ | 2,469,368 | |||||||||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Investments, foreign | ||||||||||||||||||||
currency translations and | Written | |||||||||||||||||||
Derivatives not accounted for | non-interested Trustees’ | options | ||||||||||||||||||
as hedging instruments | deferred compensation | Futures contracts | Swap contracts | contracts | Total | |||||||||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | (1,860,866 | ) | $ | – | $ | (1,860,866 | ) | ||||||||
Currency Contracts | – | (326,025 | ) | – | 245,862 | (80,163 | ) | |||||||||||||
Equity Contracts | – | – | – | 1,102,353 | 1,102,353 | |||||||||||||||
Interest Rate Contracts | – | 11,296,313 | (17,568,970 | ) | 3,037,654 | (3,235,003 | ) | |||||||||||||
Total | $ | – | $ | 10,970,288 | $ | (19,429,836 | ) | $ | 4,385,869 | $ | (4,073,679 | ) | ||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt
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could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Emerging Market Investing
Within the parameters of its specific investment policies, the Fund, may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” Investing in emerging markets may involve certain risks and considerations not typically associated with investing in the United States and imposes risks greater than, or in addition to, the risks associated with investing in securities of more developed foreign countries. Emerging markets securities are exposed to a number of additional risks, which may result from less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) 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 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.
Inflation-Linked Securities
The Fund may invest in inflation-indexed bonds, including municipal inflation-indexed bonds and corporate inflation-indexed bonds, or in derivatives that are linked to these securities. Inflation-linked bonds are fixed-income securities that have a principal value that is periodically adjusted according to the rate of inflation. If an index measuring inflation falls, the principal value of inflation-
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Notes to Financial Statements (unaudited) (continued)
indexed bonds will typically be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Because of their inflation adjustment feature, inflation-linked bonds typically have lower yields than conventional fixed-rate bonds. In addition, inflation-linked bonds also normally decline in price when real interest rates rise. In the event of deflation, when prices decline over time, the principal and income of inflation-linked bonds would likely decline, resulting in losses to the Fund.
In the case of Treasury Inflation-Protected Securities, also known as TIPS, repayment of original bond principal upon maturity (as adjusted for inflation) is guaranteed by the U.S. Treasury. For inflation-linked bonds that do not provide a similar guarantee, the adjusted principal value of the inflation-linked bond repaid at maturity may be less than the original principal. Inflation-linked bonds may also be issued by, or related to, sovereign governments of other developed countries, emerging market countries, or companies or other entities not affiliated with governments.
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net
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payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of December 31, 2014” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Barclays Capital, Inc. | $ | 1,825,594 | $ | (1,160,157) | $ | – | $ | 665,437 | ||||||||||
BNP Paribas | 582,151 | (582,151) | – | – | ||||||||||||||
Citigroup Global Markets | 1,266,463 | (1,266,463) | – | – | ||||||||||||||
Goldman Sachs International | 1,146,318 | (235,456) | – | 910,862 | ||||||||||||||
JPMorgan Chase & Co. | 736,141 | (736,141) | – | – | ||||||||||||||
Total | $ | 5,556,667 | $ | (3,980,368) | $ | – | $ | 1,576,299 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Barclays Capital, Inc. | $ | 1,160,157 | $ | (1,160,157) | $ | – | $ | – | ||||||||||
BNP Paribas | 1,610,527 | (582,151) | (1,028,376) | – | ||||||||||||||
Citigroup Global Markets | 1,417,832 | (1,266,463) | (151,369) | – | ||||||||||||||
Goldman Sachs International | 235,456 | (235,456) | – | – | ||||||||||||||
JPMorgan Chase & Co. | 1,098,245 | (736,141) | – | 362,104 | ||||||||||||||
Total | $ | 5,522,217 | $ | (3,980,368) | $ | (1,179,745) | $ | 362,104 | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s 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
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Notes to Financial Statements (unaudited) (continued)
table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Unconstrained | First $ | 1 Billion | 0.65 | |||||||
Bond Fund | Next $ | 2 Billion | 0.62 | |||||||
Over $ | 3 Billion | 0.60 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Global Unconstrained Bond Fund | 0.82 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Statement of Operations. During the period ended December 31, 2014, Janus Capital reimbursed the Fund $19,067 of fees and expenses that are eligible for recoupment. As of December 31, 2014, the aggregate amount of recoupment that may potentially be made to Janus Capital is $73,224. The recoupment of such reimbursements expires May 27, 2017.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation
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(“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus
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Notes to Financial Statements (unaudited) (continued)
Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Unconstrained Bond Fund | $ | 57,057 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Unconstrained Bond Fund | $ | 933 | ||||
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Global Unconstrained Bond Fund - Class A Shares | 38 | % | 1 | % | ||||||
Janus Global Unconstrained Bond Fund - Class C Shares | 0 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class D Shares | 1 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class I Shares | 2 | 1 | ||||||||
Janus Global Unconstrained Bond Fund - Class N Shares | 3 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class S Shares | 17 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class T Shares | 13 | 1 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets. See the Fund’s Statement of Additional Information for more information regarding ownership of Fund shares, which includes ownership by the Fund’s portfolio manager.
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
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Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Global Unconstrained Bond Fund | $ | 1,386,270,855 | $ | 1,375,263 | $ | (9,668,324) | $ | (8,293,061) | ||||||||||
6. | Capital Share Transactions |
Janus | ||||||||||
Global Unconstrained | ||||||||||
Bond Fund | ||||||||||
For each period ended December 31 (unaudited) and June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 5,358,724 | 393,333 | ||||||||
Reinvested dividends and distributions | 6,539 | – | ||||||||
Shares repurchased | (615,928) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 4,749,335 | 393,333 | ||||||||
Shares Outstanding, Beginning of Period | 393,333 | – | ||||||||
Shares Outstanding, End of Period | 5,142,668 | 393,333 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 3,695,992 | 27,160 | ||||||||
Reinvested dividends and distributions | 504 | – | ||||||||
Shares repurchased | (539,869) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,156,627 | 27,160 | ||||||||
Shares Outstanding, Beginning of Period | 27,160 | – | ||||||||
Shares Outstanding, End of Period | 3,183,787 | 27,160 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 953,878 | 25,379 | ||||||||
Reinvested dividends and distributions | 1,459 | – | ||||||||
Shares repurchased | (76,064) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 879,273 | 25,379 | ||||||||
Shares Outstanding, Beginning of Period | 25,379 | – | ||||||||
Shares Outstanding, End of Period | 904,652 | 25,379 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 122,105,693 | 393,333 | ||||||||
Reinvested dividends and distributions | 177,408 | – | ||||||||
Shares repurchased | (2,762,887) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 119,520,214 | 393,333 | ||||||||
Shares Outstanding, Beginning of Period | 393,333 | – | ||||||||
Shares Outstanding, End of Period | 119,913,547 | 393,333 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 196,757 | 5,000 | ||||||||
Reinvested dividends and distributions | 406 | – | ||||||||
Shares repurchased | (719) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 196,444 | 5,000 | ||||||||
Shares Outstanding, Beginning of Period | 5,000 | – | ||||||||
Shares Outstanding, End of Period | 201,444 | 5,000 |
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Notes to Financial Statements (unaudited) (continued)
Janus | ||||||||||
Global Unconstrained | ||||||||||
Bond Fund | ||||||||||
For each period ended December 31 (unaudited) and June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 24,395 | 5,000 | ||||||||
Reinvested dividends and distributions | 27 | – | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 24,422 | 5,000 | ||||||||
Shares Outstanding, Beginning of Period | 5,000 | – | ||||||||
Shares Outstanding, End of Period | 29,422 | 5,000 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 16,638,465 | 394,833 | ||||||||
Reinvested dividends and distributions | 22,054 | – | ||||||||
Shares repurchased | (1,171,346) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 15,489,173 | 394,833 | ||||||||
Shares Outstanding, Beginning of Period | 394,833 | – | ||||||||
Shares Outstanding, End of Period | 15,884,006 | 394,833 |
(1) | Period from May 27, 2014 (inception date) through June 30, 2014. |
7. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Unconstrained Bond Fund | $ | 1,389,853,656 | $ | 134,941,814 | $ | 18,794,530 | $ | 20,420,748 | ||||||
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital, the investment adviser of Janus Multi-Sector Income Fund and Janus Unconstrained Bond Fund (renamed Janus Global Unconstrained Bond Fund effective October 6, 2014) (each a “New Fund” and collectively, the “New Funds”), met on November 7, 2013 to consider the proposed investment advisory agreement for each New Fund. In the course of their consideration of each of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for each New Fund. Based on their evaluation of the information available to them, the Trustees unanimously approved the investment advisory agreement for each New Fund for an initial term through February 2016, subject to earlier termination as provided for in the agreements.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services to be provided by Janus Capital, taking into account the investment objective and strategies of each New Fund and the similar type services currently provided by Janus Capital to other funds in the complex. In addition, the Trustees reviewed the resources and key personnel of Janus Capital that will be providing investment and risk management services to each New Fund. The Trustees also considered other services provided to the New Funds by Janus Capital, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees noted the use of Quantum, a system built by Janus Capital, to analyze portfolio risk. The Trustees considered Janus Capital’s role as administrator to each New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to each New Fund’s investment restrictions, 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 New Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services to be provided by Janus Capital were appropriate and consistent with the terms of each New Fund’s proposed investment advisory agreement. They also concluded that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Funds effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of each New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital to non-mutual fund clients, including those for which Janus Capital provides only portfolio management services. The Trustees noted servicing that is provided by Janus Capital
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Additional Information (unaudited) (continued)
for each New Fund relative to those other clients, including regulatory compliance and administration services, and that, in serving the New Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee payable by each New Fund was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital charges to other clients, and the expense limitation agreement for each New Fund agreed to by Janus Capital. The Trustees noted the differences in investment style between each New Fund that resulted in differences in fee rates, taking into consideration the peer group selection and the fees charged by those peers.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of each New Fund increase. The Trustees noted that the proposed annual advisory fee rates, which included potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that each New Fund is part of the overall Janus funds complex, which means, among other things, that the New 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 Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the New Funds. They recognized that two affiliates of Janus Capital separately serve the New Funds as transfer agent and distributor, respectively. 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 New Fund under those agreements, each New Fund and Janus Capital may potentially benefit from their relationship with each other in other ways. The Trustees considered potential benefits to Janus Capital and its affiliates from Janus Capital’s participation in creditor committees formed to address issues related to investments by each New Fund. They concluded that the success of the New Funds 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 New Funds.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the investment advisory agreement for each New Fund.
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Useful Information About Your Fund Report (unaudited)
1. | 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.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s manager may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
Janus Investment Fund | 45
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
46 | DECEMBER 31, 2014
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
Janus Investment Fund | 47
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Notes
48 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 49
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81522 | 125-24-93024 02-15 |
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semiannual report
December 31, 2014
Janus Government Money Market Fund
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Janus Government Money Market Fund
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Janus Government Money Market Fund (unaudited)
![]() Eric Thorderson portfolio manager |
Janus Government Money Market Fund
Average Annual Total Return | ||
For the periods ended December 31, 2014 | ||
Class D Shares(1) | ||
Fiscal Year-to-Date | 0.00% | |
1 Year | 0.00% | |
5 Year | 0.01% | |
10 Year | 1.36% | |
Since Inception (February 14, 1995) | 2.53% | |
Class T Shares | ||
Fiscal Year-to-Date | 0.00% | |
1 Year | 0.00% | |
5 Year | 0.01% | |
10 Year | 1.36% | |
Since Inception (February 14, 1995) | 2.53% |
Seven-Day Current Yield | ||
Class D Shares(1) | ||
With Reimbursement | 0.00%(2) | |
Without Reimbursement | -0.47% | |
Class T Shares | ||
With Reimbursement | 0.00%(2) | |
Without Reimbursement | -0.49% | |
Expense Ratios | ||
Per the October 28, 2014 prospectuses | ||
Class D Shares(1) | ||
Total Annual Fund Operating Expenses | 0.68% | |
Class T Shares | ||
Total Annual Fund Operating Expenses | 0.70% |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. For the most recent month-end performance 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).
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 has voluntarily agreed to waive one-half of its investment advisory fee and such additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. Such reimbursements could be changed or terminated at any time.
Class D Shares of the Fund commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If Class D Shares of the Fund had been available during periods prior to February 16, 2010, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class D Shares reflects the fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Returns include reinvestment of all dividends and distributions.
The yield more closely reflects the current earnings of the Fund than the total return.
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
See “Useful Information About Your Fund Report.”
(1) | Closed to new investors. | |
(2) | Less than 0.005%. |
Janus Investment Fund | 1
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Janus Government Money Market Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in either share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.60 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.61 | 0.12% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.60 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.61 | 0.12% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
2 | DECEMBER 31, 2014
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Janus Government Money Market Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Principal Amount | Value | |||||||||
Repurchase Agreements – 21.9% | ||||||||||
$35,700,000 | Undivided interest of 24% in a joint repurchase agreement (principal amount $150,000,000 with a maturity value of $150,000,667) with RBC Capital Markets Corp., 0.0800%, dated 12/31/14, maturing 1/2/15 to be repurchased at $35,700,159 collateralized by $146,120,878 in U.S. Government Agencies, 2.0000% – 4.5000%, 6/1/28 – 1/1/45, with a value of $153,000,001 (cost $35,700,000) | $ | 35,700,000 | |||||||
U.S. Government Agency Notes – 29.1% | ||||||||||
Fannie Mae Discount Notes: | ||||||||||
3,000,000 | 0.1066%, 3/2/15 | 2,999,476 | ||||||||
1,500,000 | 0.1015%, 3/16/15 | 1,499,691 | ||||||||
1,000,000 | 0.1502%, 6/1/15 | 999,375 | ||||||||
Federal Farm Credit Discount Notes: | ||||||||||
3,000,000 | 0.1101%, 3/27/15 | 2,999,230 | ||||||||
2,000,000 | 0.0901%, 6/3/15 | 1,999,240 | ||||||||
2,000,000 | 0.0901%, 6/8/15 | 1,999,215 | ||||||||
Federal Home Loan Bank Discount Notes: | ||||||||||
1,200,000 | 0.1051%, 3/6/15 | 1,199,779 | ||||||||
1,100,000 | 0.1201%, 4/9/15 | 1,099,644 | ||||||||
2,000,000 | 0.1201%, 4/20/15 | 1,999,280 | ||||||||
3,000,000 | 0.0851%, 4/24/15 | 2,999,207 | ||||||||
1,300,000 | 0.0801%, 5/19/15 | 1,299,604 | ||||||||
2,000,000 | 0.1251%, 7/31/15 | 1,998,541 | ||||||||
FHLMC Multifamily VRD Certificates Taxable: | ||||||||||
6,136,925 | 0.2400%, 1/15/42 | 6,136,925 | ||||||||
Freddie Mac Discount Notes: | ||||||||||
3,000,000 | 0.0862%, 1/21/15 | 2,999,863 | ||||||||
3,000,000 | 0.0903%, 2/10/15 | 2,999,707 | ||||||||
2,000,000 | 0.1015%, 2/11/15 | 1,999,775 | ||||||||
2,600,000 | 0.1001%, 2/13/15 | 2,599,697 | ||||||||
2,500,000 | 0.1116%, 3/3/15 | 2,499,535 | ||||||||
1,200,000 | 0.1218%, 5/27/15 | 1,199,412 | ||||||||
3,000,000 | 0.1421%, 6/9/15 | 2,998,131 | ||||||||
800,000 | 0.1523%, 6/16/15 | 799,442 | ||||||||
Total U.S. Government Agency Notes (amortized cost $47,324,769) | 47,324,769 | |||||||||
Variable Rate Demand Agency Notes – 48.7% | ||||||||||
880,000 | AE REALTY LLC 0.1500%, 10/1/23 | 880,000 | ||||||||
1,075,000 | Clearwater Solutions LLC 0.1700%, 9/1/21 | 1,075,000 | ||||||||
9,000,000 | Cypress Bend Real Estate Development Co. LLC 0.1500%, 4/1/33 | 9,000,000 | ||||||||
2,490,000 | Florida Food Products, Inc. 0.1500%, 12/1/22 | 2,490,000 | ||||||||
5,760,000 | Florida HomeLoan Corp. 0.0700%, 7/15/36 | 5,760,000 | ||||||||
3,000,000 | Greer Family LLC 0.1500%, 8/1/31 | 3,000,000 | ||||||||
2,065,000 | Housing Development Corp., New York 0.0500%, 6/15/37 | 2,065,000 | ||||||||
400,000 | Illinois Housing Development Authority 0.1600%, 5/1/37 | 400,000 | ||||||||
2,500,000 | Irrevocable Trust Agreement John A Thomas & Elizabeth F Thomas 0.1500%, 12/1/20 | 2,500,000 | ||||||||
3,745,000 | Johnson Capital Management LLC 0.2100%, 6/1/47 | 3,745,000 | ||||||||
3,200,000 | Lake Nona Trust 0.1500%, 10/1/44 | 3,200,000 | ||||||||
135,000 | Lakeshore Professional Properties LLC 0.2600%, 7/1/45 | 135,000 | ||||||||
700,000 | Maryland Community Development Administration 0.0500%, 2/1/41 | 700,000 | ||||||||
9,935,000 | Mesivta Yeshiva Rabbi Chaim Berlin 0.1695%, 11/1/35 | 9,935,000 | ||||||||
1,945,000 | Mississippi Business Finance Corp. 0.1500%, 9/1/21 | 1,945,000 | ||||||||
3,835,000 | Mississippi Business Finance Corp. 0.1500%, 1/1/34 | 3,835,000 | ||||||||
4,500,000 | Mississippi Business Finance Corp. 0.1500%, 8/1/34 | 4,500,000 | ||||||||
3,470,000 | Mississippi Business Finance Corp. 0.1601%, 12/1/35 | 3,470,000 | ||||||||
3,735,000 | Mississippi Business Finance Corp. – Series A 0.1600%, 3/1/29 | 3,735,000 | ||||||||
3,230,000 | Mississippi Business Finance Corp. – Series B 0.1600%, 3/1/29 | 3,230,000 | ||||||||
4,310,000 | Phenix City Downtown Redevelopment Authority 0.1500%, 2/1/33 | 4,310,000 | ||||||||
500,000 | Sacramento Housing & Redevelopment Agency 0.1600%, 1/15/36 | 500,000 | ||||||||
1,625,000 | Shepherd Capital LLC 0.2600%, 10/1/53 | 1,625,000 | ||||||||
4,500,000 | Thomas H Turner Family Irrevocable Trust 0.1500%, 6/1/20 | 4,500,000 | ||||||||
1,950,000 | Tyler Enterprises LLC 0.1500%, 10/1/22 | 1,950,000 | ||||||||
760,000 | VOC-RE I LLC 0.1500%, 2/1/43 | 760,000 | ||||||||
Total Variable Rate Demand Agency Notes (amortized cost $79,245,000) | 79,245,000 | |||||||||
Total Investments (total cost $162,269,769) – 99.7% | 162,269,769 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.3% | 524,705 | |||||||||
Net Assets – 100% | $ | 162,794,474 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 3
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Notes to Schedule of Investments and Other Information (unaudited)
LLC | Limited Liability Company |
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.
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Government Money Market Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Repurchase Agreements | $ | – | $ | 35,700,000 | $ | – | |||||
U.S. Government Agency Notes | – | 47,324,769 | – | ||||||||
Variable Rate Demand Agency Notes | – | 79,245,000 | – | ||||||||
Total Assets | $ | – | $ | 162,269,769 | $ | – | |||||
4 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
Janus Government | ||||
As of December 31, 2014 (unaudited) | Money Market Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 162,269,769 | ||
Investments at value | $ | 126,569,769 | ||
Repurchase agreements at value | 35,700,000 | |||
Cash | 69,774 | |||
Non-interested Trustees’ deferred compensation | 3,328 | |||
Receivables: | ||||
Fund shares sold | 602,465 | |||
Interest | 10,705 | |||
Total Assets | 162,956,041 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 126,177 | |||
Advisory fees | 12,910 | |||
Administrative services fees | 100 | |||
Non-interested Trustees’ fees and expenses | 974 | |||
Non-interested Trustees’ deferred compensation fees | 3,328 | |||
Accrued expenses and other payables | 18,078 | |||
Total Liabilities | 161,567 | |||
Net Assets | $ | 162,794,474 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 162,808,522 | ||
Undistributed net investment income/(loss)* | (14,834) | |||
Undistributed net realized gain/(loss) from investments* | 148 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 638 | |||
Total Net Assets | $ | 162,794,474 | ||
Net Assets - Class D Shares | $ | 159,230,238 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 159,245,103 | |||
Net Asset Value Per Share | $ | 1.00 | ||
Net Assets - Class T Shares | $ | 3,564,236 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,564,635 | |||
Net Asset Value Per Share | $ | 1.00 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $35,700,000. |
See Notes to Financial Statements.
Janus Investment Fund | 5
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Statement of Operations
Janus Government | ||||
For the period ended December 31, 2014 (unaudited) | Money Market Fund | |||
Investment Income: | ||||
Interest | $ | 99,628 | ||
Total Investment Income | 99,628 | |||
Expenses: | ||||
Advisory fees | 157,592 | |||
Administration services fees: | ||||
Class D Shares | 374,189 | |||
Class T Shares | 9,245 | |||
Professional fees | 23,574 | |||
Non-interested Trustees’ fees and expenses | 1,403 | |||
Total Expenses | 566,003 | |||
Less: Excess Expense Reimbursement | (466,404) | |||
Net Expenses | 99,599 | |||
Net Investment Income/(Loss) | 29 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 29 |
See Notes to Financial Statements.
6 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Janus Government | ||||||||
Money Market Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 29 | $ | 4,118 | ||||
Net realized gain/(loss) on investments | – | – | ||||||
Change in unrealized net appreciation/depreciation of non-interested Trustees’ deferred compensation | – | 419 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 29 | 4,537 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class D Shares | (37) | (4,461) | ||||||
Class T Shares | (1) | (174) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class D Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (38) | (4,635) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class D Shares | 31,892,666 | 67,415,597 | ||||||
Class T Shares | 1,727,676 | 4,359,035 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class D Shares | 8 | 3,218 | ||||||
Class T Shares | 1 | 169 | ||||||
Shares Repurchased | ||||||||
Class D Shares | (37,907,874) | (77,352,703) | ||||||
Class T Shares | (1,569,856) | (7,521,431) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (5,857,379) | (13,096,115) | ||||||
Net Increase/(Decrease) in Net Assets | (5,857,388) | (13,096,213) | ||||||
Net Assets: | ||||||||
Beginning of period | 168,651,862 | 181,748,075 | ||||||
End of period | $ | 162,794,474 | $ | 168,651,862 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (14,834) | $ | (14,825) |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Investment Fund | 7
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Financial Highlights
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Government Money Market Fund | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | –(2)(3) | –(2)(3) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Total from Investment Operations | – | – | – | – | – | – | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | –(2) | – | – | ||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.00% | 0.00% | 0.01% | 0.00% | 0.00% | 0.01% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $159,230 | $165,245 | $175,179 | $182,311 | $189,249 | $211,746 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $161,365 | $169,002 | $178,560 | $190,180 | $199,694 | $209,798 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.68% | 0.68% | 0.69% | 0.69% | 0.71% | 0.68% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.12% | 0.12% | 0.18% | 0.18% | 0.23% | 0.26% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | (0.03)% |
Class T Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the year | Janus Government Money Market Fund | |||||||||||||||||||||||||||||
ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | –(2)(3) | –(2)(3) | –(2) | –(2) | –(2) | 0.01(5) | –(2) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | –(2) | –(2) | –(2) | –(2) | (0.01)(5) | –(2) | |||||||||||||||||||||||
Total from Investment Operations | – | – | – | – | – | – | – | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | –(2) | – | – | – | |||||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||||||||
Total Return** | 0.00% | 0.00% | 0.01% | 0.00% | 0.00% | 0.02% | 0.08% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,564 | $3,406 | $6,569 | $5,319 | $5,731 | $4,446 | $228,531 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,821 | $6,393 | $5,526 | $5,267 | $4,596 | $100,419 | $273,901 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.70% | 0.70% | 0.73% | 0.71% | 0.74% | 0.72% | 0.73% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.12% | 0.12% | 0.18% | 0.18% | 0.22% | 0.24% | 0.55% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.05% | 0.10% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Less than $0.005 on a per share basis. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Period from November 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(5) | Due to decreased shares outstanding during the period, amounts shown for a share outstanding do not correspond with the aggregate net investment income/(loss) and net gain/(loss) on investments. |
See Notes to Financial Statements.
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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 Government Money Market Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in short-term money market securities.
The Fund offers two 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 both classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Investments held by the Fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and
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Notes to Financial Statements (unaudited) (continued)
expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
Dividends, if any, are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Periodic review and monitoring of the valuation of short-term securities is performed in an effort to ensure that amortized cost approximates market value. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in
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the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through its investments in certain securities, including, but not limited to, repurchase agreements and debt securities. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and
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Notes to Financial Statements (unaudited) (continued)
a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
RBC Capital Markets Corp. | $ | 35,700,000 | $ | – | $ | (35,700,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Regulatory Risk
In July 2014, the SEC adopted additional rules applicable to money market funds which are intended to address perceived systematic risks associated with money market funds and to improve transparency for money market fund investors. Funds which do not meet the definitions of a retail money market fund or government money market fund will be required to have a floating NAV. The rules also contemplate the implementation of liquidity fees and redemption gates for non-government money market funds in times of market stress. The SEC also adopted additional diversification, stress-testing, and disclosure measures. Additionally, the Financial Stability Oversight Council (“FSOC”), a board of U.S. regulators established by the Dodd-Frank Act, had proposed certain recommendations for money market fund reform. There can be no assurance that there will not be future FSOC action relating to money market funds. The ultimate impact of money market reform is uncertain, but changes may affect the Fund’s operations and/or the trading and value of money market instruments, which in turn could negatively affect the Fund’s yield and return potential.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Government Money Market Fund | All Asset Levels | 0.20 | ||||||||
Janus Capital has voluntarily agreed to waive one-half of the Fund’s investment advisory fee. Janus Capital may
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also voluntarily waive and/or reimburse additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. These waivers and reimbursements are voluntary and could change or be terminated at any time at the discretion of Janus Capital. There is no guarantee that the Fund will maintain a positive yield. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Class D Shares and Class T Shares of the Fund compensate Janus Capital at an annual rate of 0.46% and 0.48%, respectively, of average daily net assets for providing certain administration services including, but not limited to, recordkeeping and registration functions and also to pay for costs such as shareholder servicing and custody. These amounts are disclosed as “Administration services fees” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class T Shares for providing or procuring administrative services to investors in Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the
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Notes to Financial Statements (unaudited) (continued)
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 included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
4. | 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.
5. | Capital Share Transactions |
For the period ended December 31 | Janus Government Money Market Fund | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 31,892,621 | 67,415,576 | ||||||||
Reinvested dividends and distributions | 8 | 3,218 | ||||||||
Shares repurchased | (37,907,874) | (77,352,703) | ||||||||
Net Increase/(Decrease) in Fund Shares | (6,015,245) | (9,933,909) | ||||||||
Shares Outstanding, Beginning of Period | 165,260,348 | 175,194,257 | ||||||||
Shares Outstanding, End of Period | 159,245,103 | 165,260,348 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,727,675 | 4,359,015 | ||||||||
Reinvested dividends and distributions | 1 | 169 | ||||||||
Shares repurchased | (1,569,856) | (7,521,431) | ||||||||
Net Increase/(Decrease) in Fund Shares | 157,820 | (3,162,247) | ||||||||
Shares Outstanding, Beginning of Period | 3,406,815 | 6,569,062 | ||||||||
Shares Outstanding, End of Period | 3,564,635 | 3,406,815 |
6. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 25
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Useful Information About Your Fund Report (unaudited)
1. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
2. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
3. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
4. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
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The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
5. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
Janus Investment Fund | 29
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81310 | 125-24-93025 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus High-Yield Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus High-Yield Fund
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Janus High-Yield Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process focused on free cash flow and confirming management intentions to transform and improve balance sheets can generate risk-adjusted outperformance over time. Through our comprehensive research process and moderate beta approach, we seek to preserve capital and deliver a less volatile client experience over full market cycles. | ![]() Gibson Smith co-portfolio manager | ![]() Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, Janus High-Yield Fund’s Class T Shares returned -4.58%, compared with -2.85% for its benchmark, the Barclays U.S. Corporate High-Yield Index.
INVESTMENT ENVIRONMENT
During the second half of 2014, credit spreads widened in the high-yield market. Concerns about global growth and increased market volatility prompted a rotation out of fixed income risk assets at various points during the period. Moreover, due to the prevalence of energy sector-related issuance in the high-yield market, the market suffered widespread selling when a global oversupply of crude oil sent crude oil prices into a tailspin. The front month price of the light, sweet crude contract on the New York Mercantile Exchange fell 42% in the fourth quarter alone. U.S. high-yield spreads widened from 3.37 at the period’s start and ended at 4.83.
On the plus side, the U.S. economy gathered momentum. While Japan entered recession and growth in the Eurozone stalled, the promise of more aggressive monetary stimulus measures there created optimism and were deemed beneficial for risk assets. The U.S. high-yield market began to stabilize at the very end of the period.
PERFORMANCE DISCUSSION
The Fund underperformed its benchmark, the Barclays U.S. Corporate High-Yield Index, during the period. Underperformance was driven largely by our security selection within corporate credit.
We remain committed to a bottom up, fundamental approach because it enables us to identify high-yield corporate bonds of companies that are focused on strengthening their capital structures. This approach will offer the best risk-adjusted returns in the high-yield space over the long term, in our view.
However, we believe that individual company fundamentals were eclipsed by the sharp decline in oil prices in the period. Although we believe our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, energy-related sectors, in which we were overweight, suffered indiscriminate selling. We would add that a significant portion of crude oil’s decline occurred during the fourth quarter holiday season. That is a low volume period in the high-yield market, and we believe the lower trading volume exacerbated price declines.
Independent energy was the largest credit sector detractor on a relative basis.
Nuverra, which provides environmental services to the energy industry, was one of our top individual credit detractors. We are mindful that the decline in oil prices could curb Nuverra’s growth prospects. While we believe that Nuverra’s capital expenditure needs are low and a meaningful portion of their business is tied to recurring revenues, we are revisiting our position to better account for the company’s downside risk.
Samson Resources, an oil and natural gas producer, was also one of the largest individual credit detractors. There were investor concerns about the firm’s potential liquidity challenges and rising leverage amid weakening margins and cash flow. We have since exited the Fund’s position in the credit.
The gaming sector and the metals and mining sector were relative contributors to returns. Within metals and mining, we were not exposed to credits present in the benchmark that declined sharply, reflecting our belief that what you don’t own can be just as important to returns as what you do.
Spread carry, or the excess income generated over similar securities in the benchmark, helped relative performance due to our exposure to the higher yielding segment of the below investment-grade market. Lastly, our small out-of-index exposure to convertible securities was also a relative contributor.
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Janus High-Yield Fund (unaudited)
OUTLOOK
The Federal Reserve has signaled that it may be withdrawing accommodative policy at a measured pace, with risk to acceleration, in 2015. We continue to take this into account when positioning the high-yield strategy given the increased market volatility that U.S. monetary policy could create.
Given our focus on risk-adjusted returns, we believe investors will be well served in this environment by a high-yield strategy with higher rated credits, good liquidity and solid fundamental profiles. We have begun to take the ratings composition of the portfolio higher while cutting what we believe to be riskier credit.
Market liquidity in high-yield continues to be challenging. Upgrading credit in the strategy could decrease the risk of lower liquidity, in our view. At the same time, considering the relative strength of the U.S. economy versus its trading partners, we also may have a moderately higher cash weighting ahead of a potential rotation from fixed income into higher risk stocks. Meanwhile, we have reduced our energy sector exposure as we believe oil prices will remain lower for longer. Depending on market conditions, we could reduce our energy sector allocation further.
Most of our energy credits have hedges in place for 2015 that are intended to cushion the downward pressure on earnings due to lower crude oil prices; however, negative sentiment could continue to push energy credit spreads wider. We do not yet believe it is time to start rebuilding a position in high-yield energy credits. However, there could be increasing speculation about consolidation in the sector that will idiosyncratically push prices on bonds higher.
An overall solid U.S. economic foundation is supportive for the high-yield market in 2015, with the outlook for consumer spending promising. Our focus on risk-adjusted returns leads us to favor credits in cyclical consumer sectors, like gaming and restaurants, as well as some non-cyclical sectors like health care, as they may better weather market volatility in 2015, in our view.
On behalf of every member of our investment team, thank you for your investment in Janus High-Yield Fund. We appreciate your entrusting your assets with us, and we look forward to continuing to serve your investment needs.
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(unaudited)
Janus High-Yield Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 6.1 Years | |
Average Effective Duration* | 3.8 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 6.61% | |
With Reimbursement | 6.61% | |
Class A Shares at MOP | ||
Without Reimbursement | 6.29% | |
With Reimbursement | 6.29% | |
Class C Shares*** | ||
Without Reimbursement | 5.91% | |
With Reimbursement | 5.91% | |
Class D Shares | ||
Without Reimbursement | 6.86% | |
With Reimbursement | 6.86% | |
Class I Shares | ||
Without Reimbursement | 6.97% | |
With Reimbursement | 6.97% | |
Class N Shares | ||
Without Reimbursement | 7.02% | |
With Reimbursement | 7.02% | |
Class R Shares | ||
Without Reimbursement | 6.24% | |
With Reimbursement | 6.24% | |
Class S Shares | ||
Without Reimbursement | 6.51% | |
With Reimbursement | 6.51% | |
Class T Shares | ||
Without Reimbursement | 6.78% | |
With Reimbursement | 6.78% | |
Number of Bonds/Notes | 185 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
BB | 27.6% | |
B | 45.7% | |
CCC | 18.1% | |
Not Rated | 3.3% | |
Other | 5.3% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Janus Investment Fund | 3
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Janus High-Yield Fund (unaudited)
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
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Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Emerging markets comprised 5.4% of total net assets.
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(unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus High-Yield Fund – Class A Shares | |||||||||||||
NAV | –4.64% | 0.56% | 7.97% | 6.74% | 7.68% | 1.01% | |||||||
MOP | –9.17% | –4.24% | 6.94% | 6.22% | 7.41% | ||||||||
Janus High-Yield Fund – Class C Shares | |||||||||||||
NAV | –4.98% | –0.15% | 7.17% | 5.98% | 6.92% | 1.73% | |||||||
CDSC | –5.88% | –1.08% | 7.17% | 5.98% | 6.92% | ||||||||
Janus High-Yield Fund – Class D Shares(1) | –4.53% | 0.78% | 8.18% | 6.90% | 7.77% | 0.77% | |||||||
Janus High-Yield Fund – Class I Shares | –4.60% | 0.74% | 8.24% | 6.85% | 7.75% | 0.72% | |||||||
Janus High-Yield Fund – Class N Shares | –4.46% | 0.94% | 8.08% | 6.85% | 7.75% | 0.62% | |||||||
Janus High-Yield Fund – Class R Shares | –4.82% | 0.18% | 7.57% | 6.29% | 7.21% | 1.37% | |||||||
Janus High-Yield Fund – Class S Shares | –4.68% | 0.45% | 7.83% | 6.56% | 7.47% | 1.12% | |||||||
Janus High-Yield Fund – Class T Shares | –4.58% | 0.69% | 8.08% | 6.85% | 7.75% | 0.87% | |||||||
Barclays U.S. Corporate High-Yield Bond Index | –2.85% | 2.45% | 9.03% | 7.74% | 7.37% | ||||||||
Morningstar Quartile – Class T Shares | – | 3rd | 2nd | 2nd | 1st | ||||||||
Morningstar Ranking – based on total returns for High Yield Bond Funds | – | 506/767 | 261/589 | 153/511 | 6/242 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
Janus Investment Fund | 5
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Janus High-Yield Fund (unaudited)
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than investment grade bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R 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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares of the Fund commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 29, 1995 | |
(1) | Closed to new investors. |
6 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 953.60 | $ | 4.92 | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 950.20 | $ | 8.41 | $ | 1,000.00 | $ | 1,016.59 | $ | 8.69 | 1.71% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 954.70 | $ | 3.84 | $ | 1,000.00 | $ | 1,021.27 | $ | 3.97 | 0.78% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 954.00 | $ | 3.50 | $ | 1,000.00 | $ | 1,021.63 | $ | 3.62 | 0.71% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 955.40 | $ | 3.06 | $ | 1,000.00 | $ | 1,022.08 | $ | 3.16 | 0.62% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 951.80 | $ | 6.84 | $ | 1,000.00 | $ | 1,018.20 | $ | 7.07 | 1.39% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 953.20 | $ | 5.56 | $ | 1,000.00 | $ | 1,019.51 | $ | 5.75 | 1.13% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 954.20 | $ | 4.33 | $ | 1,000.00 | $ | 1,020.77 | $ | 4.48 | 0.88% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 7
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 1.2% | ||||||||||
$7,056,905 | Credit Suisse Commercial Mortgage Trust Series 2007-C5 5.8700%, 9/15/40 | $ | 7,219,277 | |||||||
11,296,679 | Fannie Mae Connecticut Avenue Securities 5.0553%, 11/25/24‡ | 11,472,828 | ||||||||
7,596,310 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ MZ 6.1608%, 4/15/18 (144A),‡ | 7,598,589 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $26,051,399) | 26,290,694 | |||||||||
Bank Loans and Mezzanine Loans – 6.1% | ||||||||||
Basic Industry – 1.2% | ||||||||||
15,457,225 | Albaugh, Inc. 6.0000%, 5/31/21(a),‡ | 15,070,794 | ||||||||
12,110,000 | Oxbow Carbon & Minerals LLC 8.0000%, 1/17/20‡ | 10,616,474 | ||||||||
| ||||||||||
25,687,268 | ||||||||||
Capital Goods – 0.2% | ||||||||||
4,994,791 | Maxim Crane Works LP 10.2500%, 11/26/18‡ | 5,019,765 | ||||||||
Commercial Mortgage-Backed Securities – 0.4% | ||||||||||
9,499,455 | JW Marriott 8.1610%, 6/4/15 (144A),‡ | 9,570,701 | ||||||||
Consumer Cyclical – 1.4% | ||||||||||
2,012,885 | Caesars Growth Properties Holdings LLC 6.2500%, 5/8/21‡ | 1,833,154 | ||||||||
6,082,000 | Cosmopolitan of Las Vegas 0%, 12/19/16(a),‡ | 6,082,000 | ||||||||
22,032,000 | Delta 2 Lux Sarl 7.7500%, 7/29/22(a),‡ | 21,371,040 | ||||||||
1,722,386 | Orleans Homebuilders, Inc. 10.5000%, 2/14/16‡ | 1,705,163 | ||||||||
2,638 | Orleans Homebuilders, Inc. 10.7500%, 2/14/16‡ | 2,612 | ||||||||
| ||||||||||
30,993,969 | ||||||||||
Consumer Non-Cyclical – 0.9% | ||||||||||
8,527,000 | Air Medical Group Holdings, Inc. 7.6250%, 5/31/18‡ | 8,399,095 | ||||||||
1,344,000 | Del Monte Foods, Inc. 8.2500%, 8/18/21‡ | 1,140,720 | ||||||||
5,639,040 | Norcraft Cos. LP 5.2500%, 12/13/20‡ | 5,596,747 | ||||||||
4,203,000 | Surgery Center Holdings, Inc. 8.5000%, 11/3/21‡ | 4,045,387 | ||||||||
| ||||||||||
19,181,949 | ||||||||||
Energy – 0.9% | ||||||||||
3,584,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 3,201,695 | ||||||||
24,339,000 | Templar Energy LLC 8.5000%, 11/25/20‡ | 17,426,724 | ||||||||
| ||||||||||
20,628,419 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.3% | ||||||||||
7,312,000 | DTZ U.S. Borrower LLC 9.2500%, 11/4/22‡ | 7,184,040 | ||||||||
Transportation – 0.8% | ||||||||||
3,483,495 | OSG Bulk Ships, Inc. 5.2500%, 8/5/19‡ | 3,387,699 | ||||||||
4,889,714 | OSG International, Inc. 5.7500%, 8/5/19‡ | 4,743,023 | ||||||||
10,154,430 | Syncreon Group BV 5.2500%, 10/28/20‡ | 9,849,797 | ||||||||
| ||||||||||
17,980,519 | ||||||||||
Total Bank Loans and Mezzanine Loans (cost $145,763,854) | 136,246,630 | |||||||||
Common Stocks – 0.6% | ||||||||||
Communications Equipment – 0.6% | ||||||||||
571,362 | CommScope Holding Co., Inc.* (cost $8,590,656) | 13,044,194 | ||||||||
Corporate Bonds – 85.7% | ||||||||||
Banking – 1.1% | ||||||||||
$24,742,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 25,167,340 | ||||||||
Basic Industry – 0.9% | ||||||||||
6,709,000 | Rayonier AM Products, Inc. 5.5000%, 6/1/24 (144A) | 5,509,766 | ||||||||
14,154,000 | Resolute Forest Products, Inc. 5.8750%, 5/15/23 | 13,446,300 | ||||||||
| ||||||||||
18,956,066 | ||||||||||
Brokerage – 0.2% | ||||||||||
4,814,000 | Jefferies Finance LLC / JFIN Co-Issuer Corp. 7.3750%, 4/1/20 (144A) | 4,477,020 | ||||||||
Capital Goods – 7.3% | ||||||||||
44,361,000 | ADS Tactical, Inc. 11.0000%, 4/1/18 (144A),§ | 43,030,170 | ||||||||
18,801,000 | Ahern Rentals, Inc. 9.5000%, 6/15/18 (144A) | 19,459,035 | ||||||||
8,918,000 | American Builders & Contractors Supply Co., Inc. 5.6250%, 4/15/21 (144A) | 8,962,590 | ||||||||
5,213,000 | Ardagh Packaging Finance PLC / Ardagh Holdings USA, Inc. 6.2500%, 1/31/19 (144A) | 5,095,708 | ||||||||
11,942,000 | Greif, Inc. 7.7500%, 8/1/19 | 13,494,460 | ||||||||
19,511,000 | Hunt Cos., Inc. 9.6250%, 3/1/21 (144A) | 19,901,220 | ||||||||
27,062,000 | Nuverra Environmental Solutions, Inc. 9.8750%, 4/15/18 | 16,237,200 | ||||||||
15,235,000 | Reynolds Group Issuer, Inc. / Reynolds Group Issuer LLC 9.0000%, 4/15/19 | 15,768,225 | ||||||||
2,583,000 | Reynolds Group Issuer, Inc. / Reynolds Group Issuer LLC 7.8750%, 8/15/19 | 2,721,836 | ||||||||
10,766,000 | Summit Materials LLC / Summit Materials Finance Corp. 10.5000%, 1/31/20 | 11,950,260 | ||||||||
5,453,000 | United Rentals North America, Inc. 8.3750%, 9/15/20 | 5,848,342 | ||||||||
| ||||||||||
162,469,046 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Communications – 14.7% | ||||||||||
$23,074,000 | Altice SA 7.7500%, 5/15/22 (144A) | $ | 23,117,264 | |||||||
15,094,000 | Block Communications, Inc. 7.2500%, 2/1/20 (144A) | 15,395,880 | ||||||||
7,154,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.2500%, 3/15/21 | 7,207,655 | ||||||||
19,909,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.7500%, 1/15/24 | 20,108,090 | ||||||||
17,411,000 | Crown Media Holdings, Inc. 10.5000%, 7/15/19 | 18,934,462 | ||||||||
17,971,000 | DISH DBS Corp. 5.8750%, 11/15/24 (144A) | 18,060,855 | ||||||||
4,123,000 | DreamWorks Animation SKG, Inc. 6.8750%, 8/15/20 (144A) | 4,226,075 | ||||||||
18,610,000 | Entercom Radio LLC 10.5000%, 12/1/19 | 20,191,850 | ||||||||
12,859,000 | Frontier Communications Corp. 6.2500%, 9/15/21 | 12,923,295 | ||||||||
4,452,000 | Frontier Communications Corp. 6.8750%, 1/15/25 | 4,452,000 | ||||||||
5,145,000 | Gannett Co., Inc. 5.5000%, 9/15/24 (144A) | 5,157,863 | ||||||||
6,895,000 | Harron Communications LP/Harron Finance Corp. 9.1250%, 4/1/20 (144A) | 7,515,550 | ||||||||
12,543,000 | iHeartCommunications, Inc. 9.0000%, 9/15/22 (144A) | 12,292,140 | ||||||||
12,755,000 | Intelsat Luxembourg SA 7.7500%, 6/1/21 | 12,786,888 | ||||||||
14,762,000 | Level 3 Communications, Inc. 5.7500%, 12/1/22 (144A) | 14,854,262 | ||||||||
12,548,000 | Level 3 Escrow II, Inc. 5.3750%, 8/15/22 (144A) | 12,610,740 | ||||||||
8,815,000 | National CineMedia LLC 7.8750%, 7/15/21 | 9,277,788 | ||||||||
30,253,000 | Numericable-SFR 6.0000%, 5/15/22 (144A) | 30,419,391 | ||||||||
2,942,000 | Sprint Capital Corp. 6.9000%, 5/1/19 | 3,000,840 | ||||||||
14,004,000 | Sprint Communications, Inc. 7.0000%, 8/15/20 | 14,004,000 | ||||||||
11,810,000 | T-Mobile USA, Inc. 6.2500%, 4/1/21 | 12,087,535 | ||||||||
20,433,000 | T-Mobile USA, Inc. 6.0000%, 3/1/23 | 20,484,082 | ||||||||
11,590,000 | T-Mobile USA, Inc. 6.3750%, 3/1/25 | 11,775,440 | ||||||||
13,953,000 | Townsquare Radio LLC / Townsquare Radio, Inc. 9.0000%, 4/1/19 (144A) | 14,859,945 | ||||||||
| ||||||||||
325,743,890 | ||||||||||
Consumer Cyclical – 18.3% | ||||||||||
8,372,000 | AV Homes, Inc. 8.5000%, 7/1/19 (144A) | 8,078,980 | ||||||||
17,661,000 | Caesars Entertainment Resort Properties LLC 8.0000%, 10/1/20 (144A) | 17,307,780 | ||||||||
14,880,000 | Caesars Entertainment Resort Properties LLC 11.0000%, 10/1/21 (144A) | 13,540,800 | ||||||||
14,832,000 | Caesars Growth Properties Holdings LLC / Caesars Growth Properties Finance, Inc. 9.3750%, 5/1/22 (144A) | 13,052,160 | ||||||||
5,757,000 | CCM Merger, Inc. 9.1250%, 5/1/19 (144A) | 6,044,850 | ||||||||
14,063,000 | Century Communities, Inc. 6.8750%, 5/15/22 (144A) | 14,063,000 | ||||||||
7,721,000 | Chrysler Group LLC / CG Co-Issuer, Inc. 8.0000%, 6/15/19 | 8,116,701 | ||||||||
5,190,000 | Chrysler Group LLC / CG Co-Issuer, Inc. 8.2500%, 6/15/21 | 5,747,925 | ||||||||
8,393,000 | Dana Holding Corp. 5.3750%, 9/15/21 | 8,644,790 | ||||||||
4,265,000 | Greektown Holdings LLC/Greektown Mothership Corp. 8.8750%, 3/15/19 (144A) | 4,254,338 | ||||||||
13,446,000 | IHS, Inc. 5.0000%, 11/1/22 (144A) | 13,311,540 | ||||||||
1,063,000 | Landry’s Holdings II, Inc. 10.2500%, 1/1/18 (144A) | 1,094,890 | ||||||||
31,571,000 | Landry’s, Inc. 9.3750%, 5/1/20 (144A) | 33,465,260 | ||||||||
5,616,000 | Meritage Homes Corp. 7.1500%, 4/15/20 | 6,037,200 | ||||||||
10,177,000 | �� | Meritage Homes Corp. 7.0000%, 4/1/22 | 10,787,620 | |||||||
11,760,000 | MGM Resorts International 6.7500%, 10/1/20 | 12,348,000 | ||||||||
14,643,000 | MGM Resorts International 6.6250%, 12/15/21 | 15,375,150 | ||||||||
7,394,000 | MGM Resorts International 7.7500%, 3/15/22 | 8,188,855 | ||||||||
20,878,000 | Mohegan Tribal Gaming Authority 9.7500%, 9/1/21 | 21,295,560 | ||||||||
18,704,000 | MPG HoldCo I, Inc. 7.3750%, 10/15/22 (144A) | 19,265,120 | ||||||||
7,613,000 | Navistar International Corp. 8.2500%, 11/1/21 | 7,508,321 | ||||||||
17,125,000 | Peninsula Gaming LLC / Peninsula Gaming Corp. 8.3750%, 2/15/18 (144A) | 17,810,000 | ||||||||
23,944,000 | PF Chang’s China Bistro, Inc. 10.2500%, 6/30/20 (144A) | 23,884,140 | ||||||||
11,819,000 | Pinnacle Entertainment, Inc. 7.5000%, 4/15/21 | 12,321,189 | ||||||||
14,222,000 | Playa Resorts Holding BV 8.0000%, 8/15/20 (144A) | 14,186,445 | ||||||||
12,128,000 | Quiksilver, Inc. / QS Wholesale, Inc. 7.8750%, 8/1/18 (144A) | 10,672,640 | ||||||||
14,519,000 | Quiksilver, Inc. / QS Wholesale, Inc. 10.0000%, 8/1/20 | 9,945,515 | ||||||||
21,147,000 | ROC Finance LLC / ROC Finance 1 Corp. 12.1250%, 9/1/18 (144A) | 22,310,085 | ||||||||
10,901,000 | Schaeffler Holding Finance BV 6.2500%, 11/15/19 (144A) | 11,228,030 | ||||||||
11,803,000 | Schaeffler Holding Finance BV 6.7500%, 11/15/22 (144A) | 12,334,135 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Consumer Cyclical – (continued) | ||||||||||
$12,422,000 | Scientific Games International, Inc. 10.0000%, 12/1/22 (144A) | $ | 11,381,658 | |||||||
7,172,000 | Station Casinos LLC 7.5000%, 3/1/21 | 7,351,300 | ||||||||
5,706,000 | WCI Communities, Inc. 6.8750%, 8/15/21 | 5,720,265 | ||||||||
| ||||||||||
406,674,242 | ||||||||||
Consumer Non-Cyclical – 12.7% | ||||||||||
3,341,000 | Albertsons Holdings LLC/Saturn Acquisition Merger Sub, Inc. 7.7500%, 10/15/22 (144A) | 3,424,525 | ||||||||
13,927,000 | C&S Group Enterprises LLC 5.3750%, 7/15/22 (144A) | 13,822,547 | ||||||||
9,181,000 | Capsugel SA 7.0000%, 5/15/19 (144A) | 9,272,810 | ||||||||
6,963,000 | Catamaran Corp. 4.7500%, 3/15/21 | 6,963,000 | ||||||||
11,740,000 | ConvaTec Finance International SA 8.2500%, 1/15/19 (144A) | 11,916,100 | ||||||||
1,667,000 | Endo Finance LLC & Endo Finco, Inc. 7.0000%, 7/15/19 (144A) | 1,739,931 | ||||||||
3,995,000 | Endo Finance LLC & Endo Finco, Inc. 7.0000%, 12/15/20 (144A) | 4,194,750 | ||||||||
24,083,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A) | 25,166,735 | ||||||||
4,019,000 | Fresenius Medical Care U.S. Finance II, Inc. 5.6250%, 7/31/19 (144A) | 4,290,283 | ||||||||
8,150,000 | Fresenius Medical Care U.S. Finance II, Inc. 5.8750%, 1/31/22 (144A) | 8,842,750 | ||||||||
2,355,000 | HCA Holdings, Inc. 7.7500%, 5/15/21 | 2,508,075 | ||||||||
4,982,000 | Jaguar Holding Co. II / Jaguar Merger Sub, Inc. 9.5000%, 12/1/19 (144A) | 5,343,195 | ||||||||
11,797,000 | JBS USA LLC / JBS USA Finance, Inc. 8.2500%, 2/1/20 (144A) | 12,416,343 | ||||||||
7,887,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A) | 8,123,610 | ||||||||
11,738,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A) | 12,090,140 | ||||||||
9,601,000 | JBS USA LLC / JBS USA Finance, Inc. 5.8750%, 7/15/24 (144A) | 9,432,983 | ||||||||
7,397,000 | Physio-Control International, Inc. 9.8750%, 1/15/19 (144A) | 7,840,820 | ||||||||
5,764,000 | Salix Pharmaceuticals, Ltd. 6.0000%, 1/15/21 (144A) | 5,879,280 | ||||||||
24,769,000 | Simmons Foods, Inc. 7.8750%, 10/1/21 (144A) | 24,335,542 | ||||||||
4,653,000 | Smithfield Foods, Inc. 5.8750%, 8/1/21 (144A) | 4,746,060 | ||||||||
7,560,000 | Smithfield Foods, Inc. 6.6250%, 8/15/22 | 7,900,200 | ||||||||
40,317,000 | SUPERVALU, Inc. 6.7500%, 6/1/21 | 39,599,673 | ||||||||
7,794,000 | SUPERVALU, Inc. 7.7500%, 11/15/22 | 7,638,120 | ||||||||
9,399,000 | Tenet Healthcare Corp. 5.5000%, 3/1/19 (144A) | 9,610,478 | ||||||||
6,504,000 | Tenet Healthcare Corp. 8.0000%, 8/1/20 | 6,861,720 | ||||||||
6,416,000 | Tenet Healthcare Corp. 6.0000%, 10/1/20 | 6,889,693 | ||||||||
9,348,000 | TreeHouse Foods, Inc. 4.8750%, 3/15/22 | 9,464,850 | ||||||||
11,846,000 | Valeant Pharmaceuticals International 6.3750%, 10/15/20 (144A) | 12,379,070 | ||||||||
| ||||||||||
282,693,283 | ||||||||||
Electric – 0.1% | ||||||||||
974,000 | AES Corp. 8.0000%, 10/15/17 | 1,093,315 | ||||||||
Energy – 15.4% | ||||||||||
3,628,000 | Atlas Pipeline Partners LP / Atlas Pipeline Finance Corp. 6.6250%, 10/1/20 | 3,691,490 | ||||||||
2,732,000 | California Resources Corp. 6.0000%, 11/15/24 (144A) | 2,308,540 | ||||||||
1,540,000 | Chaparral Energy, Inc. 9.8750%, 10/1/20 | 1,047,200 | ||||||||
9,062,000 | Chaparral Energy, Inc. 8.2500%, 9/1/21 | 6,162,160 | ||||||||
36,306,000 | Chesapeake Energy Corp. 6.1250%, 2/15/21 | 38,121,300 | ||||||||
9,534,000 | Chesapeake Energy Corp. 5.7500%, 3/15/23 | 9,820,020 | ||||||||
3,168,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 6.0000%, 12/15/20 | 3,033,360 | ||||||||
16,441,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 6.1250%, 3/1/22 | 15,701,155 | ||||||||
14,444,000 | Dresser-Rand Group, Inc. 6.5000%, 5/1/21 | 15,527,300 | ||||||||
21,379,000 | Endeavor Energy Resources LP / EER Finance, Inc. 7.0000%, 8/15/21 (144A) | 18,920,415 | ||||||||
5,934,000 | Ferrellgas Partners LP / Ferrellgas Partners Finance Corp. 8.6250%, 6/15/20 | 5,948,835 | ||||||||
4,688,000 | Halcon Resources Corp. 9.7500%, 7/15/20 | 3,516,000 | ||||||||
16,751,000 | Hiland Partners LP / Hiland Partners Finance Corp. 7.2500%, 10/1/20 (144A) | 15,913,450 | ||||||||
14,292,000 | Hiland Partners LP / Hiland Partners Finance Corp. 5.5000%, 5/15/22 (144A) | 12,576,960 | ||||||||
9,362,000 | Holly Energy Partners LP / Holly Energy Finance Corp. 6.5000%, 3/1/20 | 9,268,380 | ||||||||
4,968,000 | Kodiak Oil & Gas Corp. 8.1250%, 12/1/19 | 5,054,940 | ||||||||
7,728,000 | Kodiak Oil & Gas Corp. 5.5000%, 2/1/22 | 7,747,320 | ||||||||
11,468,000 | Linn Energy LLC / Linn Energy Finance Corp. 6.5000%, 5/15/19 | 9,805,140 | ||||||||
24,381,000 | MarkWest Energy Partners LP / MarkWest Energy Finance Corp. 4.5000%, 7/15/23 | 23,466,712 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$6,978,000 | Oasis Petroleum, Inc. 6.5000%, 11/1/21 | $ | 6,349,980 | |||||||
14,668,000 | Oasis Petroleum, Inc. 6.8750%, 3/15/22 | 13,347,880 | ||||||||
14,817,000 | Parsley Energy LLC / Parsley Finance Corp. 7.5000%, 2/15/22 (144A) | 14,039,108 | ||||||||
9,908,000 | PBF Holding Co. LLC / PBF Finance Corp. 8.2500%, 2/15/20 | 9,957,540 | ||||||||
14,290,000 | QEP Resources, Inc. 5.3750%, 10/1/22 | 13,504,050 | ||||||||
13,865,000 | QEP Resources, Inc. 5.2500%, 5/1/23 | 12,963,775 | ||||||||
6,310,000 | Rice Energy, Inc. 6.2500%, 5/1/22 (144A) | 5,868,300 | ||||||||
15,427,000 | Sabine Pass Liquefaction LLC 5.6250%, 2/1/21 | 15,157,027 | ||||||||
8,958,000 | Sabine Pass Liquefaction LLC 5.6250%, 4/15/23 | 8,756,445 | ||||||||
20,006,000 | Samson Investment Co. 9.7500%, 2/15/20‡ | 8,289,986 | ||||||||
3,294,000 | Sanchez Energy Corp. 6.1250%, 1/15/23 (144A) | 2,766,960 | ||||||||
5,537,000 | SandRidge Energy, Inc. 7.5000%, 3/15/21 | 3,543,680 | ||||||||
5,169,000 | SandRidge Energy, Inc. 8.1250%, 10/15/22 | 3,256,470 | ||||||||
11,949,000 | Sidewinder Drilling, Inc. 9.7500%, 11/15/19 (144A) | 6,661,568 | ||||||||
7,662,000 | Triangle USA Petroleum Corp. 6.7500%, 7/15/22 (144A) | 5,056,920 | ||||||||
6,900 | U.S. Shale Solutions, Inc 12.5000%, 9/1/17 (144A) | 5,175,000 | ||||||||
| ||||||||||
342,325,366 | ||||||||||
Finance Companies – 0.5% | ||||||||||
2,200,000 | CIT Group, Inc. 6.6250%, 4/1/18 (144A) | 2,387,000 | ||||||||
8,691,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 9,169,005 | ||||||||
| ||||||||||
11,556,005 | ||||||||||
Industrial – 1.9% | ||||||||||
5,196,000 | Greystar Real Estate Partners LLC 8.2500%, 12/1/22 (144A) | 5,286,930 | ||||||||
1,148,000 | Hillman Group, Inc. 6.3750%, 7/15/22 (144A) | 1,102,080 | ||||||||
22,380,000 | Howard Hughes Corp. 6.8750%, 10/1/21 (144A) | 23,163,300 | ||||||||
8,874,000 | Park-Ohio Industries, Inc. 8.1250%, 4/1/21 | 9,428,625 | ||||||||
4,580,000 | Permian Holdings, Inc. 10.5000%, 1/15/18 (144A) | 3,435,000 | ||||||||
| ||||||||||
42,415,935 | ||||||||||
Insurance – 0.5% | ||||||||||
10,574,000 | Centene Corp. 4.7500%, 5/15/22 | 10,600,435 | ||||||||
Real Estate Investment Trusts (REITs) – 1.9% | ||||||||||
3,400,000 | Forest City Enterprises, Inc. 3.6250%, 8/15/20 | 3,616,750 | ||||||||
12,809,000 | Forestar USA Real Estate Group, Inc. 8.5000%, 6/1/22 (144A) | 12,488,775 | ||||||||
24,805,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 24,867,013 | ||||||||
| ||||||||||
40,972,538 | ||||||||||
Technology – 4.9% | ||||||||||
34,222,000 | Blackboard, Inc. 7.7500%, 11/15/19 (144A) | 34,307,555 | ||||||||
19,560,000 | Cardtronics, Inc. 5.1250%, 8/1/22 (144A) | 19,071,000 | ||||||||
23,382,000 | CommScope Holding Co., Inc. 6.6250%, 6/1/20 (144A) | 24,083,460 | ||||||||
12,575,000 | Sensata Technologies BV 5.6250%, 11/1/24 (144A) | 13,046,562 | ||||||||
6,035,000 | TransUnion Holding Co., Inc. 8.1250%, 6/15/18 | 6,185,875 | ||||||||
11,546,000 | TransUnion Holding Co., Inc. 9.6250%, 6/15/18 | 11,809,249 | ||||||||
| ||||||||||
108,503,701 | ||||||||||
Transportation – 5.3% | ||||||||||
11,157,000 | CEVA Group PLC 4.0000%, 5/1/18 (144A) | 9,706,590 | ||||||||
1,609,000 | CEVA Group PLC 7.0000%, 3/1/21 (144A) | 1,552,685 | ||||||||
2,235,000 | CEVA Group PLC 9.0000%, 9/1/21 (144A) | 2,100,900 | ||||||||
5,354,000 | Eletson Holdings 9.6250%, 1/15/22 (144A) | 5,246,920 | ||||||||
21,047,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 20,836,530 | ||||||||
18,702,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 18,608,490 | ||||||||
12,631,000 | Syncreon Group BV / Syncreon Global Finance U.S., Inc. 8.6250%, 11/1/21 (144A) | 11,873,140 | ||||||||
13,470,000 | U.S. Airways Group, Inc. 6.1250%, 6/1/18 | 14,042,475 | ||||||||
6,757,000 | Watco Cos. LLC / Watco Finance Corp. 6.3750%, 4/1/23 (144A) | 6,689,430 | ||||||||
24,942,000 | XPO Logistics, Inc. 7.8750%, 9/1/19 (144A) | 26,064,390 | ||||||||
| ||||||||||
116,721,550 | ||||||||||
Total Corporate Bonds (cost $1,968,719,119) | 1,900,369,732 | |||||||||
Preferred Stocks – 1.5% | ||||||||||
Automobiles – 0.6% | ||||||||||
128,230 | Fiat Chrysler Automobiles NV, 7.8750% | 13,808,768 | ||||||||
Diversified Telecommunication Services – 0.6% | ||||||||||
249,050 | T-Mobile U.S., Inc., 5.5000% | 13,197,160 | ||||||||
Household Durables – 0.3% | ||||||||||
58,750 | William Lyon Homes, 6.5000% | 6,315,625 | ||||||||
Total Preferred Stocks (cost $31,175,402) | 33,321,553 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Investment Companies – 4.2% | ||||||||||
Money Markets – 4.2% | ||||||||||
94,236,792 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $94,236,792) | $ | 94,236,792 | |||||||
Total Investments (total cost $2,274,537,222) – 99.3% | 2,203,509,595 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.7% | 14,904,246 | |||||||||
Net Assets – 100% | $ | 2,218,413,841 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 1,900,212,188 | 86 | .2% | ||||
United Kingdom | 59,898,555 | 2 | .7 | |||||
Luxembourg | 47,820,252 | 2 | .2 | |||||
Brazil | 42,063,076 | 1 | .9 | |||||
Netherlands | 37,082,804 | 1 | .7 | |||||
Germany | 36,695,198 | 1 | .7 | |||||
France | 30,419,391 | 1 | .4 | |||||
Greece | 30,413,655 | 1 | .4 | |||||
Italy | 13,808,768 | 0 | .6 | |||||
Ireland | 5,095,708 | 0 | .2 | |||||
Total | $ | 2,203,509,595 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays U.S. Corporate High-Yield Bond Index | Composed of fixed-rate, publicly issued, non-investment grade debt. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus High-Yield Fund | $ | 1,083,775,530 | 48.9 | % | ||||||
(a) | All or a portion of this position has not settled. Upon settlement date, interest rates for unsettled amounts will be determined. Interest and dividends will not be accrued until time of settlement. | |
* | Non-income producing security. |
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus High-Yield Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 3/22/11 – 8/5/14 | $ | 44,832,208 | $ | 43,030,170 | 1.9 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus High-Yield Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 110,274,829 | 977,733,963 | (993,772,000) | 94,236,792 | $ | – | $ | 48,662 | $ | 94,236,792 | |||||||||||
Janus Investment Fund | 13
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
Janus High-Yield Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 26,290,694 | $– | |||||
Bank Loans and Mezzanine Loans | – | 136,246,630 | – | |||||||
Common Stocks | 13,044,194 | – | – | |||||||
Corporate Bonds | – | 1,900,369,732 | – | |||||||
Preferred Stocks | – | 33,321,553 | – | |||||||
Investment Companies | – | 94,236,792 | – | |||||||
Total Assets | $ | 13,044,194 | $ | 2,190,465,401 | $– | |||||
14 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
Janus | ||||
As of December 31, 2014 (unaudited) | High-Yield Fund | |||
Assets: | ||||
Investments at cost | $ | 2,274,537,222 | ||
Unaffiliated investments at value | $ | 2,109,272,803 | ||
Affiliated investments at value | 94,236,792 | |||
Non-interested Trustees’ deferred compensation | 45,555 | |||
Receivables: | ||||
Investments sold | 1,340,540 | |||
Fund shares sold | 2,259,447 | |||
Dividends from affiliates | 5,353 | |||
Interest | 38,312,724 | |||
Other assets | 632,426 | |||
Total Assets | 2,246,105,640 | |||
Liabilities: | ||||
Due to custodian | 4,849,072 | |||
Payables: | ||||
Investments purchased | 37,073 | |||
Fund shares repurchased | 17,393,324 | |||
Dividends | 3,377,082 | |||
Advisory fees | 1,128,918 | |||
Fund administration fees | 20,048 | |||
Transfer agent fees and expenses | 459,506 | |||
12b-1 Distribution and shareholder servicing fees | 129,753 | |||
Non-interested Trustees’ fees and expenses | 15,138 | |||
Non-interested Trustees’ deferred compensation fees | 45,555 | |||
Accrued expenses and other payables | 236,330 | |||
Total Liabilities | 27,691,799 | |||
Net Assets | $ | 2,218,413,841 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statement of Assets and Liabilities (continued)
Janus | ||||
As of December 31, 2014 (unaudited) | High-Yield Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 2,311,366,169 | ||
Undistributed net investment income/(loss)* | 390,612 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (22,325,896) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (71,017,044) | |||
Total Net Assets | $ | 2,218,413,841 | ||
Net Assets - Class A Shares | $ | 289,235,041 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 33,949,144 | |||
Net Asset Value Per Share(1) | $ | 8.52 | ||
Maximum Offering Price Per Share(2) | $ | 8.94 | ||
Net Assets - Class C Shares | $ | 65,506,881 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,686,093 | |||
Net Asset Value Per Share(1) | $ | 8.52 | ||
Net Assets - Class D Shares | $ | 360,864,724 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 42,350,894 | |||
Net Asset Value Per Share | $ | 8.52 | ||
Net Assets - Class I Shares | $ | 256,491,769 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 30,090,417 | |||
Net Asset Value Per Share | $ | 8.52 | ||
Net Assets - Class N Shares | $ | 6,962,071 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 816,859 | |||
Net Asset Value Per Share | $ | 8.52 | ||
Net Assets - Class R Shares | $ | 1,663,435 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 195,344 | |||
Net Asset Value Per Share | $ | 8.52 | ||
Net Assets - Class S Shares | $ | 3,848,323 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 450,742 | |||
Net Asset Value Per Share | $ | 8.54 | ||
Net Assets - Class T Shares | $ | 1,233,841,597 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 144,778,118 | |||
Net Asset Value Per Share | $ | 8.52 |
* | See “Federal Income Tax” 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.
16 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
Janus | ||||
For the period ended December 31, 2014 (unaudited) | High-Yield Fund | |||
Investment Income: | ||||
Interest | $ | 83,561,862 | ||
Dividends from affiliates | 48,662 | |||
Other income | 1,146,114 | |||
Total Investment Income | 84,756,638 | |||
Expenses: | ||||
Advisory fees | 7,099,742 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 411,052 | |||
Class C Shares | 372,191 | |||
Class R Shares | 4,461 | |||
Class S Shares | 6,055 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 236,783 | |||
Class R Shares | 2,230 | |||
Class S Shares | 6,055 | |||
Class T Shares | 1,714,283 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 180,054 | |||
Class C Shares | 23,149 | |||
Class I Shares | 138,517 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 19,259 | |||
Class C Shares | 5,822 | |||
Class D Shares | 39,924 | |||
Class I Shares | 8,364 | |||
Class N Shares | 84 | |||
Class R Shares | 73 | |||
Class S Shares | 89 | |||
Class T Shares | 8,271 | |||
Shareholder reports expense | 90,508 | |||
Registration fees | 131,488 | |||
Custodian fees | 7,778 | |||
Professional fees | 40,256 | |||
Non-interested Trustees’ fees and expenses | 22,275 | |||
Fund administration fees | 126,321 | |||
Other expenses | 342,226 | |||
Total Expenses | 11,037,310 | |||
Net Expenses | 11,037,310 | |||
Net Investment Income/(Loss) | 73,719,328 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (14,007,874) | |||
Total Net Realized Gain/(Loss) on Investments | (14,007,874) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (178,446,458) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (178,446,458) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (118,735,004) |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statements of Changes in Net Assets
Janus | ||||||||
High-Yield Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 73,719,328 | $ | 156,586,474 | ||||
Net realized gain/(loss) on investments | (14,007,874) | 49,425,624 | ||||||
Change in unrealized net appreciation/depreciation | (178,446,458) | 86,063,398 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (118,735,004) | 292,075,496 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (9,440,043) | (20,154,186) | ||||||
Class C Shares | (1,873,426) | (4,024,097) | ||||||
Class D Shares | (11,754,327) | (23,122,112) | ||||||
Class I Shares | (10,137,318) | (24,771,637) | ||||||
Class N Shares | (330,378) | (571,198) | ||||||
Class R Shares | (47,750) | (106,419) | ||||||
Class S Shares | (135,806) | (391,478) | ||||||
Class T Shares | (40,185,970) | (83,957,644) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (6,528,274) | (7,916,746) | ||||||
Class C Shares | (1,478,907) | (1,843,182) | ||||||
Class D Shares | (8,104,546) | (8,844,817) | ||||||
Class I Shares | (5,775,085) | (9,707,997) | ||||||
Class N Shares | (155,018) | (193,478) | ||||||
Class R Shares | (37,278) | (42,848) | ||||||
Class S Shares | (97,519) | (164,302) | ||||||
Class T Shares | (27,775,564) | (32,911,493) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (123,857,209) | (218,723,634) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Janus | ||||||||
High-Yield Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 89,246,069 | 152,372,084 | ||||||
Class C Shares | 5,626,171 | 9,541,692 | ||||||
Class D Shares | 28,790,117 | 81,734,897 | ||||||
Class I Shares | 177,119,559 | 401,297,463 | ||||||
Class N Shares | 20,843,079 | 15,911,616 | ||||||
Class R Shares | 226,172 | 1,237,462 | ||||||
Class S Shares | 406,779 | 1,082,970 | ||||||
Class T Shares | 162,401,253 | 362,634,354 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 15,336,530 | 26,759,991 | ||||||
Class C Shares | 2,933,956 | 5,146,415 | ||||||
Class D Shares | 17,157,905 | 27,622,222 | ||||||
Class I Shares | 13,503,868 | 30,330,687 | ||||||
Class N Shares | 371,084 | 634,635 | ||||||
Class R Shares | 53,189 | 97,794 | ||||||
Class S Shares | 232,466 | 554,921 | ||||||
Class T Shares | 67,065,090 | 115,063,168 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (135,805,378) | (158,574,789) | ||||||
Class C Shares | (12,238,953) | (20,397,677) | ||||||
Class D Shares | (52,989,409) | (75,358,390) | ||||||
Class I Shares | (380,145,718) | (199,150,744) | ||||||
Class N Shares | (32,618,816) | (4,152,189) | ||||||
Class R Shares | (365,652) | (1,139,884) | ||||||
Class S Shares | (1,375,678) | (3,695,044) | ||||||
Class T Shares | (330,952,353) | (361,235,745) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (345,178,670) | 408,317,909 | ||||||
Net Increase/(Decrease) in Net Assets | (587,770,883) | 481,669,771 | ||||||
Net Assets: | ||||||||
Beginning of period | 2,806,184,724 | 2,324,514,953 | ||||||
End of period | $ | 2,218,413,841 | $ | 2,806,184,724 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 390,612 | $ | 576,302 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus High-Yield Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.29 | $7.61 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.26(3) | 0.55(3) | 0.57 | 0.62 | 0.65 | 0.47 | 0.27 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.68) | 0.50 | 0.15 | (0.13) | 0.68 | 0.16 | 0.68 | |||||||||||||||||||||||
Total from Investment Operations | (0.42) | 1.05 | 0.72 | 0.49 | 1.33 | 0.63 | 0.95 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.55) | (0.57) | (0.62) | (0.65) | (0.47) | (0.27) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(4) | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.47) | (0.78) | (0.58) | (0.62) | (0.65) | (0.47) | (0.27) | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.29 | |||||||||||||||||||||||
Total Return** | (4.64)% | 11.93% | 8.12% | 5.71% | 16.09%(5) | 7.66% | 12.63% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $289,235 | $352,140 | $321,554 | $265,944 | $171,976 | $109,096 | $84,972 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $324,579 | $338,923 | $298,736 | $212,564 | $143,277 | $98,784 | $75,369 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.00% | 1.01% | 0.97% | 0.99% | 0.92% | 0.92% | 0.96% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.00% | 1.01% | 0.97% | 0.99% | 0.92% | 0.92% | 0.96% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.75% | 5.93% | 6.10% | 6.91% | 7.23% | 8.30% | 10.07% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
Class C Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Janus High-Yield Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.29 | $7.61 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.23(3) | 0.48(3) | 0.50 | 0.55 | 0.59 | 0.43 | 0.27 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.69) | 0.51 | 0.15 | (0.12) | 0.68 | 0.16 | 0.68 | |||||||||||||||||||||||
Total from Investment Operations | (0.46) | 0.99 | 0.65 | 0.43 | 1.27 | 0.59 | 0.95 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.23) | (0.49) | (0.50) | (0.56) | (0.59) | (0.43) | (0.27) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(4) | – | – | – | |||||||||||||||||||||||
Total Distributions | (0.43) | (0.72) | (0.51) | (0.56) | (0.59) | (0.43) | (0.27) | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.29 | |||||||||||||||||||||||
Total Return** | (4.98)% | 11.13% | 7.31% | 4.93% | 15.30%(5) | 7.14% | 12.36% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $65,507 | $76,294 | $79,726 | $78,392 | $78,456 | $68,485 | $61,744 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $73,473 | $77,004 | $84,174 | $73,801 | $76,507 | $67,693 | $51,080 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.71% | 1.73% | 1.72% | 1.72% | 1.61% | 1.65% | 1.71% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.71% | 1.73% | 1.72% | 1.72% | 1.61% | 1.65% | 1.71% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.05% | 5.21% | 5.36% | 6.19% | 6.57% | 7.59% | 9.27% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Impact on performance due to reimbursement from advisor was 0.51%. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
Table of Contents
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year ended | Janus High-Yield Fund | |||||||||||||||||||||||||
June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.27 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.27(2) | 0.57(2) | 0.59 | 0.64 | 0.67 | 0.26 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.68) | 0.51 | 0.15 | (0.13) | 0.68 | 0.18 | ||||||||||||||||||||
Total from Investment Operations | (0.41) | 1.08 | 0.74 | 0.51 | 1.35 | 0.44 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.58) | (0.59) | (0.64) | (0.67) | (0.26) | ||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(3) | – | – | ||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | ||||||||||||||||||||
Total Distributions and Other | (0.48) | (0.81) | (0.60) | (0.64) | (0.67) | (0.26) | ||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | ||||||||||||||||||||
Total Return** | (4.53)% | 12.20% | 8.33% | 5.94% | 16.28%(5) | 5.31% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $360,865 | $405,861 | $360,924 | $328,700 | $317,038 | $247,945 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $389,459 | $373,985 | $361,587 | $310,872 | $292,765 | $245,710 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.78% | 0.77% | 0.77% | 0.76% | 0.76% | 0.77% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.78% | 0.77% | 0.77% | 0.76% | 0.76% | 0.77% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.97% | 6.16% | 6.30% | 7.15% | 7.41% | 8.27% | ||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus High-Yield Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(6) | 2009(7) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.42 | $9.15 | $9.01 | $9.13 | $8.45 | $8.28 | $7.61 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.28(2) | 0.58(2) | 0.60 | 0.64 | 0.67 | 0.48 | 0.28 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.70) | 0.50 | 0.15 | (0.11) | 0.68 | 0.17 | 0.67 | |||||||||||||||||||||||
Total from Investment Operations | (0.42) | 1.08 | 0.75 | 0.53 | 1.35 | 0.65 | 0.95 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.58) | (0.60) | (0.65) | (0.67) | (0.48) | (0.28) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(3) | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | – | |||||||||||||||||||||||
Total Distributions and Other | (0.48) | (0.81) | (0.61) | (0.65) | (0.67) | (0.48) | (0.28) | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.42 | $9.15 | $9.01 | $9.13 | $8.45 | $8.28 | |||||||||||||||||||||||
Total Return** | (4.60)% | 12.25% | 8.43% | 6.13% | 16.35%(5) | 7.98% | 12.60% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $256,492 | $478,576 | $236,426 | $241,339 | $174,961 | $73,042 | $22,052 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $331,908 | $396,882 | $285,515 | $226,809 | $178,564 | $43,060 | $14,845 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.71% | 0.72% | 0.68% | 0.68% | 0.70% | 0.64% | 0.66% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.71% | 0.72% | 0.68% | 0.68% | 0.70% | 0.64% | 0.66% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 6.04% | 6.22% | 6.38% | 7.23% | 7.43% | 8.50% | 10.33% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(5) | Impact on performance due to reimbursement from advisor was 0.51%. | |
(6) | Period from November 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(7) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Financial Highlights (continued)
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | Janus High-Yield Fund | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.01 | $8.92 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.28(2) | 0.58(2) | 0.60 | 0.06 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.69) | 0.51 | 0.14 | 0.08 | ||||||||||||||
Total from Investment Operations | (0.41) | 1.09 | 0.74 | 0.14 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.28) | (0.59) | (0.60) | (0.05) | ||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | – | ||||||||||||||
Total Distributions | (0.48) | (0.82) | (0.61) | (0.05) | ||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.01 | ||||||||||||||
Total Return** | (4.46)% | 12.37% | 8.38% | 1.62% | ||||||||||||||
Net Assets, End of Period (in thousands) | $6,962 | $19,353 | $6,738 | $4,392 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $10,793 | $9,055 | $8,788 | $3,390 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.62% | 0.62% | 0.61% | 0.61% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.62% | 0.62% | 0.61% | 0.61% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 6.05% | 6.29% | 6.47% | 6.86% | ||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% |
Class R Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus High-Yield Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.28 | $7.61 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.25(2) | 0.52(2) | 0.53 | 0.59 | 0.61 | 0.45 | 0.26 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.69) | 0.50 | 0.15 | (0.13) | 0.68 | 0.17 | 0.67 | |||||||||||||||||||||||
Total from Investment Operations | (0.44) | 1.02 | 0.68 | 0.46 | 1.29 | 0.62 | 0.93 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.25) | (0.52) | (0.53) | (0.59) | (0.61) | (0.45) | (0.26) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | 0.01 | –(5) | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(6) | –(6) | – | – | |||||||||||||||||||||||
Total Distributions and Other | (0.45) | (0.75) | (0.54) | (0.59) | (0.61) | (0.45) | 0.26 | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.28 | |||||||||||||||||||||||
Total Return** | (4.82)% | 11.52% | 7.68% | 5.38% | 15.62%(7) | 7.46% | 12.33% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,663 | $1,918 | $1,666 | $1,082 | $1,100 | $876 | $959 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,761 | $1,899 | $1,459 | $1,081 | $997 | $1,095 | $885 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets | 1.39% | 1.37% | 1.37% | 1.29% | 1.33% | 1.37% | 1.41% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets | 1.39% | 1.37% | 1.37% | 1.29% | 1.33% | 1.37% | 1.41% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets | 5.36% | 5.58% | 5.67% | 6.64% | 6.85% | 7.88% | 9.83% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
* | See “Federal Income Tax” 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 May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. | |
(5) | Less than $0.005 on a per share basis. | |
(6) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(7) | Impact on performance due to reimbursement from advisor was 0.50%. |
See Notes to Financial Statements.
22 | DECEMBER 31, 2014
Table of Contents
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus High-Yield Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.43 | $9.16 | $9.02 | $9.15 | $8.47 | $8.29 | $7.61 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.26(3) | 0.54(3) | 0.56 | 0.61 | 0.63 | 0.46 | 0.27 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.69) | 0.51 | 0.15 | (0.13) | 0.68 | 0.17 | 0.67 | |||||||||||||||||||||||
Total from Investment Operations | (0.43) | 1.05 | 0.71 | 0.48 | 1.31 | 0.63 | 0.94 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.26) | (0.55) | (0.56) | (0.61) | (0.63) | (0.45) | (0.27) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(4) | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | 0.01 | |||||||||||||||||||||||
Total Distributions and Other | (0.46) | (0.78) | (0.57) | (0.61) | (0.63) | (0.45) | (0.26) | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.54 | $9.43 | $9.16 | $9.02 | $9.15 | $8.47 | $8.29 | |||||||||||||||||||||||
Total Return** | (4.68)% | 11.80% | 7.95% | 5.57% | 15.83%(6) | 7.77% | 12.55% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,848 | $5,045 | $6,901 | $6,213 | $7,015 | $6,354 | $5,841 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,781 | $6,694 | $6,893 | $5,959 | $7,079 | $6,774 | $5,037 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.13% | 1.12% | 1.12% | 1.11% | 1.13% | 1.12% | 1.18% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.13% | 1.11% | 1.12% | 1.11% | 1.13% | 1.12% | 1.18% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.62% | 5.83% | 5.96% | 6.80% | 7.05% | 8.12% | 9.82% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or | ||||||||||||||||||||||||||||||
period ended June 30 and the year ended | Janus High-Yield Fund | |||||||||||||||||||||||||||||
October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.28 | $6.94 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.27(3) | 0.57(3) | 0.58 | 0.63 | 0.65 | 0.47 | 0.93 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.69) | 0.50 | 0.15 | (0.13) | 0.69 | 0.17 | 1.34 | |||||||||||||||||||||||
Total from Investment Operations | (0.42) | 1.07 | 0.73 | 0.50 | 1.34 | 0.64 | 2.27 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.57) | (0.58) | (0.63) | (0.66) | (0.47) | (0.93) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.20) | (0.23) | (0.01) | –(4) | – | – | – | |||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | –(5) | |||||||||||||||||||||||
Total Distributions and Other | (0.47) | (0.80) | (0.59) | (0.63) | (0.66) | (0.47) | (0.93) | |||||||||||||||||||||||
Net Asset Value, End of Period | $8.52 | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | $8.28 | |||||||||||||||||||||||
Total Return** | (4.58)% | 12.09% | 8.23% | 5.83% | 16.14%(7) | 7.83% | 35.34% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,233,842 | $1,466,998 | $1,310,580 | $1,269,091 | $1,060,678 | $707,010 | $881,347 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,353,522 | $1,378,198 | $1,401,785 | $1,107,108 | $875,192 | $819,927 | $574,291 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.88% | 0.87% | 0.87% | 0.86% | 0.88% | 0.86% | 0.89% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.88% | 0.86% | 0.86% | 0.86% | 0.88% | 0.86% | 0.89% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 5.87% | 6.07% | 6.21% | 7.05% | 7.28% | 8.42% | 12.44% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 67% | 93% | 61% | 92% | 61% | 97% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(6) | Impact on performance due to reimbursement from advisor was 0.50%. | |
(7) | Impact on performance due to reimbursement from advisor was 0.51%. |
See Notes to Financial Statements.
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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 High-Yield Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect
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at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity risk. Risks may
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Notes to Financial Statements (unaudited) (continued)
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 Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
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There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Emerging Market Investing
Within the parameters of its specific investment policies, the Fund, may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” Investing in emerging markets may involve certain risks and considerations not typically associated with investing in the United States and imposes risks greater than, or in addition to, the risks associated with investing in securities of more developed foreign countries. Emerging markets securities are exposed to a number of additional risks, which may result from less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies
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Notes to Financial Statements (unaudited) (continued)
and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as
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conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus High-Yield Fund | First $ | 300 Million | 0.65 | |||||||
Over $ | 300 Million | 0.55 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
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Notes to Financial Statements (unaudited) (continued)
Expense | ||||||
Fund | Limit (%) | |||||
Janus High-Yield Fund | 0.69 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, 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. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will
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be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the ‘Investing Fund‘). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus High-Yield Fund | $ | 3,213 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
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Notes to Financial Statements (unaudited) (continued)
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus High-Yield Fund | $ | 459 | ||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus High-Yield Fund | $ | 2,275,090,068 | $ | 26,849,577 | $ | (98,430,050) | $ | (71,580,473) | ||||||||||
5. | Capital Share Transactions |
Janus High-Yield Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 9,808,365 | 16,379,638 | ||||||||
Reinvested dividends and distributions | 1,740,226 | 2,886,495 | ||||||||
Shares repurchased | (15,019,555) | (17,021,962) | ||||||||
Net Increase/(Decrease) in Fund Shares | (3,470,964) | 2,244,171 | ||||||||
Shares Outstanding, Beginning of Period | 37,420,108 | 35,175,937 | ||||||||
Shares Outstanding, End of Period | 33,949,144 | 37,420,108 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 614,396 | 1,025,930 | ||||||||
Reinvested dividends and distributions | 333,426 | 555,288 | ||||||||
Shares repurchased | (1,366,110) | (2,195,195) | ||||||||
Net Increase/(Decrease) in Fund Shares | (418,288) | (613,977) | ||||||||
Shares Outstanding, Beginning of Period | 8,104,381 | 8,718,358 | ||||||||
Shares Outstanding, End of Period | 7,686,093 | 8,104,381 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 3,152,834 | 8,784,135 | ||||||||
Reinvested dividends and distributions | 1,946,938 | 2,978,903 | ||||||||
Shares repurchased | (5,871,941) | (8,118,551) | ||||||||
Net Increase/(Decrease) in Fund Shares | (772,169) | 3,644,487 | ||||||||
Shares Outstanding, Beginning of Period | 43,123,063 | 39,478,576 | ||||||||
Shares Outstanding, End of Period | 42,350,894 | 43,123,063 |
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Janus High-Yield Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 19,303,623 | 43,093,850 | ||||||||
Reinvested dividends and distributions | 1,525,172 | 3,267,472 | ||||||||
Shares repurchased | (41,567,589) | (21,384,510) | ||||||||
Net Increase/(Decrease) in Fund Shares | (20,738,794) | 24,976,812 | ||||||||
Shares Outstanding, Beginning of Period | 50,829,211 | 25,852,399 | ||||||||
Shares Outstanding, End of Period | 30,090,417 | 50,829,211 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,242,078 | 1,700,178 | ||||||||
Reinvested dividends and distributions | 42,127 | 68,487 | ||||||||
Shares repurchased | (3,523,347) | (449,478) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,239,142) | 1,319,187 | ||||||||
Shares Outstanding, Beginning of Period | 2,056,001 | 736,814 | ||||||||
Shares Outstanding, End of Period | 816,859 | 2,056,001 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 25,258 | 133,266 | ||||||||
Reinvested dividends and distributions | 6,049 | 10,552 | ||||||||
Shares repurchased | (39,880) | (122,262) | ||||||||
Net Increase/(Decrease) in Fund Shares | (8,573) | 21,556 | ||||||||
Shares Outstanding, Beginning of Period | 203,917 | 182,361 | ||||||||
Shares Outstanding, End of Period | 195,344 | 203,917 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 44,359 | 116,163 | ||||||||
Reinvested dividends and distributions | 26,327 | 59,764 | ||||||||
Shares repurchased | (154,912) | (394,394) | ||||||||
Net Increase/(Decrease) in Fund Shares | (84,226) | (218,467) | ||||||||
Shares Outstanding, Beginning of Period | 534,968 | 753,435 | ||||||||
Shares Outstanding, End of Period | 450,742 | 534,968 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 17,683,696 | 38,970,092 | ||||||||
Reinvested dividends and distributions | 7,605,941 | 12,406,893 | ||||||||
Shares repurchased | (36,356,080) | (38,864,180) | ||||||||
Net Increase/(Decrease) in Fund Shares | (11,066,443) | 12,512,805 | ||||||||
Shares Outstanding, Beginning of Period | 155,844,561 | 143,331,756 | ||||||||
Shares Outstanding, End of Period | 144,778,118 | 155,844,561 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||
Janus High-Yield Fund | $ | 854,035,967 | $ | 1,214,244,723 | $– | $– | ||||||
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Notes to Financial Statements (unaudited) (continued)
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
46 | DECEMBER 31, 2014
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
Janus Investment Fund | 47
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
48 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 49
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81205 | 125-24-93026 02-15 |
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semiannual report
December 31, 2014
Janus Money Market Fund
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
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Janus Money Market Fund
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5 | ||
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Janus Money Market Fund (unaudited)
![]() Eric Thorderson portfolio manager |
Janus Money Market Fund
Average Annual Total Return | ||
For the periods ended December 31, 2014 | ||
Class D Shares(1) | ||
Fiscal Year-to-Date | 0.00% | |
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.42% | |
Since Inception (February 14, 1995) | 2.61% | |
Class T Shares | ||
Fiscal Year-to-Date | 0.00% | |
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.42% | |
Since Inception (February 14, 1995) | 2.61% |
Seven-Day Current Yield | ||
Class D Shares(1) | ||
With Reimbursement | 0.00%(2) | |
Without Reimbursement | -0.43% | |
Class T Shares | ||
With Reimbursement | 0.00%(2) | |
Without Reimbursement | -0.45% | |
Expense Ratios | ||
Per the October 28, 2014 prospectuses | ||
Class D Shares(1) | ||
Total Annual Fund Operating Expenses | 0.66% | |
Class T Shares | ||
Total Annual Fund Operating Expenses | 0.68% |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. For the most recent month-end performance 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).
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 has voluntarily agreed to waive one-half of its investment advisory fee and such additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. Such reimbursements could be changed or terminated at any time.
Class D Shares of the Fund commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If Class D Shares of the Fund had been available during periods prior to February 16, 2010, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class D Shares reflects the fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Returns include reinvestment of all dividends and distributions.
The yield more closely reflects the current earnings of the Fund than the total return.
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
See “Useful Information About Your Fund Report.”
(1) | Closed to new investors. | |
(2) | Less than 0.005%. |
Janus Investment Fund | 1
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Janus Money Market Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in either share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.60 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.61 | 0.12% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.60 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.61 | 0.12% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
2 | DECEMBER 31, 2014
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Janus Money Market Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Principal Amount | Value | |||||||||
Certificates of Deposit – 32.2% | ||||||||||
$38,000,000 | Bank of Tokyo-Mitsubishi UFJ, Ltd., New York 0.1200%, 1/7/15 | $ | 38,000,000 | |||||||
20,000,000 | Bank of Tokyo-Mitsubishi UFJ, Ltd., New York 0.1200%, 1/2/15 | 20,000,000 | ||||||||
25,000,000 | Canadian Imperial Bank of Commerce, New York 0.1100%, 1/13/15 | 25,000,000 | ||||||||
20,000,000 | Canadian Imperial Bank of Commerce, New York 0.1400%, 2/23/15 | 20,000,000 | ||||||||
30,000,000 | Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, New York 0.2600%, 6/19/15 | 30,000,000 | ||||||||
5,000,000 | Sumitomo Mitsui Banking Corp., New York 0.1300%, 1/5/15 | 5,000,000 | ||||||||
50,000,000 | Sumitomo Mitsui Banking Corp., New York 0.1300%, 1/12/15 | 50,000,000 | ||||||||
25,000,000 | Svenska Handelsbanken, New York 0.1700%, 2/12/15 | 25,000,142 | ||||||||
10,000,000 | Svenska Handelsbanken, New York 0.1700%, 2/17/15 | 10,000,000 | ||||||||
16,500,000 | Svenska Handelsbanken, New York 0.1750%, 3/4/15 | 16,500,140 | ||||||||
25,000,000 | Swedbank AB, New York 0.1000%, 1/2/15 | 25,000,000 | ||||||||
9,000,000 | Toronto-Dominion Bank, New York 0.1400%, 1/12/15 | 9,000,000 | ||||||||
14,000,000 | Toronto-Dominion Bank, New York 0.1400%, 1/22/15 | 14,000,000 | ||||||||
15,000,000 | Toronto-Dominion Bank, New York 0.1300%, 3/12/15 | 15,000,000 | ||||||||
20,000,000 | Toronto-Dominion Bank, New York 0.2000%, 5/4/15 | 20,000,000 | ||||||||
20,000,000 | U.S. Bank NA, Cincinnati 0.1300%, 2/2/15 | 20,000,000 | ||||||||
25,000,000 | Wells Fargo Bank NA 0.2000%, 4/1/15 | 25,000,000 | ||||||||
15,000,000 | Wells Fargo Bank NA 0.2300%, 6/5/15 | 15,000,000 | ||||||||
Total Certificates of Deposit (amortized cost $382,500,282) | 382,500,282 | |||||||||
Commercial Paper – 18.0% | ||||||||||
10,000,000 | HSBC Bank PLC 0.3153%, 8/5/15 (Section 4(2)) | 9,981,474 | ||||||||
10,000,000 | JP Morgan Securities LLC 0.2438%, 1/23/15 (Section 4(2)) | 9,998,599 | ||||||||
12,000,000 | JP Morgan Securities LLC 0.2030%, 2/10/15 | 11,997,400 | ||||||||
8,700,000 | JP Morgan Securities LLC 0.2539%, 2/17/15 (Section 4(2)) | 8,697,220 | ||||||||
25,000,000 | JP Morgan Securities LLC 0.2132%, 3/9/15 | 24,990,374 | ||||||||
11,000,000 | Manhattan Asset Funding Co. LLC 0.1421%, 1/15/15 (Section 4(2)) | 10,999,444 | ||||||||
10,000,000 | Nieuw Amsterdam Receivables Corp. 0.1522%, 1/14/15 (Section 4(2)) | 9,999,500 | ||||||||
28,000,000 | Nieuw Amsterdam Receivables Corp. 0.1421%, 1/26/15 (Section 4(2)) | 27,997,386 | ||||||||
9,000,000 | Nieuw Amsterdam Receivables Corp. 0.1827%, 2/5/15 | 8,998,470 | ||||||||
10,000,000 | Nieuw Amsterdam Receivables Corp. 0.1827%, 3/2/15 (Section 4(2)) | 9,997,050 | ||||||||
20,000,000 | Rabobank USA Financial Corp. 0.2031%, 5/15/15 | 19,985,220 | ||||||||
10,000,000 | Standard Chartered Bank, New York 0.1624%, 1/16/15 | 9,999,378 | ||||||||
5,000,000 | Standard Chartered Bank, New York 0.1725%, 1/21/15 (Section 4(2)) | 4,999,551 | ||||||||
25,000,000 | Standard Chartered Bank, New York 0.1827%, 3/30/15 (Section 4(2)) | 24,989,125 | ||||||||
20,000,000 | Swedbank AB, New York 0.1116%, 2/17/15 | 19,997,189 | ||||||||
Total Commercial Paper (amortized cost $213,627,380) | 213,627,380 | |||||||||
Repurchase Agreements – 32.3% | ||||||||||
100,000,000 | Goldman Sachs & Co., 0.0800%, dated 12/31/14, maturing 1/2/15 to be repurchased at $100,000,444 collateralized by $89,435,097 in U.S. Government Agencies 2.2560% – 38.9685%, 8/15/34 – 11/25/44 with a value of $102,000,001 | 100,000,000 | ||||||||
100,000,000 | HSBC Securities (USA), Inc., 0.0700%, dated 12/31/14, maturing 1/2/15 to be repurchased at $100,000,389 collateralized by $98,920,000 in a U.S. Treasury 2.5000%, 5/15/24 with a value of $102,001,038 | 100,000,000 | ||||||||
183,100,000 | Undivided interest of 61% in a joint repurchase agreement (principal amount $300,000,000 with a maturity value of $300,001,333) with Wells Fargo Securities LLC, 0.0800%, dated 12/31/14, maturing 1/2/15 to be repurchased at $183,100,814 collateralized by $287,084,157 in U.S. Government Agencies, 0% – 11.5950%, 12/25/21 – 12/20/44, with a value of $306,001,361 | 183,100,000 | ||||||||
Total Repurchase Agreements (amortized cost $383,100,000) | 383,100,000 | |||||||||
U.S. Government Agency Notes – 8.1% | ||||||||||
Fannie Mae Discount Notes: | ||||||||||
4,500,000 | 0.1167%, 4/15/15 | 4,498,498 | ||||||||
Federal Home Loan Bank Discount Notes: | ||||||||||
20,000,000 | 0.0600%, 1/30/15 | 19,999,067 | ||||||||
20,000,000 | 0.1151%, 3/17/15 | 19,995,272 | ||||||||
Freddie Mac Discount Notes: | ||||||||||
3,100,000 | 0.1218%, 4/22/15 | 3,098,847 | ||||||||
10,000,000 | 0.1552%, 4/23/15 | 9,995,221 | ||||||||
12,100,000 | 0.0901%, 5/14/15 | 12,096,007 | ||||||||
5,700,000 | 0.1421%, 6/9/15 | 5,696,448 | ||||||||
14,000,000 | 0.1402%, 7/22/15 | 13,989,057 | ||||||||
7,000,000 | 0.1903%, 8/18/15 | 6,991,577 | ||||||||
Total U.S. Government Agency Notes (amortized cost $96,359,994) | 96,359,994 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 3
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Janus Money Market Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Principal Amount | Value | |||||||||
Variable Rate Demand Agency Notes – 9.4% | ||||||||||
$4,000,000 | Breckenridge Terrace LLC 0.2100%, 5/1/39 | $ | 4,000,000 | |||||||
14,980,000 | Breckenridge Terrace LLC 0.2100%, 5/1/39 | 14,980,000 | ||||||||
800,000 | California Infrastructure & Economic Development Bank 0.1100%, 7/1/33 | 800,000 | ||||||||
930,000 | Capital Markets Access Co. LC 0.1500%, 7/1/25 | 930,000 | ||||||||
9,100,000 | County of Eagle CO 0.2100%, 6/1/27 | 9,100,000 | ||||||||
8,000,000 | County of Eagle CO 0.2100%, 5/1/39 | 8,000,000 | ||||||||
7,470,000 | County of Franklin OH – Series A 0.0400%, 11/1/22 | 7,470,000 | ||||||||
4,605,000 | Industrial Development Board of the City of Auburn 0.1500%, 7/1/26 | 4,605,000 | ||||||||
3,580,000 | J-Jay Properties LLC 0.1400%, 7/1/35 | 3,580,000 | ||||||||
5,255,000 | Kaneville Road Joint Venture, Inc. 0.1500%, 11/1/32 | 5,255,000 | ||||||||
170,000 | Kentucky Economic Development Finance Authority 1.0000%, 11/1/15 | 170,000 | ||||||||
430,000 | Lone Tree Building Authority 0.1800%, 12/1/17 | 430,000 | ||||||||
7,000,000 | Louisiana Public Facilities Authority 0.0200%, 7/1/47 | 7,000,000 | ||||||||
5,395,000 | Lush Properties LLC 0.1500%, 11/1/33 | 5,395,000 | ||||||||
4,230,000 | Mesivta Yeshiva Rabbi Chaim Berlin 0.1695%, 11/1/35 | 4,230,000 | ||||||||
6,000,000 | Mississippi Business Finance Corp. 0.1601%, 12/1/35 | 6,000,000 | ||||||||
5,000,000 | Phenix City Downtown Redevelopment Authority 0.1500%, 2/1/33 | 5,000,000 | ||||||||
160,000 | Phoenix Realty Special Account 0.2100%, 4/1/20 | 160,000 | ||||||||
10,865,000 | RBS Insurance Trust 0.1500%, 11/1/31 | 10,865,000 | ||||||||
5,000,000 | SSAB AB 0.1500%, 4/1/34 | 5,000,000 | ||||||||
5,700,000 | Tenderfoot Seasonal Housing LLC 0.2100%, 7/1/35 | 5,700,000 | ||||||||
2,600,000 | Tift County Development Authority 0.2000%, 2/1/18 | 2,600,000 | ||||||||
Total Variable Rate Demand Agency Notes (amortized cost $111,270,000) | 111,270,000 | |||||||||
Total Investments (total cost $1,186,857,656) – 100.0% | 1,186,857,656 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (109,784) | |||||||||
Net Assets – 100% | $ | 1,186,747,872 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
4 | DECEMBER 31, 2014
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Notes to Schedule of Investments and Other Information (unaudited)
LC | Limited Company | |
LLC | Limited Liability Company | |
PLC | Public Limited Company | |
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. |
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.
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||
Janus Money Market Fund | |||||||||
Assets | |||||||||
Investments in Securities: | |||||||||
Certificates of Deposit | $– | $ | 382,500,282 | $– | |||||
Commercial Paper | – | 213,627,380 | – | ||||||
Repurchase Agreements | – | 383,100,000 | – | ||||||
U.S. Government Agency Notes | – | 96,359,994 | – | ||||||
Variable Rate Demand Agency Notes | – | 111,270,000 | – | ||||||
Total Assets | $– | $ | 1,186,857,656 | $– | |||||
Janus Investment Fund | 5
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Statement of Assets and Liabilities
Janus Money | ||||
As of December 31, 2014 (unaudited) | Market Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 1,186,857,656 | ||
Investments at value | $ | 803,757,656 | ||
Repurchase agreements at value | 383,100,000 | |||
Cash | 157,167 | |||
Non-interested Trustees’ deferred compensation | 24,336 | |||
Receivables: | ||||
Investments sold | 421,700,909 | |||
Fund shares sold | 6,919,683 | |||
Interest | 65,609 | |||
Other assets | 70 | |||
Total Assets | 1,615,725,430 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 425,195,947 | |||
Fund shares repurchased | 3,618,764 | |||
Advisory fees | 103,567 | |||
Administrative services fees | 7,460 | |||
Non-interested Trustees’ fees and expenses | 7,082 | |||
Non-interested Trustees’ deferred compensation fees | 24,336 | |||
Accrued expenses and other payables | 20,402 | |||
Total Liabilities | 428,977,558 | |||
Net Assets | $ | 1,186,747,872 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 1,186,777,995 | ||
Undistributed net investment income/(loss)* | (34,743) | |||
Undistributed net realized gain/(loss) from investments* | (2) | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 4,622 | |||
Total Net Assets | $ | 1,186,747,872 | ||
Net Assets - Class D Shares | $ | 964,680,063 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 964,703,685 | |||
Net Asset Value Per Share | $ | 1.00 | ||
Net Assets - Class T Shares | $ | 222,067,809 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 222,076,056 | |||
Net Asset Value Per Share | $ | 1.00 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $383,100,000. |
See Notes to Financial Statements.
6 | DECEMBER 31, 2014
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��
Statement of Operations
Janus Money | ||||
For the period ended December 31, 2014 (unaudited) | Market Fund | |||
Investment Income: | ||||
Interest | $ | 696,616 | ||
Other income | 101 | |||
Total Investment Income | 696,717 | |||
Expenses: | ||||
Advisory fees | 1,211,316 | |||
Administration services fees: | ||||
Class D Shares | 2,275,476 | |||
Class T Shares | 525,948 | |||
Professional fees | 26,622 | |||
Non-interested Trustees’ fees and expenses | 10,359 | |||
Total Expenses | 4,049,721 | |||
Less: Excess Expense Reimbursement | (3,353,298) | |||
Net Expenses | 696,423 | |||
Net Investment Income/(Loss) | 294 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | (56) | |||
Total Net Realized Gain/(Loss) on Investments | (56) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 238 |
See Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Statements of Changes in Net Assets
Janus Money | ||||||||
Market Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 294 | $ | 33,130 | ||||
Net realized gain/(loss) on investments | (56) | – | ||||||
Change in unrealized net appreciation/depreciation of non-interested Trustees’ deferred compensation | – | 3,097 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 238 | 36,227 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class D Shares | (193) | (30,763) | ||||||
Class T Shares | (30) | (5,997) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class D Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (223) | (36,760) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class D Shares | 243,099,603 | 505,275,000 | ||||||
Class T Shares | 44,494,479 | 149,911,496 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class D Shares | 31 | 22,626 | ||||||
Class T Shares | 21 | 3,067 | ||||||
Shares Repurchased | ||||||||
Class D Shares | (271,974,044) | (589,111,762) | ||||||
Class T Shares | (49,315,118) | (113,275,217) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (33,695,028) | (47,174,790) | ||||||
Net Increase/(Decrease) in Net Assets | (33,695,013) | (47,175,323) | ||||||
Net Assets: | ||||||||
Beginning of period | 1,220,442,885 | 1,267,618,208 | ||||||
End of period | $ | 1,186,747,872 | $ | 1,220,442,885 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (34,743) | $ | (34,814) |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
8 | DECEMBER 31, 2014
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Financial Highlights
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or | Janus Money Market Fund | |||||||||||||||||||||||||
period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | –(2)(3) | –(2)(3) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Total from Investment Operations | – | – | – | – | – | – | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | –(2) | – | – | ||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 0.00% | 0.00% | 0.00% | 0.00% | 0.01% | 0.00% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $964,680 | $993,554 | $1,077,369 | $1,089,252 | $1,105,288 | $1,236,987 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $981,224 | $1,046,368 | $1,070,220 | $1,131,399 | $1,148,654 | $1,244,263 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.67% | 0.66% | 0.67% | 0.67% | 0.67% | 0.67% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.12% | 0.10% | 0.17% | 0.14% | 0.22% | 0.24% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.01% |
Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus Money Market Fund | |||||||||||||||||||||||||||||
ended June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | –(2)(3) | –(2)(3) | –(2) | –(2) | –(2) | –(2) | –(2) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | |||||||||||||||||||||||
Total from Investment Operations | – | – | – | – | – | – | – | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | |||||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | –(2) | – | – | – | |||||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||||||||
Total Return** | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.18% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $222,068 | $226,888 | $190,249 | $167,685 | $164,553 | $166,308 | $1,517,715 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $217,347 | $210,433 | $178,310 | $162,966 | $163,660 | $741,343 | $1,785,483 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.69% | 0.68% | 0.69% | 0.69% | 0.69% | 0.71% | 0.73% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.12% | 0.10% | 0.17% | 0.14% | 0.22% | 0.25% | 0.54% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.20% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Less than $0.005 on a per share basis. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Period from November 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. |
See Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
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 Money Market Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in short-term money market securities.
The Fund offers two 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 both classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Investments held by the Fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and
10 | DECEMBER 31, 2014
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expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Dividend Distributions
Dividends, if any, are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Periodic review and monitoring of the valuation of short-term securities is performed in an effort to ensure that amortized cost approximates market value. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in
Janus Investment Fund | 11
Table of Contents
Notes to Financial Statements (unaudited) (continued)
the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through its investments in certain securities, including, but not limited to, repurchase agreements and debt securities. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and
12 | DECEMBER 31, 2014
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a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Goldman Sachs & Co. | $ | 100,000,000 | $ | – | $ | (100,000,000) | $ | – | ||||||||||
HSBC Securities (USA), Inc. | 100,000,000 | – | (100,000,000) | – | ||||||||||||||
Wells Fargo Securities LLC | 183,100,000 | – | (183,100,000) | – | ||||||||||||||
Total | $ | 383,100,000 | $ | – | $ | (383,100,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Regulatory Risk
In July 2014, the SEC adopted additional rules applicable to money market funds which are intended to address perceived systematic risks associated with money market funds and to improve transparency for money market fund investors. Funds which do not meet the definitions of a retail money market fund or government money market fund will be required to have a floating NAV. The rules also contemplate the implementation of liquidity fees and redemption gates for non-government money market funds in times of market stress. The SEC also adopted additional diversification, stress-testing, and disclosure measures. Additionally, the Financial Stability Oversight Council (“FSOC”), a board of U.S. regulators established by the Dodd-Frank Act, had proposed certain recommendations for money market fund reform. There can be no assurance that there will not be future FSOC action relating to money market funds. The ultimate impact of money market reform is uncertain, but changes may affect the Fund’s operations and/or the trading and value of money market instruments, which in turn could negatively affect the Fund’s yield and return potential.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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.
3. | 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
Janus Investment Fund | 13
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Notes to Financial Statements (unaudited) (continued)
table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Money Market Fund | All Asset Levels | 0.20 | ||||||||
Janus Capital has voluntarily agreed to waive one-half of the Fund’s investment advisory fee. Janus Capital may also voluntarily waive and/or reimburse additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. These waivers and reimbursements are voluntary and could change or be terminated at any time at the discretion of Janus Capital. There is no guarantee that the Fund will maintain a positive yield. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Class D Shares and Class T Shares of the Fund compensate Janus Capital at an annual rate of 0.46% and 0.48%, respectively, of average daily net assets for providing certain administration services including, but not limited to, recordkeeping and registration functions and also to pay for costs such as shareholder servicing and custody. These amounts are disclosed as “Administration services fees” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class T Shares for providing or procuring administrative services to investors in Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
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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 included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
4. | 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.
5. | Capital Share Transactions |
For the period ended December 31 | Janus Money Market Fund | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 243,099,565 | 505,274,999 | ||||||||
Reinvested dividends and distributions | 31 | 22,626 | ||||||||
Shares repurchased | (271,974,044) | (589,111,760) | ||||||||
Net Increase/(Decrease) in Fund Shares | (28,874,448) | (83,814,135) | ||||||||
Shares Outstanding, Beginning of Period | 993,578,133 | 1,077,392,268 | ||||||||
Shares Outstanding, End of Period | 964,703,685 | 993,578,133 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 44,494,470 | 149,911,036 | ||||||||
Reinvested dividends and distributions | 21 | 3,067 | ||||||||
Shares repurchased | (49,315,116) | (113,275,217) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,820,625) | 36,638,886 | ||||||||
Shares Outstanding, Beginning of Period | 226,896,681 | 190,257,795 | ||||||||
Shares Outstanding, End of Period | 222,076,056 | 226,896,681 |
6. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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Additional Information (unaudited) (continued)
quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Additional Information (unaudited) (continued)
Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Additional Information (unaudited) (continued)
Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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Additional Information (unaudited) (continued)
that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
2. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
3. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
4. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
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Useful Information About Your Fund Report (unaudited) (continued)
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
5. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
28 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 29
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81500 | 125-24-93027 02-15 |
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semiannual report
December 31, 2014
Janus Multi-Sector Income Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Multi-Sector Income Fund
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Janus Multi-Sector Income Fund (unaudited)
FUND SNAPSHOT The Fund will typically hold 35% to 65% below investment grade bonds while seeking consistent high current income and capital appreciation. Our approach leverages a bottom-up, fundamentally driven process that focuses on credit-oriented investments. | ![]() John Kerschner co-portfolio manager | ![]() John Lloyd co-portfolio manager | ![]() Seth Meyer co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, the Janus Multi-Sector Income Fund Class I Shares returned -0.36%, compared with 1.96% for its primary benchmark, the Barclays U.S. Aggregate Bond Index.
MARKET ENVIRONMENT
After the U.S. economy kicked off 2014 with a winter-related slowdown, the U.S. economy recovered and gathered momentum in the second half of the year. Economic growth abroad deteriorated, however. Uneven global growth created a push and pull within the U.S. fixed income market. Prices on fixed income risk assets, like high yield, fell. Long-end Treasurys (those with maturities of 10 years or more) benefited from safe-haven purchases, especially from foreign investors. Yields on the 10-year and 30-year Treasurys continued to defy expectations by declining.
A risk-averse mentality grew in the second half of the year as the global economic outlook darkened and plummeting oil prices fueled overall volatility in the fixed income market. However, with U.S. growth bucking the global trend, the Federal Reserve (Fed) remained on track to hike rates in the second half of 2015. This pushed yields on the short-end of the curve upward. With long-end yields contained and front-end yields higher, the U.S. yield curve flattened. The flattening curve signaled concern that slowing global growth will create headwinds for the U.S. economy.
PERFORMANCE DISCUSSION
We continue to believe that the most effective way to generate consistent risk-adjusted outperformance long term is by bottom-up security selection based on fundamental research. However, macroeconomic challenges, in the form of falling crude oil prices and slowing global growth, held sway over the fixed income market during the six-month period, and the Fund underperformed its benchmark, the Barclays U.S. Aggregate Bond Index.
The sharp decline in crude oil prices late in the period sparked indiscriminate selling in energy-related corporate credit, primarily within the high-yield market, where we had significant exposure. Many of our energy-related credits had ratings in the high-yield market’s “crossover” section, which is just beneath investment grade. We believe this section of the high yield market, in general, offers attractive risk-adjusted returns due to the potential ratings upgrades for these companies. We also believe many of our energy holdings can efficiently produce oil at lower prices.
But, wholesale selling of energy credits meant individual company fundamentals were ignored, in our view. We would add that a significant portion of crude oil’s quarterly decline occurred during the fourth quarter holiday season. That is a low volume period in the high yield market, and we believe the lower trading volume exacerbated price declines.
The independent-energy sector, which comprises exploration and production companies, detracted from the Fund’s relative performance in particular.
Meanwhile, securities on the longer end of the yield curve, which are also longer in duration, rallied generally during the period. The portfolio’s shorter duration versus the benchmark made our yield curve positioning a relative detractor.
Our small out-of-index exposure to bank loans was also a relative detractor.
The Fund’s allocation in mortgage-backed securities (MBS) was its largest asset class contributor on a relative basis. We employed a barbell approach with both high- and low-coupon MBS. Our high-coupon MBS benefitted from low prepayments while our low-coupon MBS are longer in duration, which was a benefit amid declining rates.
In keeping with the Fund’s mandate, its spread carry, or the excess income generated by the Fund’s securities versus those in the Index, was a large relative contributor as well.
Janus Investment Fund | 1
Table of Contents
Janus Multi-Sector Income Fund (unaudited)
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
We believe that U.S. economic growth has established a strong foundation and that unprecedented monetary stimulus measures abroad could eventually spark the beginnings of a global economic recovery over the next year. In the near term, however, the global economy faces headwinds, such as the threat of deflation and China’s slowing growth. Uncertainty created by the diverging growth and monetary policy trajectories of the U.S. and its major trading partners could drive volatility in the fixed income markets.
First and foremost, we invest according to our two core tenets of seeking capital preservation and risk-adjusted returns. Consequently, we have sought to reduce risk within our portfolio by reducing our exposure to corporate credit, though we remain overweight the benchmark. Within energy, we are focused on less leveraged credits, those cost efficient producers that are hedging their output and, in our view, are solid capital stewards. We expect that volatility in crude oil prices will persist, and given the downside risk this present to energy credit, we have reduced our energy sector exposure. Depending on market conditions, we may reduce our energy sector exposure further and increase exposure to more defensive sectors.
We have also decreased our high yield allocation, generally, and boosted our exposure to commercial mortgage-backed securities (CMBS). Our CMBS holdings offer comparable income to high yield bonds, but they are also less volatile, in our view. Moreover, these are seasoned securities, which are backed by de-leveraging real estate assets that have demonstrated consistent cash-flow generation over time.
Meanwhile, the Fed has signaled that it is preparing to exit loose monetary policy, and we believe near-term global growth concerns and tame inflation trends may contain long-end Treasury rates. We are also mindful of stepped up Treasury purchases by foreign investors hungry for yield. As part of our defensive positioning, we have increased our Treasury exposure. We also believe it is prudent at this juncture for the Fund’s overall duration to be relatively closer to the benchmark’s and allow for flexibility to adjust upward or downward as conditions warrant.
On the securitized front, the MBS sector’s favorable supply/demand profile should keep spread levels tight, in our view. However, we also believe that the fixed income market is vulnerable to increased volatility over the near term. Our MBS allocation is defensively positioned to weather volatility and for the current flattening yield curve through the use of higher coupon MBS, in our view. MBS generally does better in a market with lower volatility, so we have decreased our MBS allocation overall. We remain underweight MBS versus the benchmark.
Meanwhile, solid U.S. economic growth bodes well for corporate prospects. Moreover, with yields low, corporate credit will continue to be in demand. Nevertheless, at this stage in the credit cycle, companies are re-leveraging their balance sheets through share repurchases and expensive acquisitions. Selectivity is key, and that plays to our bottom-up, fundamental process of focusing on strong balance sheets and managements.
On behalf of each member of our investment team, thank you for your investment in Janus Multi-Sector Income Fund. We appreciate you entrusting us with your assets and look forward to continuing to serve your investment needs.
2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Janus Multi-Sector Income Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 8.3 Years | |
Average Effective Duration* | 4.5 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 2.80% | |
With Reimbursement | 4.12% | |
Class A Shares at MOP | ||
Without Reimbursement | 2.67% | |
With Reimbursement | 3.92% | |
Class C Shares*** | ||
Without Reimbursement | 2.04% | |
With Reimbursement | 3.36% | |
Class D Shares | ||
Without Reimbursement | 2.90% | |
With Reimbursement | 4.22% | |
Class I Shares | ||
Without Reimbursement | 3.06% | |
With Reimbursement | 4.38% | |
Class N Shares | ||
Without Reimbursement | 3.06% | |
With Reimbursement | 4.38% | |
Class S Shares | ||
Without Reimbursement | 2.56% | |
With Reimbursement | 3.88% | |
Class T Shares | ||
Without Reimbursement | 2.81% | |
With Reimbursement | 4.13% | |
Number of Bonds/Notes | 135 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AA | 22.1% | |
A | 2.2% | |
BBB | 11.8% | |
BB | 16.4% | |
B | 20.2% | |
CCC | 13.9% | |
D | 0.8% | |
Not Rated | 11.0% | |
Other | 1.6% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18b10.gif)
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18p10.gif)
Janus Investment Fund | 3
Table of Contents
Janus Multi-Sector Income Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18m10.gif)
Cumulative Total Return – for the period ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses (estimated for the fiscal year) | ||||||||
Fiscal | Since | Total Annual Fund | Net Annual Fund | ||||||
Year-to-Date | Inception* | Operating Expenses | Operating Expenses | ||||||
Janus Multi-Sector Income Fund – Class A Shares | |||||||||
NAV | –0.49% | 2.33% | 1.97% | 0.98% | |||||
MOP | –5.25% | –2.55% | |||||||
Janus Multi-Sector Income Fund – Class C Shares | |||||||||
NAV | –0.87% | 1.69% | 2.73% | 1.73% | |||||
CDSC | –1.84% | 0.71% | |||||||
Janus Multi-Sector Income Fund – Class D Shares(1) | –0.43% | 2.38% | 1.84% | 0.85% | |||||
Janus Multi-Sector Income Fund – Class I Shares | –0.36% | 2.54% | 1.72% | 0.73% | |||||
Janus Multi-Sector Income Fund – Class N Shares | –0.36% | 2.55% | 1.69% | 0.71% | |||||
Janus Multi-Sector Income Fund – Class S Shares | –0.61% | 2.12% | 2.19% | 1.21% | |||||
Janus Multi-Sector Income Fund – Class T Shares | –0.49% | 2.33% | 1.94% | 0.96% | |||||
Barclays U.S. Aggregate Bond Index | 1.96% | 3.87% | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
Performance for very short time periods may not be indicative of future performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” 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.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Until the earlier of three years from inception or the Fund’s assets exceeding the first fee breakpoint, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Rankings are not provided for Funds that are less than one year old.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – February 28, 2014 | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Multi-Sector Income Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 995.10 | $ | 4.98 | $ | 1,000.00 | $ | 1,020.21 | $ | 5.04 | 0.99% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 991.30 | $ | 8.78 | $ | 1,000.00 | $ | 1,016.38 | $ | 8.89 | 1.75% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 995.70 | $ | 4.43 | $ | 1,000.00 | $ | 1,020.77 | $ | 4.48 | 0.88% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 996.40 | $ | 3.67 | $ | 1,000.00 | $ | 1,021.53 | $ | 3.72 | 0.73% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 996.40 | $ | 3.67 | $ | 1,000.00 | $ | 1,021.53 | $ | 3.72 | 0.73% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 993.90 | $ | 6.18 | $ | 1,000.00 | $ | 1,019.00 | $ | 6.26 | 1.23% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 995.10 | $ | 4.93 | $ | 1,000.00 | $ | 1,020.27 | $ | 4.99 | 0.98% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Multi-Sector Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 19.9% | ||||||||||
$ | 125,000 | American Homes 4 Rent 2014-SFR1 3.5000%, 6/17/31 (144A),‡ | $ | 116,676 | ||||||
122,000 | Banc of America Commercial Mortgage Trust 2006-6 5.5100%, 10/10/45 | 114,259 | ||||||||
210,000 | BHMS 2014-ATLS Mortgage Trust 6.2460%, 7/5/33 (144A) | 212,228 | ||||||||
130,482 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 132,317 | ||||||||
125,000 | Colony American Homes 2014-1 3.0500%, 5/17/31 (144A) | 119,589 | ||||||||
150,000 | COMM 2007-C9 Mortgage Trust 5.7955%, 12/10/49 | 156,879 | ||||||||
67,291 | Credit Suisse Commercial Mortgage Trust Series 2007-C5 5.8700%, 9/15/40 | 68,839 | ||||||||
130,762 | Fannie Mae Connecticut Avenue Securities 5.4195%, 10/25/23‡ | 141,418 | ||||||||
169,117 | Fannie Mae Connecticut Avenue Securities 5.0553%, 11/25/24‡ | 171,754 | ||||||||
EUR | 97,228 | German Residential Funding 2013-2, Ltd. 3.5810%, 8/27/24‡ | 123,555 | |||||||
EUR | 115,880 | German Residential Funding 2013-2, Ltd. 3.0810%, 11/27/24‡ | 144,307 | |||||||
475,000 | Hilton USA Trust 2013-HLT 5.2216%, 11/5/30 (144A),† | 486,667 | ||||||||
120,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.9008%, 4/15/30 (144A),‡ | 120,150 | ||||||||
GBP | 148,571 | London & Regional Debt Securitisation No 2 PLC 5.8596%, 10/15/15‡ | 234,429 | |||||||
120,000 | Mach One 2004-1A ULC 5.4500%, 5/28/40 (144A) | 120,375 | ||||||||
145,000 | Silver Bay Realty 2014-1 Trust 3.4120%, 9/17/31 (144A),‡ | 139,052 | ||||||||
280,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.4130%, 12/15/43‡ | 285,300 | ||||||||
130,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6724%, 4/15/47‡ | 127,550 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $3,067,251) | 3,015,344 | |||||||||
Bank Loans and Mezzanine Loans – 5.2% | ||||||||||
Basic Industry – 0.5% | ||||||||||
72,000 | Albaugh, Inc. 6.0000%, 5/31/21‡ | 70,200 | ||||||||
Capital Goods – 0.2% | ||||||||||
31,935 | Maxim Crane Works LP 10.2500%, 11/26/18‡ | 32,095 | ||||||||
Consumer Cyclical – 2.1% | ||||||||||
9,950 | Caesars Growth Properties Holdings LLC 6.2500%, 5/8/21‡ | 9,061 | ||||||||
100,000 | Cosmopolitan of Las Vegas 0%, 12/19/16(a),‡ | 100,000 | ||||||||
213,000 | Delta 2 Lux Sarl 7.7500%, 7/29/22‡ | 206,610 | ||||||||
| ||||||||||
315,671 | ||||||||||
Consumer Non-Cyclical – 0.2% | ||||||||||
39,000 | Air Medical Group Holdings, Inc. 7.6250%, 5/31/18‡ | 38,415 | ||||||||
Energy – 0.7% | ||||||||||
17,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 15,187 | ||||||||
126,000 | Templar Energy LLC 8.5000%, 11/25/20‡ | 90,216 | ||||||||
| ||||||||||
105,403 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.4% | ||||||||||
43,000 | DTZ U.S. Borrower LLC 9.2500%, 11/4/22‡ | 42,248 | ||||||||
21,000 | ESH Hospitality, Inc. 5.0000%, 6/24/19‡ | 20,934 | ||||||||
| ||||||||||
63,182 | ||||||||||
Technology – 0.8% | ||||||||||
125,370 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 124,796 | ||||||||
Transportation – 0.3% | ||||||||||
16,958 | OSG Bulk Ships, Inc. 5.2500%, 8/5/19‡ | 16,491 | ||||||||
23,897 | OSG International, Inc. 5.7500%, 8/5/19‡ | 23,180 | ||||||||
| ||||||||||
39,671 | ||||||||||
Total Bank Loans and Mezzanine Loans (cost $832,755) | 789,433 | |||||||||
Common Stocks – 0.4% | ||||||||||
Communications Equipment – 0.4% | ||||||||||
2,358 | CommScope Holding Co., Inc.* (cost $51,876) | 53,833 | ||||||||
Corporate Bonds – 49.5% | ||||||||||
Banking – 3.3% | ||||||||||
$ | 115,000 | American Express Co. 6.8000%, 9/1/66‡ | 120,463 | |||||||
EUR | 100,000 | Bank of Ireland 4.2500%, 6/11/24 | 119,478 | |||||||
35,000 | Morgan Stanley 4.3500%, 9/8/26 | 35,209 | ||||||||
90,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 97,614 | ||||||||
EUR | 100,000 | UBS AG 4.7500%, 2/12/26‡ | 129,611 | |||||||
| ||||||||||
502,375 | ||||||||||
Basic Industry – 1.2% | ||||||||||
51,000 | Albemarle Corp. 4.1500%, 12/1/24 | 51,816 | ||||||||
40,000 | Albemarle Corp. 5.4500%, 12/1/44 | 43,042 | ||||||||
85,000 | INVISTA Finance LLC 4.2500%, 10/15/19 (144A) | 85,000 | ||||||||
| ||||||||||
179,858 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Multi-Sector Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Brokerage – 2.0% | ||||||||||
$ | 105,000 | Charles Schwab Corp. 7.0000%µ | $ | 121,341 | ||||||
89,000 | E*TRADE Financial Corp. 6.3750%, 11/15/19 | 94,340 | ||||||||
85,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.6250%, 3/15/20 (144A) | 88,825 | ||||||||
| ||||||||||
304,506 | ||||||||||
Capital Goods – 6.2% | ||||||||||
167,000 | ADS Tactical, Inc. 11.0000%, 4/1/18 (144A),§ | 161,990 | ||||||||
120,000 | Hunt Cos., Inc. 9.6250%, 3/1/21 (144A) | 122,400 | ||||||||
40,000 | Martin Marietta Materials, Inc. 1.3331%, 6/30/17‡ | 40,439 | ||||||||
120,000 | Masco Corp. 6.5000%, 8/15/32 | 122,700 | ||||||||
170,000 | Masonite International Corp. 8.2500%, 4/15/21 (144A) | 181,475 | ||||||||
125,000 | Nuverra Environmental Solutions, Inc. 9.8750%, 4/15/18 | 75,000 | ||||||||
106,000 | Summit Materials LLC / Summit Materials Finance Corp. 10.5000%, 1/31/20 | 117,660 | ||||||||
122,000 | Vulcan Materials Co. 7.1500%, 11/30/37 | 124,440 | ||||||||
| ||||||||||
946,104 | ||||||||||
Communications – 5.8% | ||||||||||
EUR | 100,000 | Altice SA 7.2500%, 5/15/22 (144A) | 122,503 | |||||||
106,000 | DISH DBS Corp. 5.8750%, 11/15/24 (144A) | 106,530 | ||||||||
130,000 | Entercom Radio LLC 10.5000%, 12/1/19 | 141,050 | ||||||||
136,000 | Harron Communications LP/Harron Finance Corp. 9.1250%, 4/1/20 (144A) | 148,240 | ||||||||
69,000 | iHeartCommunications, Inc. 9.0000%, 9/15/22 (144A) | 67,620 | ||||||||
142,000 | National CineMedia LLC 6.0000%, 4/15/22 | 142,000 | ||||||||
17,000 | Scripps Networks Interactive, Inc. 2.7500%, 11/15/19 | 17,071 | ||||||||
135,000 | Univision Communications, Inc. 8.5000%, 5/15/21 (144A) | 143,775 | ||||||||
| ||||||||||
888,789 | ||||||||||
Consumer Cyclical – 11.3% | ||||||||||
39,000 | AV Homes, Inc. 8.5000%, 7/1/19 (144A) | 37,635 | ||||||||
85,000 | Caesars Entertainment Resort Properties LLC 8.0000%, 10/1/20 (144A) | 83,300 | ||||||||
63,000 | Century Communities, Inc. 6.8750%, 5/15/22 (144A) | 63,000 | ||||||||
55,000 | General Motors Co. 4.8750%, 10/2/23 | 58,850 | ||||||||
6,000 | General Motors Co. 6.2500%, 10/2/43 | 7,168 | ||||||||
29,000 | General Motors Co. 5.2000%, 4/1/45 | 30,595 | ||||||||
60,000 | Greektown Holdings LLC/Greektown Mothership Corp. 8.8750%, 3/15/19 (144A) | 59,850 | ||||||||
138,000 | Landry’s Holdings II, Inc. 10.2500%, 1/1/18 (144A) | 142,140 | ||||||||
143,000 | Landry’s, Inc. 9.3750%, 5/1/20 (144A) | 151,580 | ||||||||
145,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 140,287 | ||||||||
65,000 | MDC Holdings, Inc. 6.0000%, 1/15/43 | 53,950 | ||||||||
55,000 | MGM Resorts International 6.7500%, 10/1/20 | 57,750 | ||||||||
51,000 | MGM Resorts International 6.0000%, 3/15/23 | 51,255 | ||||||||
22,000 | Navistar International Corp. 8.2500%, 11/1/21 | 21,697 | ||||||||
80,000 | PF Chang’s China Bistro, Inc. 10.2500%, 6/30/20 (144A) | 79,800 | ||||||||
100,000 | PulteGroup, Inc. 7.8750%, 6/15/32 | 113,750 | ||||||||
61,000 | Quiksilver, Inc. / QS Wholesale, Inc. 7.8750%, 8/1/18 (144A) | 53,680 | ||||||||
22,000 | Quiksilver, Inc. / QS Wholesale, Inc. 10.0000%, 8/1/20 | 15,070 | ||||||||
88,000 | ROC Finance LLC / ROC Finance 1 Corp. 12.1250%, 9/1/18 (144A) | 92,840 | ||||||||
200,000 | Schaeffler Holding Finance BV 6.7500%, 11/15/22 (144A) | 209,000 | ||||||||
75,000 | Scientific Games International, Inc. 10.0000%, 12/1/22 (144A) | 68,719 | ||||||||
120,000 | WCI Communities, Inc. 6.8750%, 8/15/21 | 120,300 | ||||||||
| ||||||||||
1,712,216 | ||||||||||
Consumer Non-Cyclical – 8.1% | ||||||||||
10,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 10,051 | ||||||||
9,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 9,133 | ||||||||
145,000 | Albertsons Holdings LLC/Saturn Acquisition Merger Sub, Inc. 7.7500%, 10/15/22 (144A) | 148,625 | ||||||||
215,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A) | 224,675 | ||||||||
75,000 | IGI Laboratories, Inc. 3.7500%, 12/15/19 (144A) | 75,469 | ||||||||
145,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A) | 149,350 | ||||||||
33,000 | Kraft Foods Group, Inc. 5.0000%, 6/4/42 | 36,326 | ||||||||
71,000 | Owens & Minor, Inc. 4.3750%, 12/15/24 | 73,563 | ||||||||
68,000 | Salix Pharmaceuticals, Ltd. 6.0000%, 1/15/21 (144A) | 69,360 | ||||||||
146,000 | Simmons Foods, Inc. 7.8750%, 10/1/21 (144A) | 143,445 | ||||||||
108,000 | SUPERVALU, Inc. 6.7500%, 6/1/21 | 106,110 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Consumer Non-Cyclical – (continued) | ||||||||||
$ | 90,000 | SUPERVALU, Inc. 7.7500%, 11/15/22 | $ | 88,200 | ||||||
94,000 | Tenet Healthcare Corp. 5.5000%, 3/1/19 (144A) | 96,115 | ||||||||
| ||||||||||
1,230,422 | ||||||||||
Energy – 3.3% | ||||||||||
70,000 | Chesapeake Energy Corp. 3.4806%, 4/15/19‡ | 68,600 | ||||||||
24,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 24,537 | ||||||||
96,000 | Endeavor Energy Resources LP / EER Finance, Inc. 7.0000%, 8/15/21 (144A) | 84,960 | ||||||||
32,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 32,417 | ||||||||
28,000 | Ensco PLC 4.5000%, 10/1/24 | 27,215 | ||||||||
81,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 99,630 | ||||||||
65,000 | QEP Resources, Inc. 5.2500%, 5/1/23 | 60,775 | ||||||||
118,000 | Samson Investment Co. 9.7500%, 2/15/20 | 48,896 | ||||||||
95,000 | Sidewinder Drilling, Inc. 9.7500%, 11/15/19 (144A) | 52,963 | ||||||||
| ||||||||||
499,993 | ||||||||||
Finance Companies – 0.8% | ||||||||||
100,000 | General Electric Capital Corp. 7.1250%µ | 116,375 | ||||||||
Industrial – 1.1% | ||||||||||
100,000 | Brundage-Bone Concrete Pumping, Inc. 10.3750%, 9/1/21 (144A) | 102,250 | ||||||||
59,000 | Greystar Real Estate Partners LLC 8.2500%, 12/1/22 (144A) | 60,033 | ||||||||
| ||||||||||
162,283 | ||||||||||
Insurance – 0.2% | ||||||||||
26,000 | American International Group, Inc. 8.1750%, 5/15/58‡ | 35,230 | ||||||||
Real Estate Investment Trusts (REITs) – 0.4% | ||||||||||
57,000 | Forestar USA Real Estate Group, Inc. 8.5000%, 6/1/22 (144A) | 55,575 | ||||||||
Technology – 4.0% | ||||||||||
76,000 | Alliance Data Systems Corp. 5.3750%, 8/1/22 (144A) | 75,050 | ||||||||
105,000 | Motorola Solutions, Inc 3.5000%, 9/1/21 | 105,003 | ||||||||
10,000 | Motorola Solutions, Inc. 4.0000%, 9/1/24 | 10,060 | ||||||||
2,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 2,078 | ||||||||
139,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 143,193 | ||||||||
69,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 70,697 | ||||||||
200,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A),† | 196,304 | ||||||||
| ||||||||||
602,385 | ||||||||||
Transportation – 1.8% | ||||||||||
43,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 42,570 | ||||||||
83,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 82,585 | ||||||||
140,000 | XPO Logistics, Inc. 7.8750%, 9/1/19 (144A) | 146,300 | ||||||||
| ||||||||||
271,455 | ||||||||||
Total Corporate Bonds (cost $7,795,568) | 7,507,566 | |||||||||
Foreign Government Bonds – 0.2% | ||||||||||
EUR | 22,000 | Portugal Obrigacoes do Tesouro OT 5.6500%, 2/15/24 (144A) (cost $35,004) | 32,853 | |||||||
Mortgage-Backed Securities – 11.4% | ||||||||||
Fannie Mae Pool: | ||||||||||
129,821 | 6.5000%, 12/1/28 | 148,336 | ||||||||
182,047 | 6.5000%, 5/1/29 | 211,959 | ||||||||
164,172 | 6.5000%, 9/1/33 | 190,215 | ||||||||
107,560 | 6.5000%, 3/1/35 | 126,202 | ||||||||
151,896 | 6.5000%, 12/1/35 | 175,299 | ||||||||
246,284 | 4.0000%, 3/1/44 | 265,738 | ||||||||
88,301 | 4.0000%, 7/1/44 | 95,436 | ||||||||
55,860 | 4.0000%, 8/1/44 | 60,374 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
193,878 | 4.5000%, 9/1/44 | 214,695 | ||||||||
Ginnie Mae I Pool: | ||||||||||
186,280 | 6.0000%, 1/15/34 | 218,401 | ||||||||
Ginnie Mae II Pool: | ||||||||||
16,709 | 5.5000%, 5/20/42 | 18,850 | ||||||||
Total Mortgage-Backed Securities (cost $1,682,500) | 1,725,505 | |||||||||
Preferred Stocks – 1.5% | ||||||||||
Automobiles – 0.6% | ||||||||||
850 | Fiat Chrysler Automobiles NV, 7.7850% | 91,534 | ||||||||
Construction & Engineering – 0% | ||||||||||
125 | Citigroup Capital XIII, 7.8750% | 3,323 | ||||||||
Diversified Telecommunication Services – 0.6% | ||||||||||
1,650 | T-Mobile U.S., Inc., 5.5000% | 87,434 | ||||||||
Household Durables – 0.3% | ||||||||||
350 | William Lyon Homes, 6.5000% | 37,625 | ||||||||
Total Preferred Stocks (cost $206,025) | 219,916 | |||||||||
U.S. Treasury Notes/Bonds – 10.5% | ||||||||||
$ | 630,000 | 0.5000%, 11/30/16 | 628,753 | |||||||
242,000 | 2.3750%, 8/15/24 | 246,481 | ||||||||
362,000 | 2.2500%, 11/15/24 | 364,432 | ||||||||
6,000 | 3.3750%, 5/15/44 | 6,755 | ||||||||
187,000 | 3.1250%, 8/15/44 | 201,317 | ||||||||
141,000 | 3.0000%, 11/15/44 | 148,182 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $1,593,969) | 1,595,920 | |||||||||
Investment Companies – 0.9% | ||||||||||
Money Markets – 0.9% | ||||||||||
138,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $138,000) | 138,000 | ||||||||
Total Investments (total cost $15,402,948) – 99.5% | 15,078,370 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.5% | 80,850 | |||||||||
Net Assets – 100% | $ | 15,159,220 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Multi-Sector Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 12,871,751 | 85 | .4% | ||||
United Kingdom | 538,653 | 3 | .6 | |||||
Ireland | 387,340 | 2 | .6 | |||||
Greece | 224,675 | 1 | .5 | |||||
Germany | 209,000 | 1 | .4 | |||||
Taiwan | 196,304 | 1 | .3 | |||||
Brazil | 149,350 | 1 | .0 | |||||
Switzerland | 129,611 | 0 | .8 | |||||
Singapore | 124,796 | 0 | .8 | |||||
Luxembourg | 122,503 | 0 | .8 | |||||
Italy | 91,534 | 0 | .6 | |||||
Portugal | 32,853 | 0 | .2 | |||||
Total | $ | 15,078,370 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Unrealized | ||||||||||||
Currency | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
JPMorgan Chase & Co.: | ||||||||||||
British Pound 1/22/15 | 152,000 | $ | 236,842 | $ | 1,739 | |||||||
Euro 1/22/15 | 569,000 | 688,564 | 15,984 | |||||||||
Total | $ | 925,406 | $ | 17,723 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays U.S. Aggregate Bond Index | Made up of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
ULC | Unlimited Liability Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Multi-Sector Income Fund | $ | 5,698,631 | 37.6 | % | ||||||
(a) | All or a portion of this position has not settled, or is not funded. Upon settlement or funding date, interest rates for unsettled or unfunded amounts will be determined. Interest and dividends will not be accrued until time of settlement or funding. | |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2014, is noted below. |
Fund | Aggregate Value | ||||
Janus Multi-Sector Income Fund | $ | 454,597 | |||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Multi-Sector Income Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 3/5/2014 – 8/5/2014 | $ | 164,610 | $ | 161,990 | 1.1 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Multi-Sector Income Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 587,152 | 11,742,237 | (12,191,389) | 138,000 | $ | – | $ | 242 | $ | 138,000 | |||||||||||
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Multi-Sector Income Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 3,015,344 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 789,433 | – | ||||||||
Common Stocks | 53,833 | – | – | ||||||||
Corporate Bonds | – | 7,507,566 | – | ||||||||
Foreign Government Bonds | – | 32,853 | – | ||||||||
Mortgage-Backed Securities | – | 1,725,505 | – | ||||||||
Preferred Stocks | – | 219,916 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 1,595,920 | – | ||||||||
Investment Companies | – | 138,000 | – | ||||||||
Total Investments in Securities | $ | 53,833 | $ | 15,024,537 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 17,723 | $ | – | |||||
Total Assets | $ | 53,833 | $ | 15,042,260 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
12 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Janus Multi-Sector Income Fund | |||
Assets: | ||||
Investments at cost | $ | 15,402,948 | ||
Unaffiliated investments at value | $ | 14,940,370 | ||
Affiliated investments at value | 138,000 | |||
Cash | 21,928 | |||
Forward currency contracts | 17,723 | |||
Non-interested Trustees’ deferred compensation | 309 | |||
Receivables: | ||||
Investments sold | 5,820 | |||
Fund shares sold | 10,000 | |||
Interest | 177,466 | |||
Due from adviser | 17,189 | |||
Other assets | 122 | |||
Total Assets | 15,328,927 | |||
Liabilities: | ||||
Closed foreign currency contracts | 1,254 | |||
Payables: | ||||
Investments purchased | 102,312 | |||
Fund shares repurchased | 1,397 | |||
Dividends | 853 | |||
Advisory fees | 7,946 | |||
Fund administration fees | 132 | |||
Transfer agent fees and expenses | 1,274 | |||
12b-1 Distribution and shareholder servicing fees | 2,401 | |||
Non-interested Trustees’ fees and expenses | 284 | |||
Non-interested Trustees’ deferred compensation fees | 309 | |||
Accrued expenses and other payables | 51,545 | |||
Total Liabilities | 169,707 | |||
Net Assets | $ | 15,159,220 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities (continued)
As of December 31, 2014 (unaudited) | Janus Multi-Sector Income Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 15,481,426 | ||
Undistributed net investment income/(loss)* | (74,337) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 58,986 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (306,855) | |||
Total Net Assets | $ | 15,159,220 | ||
Net Assets - Class A Shares | $ | 1,978,697 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 201,908 | |||
Net Asset Value Per Share(1) | $ | 9.80 | ||
Maximum Offering Price Per Share(2) | $ | 10.29 | ||
Net Assets - Class C Shares | $ | 1,812,400 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 184,938 | |||
Net Asset Value Per Share(1) | $ | 9.80 | ||
Net Assets - Class D Shares | $ | 3,718,724 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 379,458 | |||
Net Asset Value Per Share | $ | 9.80 | ||
Net Assets - Class I Shares | $ | 1,757,886 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 179,376 | |||
Net Asset Value Per Share | $ | 9.80 | ||
Net Assets - Class N Shares | $ | 2,017,269 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 205,840 | |||
Net Asset Value Per Share | $ | 9.80 | ||
Net Assets - Class S Shares | $ | 1,791,123 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 182,766 | |||
Net Asset Value Per Share | $ | 9.80 | ||
Net Assets - Class T Shares | $ | 2,083,121 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 212,564 | |||
Net Asset Value Per Share | $ | 9.80 |
* | See “Federal Income Tax” 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.
14 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | Janus Multi-Sector Income Fund | |||
Investment Income: | ||||
Interest | $ | 362,066 | ||
Dividends | 62 | |||
Dividends from affiliates | 242 | |||
Other income | 7,439 | |||
Total Investment Income | 369,809 | |||
Expenses: | ||||
Advisory fees | 43,893 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 2,306 | |||
Class C Shares | 9,118 | |||
Class S Shares | 2,273 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 2,123 | |||
Class S Shares | 2,273 | |||
Class T Shares | 2,398 | |||
Transfer agent networking and omnibus fees: | ||||
Class C Shares | 22 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 105 | |||
Class C Shares | 150 | |||
Class D Shares | 485 | |||
Class I Shares | 42 | |||
Class N Shares | 25 | |||
Class S Shares | 26 | |||
Class T Shares | 50 | |||
Shareholder reports expense | 202 | |||
Registration fees | 45,510 | |||
Custodian fees | 2,738 | |||
Professional fees | 26,709 | |||
Non-interested Trustees’ fees and expenses | 286 | |||
Fund administration fees | 732 | |||
Accounting systems fee expense | 26,393 | |||
Other expenses | 788 | |||
Total Expenses | 168,647 | |||
Less: Excess Expense Reimbursement | (94,545) | |||
Net Expenses | 74,102 | |||
Net Investment Income/(Loss) | 295,707 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 47,183 | |||
Total Net Realized Gain/(Loss) on Investments | 47,183 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (410,628) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (410,628) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (67,738) |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
Janus Multi-Sector | ||||||||
Income Fund | ||||||||
For each period ended December 31 (unaudited) and June 30 | 2014 | 2014(1) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 295,707 | $ | 159,090 | ||||
Net realized gain/(loss) on investments | 47,183 | 85,595 | ||||||
Change in unrealized net appreciation/depreciation | (410,628) | 103,773 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (67,738) | 348,458 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (48,105) | (22,706) | ||||||
Class C Shares | (40,125) | (18,544) | ||||||
Class D Shares | (94,209) | (29,980) | ||||||
Class I Shares | (48,187) | (24,140) | ||||||
Class N Shares | (52,475) | (24,154) | ||||||
Class S Shares | (44,634) | (21,601) | ||||||
Class T Shares | (50,179) | (23,238) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (7,921) | – | ||||||
Class C Shares | (7,260) | – | ||||||
Class D Shares | (14,847) | – | ||||||
Class I Shares | (7,035) | – | ||||||
Class N Shares | (8,072) | – | ||||||
Class S Shares | (7,171) | – | ||||||
Class T Shares | (8,343) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (438,563) | (164,363) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 229,815 | 1,714,286 | ||||||
Class C Shares | 30,006 | 1,754,568 | ||||||
Class D Shares | 1,545,741 | 2,684,391 | ||||||
Class I Shares | 6 | 1,714,286 | ||||||
Class N Shares | 262,631 | 1,714,286 | ||||||
Class S Shares | 6 | 1,758,398 | ||||||
Class T Shares | 280,781 | 1,787,868 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 56,026 | 22,706 | ||||||
Class C Shares | 47,385 | 18,544 | ||||||
Class D Shares | 105,639 | 29,686 | ||||||
Class I Shares | 55,222 | 24,140 | ||||||
Class N Shares | 60,547 | 24,154 | ||||||
Class S Shares | 51,805 | 21,601 | ||||||
Class T Shares | 58,505 | 23,238 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (5,171) | – | ||||||
Class C Shares | (654) | (77) | ||||||
Class D Shares | (497,903) | (58,720) | ||||||
Class N Shares | (2,293) | – | ||||||
Class S Shares | (1) | (4,120) | ||||||
Class T Shares | (19,865) | (6,037) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 2,258,228 | 13,223,198 | ||||||
Net Increase/(Decrease) in Net Assets | 1,751,927 | 13,407,293 | ||||||
Net Assets: | ||||||||
Beginning of period | 13,407,293 | – | ||||||
End of period | $ | 15,159,220 | $ | 13,407,293 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (74,337) | $ | 7,870 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.21(2) | 0.13(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.25) | 0.14 | ||||||||
Total from Investment Operations | (0.04) | 0.27 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.26) | (0.13) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.30) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.39)% | 2.73% | ||||||||
Net Assets, End of Period (in thousands) | $1,979 | $1,762 | ||||||||
Average Net Assets for the Period (in thousands) | $1,817 | $1,676 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.29% | 6.12% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.99% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.10% | 3.89% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
Class C Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.17(2) | 0.11(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.25) | 0.14 | ||||||||
Total from Investment Operations | (0.08) | 0.25 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.22) | (0.11) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.26) | (0.11) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.77)% | 2.48% | ||||||||
Net Assets, End of Period (in thousands) | $1,812 | $1,798 | ||||||||
Average Net Assets for the Period (in thousands) | $1,798 | $1,685 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 3.05% | 6.87% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.75% | 1.75% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.33% | 3.14% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 17
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Financial Highlights (continued)
Class D Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.21(2) | 0.13(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.24) | 0.14 | ||||||||
Total from Investment Operations | (0.03) | 0.27 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.27) | (0.13) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.31) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.34)% | 2.72% | ||||||||
Net Assets, End of Period (in thousands) | $3,719 | $2,690 | ||||||||
Average Net Assets for the Period (in thousands) | $3,480 | $2,204 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.17% | 6.05% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.88% | 1.03% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.23% | 3.90% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
Class I Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.22(2) | 0.14(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.25) | 0.14 | ||||||||
Total from Investment Operations | (0.03) | 0.28 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.27) | (0.14) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.31) | (0.14) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.26)% | 2.81% | ||||||||
Net Assets, End of Period (in thousands) | $1,758 | $1,763 | ||||||||
Average Net Assets for the Period (in thousands) | $1,757 | $1,677 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.03% | 5.86% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.73% | 0.74% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.34% | 4.15% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
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Class N Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.22(2) | 0.14(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.25) | 0.14 | ||||||||
Total from Investment Operations | (0.03) | 0.28 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.27) | (0.14) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.31) | (0.14) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.26)% | 2.82% | ||||||||
Net Assets, End of Period (in thousands) | $2,017 | $1,763 | ||||||||
Average Net Assets for the Period (in thousands) | $1,895 | $1,677 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.03% | 5.85% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.73% | 0.74% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.36% | 4.15% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
Class S Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.19(2) | 0.12(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.24) | 0.14 | ||||||||
Total from Investment Operations | (0.05) | 0.26 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.25) | (0.12) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.29) | (0.12) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.52)% | 2.65% | ||||||||
Net Assets, End of Period (in thousands) | $1,791 | $1,801 | ||||||||
Average Net Assets for the Period (in thousands) | $1,793 | $1,699 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.53% | 6.35% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.23% | 1.25% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.84% | 3.65% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 19
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Financial Highlights (continued)
Class T Shares
Janus Multi-Sector | ||||||||||
For a share outstanding during the period ended December 31, 2014 (unaudited) and the period ended | Income Fund | |||||||||
June 30 | 2014 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss) | 0.21(2) | 0.13(2) | ||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.25) | 0.14 | ||||||||
Total from Investment Operations | (0.04) | 0.27 | ||||||||
Less Distributions: | ||||||||||
Dividends (from net investment income)* | (0.26) | (0.13) | ||||||||
Distributions (from capital gains)* | (0.04) | – | ||||||||
Total Distributions | (0.30) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.80 | $10.14 | ||||||||
Total Return** | (0.39)% | 2.73% | ||||||||
Net Assets, End of Period (in thousands) | $2,083 | $1,831 | ||||||||
Average Net Assets for the Period (in thousands) | $1,889 | $1,716 | ||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.28% | 6.10% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.98% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.10% | 3.89% | ||||||||
Portfolio Turnover Rate | 78% | 74% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
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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 Multi-Sector Income Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
22 | DECEMBER 31, 2014
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Dividend Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2014 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative (to earn income and seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets in which it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including, but not limited to, counterparty risk, credit risk, currency risk, equity risk, index risk, interest rate risk, leverage risk, and liquidity risk, as described below.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC, such as options and structured notes, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs.
OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk. In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
• | Counterparty Risk – Counterparty risk is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
• | Credit Risk – Credit risk is the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
• | Currency Risk – Currency risk is the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
• | Equity Risk – Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market. | |
• | Index Risk – If the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
• | Interest Rate Risk – Interest rate risk is the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
• | Leverage Risk – Leverage risk is the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short |
24 | DECEMBER 31, 2014
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sales, that involve leverage can result in losses that greatly exceed the amount originally invested. |
• | Liquidity Risk – Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk in the normal course of pursuing its investment objective through its 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 investments and foreign currency transactions” on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on sold forward contracts during the period ended December 31, 2014.
Fund | Sold | |||||
Janus Multi-Sector Income Fund | $ | 1,174,238 | ||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2014.
Fair Value of Derivative Instruments as of December 31, 2014
Asset Derivatives | ||||||||
Derivatives not accounted for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | ||||||
Janus Multi-Sector Income Fund | ||||||||
Currency Contracts | Forward currency contracts | 17,723 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2014.
The effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2014
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments | Investments and foreign currency transactions | |||
Janus Multi-Sector Income Fund | ||||
Currency Contracts | $ | 110,547 | ||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments | Investments, foreign currency translations and non-interested Trustees’ deferred compensation | |||
Janus Multi-Sector Income Fund | ||||
Currency Contracts | $ | 30,004 | ||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks
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Notes to Financial Statements (unaudited) (continued)
took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and |
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refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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
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Notes to Financial Statements (unaudited) (continued)
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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of December 31, 2014” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
JPMorgan Chase & Co. | $ | 17,723 | $ | – | $ | – | $ | 17,723 | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund will segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
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Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s 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).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Multi-Sector Income Fund | First $ | 200 Million | 0.60 | |||||||
Next $ | 500 Million | 0.57 | ||||||||
Over $ | 700 Million | 0.55 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Multi-Sector Income Fund | 0.71 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Statement of Operations. During the period ended December 31, 2014, Janus Capital reimbursed the Fund $94,545 of fees and expenses that are eligible for recoupment. As of December 31, 2014, the aggregate amount of recoupment that may potentially be made to Janus Capital is $306,305. The recoupment of such reimbursements expires February 28, 2017.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to
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Notes to Financial Statements (unaudited) (continued)
investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund
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administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Multi-Sector Income Fund | $ | 1,040 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
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Notes to Financial Statements (unaudited) (continued)
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Multi-Sector Income Fund - Class A Shares | 89 | % | 12 | % | ||||||
Janus Multi-Sector Income Fund - Class C Shares | 96 | 12 | ||||||||
Janus Multi-Sector Income Fund - Class D Shares | 48 | 12 | ||||||||
Janus Multi-Sector Income Fund - Class I Shares | 100 | 12 | ||||||||
Janus Multi-Sector Income Fund - Class N Shares | 88 | 12 | ||||||||
Janus Multi-Sector Income Fund - Class S Shares | 98 | 12 | ||||||||
Janus Multi-Sector Income Fund - Class T Shares | 84 | 12 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Multi-Sector Income Fund | $ | 15,404,485 | $ | 125,297 | $ | (451,412) | $ | (326,115) | ||||||||||
6. | Capital Share Transactions |
Janus Multi-Sector | ||||||||||
Income Fund | ||||||||||
For the period ended December 31 (unaudited) and the period ended June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 23,104 | 171,428 | ||||||||
Reinvested dividends and distributions | 5,641 | 2,250 | ||||||||
Shares repurchased | (515) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 28,230 | 173,678 | ||||||||
Shares Outstanding, Beginning of Period | 173,678 | – | ||||||||
Shares Outstanding, End of Period | 201,908 | 173,678 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 3,000 | 175,403 | ||||||||
Reinvested dividends and distributions | 4,772 | 1,837 | ||||||||
Shares repurchased | (66) | (8) | ||||||||
Net Increase/(Decrease) in Fund Shares | 7,706 | 177,232 | ||||||||
Shares Outstanding, Beginning of Period | 177,232 | – | ||||||||
Shares Outstanding, End of Period | 184,938 | 177,232 |
32 | DECEMBER 31, 2014
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Janus Multi-Sector | ||||||||||
Income Fund | ||||||||||
For the period ended December 31 (unaudited) and the period ended June 30 | 2014 | 2014(1) | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 153,647 | 268,015 | ||||||||
Reinvested dividends and distributions | 10,637 | 2,940 | ||||||||
Shares repurchased | (49,983) | (5,798) | ||||||||
Net Increase/(Decrease) in Fund Shares | 114,301 | 265,157 | ||||||||
Shares Outstanding, Beginning of Period | 265,157 | – | ||||||||
Shares Outstanding, End of Period | 379,458 | 265,157 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | – | 171,429 | ||||||||
Reinvested dividends and distributions | 5,555 | 2,392 | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,555 | 173,821 | ||||||||
Shares Outstanding, Beginning of Period | 173,821 | – | ||||||||
Shares Outstanding, End of Period | 179,376 | 173,821 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 26,154 | 171,429 | ||||||||
Reinvested dividends and distributions | 6,094 | 2,393 | ||||||||
Shares repurchased | (230) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 32,018 | 173,822 | ||||||||
Shares Outstanding, Beginning of Period | 173,822 | – | ||||||||
Shares Outstanding, End of Period | 205,840 | 173,822 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | 175,818 | ||||||||
Reinvested dividends and distributions | 5,214 | 2,140 | ||||||||
Shares repurchased | – | (406) | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,214 | 177,552 | ||||||||
Shares Outstanding, Beginning of Period | 177,552 | – | ||||||||
Shares Outstanding, End of Period | 182,766 | 177,552 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 28,215 | 178,754 | ||||||||
Reinvested dividends and distributions | 5,890 | 2,302 | ||||||||
Shares repurchased | (2,000) | (597) | ||||||||
Net Increase/(Decrease) in Fund Shares | 32,105 | 180,459 | ||||||||
Shares Outstanding, Beginning of Period | 180,459 | – | ||||||||
Shares Outstanding, End of Period | 212,564 | 180,459 | ||||||||
(1) Period from February 28, 2014 (inception date) through June 30, 2014. |
7. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Multi-Sector Income Fund | $ | 10,835,417 | $ | 8,863,592 | $ | 2,528,703 | $ | 1,991,578 | ||||||
Janus Investment Fund | 33
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Notes to Financial Statements (unaudited) (continued)
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
34 | DECEMBER 31, 2014
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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
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital, the investment adviser of Janus Multi-Sector Income Fund and Janus Unconstrained Bond Fund (renamed Janus Global Unconstrained Bond Fund effective October 6, 2014) (each a “New Fund” and collectively, the “New Funds”), met on November 7, 2013 to consider the proposed investment advisory agreement for each New Fund. In the course of their consideration of each of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for each New Fund. Based on their evaluation of the information available to them, the Trustees unanimously approved the investment advisory agreement for each New Fund for an initial term through February 2016, subject to earlier termination as provided for in the agreements.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services to be provided by Janus Capital, taking into account the investment objective and strategies of each New Fund and the similar type services currently provided by Janus Capital to other funds in the complex. In addition, the Trustees reviewed the resources and key personnel of Janus Capital that will be providing investment and risk management services to each New Fund. The Trustees also considered other services provided to the New Funds by Janus Capital, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees noted the use of Quantum, a system built by Janus Capital, to analyze portfolio risk. The Trustees considered Janus Capital’s role as administrator to each New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to each New Fund’s investment restrictions, 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 New Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services to be provided by Janus Capital were appropriate and consistent with the terms of each New Fund’s proposed investment advisory agreement. They also concluded that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Funds effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of each New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital to non-mutual fund clients, including those for which Janus Capital provides only portfolio management services. The Trustees noted servicing that is provided by Janus Capital for each New Fund relative to those other clients, including regulatory compliance and administration
Janus Investment Fund | 35
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Additional Information (unaudited) (continued)
services, and that, in serving the New Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee payable by each New Fund was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital charges to other clients, and the expense limitation agreement for each New Fund agreed to by Janus Capital. The Trustees noted the differences in investment style between each New Fund that resulted in differences in fee rates, taking into consideration the peer group selection and the fees charged by those peers.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of each New Fund increase. The Trustees noted that the proposed annual advisory fee rates, which included potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that each New Fund is part of the overall Janus funds complex, which means, among other things, that the New 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 Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the New Funds. They recognized that two affiliates of Janus Capital separately serve the New Funds as transfer agent and distributor, respectively. 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 New Fund under those agreements, each New Fund and Janus Capital may potentially benefit from their relationship with each other in other ways. The Trustees considered potential benefits to Janus Capital and its affiliates from Janus Capital’s participation in creditor committees formed to address issues related to investments by each New Fund. They concluded that the success of the New Funds 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 New Funds.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the investment advisory agreement for each New Fund.
36 | DECEMBER 31, 2014
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
Janus Investment Fund | 37
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
38 | DECEMBER 31, 2014
Table of Contents
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
Janus Investment Fund | 39
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Notes
40 | DECEMBER 31, 2014
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Notes
Janus Investment Fund | 41
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81206 | 125-24-93028 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Real Return Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Real Return Fund
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Table of Contents
Janus Real Return Fund (unaudited)
FUND SNAPSHOT The Fund employs a bottom-up fundamentally driven investment process designed to protect against the potential for inflationary or deflationary environments. The nontraditional portfolio invests across a broad range of fixed income securities, including short-duration high yield. | ![]() Gibson Smith co-portfolio manager | ![]() Mayur Saigal co-portfolio manager | ![]() Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, Janus Real Return Fund’s Class I Shares returned -1.64% compared with -3.10% for its primary benchmark, the Barclays U.S. 1-5 Year TIPS Index, and -0.49% for its secondary benchmark, the Consumer Price Index (CPI) + 2%.
MARKET ENVIRONMENT
The yield on the two-year Treasury rose as the U.S. economy gathered momentum and a market consensus formed that a rate hike by the Federal Reserve (Fed) was in the offing in 2015. The Fed’s benchmark rates are short-term; thus, the short end of the yield curve is typically tied to the direction of the Fed’s benchmark rates. However, inflation pressure remained extremely low, with year-over-year CPI growth of 0.8% as of December 2014.
Corporate credit spreads widened in the final six months of 2014. Concerns about global economic growth and increased market volatility prompted a rotation out of fixed income risk assets at various points during the period. Moreover, due to the prevalence of energy sector-related issuance in the high-yield market, that market suffered widespread selling when a global oversupply of crude oil sent crude oil prices into a tailspin. The front month price of the light, sweet crude contract on the New York Mercantile Exchange fell 42% in the fourth quarter alone. Yields on the long-end of the curve declined amid disinflation and economic growth concerns globally.
PERFORMANCE DISCUSSION
The Janus Real Return Fund outperformed its primary benchmark, the Barclays U.S. 1-5 Year TIPS Index, during the period.
Our out-of-index allocation to corporate credit was large driver of outperformance. Moreover, the additional income, or spread carry, that our credit investments generated compared with the Treasury Inflation-Protected Securities (TIPS) in the benchmark was another major relative contributor.
As of December 31, 2014, the Fund held a 0.81% weighting to equities, 10.93% in Treasury securities and 86.94% in corporate credit, primarily high-yield credit. The remainder included small allocations in bank loans and convertibles. Most of the portfolio was invested in U.S. corporate and government securities.
The corporates segment consists mainly of short duration high-yield securities. We believe short duration high-yield securities offer solid risk-adjusted return potential in a low rate environment as corporate balance sheets are the strongest they have been in recent history.
We also believe short duration high-yield securities offer better risk-adjusted returns than TIPS. The Fed’s highly accommodative monetary policy has artificially suppressed real yields. As this has made the low levels of real yields unsustainable, TIPS prices have downside risk as rates normalize, in our view. In October, the Fed ended its quantitative easing program in a first step in normalizing its monetary policy. Real yields are negative, so we have opted for nominal rate exposure through an out-of-index allocation in Treasurys. While our Treasury exposure was still significantly smaller than our corporate exposure, it was a relative contributor.
The Fund’s small out-of-index allocation to common stock was a relative detractor.
While our corporate credit allocation was a relative contributor overall, the Fund’s exposure to the independent-energy sector was a significant relative detractor amid the sharp decline in crude oil prices. On an individual credit basis, Samson Resources, an oil and natural gas producer, was our largest individual credit detractor. There were investor concerns about the firm’s facing potential liquidity challenges and rising leverage amid weakening margins and cash flow. We have since reduced our position in the Fund.
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Janus Real Return Fund (unaudited)
OUTLOOK
We believe that U.S. economic growth has established a strong foundation. In the near term, however, the global economy faces headwinds, such as the threat of deflation and China’s slowing growth. Uncertainty created by the diverging growth and monetary policy trajectories of the U.S. and its major trading partners could drive volatility in the fixed income markets.
Volatility will remain a key consideration for us as we continue to invest according to our two core tenets of seeking capital preservation and risk-adjusted returns.
While the Fed has signaled that it is preparing to exit loose monetary policy, we believe near-term global growth concerns and tame inflation trends may contain long-end Treasury rates.
Solid U.S. economic growth bodes well for corporate prospects. With yields low, higher yielding corporate credit will continue to be in demand. Nevertheless, at this stage in the credit cycle, companies are re-leveraging their balance sheets through share repurchases and expensive acquisitions. Selectivity is key, and that plays to our bottom-up, fundamental process of focusing on strong balance sheets and managements.
Not taking on excessive risk, being diversified and defensive in one’s positioning does not require giving up solid risk-adjusted returns. When the U.S. fixed income market begins to register signs of a global economic recovery, a portfolio that didn’t take excessive bets and instead, focused on capital preservation and risk-adjusted returns should have the flexibility to take advantage of the opportunities that arise.
Thank you for your investment in Janus Real Return Fund.
2 | DECEMBER 31, 2014
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(unaudited)
Janus Real Return Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 5.8 Years | |
Average Effective Duration* | 2.8 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 3.48% | |
With Reimbursement | 4.15% | |
Class A Shares at MOP | ||
Without Reimbursement | 3.32% | |
With Reimbursement | 3.95% | |
Class C Shares*** | ||
Without Reimbursement | 2.73% | |
With Reimbursement | 3.40% | |
Class D Shares | ||
Without Reimbursement | 3.57% | |
With Reimbursement | 4.24% | |
Class I Shares | ||
Without Reimbursement | 3.74% | |
With Reimbursement | 4.41% | |
Class S Shares | ||
Without Reimbursement | 3.25% | |
With Reimbursement | 3.92% | |
Class T Shares | ||
Without Reimbursement | 3.50% | |
With Reimbursement | 4.17% | |
Number of Bonds/Notes | 85 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AA | 10.9% | |
A | 1.3% | |
BBB | 13.6% | |
BB | 48.8% | |
B | 22.1% | |
CCC | 2.4% | |
Not Rated | 0.3% | |
Other | 0.6% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
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Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Janus Real Return Fund (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Real Return Fund – Class A Shares | |||||||||||
NAV | –1.75% | 0.92% | 0.74% | 2.15% | 0.72% | ||||||
MOP | –6.45% | –3.88% | –0.88% | ||||||||
Janus Real Return Fund – Class C Shares | |||||||||||
NAV | –2.04% | 0.16% | 0.00% | 2.90% | 1.47% | ||||||
CDSC | –3.00% | –0.82% | 0.00% | ||||||||
Janus Real Return Fund – Class D Shares(1) | –1.60% | 1.02% | 0.86% | 2.08% | 0.62% | ||||||
Janus Real Return Fund – Class I Shares | –1.64% | 1.16% | 0.99% | 1.88% | 0.48% | ||||||
Janus Real Return Fund – Class S Shares | –1.86% | 0.80% | 0.64% | 2.37% | 0.97% | ||||||
Janus Real Return Fund – Class T Shares | –1.75% | 1.00% | 0.87% | 2.16% | 0.73% | ||||||
Barclays U.S. 1-5 Year TIPS Index | –3.10% | –1.13% | 0.23% | ||||||||
Consumer Price Index (CPI) + 2% | –0.49% | 2.76% | 3.07%** | ||||||||
Morningstar Quartile – Class I Shares | – | 4th | 4th | ||||||||
Morningstar Ranking – based on total returns for Multisector Bond Funds | – | 257/284 | 214/221 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” 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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
® 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date — May 13, 2011 | |
** | The Consumer Price Index (CPI) + 2% since inception returns are calculated from May 31, 2011. | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Real Return Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 982.50 | $ | 4.65 | $ | 1,000.00 | $ | 1,020.52 | $ | 4.74 | 0.93% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 979.60 | $ | 8.43 | $ | 1,000.00 | $ | 1,016.69 | $ | 8.59 | 1.69% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 984.00 | $ | 4.20 | $ | 1,000.00 | $ | 1,020.97 | $ | 4.28 | 0.84% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 983.60 | $ | 3.35 | $ | 1,000.00 | $ | 1,021.83 | $ | 3.41 | 0.67% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 981.40 | $ | 5.84 | $ | 1,000.00 | $ | 1,019.31 | $ | 5.96 | 1.17% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 982.50 | $ | 4.60 | $ | 1,000.00 | $ | 1,020.57 | $ | 4.69 | 0.92% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Real Return Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Bank Loans and Mezzanine Loans – 1.3% | ||||||||||
Technology – 1.3% | ||||||||||
$184,075 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ (cost $184,250) | $ | 183,232 | |||||||
Corporate Bonds – 85.7% | ||||||||||
Banking – 5.0% | ||||||||||
100,000 | American Express Co. 6.8000%, 9/1/66‡ | 104,750 | ||||||||
66,000 | Bank of America Corp. 8.0000%µ | 70,867 | ||||||||
11,000 | Goldman Sachs Group, Inc. 5.7000%µ | 11,127 | ||||||||
40,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 40,400 | ||||||||
175,000 | Royal Bank of Scotland Group PLC 4.7000%, 7/3/18 | 181,115 | ||||||||
157,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 159,699 | ||||||||
125,000 | Wells Fargo & Co. 7.9800%µ | 137,969 | ||||||||
| ||||||||||
705,927 | ||||||||||
Basic Industry – 3.2% | ||||||||||
70,000 | ArcelorMittal 4.2500%, 3/1/16 | 71,750 | ||||||||
72,000 | Ashland, Inc. 3.0000%, 3/15/16 | 72,360 | ||||||||
50,000 | Ashland, Inc. 3.8750%, 4/15/18 | 50,500 | ||||||||
31,111 | FMG Resources August 2006 Pty, Ltd. 6.8750%, 2/1/18 (144A) | 28,233 | ||||||||
100,000 | Georgia-Pacific LLC 7.7000%, 6/15/15 | 102,898 | ||||||||
124,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 128,030 | ||||||||
| ||||||||||
453,771 | ||||||||||
Brokerage – 1.7% | ||||||||||
65,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 69,550 | ||||||||
126,000 | E*TRADE Financial Corp. 6.3750%, 11/15/19 | 133,560 | ||||||||
34,000 | Raymond James Financial, Inc. 4.2500%, 4/15/16 | 35,251 | ||||||||
| ||||||||||
238,361 | ||||||||||
Capital Goods – 9.3% | ||||||||||
185,000 | ADS Tactical, Inc. 11.0000%, 4/1/18 (144A),§ | 179,450 | ||||||||
213,000 | Ahern Rentals, Inc. 9.5000%, 6/15/18 (144A) | 220,455 | ||||||||
274,000 | CNH Industrial Capital LLC 3.8750%, 11/1/15 | 275,370 | ||||||||
98,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 96,530 | ||||||||
13,000 | Exelis, Inc. 4.2500%, 10/1/16 | 13,445 | ||||||||
120,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 124,385 | ||||||||
117,000 | Masonite International Corp. 8.2500%, 4/15/21 (144A) | 124,898 | ||||||||
130,000 | Nuverra Environmental Solutions, Inc. 9.8750%, 4/15/18 | 78,000 | ||||||||
187,000 | Sealed Air Corp. 8.3750%, 9/15/21 (144A) | 208,972 | ||||||||
8,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 8,800 | ||||||||
| ||||||||||
1,330,305 | ||||||||||
Communications – 9.3% | ||||||||||
200,000 | DISH DBS Corp. 4.6250%, 7/15/17 | 206,750 | ||||||||
200,000 | Frontier Communications Corp. 8.1250%, 10/1/18 | 224,500 | ||||||||
145,000 | Sprint Communications, Inc. 8.3750%, 8/15/17 | 156,419 | ||||||||
179,000 | T-Mobile USA, Inc. 6.0000%, 3/1/23 | 179,447 | ||||||||
262,000 | Univision Communications, Inc. 7.8750%, 11/1/20 (144A) | 279,030 | ||||||||
250,000 | Windstream Corp. 7.8750%, 11/1/17 | 270,625 | ||||||||
| ||||||||||
1,316,771 | ||||||||||
Consumer Cyclical – 13.6% | ||||||||||
160,000 | CCM Merger, Inc. 9.1250%, 5/1/19 (144A) | 168,000 | ||||||||
110,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 108,900 | ||||||||
325,000 | Ford Motor Credit Co. LLC 4.2500%, 2/3/17 | 341,272 | ||||||||
250,000 | Lennar Corp. 4.7500%, 12/15/17 | 256,250 | ||||||||
469,000 | Meritage Homes Corp. 4.5000%, 3/1/18 | 469,000 | ||||||||
290,000 | MGM Resorts International 7.5000%, 6/1/16 | 305,950 | ||||||||
268,000 | Sally Holdings LLC / Sally Capital, Inc. 6.8750%, 11/15/19 | 284,750 | ||||||||
| ||||||||||
1,934,122 | ||||||||||
Consumer Non-Cyclical – 12.0% | ||||||||||
125,000 | Capsugel SA 7.0000%, 5/15/19 (144A) | 126,250 | ||||||||
190,000 | Constellation Brands, Inc. 7.2500%, 9/1/16 | 205,200 | ||||||||
135,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A) | 141,075 | ||||||||
250,000 | HCA, Inc. 6.5000%, 2/15/16 | 260,937 | ||||||||
190,000 | Jarden Corp. 7.5000%, 5/1/17 | 208,050 | ||||||||
144,000 | Owens & Minor, Inc. 4.3750%, 12/15/24 | 149,198 | ||||||||
173,000 | SUPERVALU, Inc. 6.7500%, 6/1/21 | 169,973 | ||||||||
414,000 | Tenet Healthcare Corp. 6.2500%, 11/1/18 | 449,190 | ||||||||
| ||||||||||
1,709,873 | ||||||||||
Electric – 0.7% | ||||||||||
97,000 | AES Corp. 9.7500%, 4/15/16 | 105,973 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Real Return Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – 20.2% | ||||||||||
$61,000 | California Resources Corp. 5.5000%, 9/15/21 (144A) | $ | 52,155 | |||||||
4,000 | California Resources Corp. 6.0000%, 11/15/24 (144A) | 3,380 | ||||||||
122,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16 | 121,695 | ||||||||
143,000 | Chesapeake Energy Corp. 7.2500%, 12/15/18 | 156,585 | ||||||||
206,000 | Chesapeake Energy Corp. 3.4806%, 4/15/19‡ | 201,880 | ||||||||
352,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 7.7500%, 4/1/19 | 360,800 | ||||||||
73,000 | Dresser-Rand Group, Inc. 6.5000%, 5/1/21 | 78,475 | ||||||||
156,000 | EP Energy LLC / Everest Acquisition Finance, Inc. 6.8750%, 5/1/19 | 158,340 | ||||||||
190,000 | Frontier Oil Corp. 6.8750%, 11/15/18 | 193,800 | ||||||||
435,000 | Holly Energy Partners LP / Holly Energy Finance Corp. 6.5000%, 3/1/20 | 430,650 | ||||||||
2,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16 | 2,076 | ||||||||
73,000 | Natural Resource Partners LP / NRP Finance Corp. 9.1250%, 10/1/18 | 70,810 | ||||||||
71,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 69,520 | ||||||||
411,000 | Sabine Pass LNG LP 7.5000%, 11/30/16 | 427,440 | ||||||||
113,000 | Samson Investment Co.‡ 9.7500%, 2/15/20 | 46,824 | ||||||||
346,000 | SM Energy Co. 6.6250%, 2/15/19 | 339,080 | ||||||||
179,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 167,365 | ||||||||
| ||||||||||
2,880,875 | ||||||||||
Finance Companies – 3.9% | ||||||||||
290,000 | CIT Group, Inc. 4.7500%, 2/15/15 (144A) | 290,217 | ||||||||
70,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 75,394 | ||||||||
190,000 | Navient Corp. 5.0000%, 4/15/15 | 191,425 | ||||||||
| ||||||||||
557,036 | ||||||||||
Insurance – 1.5% | ||||||||||
200,000 | Centene Corp. 5.7500%, 6/1/17 | 212,000 | ||||||||
Real Estate Investment Trusts (REITs) – 2.4% | ||||||||||
40,000 | Forest City Enterprises, Inc. 3.6250%, 8/15/20 | 42,550 | ||||||||
288,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 303,590 | ||||||||
| ||||||||||
346,140 | ||||||||||
Transportation – 2.9% | ||||||||||
34,000 | Eletson Holdings 9.6250%, 1/15/22 (144A) | 33,320 | ||||||||
137,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 135,630 | �� | |||||||
122,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 121,390 | ||||||||
123,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 124,693 | ||||||||
| ||||||||||
415,033 | ||||||||||
Total Corporate Bonds (cost $12,484,175) | 12,206,187 | |||||||||
Preferred Stocks – 0.8% | ||||||||||
Commercial Banks – 0.5% | ||||||||||
3,175 | Royal Bank of Scotland Group PLC, 6.3500% | $ | 78,581 | |||||||
Construction & Engineering – 0.3% | ||||||||||
1,350 | Citigroup Capital XIII, 7.8750% | 35,883 | ||||||||
Total Preferred Stocks (cost $109,285) | 114,464 | |||||||||
U.S. Treasury Notes/Bonds – 10.9% | ||||||||||
$70,000 | 0.3750%, 10/31/16 | 69,710 | ||||||||
854,000 | 0.5000%, 11/30/16 | 851,409 | ||||||||
266,000 | 0.6250%, 12/31/16 | 265,647 | ||||||||
5,000 | 1.0000%, 9/15/17 | 5,003 | ||||||||
8,000 | 0.8750%, 10/15/17 | 7,969 | ||||||||
35,000 | 2.3750%, 8/15/24 | 35,648 | ||||||||
115,000 | 2.2500%, 11/15/24 | 115,773 | ||||||||
1,000 | 3.1250%, 8/15/44 | 1,077 | ||||||||
187,000 | 3.0000%, 11/15/44 | 196,525 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $1,541,151) | 1,548,761 | |||||||||
Investment Companies – 0.5% | ||||||||||
Money Markets – 0.5% | ||||||||||
68,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $68,000) | 68,000 | ||||||||
Total Investments (total cost $14,386,861) – 99.2% | 14,120,644 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.8% | 119,021 | |||||||||
Net Assets – 100% | $ | 14,239,665 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 13,203,239 | 93 | .5% | ||||
United Kingdom | 459,795 | 3 | .3 | |||||
Singapore | 183,232 | 1 | .3 | |||||
Greece | 174,395 | 1 | .2 | |||||
Luxembourg | 71,750 | 0 | .5 | |||||
Australia | 28,233 | 0 | .2 | |||||
Total | $ | 14,120,644 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays U.S. 1-5 year TIPS Index | The Barclays U.S. Government Inflation-Linked Bond Index also known as the Barclays U.S. TIPS Index measures the performance of the U.S. Treasury Inflation-Protected Securities (“TIPS”) market. The index includes TIPS with one to 5 years remaining maturity with total outstanding issue size of $500M or more. | |
Consumer Price Index (CPI) + 2% | The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services plus 200 basis points | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Real Return Fund | $ | 2,237,148 | 15.7 | % | ||||||
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Real Return Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 11/19/13 | $ | 166,808 | $ | 179,450 | 1.3 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Real Return Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 119,101 | 5,635,208 | (5,686,309) | 68,000 | $ | – | $ | 241 | $ | 68,000 | |||||||||||
Janus Investment Fund | 9
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Real Return Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Bank Loans and Mezzanine Loans | $ | – | $ | 183,232 | $ | – | |||||
Corporate Bonds | – | 12,206,187 | – | ||||||||
Preferred Stocks | – | 114,464 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 1,548,761 | – | ||||||||
Investment Companies | – | 68,000 | – | ||||||||
Total Assets | $ | – | $ | 14,120,644 | $ | – | |||||
10 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Janus Real Return Fund | |||
Assets: | ||||
Investments at cost | $ | 14,386,861 | ||
Unaffiliated investments at value | $ | 14,052,644 | ||
Affiliated investments at value | 68,000 | |||
Cash | 990 | |||
Non-interested Trustees’ deferred compensation | 291 | |||
Receivables: | ||||
Fund shares sold | 3,076 | |||
Dividends from affiliates | 6 | |||
Foreign dividend tax reclaim | 250 | |||
Interest | 178,535 | |||
Due from adviser | 8,455 | |||
Other assets | 669 | |||
Total Assets | 14,312,916 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 3,216 | |||
Dividends | 153 | |||
Advisory fees | 6,884 | |||
Fund administration fees | 125 | |||
Transfer agent fees and expenses | 2,036 | |||
12b-1 Distribution and shareholder servicing fees | 2,434 | |||
Non-interested Trustees’ fees and expenses | 89 | |||
Non-interested Trustees’ deferred compensation fees | 291 | |||
Accrued expenses and other payables | 58,023 | |||
Total Liabilities | 73,251 | |||
Net Assets | $ | 14,239,665 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities (continued)
As of December 31, 2014 (unaudited) | Janus Real Return Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 14,979,622 | ||
Undistributed net investment income/(loss)* | (12,834) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (460,887) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (266,236) | |||
Total Net Assets | $ | 14,239,665 | ||
Net Assets - Class A Shares | $ | 2,269,157 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 236,829 | |||
Net Asset Value Per Share(1) | $ | 9.58 | ||
Maximum Offering Price Per Share(2) | $ | 10.06 | ||
Net Assets - Class C Shares | $ | 1,999,423 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 209,653 | |||
Net Asset Value Per Share(1) | $ | 9.54 | ||
Net Assets - Class D Shares | $ | 4,337,082 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 452,011 | |||
Net Asset Value Per Share | $ | 9.60 | ||
Net Assets - Class I Shares | $ | 2,232,059 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 234,200 | |||
Net Asset Value Per Share | $ | 9.53 | ||
Net Assets - Class S Shares | $ | 805,614 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 83,901 | |||
Net Asset Value Per Share | $ | 9.60 | ||
Net Assets - Class T Shares | $ | 2,596,330 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 271,564 | |||
Net Asset Value Per Share | $ | 9.56 |
* | See “Federal Income Tax” 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.
12 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
For the period ended December 31, 2014 (unaudited) | Janus Real Return Fund | |||
Investment Income: | ||||
Interest | $ | 324,652 | ||
Dividends | 4,315 | |||
Dividends from affiliates | 241 | |||
Other income | 16,526 | |||
Total Investment Income | 345,734 | |||
Expenses: | ||||
Advisory fees | 42,453 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 3,120 | |||
Class C Shares | 10,269 | |||
Class S Shares | 1,360 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 2,889 | |||
Class S Shares | 1,360 | |||
Class T Shares | 3,282 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 158 | |||
Class C Shares | 157 | |||
Class D Shares | 1,227 | |||
Class I Shares | 79 | |||
Class S Shares | 3 | |||
Class T Shares | 73 | |||
Shareholder reports expense | 1,351 | |||
Registration fees | 42,686 | |||
Custodian fees | 971 | |||
Professional fees | 6,271 | |||
Non-interested Trustees’ fees and expenses | 124 | |||
Fund administration fees | 772 | |||
Accounting systems fee expense | 17,421 | |||
Other expenses | 122 | |||
Total Expenses | 136,148 | |||
Less: Excess Expense Reimbursement | (60,752) | |||
Net Expenses | 75,396 | |||
Net Investment Income/(Loss) | 270,338 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 24,465 | |||
Total Net Realized Gain/(Loss) on Investments | 24,465 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (581,883) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (581,883) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (287,080) |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
Janus Real Return Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 270,338 | $ | 443,206 | ||||
Net realized gain/(loss) on investments | 24,465 | 51,464 | ||||||
Change in unrealized net appreciation/depreciation | (581,883) | 460,411 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (287,080) | 955,081 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (47,077) | (59,954) | ||||||
Class C Shares | (31,253) | (37,303) | ||||||
Class D Shares | (92,011) | (159,214) | ||||||
Class I Shares | (46,586) | (63,621) | ||||||
Class S Shares | (18,502) | (50,351) | ||||||
Class T Shares | (49,987) | (72,872) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | – | – | ||||||
Class C Shares | – | – | ||||||
Class D Shares | – | – | ||||||
Class I Shares | – | – | ||||||
Class S Shares | – | – | ||||||
Class T Shares | – | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (285,416) | (443,315) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 62,440 | 503,017 | ||||||
Class C Shares | 3,002 | 25,061 | ||||||
Class D Shares | 1,060,034 | 3,668,660 | ||||||
Class I Shares | 5,360 | 70,788 | ||||||
Class S Shares | 6 | – | ||||||
Class T Shares | 131,964 | 1,186,019 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 47,077 | 59,954 | ||||||
Class C Shares | 31,217 | 37,303 | ||||||
Class D Shares | 87,800 | 153,889 | ||||||
Class I Shares | 46,586 | 63,621 | ||||||
Class S Shares | 18,502 | 50,351 | ||||||
Class T Shares | 49,819 | 72,872 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (426,400) | (6,979) | ||||||
Class C Shares | (37,700) | (24,859) | ||||||
Class D Shares | (3,467,894) | (1,581,349) | ||||||
Class I Shares | (39,091) | (96,370) | ||||||
Class S Shares | (1,265,929) | – | ||||||
Class T Shares | (93,207) | (764,725) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (3,786,414) | 3,417,253 | ||||||
Net Increase/(Decrease) in Net Assets | (4,358,910) | 3,929,019 | ||||||
Net Assets: | ||||||||
Beginning of period | 18,598,575 | 14,669,556 | ||||||
End of period | $ | 14,239,665 | $ | 18,598,575 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (12,834) | $ | 2,244 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.94 | $9.64 | $9.55 | $9.95 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.18(3) | 0.26(3) | 0.17 | 0.01 | 0.04 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.35) | 0.29 | 0.07 | (0.32) | (0.09) | |||||||||||||||
Total from Investment Operations | (0.17) | 0.55 | 0.24 | (0.31) | (0.05) | |||||||||||||||
Less Distributions: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.25) | (0.09) | (0.04) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.06) | – | – | |||||||||||||||
Total Distributions | (0.19) | (0.25) | (0.15) | (0.09) | – | |||||||||||||||
Net Asset Value, End of Period | $9.58 | $9.94 | $9.64 | $9.55 | $9.95 | |||||||||||||||
Total Return** | (1.75)% | 5.81% | 2.48% | (3.09)% | (0.50)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $2,269 | $2,677 | $2,054 | $6,759 | $6,660 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,468 | $2,280 | $3,351 | $6,973 | $6,635 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.73% | 2.15% | 2.71% | 2.25% | 5.68% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.93% | 1.01% | 1.15% | 1.26% | 1.27% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.59% | 2.63% | 0.60% | 1.24% | 3.21% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(4) | 45% | 6% |
Class C Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.89 | $9.59 | $9.48 | $9.94 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.14(3) | 0.18(3) | (0.10) | (0.05) | 0.03 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.34) | 0.30 | 0.26 | (0.33) | (0.09) | |||||||||||||||
Total from Investment Operations | (0.20) | 0.48 | 0.16 | (0.38) | (0.06) | |||||||||||||||
Less Distributions: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.15) | (0.18) | (0.03) | (0.03) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.02) | – | – | |||||||||||||||
Total Distributions | (0.15) | (0.18) | (0.05) | (0.08) | – | |||||||||||||||
Net Asset Value, End of Period | $9.54 | $9.89 | $9.59 | $9.48 | $9.94 | |||||||||||||||
Total Return** | (2.04)% | 5.04% | 1.64% | (3.80)% | (0.60)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $1,999 | $2,077 | $1,978 | $6,400 | $6,627 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,026 | $2,024 | $3,182 | $6,492 | $6,616 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.49% | 2.90% | 3.52% | 2.95% | 6.43% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.69% | 1.76% | 1.90% | 2.01% | 2.02% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.85% | 1.84% | (0.16)% | 0.51% | 2.46% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(4) | 45% | 6% |
* | See “Federal Income Tax” 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) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.95 | $9.65 | $9.56 | $9.95 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.18(3) | 0.27(3) | 0.18 | 0.03 | 0.04 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.34) | 0.29 | 0.07 | (0.33) | (0.09) | |||||||||||||||
Total from Investment Operations | (0.16) | 0.56 | 0.25 | (0.30) | (0.05) | |||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.26) | (0.10) | (0.04) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.06) | – | – | |||||||||||||||
Total Distributions and Other | (0.19) | (0.26) | (0.16) | (0.09) | – | |||||||||||||||
Net Asset Value, End of Period | $9.60 | $9.95 | $9.65 | $9.56 | $9.95 | |||||||||||||||
Total Return** | (1.60)% | 5.91% | 2.59% | (3.02)% | (0.50)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $4,337 | $6,842 | $4,431 | $7,632 | $6,954 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,787 | $5,771 | $4,876 | $7,558 | $6,832 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.63% | 2.08% | 2.98% | 2.25% | 5.96% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.84% | 0.91% | 1.00% | 1.14% | 1.25% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.62% | 2.76% | 0.97% | 1.40% | 3.24% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(4) | 45% | 6% |
Class I Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.89 | $9.59 | $9.57 | $9.95 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.19(3) | 0.28(3) | 0.27 | 0.04 | 0.05 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.35) | 0.30 | –(5) | (0.33) | (0.10) | |||||||||||||||
Total from Investment Operations | (0.16) | 0.58 | 0.27 | (0.29) | (0.05) | |||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.20) | (0.28) | (0.16) | (0.04) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.09) | – | – | |||||||||||||||
Total Distributions and Other | (0.20) | (0.28) | (0.25) | (0.09) | – | |||||||||||||||
Net Asset Value, End of Period | $9.53 | $9.89 | $9.59 | $9.57 | $9.95 | |||||||||||||||
Total Return** | (1.64)% | 6.08% | 2.77% | (2.86)% | (0.50)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $2,232 | $2,302 | $2,195 | $6,650 | $6,797 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,268 | $2,241 | $3,457 | $6,738 | $6,658 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.47% | 1.88% | 2.47% | 1.93% | 5.43% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.67% | 0.77% | 0.90% | 1.01% | 1.02% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.86% | 2.84% | 0.89% | 1.50% | 3.47% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(4) | 45% | 6% |
* | See “Federal Income Tax” 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) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. | |
(5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Class S Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.96 | $9.65 | $9.53 | $9.95 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.16(3) | 0.24(3) | 0.13 | –(4) | 0.04 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.34) | 0.31 | 0.11 | (0.33) | (0.09) | |||||||||||||||
Total from Investment Operations | (0.18) | 0.55 | 0.24 | (0.33) | (0.05) | |||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.18) | (0.24) | (0.08) | (0.04) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.04) | – | – | |||||||||||||||
Total Distributions and Other | (0.18) | (0.24) | (0.12) | (0.09) | – | |||||||||||||||
Net Asset Value, End of Period | $9.60 | $9.96 | $9.65 | $9.53 | $9.95 | |||||||||||||||
Total Return** | (1.86)% | 5.77% | 2.51% | (3.33)% | (0.50)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $806 | $2,097 | $1,984 | $6,412 | $6,632 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,095 | $2,042 | $3,207 | $6,502 | $6,618 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.93% | 2.37% | 2.70% | 2.43% | 5.93% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.17% | 1.14% | 1.19% | 1.45% | 1.52% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.20% | 2.47% | 0.56% | 1.07% | 2.96% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(5) | 45% | 6% |
Class T Shares
For a share outstanding during the period ended December 31, 2014 | Janus Real Return Fund | |||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||
Net Asset Value, Beginning of Period | $9.92 | $9.61 | $9.55 | $9.95 | $10.00 | |||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||
Net investment income/(loss) | 0.18(3) | 0.27(3) | 0.22 | 0.02 | 0.04 | |||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.35) | 0.30 | 0.04 | (0.33) | (0.09) | |||||||||||||||
Total from Investment Operations | (0.17) | 0.57 | 0.26 | (0.31) | (0.05) | |||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.26) | (0.13) | (0.04) | – | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (0.05) | – | |||||||||||||||
Return of capital | – | – | (0.07) | – | – | |||||||||||||||
Total Distributions and Other | (0.19) | (0.26) | (0.20) | (0.09) | – | |||||||||||||||
Net Asset Value, End of Period | $9.56 | $9.92 | $9.61 | $9.55 | $9.95 | |||||||||||||||
Total Return** | (1.75)% | 6.01% | 2.76% | (3.09)% | (0.50)% | |||||||||||||||
Net Assets, End of Period (in thousands) | $2,596 | $2,603 | $2,028 | $6,545 | $6,641 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,590 | $2,694 | $3,323 | $6,633 | $6,623 | |||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.72% | 2.16% | 2.48% | 2.17% | 5.68% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.92% | 0.92% | 0.94% | 1.20% | 1.27% | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.62% | 2.70% | 0.83% | 1.31% | 3.21% | |||||||||||||||
Portfolio Turnover Rate | 38% | 91% | 112%(5) | 45% | 6% |
* | See “Federal Income Tax” 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) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
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 Real Return Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith
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under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of
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Notes to Financial Statements (unaudited) (continued)
capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity
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of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 |
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Notes to Financial Statements (unaudited) (continued)
default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
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3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Real Return Fund | First $ | 1 Billion | 0.55 | |||||||
Next $ | 4 Billion | 0.53 | ||||||||
Over $ | 5 Billion | 0.50 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
Janus Real Return Fund | 0.47 | 0.76 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are
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Notes to Financial Statements (unaudited) (continued)
disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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
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the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. There were no upfront sales charges retained by Janus Distributors during the period ended December 31, 2014.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Real Return Fund - Class A Shares | 79 | % | 13 | % | ||||||
Janus Real Return Fund - Class C Shares | 97 | 14 | ||||||||
Janus Real Return Fund - Class D Shares | – | – | ||||||||
Janus Real Return Fund - Class I Shares | 95 | 15 | ||||||||
Janus Real Return Fund - Class S Shares | 99 | 6 | ||||||||
Janus Real Return Fund - Class T Shares | 81 | 15 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships, and investments in passive foreign investment companies.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Real Return Fund | $ | 14,420,304 | $ | 41,494 | $ | (341,154) | $ | (299,660) | ||||||||||
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Notes to Financial Statements (unaudited) (continued)
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Real Return Fund | $ | (441,682) | $ | (15,035) | $ | (456,717) | |||||||||
5. | Capital Share Transactions |
For the period ended December 31 | Janus Real Return Fund | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 6,289 | 50,923 | ||||||||
Reinvested dividends and distributions | 4,834 | 6,084 | ||||||||
Shares repurchased | (43,693) | (711) | ||||||||
Net Increase/(Decrease) in Fund Shares | (32,570) | 56,296 | ||||||||
Shares Outstanding, Beginning of Period | 269,399 | 213,103 | ||||||||
Shares Outstanding, End of Period | 236,829 | 269,399 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 307 | 2,573 | ||||||||
Reinvested dividends and distributions | 3,222 | 3,809 | ||||||||
Shares repurchased | (3,855) | (2,574) | ||||||||
Net Increase/(Decrease) in Fund Shares | (326) | 3,808 | ||||||||
Shares Outstanding, Beginning of Period | 209,979 | 206,171 | ||||||||
Shares Outstanding, End of Period | 209,653 | 209,979 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 108,593 | 373,314 | ||||||||
Reinvested dividends and distributions | 8,998 | 15,575 | ||||||||
Shares repurchased | (352,984) | (160,617) | ||||||||
Net Increase/(Decrease) in Fund Shares | (235,393) | 228,272 | ||||||||
Shares Outstanding, Beginning of Period | 687,404 | 459,132 | ||||||||
Shares Outstanding, End of Period | 452,011 | 687,404 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 550 | 7,263 | ||||||||
Reinvested dividends and distributions | 4,810 | 6,494 | ||||||||
Shares repurchased | (4,028) | (9,906) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,332 | 3,851 | ||||||||
Shares Outstanding, Beginning of Period | 232,868 | 229,017 | ||||||||
Shares Outstanding, End of Period | 234,200 | 232,868 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 1,893 | 5,100 | ||||||||
Shares repurchased | (128,651) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (126,758) | 5,100 | ||||||||
Shares Outstanding, Beginning of Period | 210,659 | 205,559 | ||||||||
Shares Outstanding, End of Period | 83,901 | 210,659 |
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For the period ended December 31 | Janus Real Return Fund | |||||||||
(unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 13,531 | 121,654 | ||||||||
Reinvested dividends and distributions | 5,128 | 7,410 | ||||||||
Shares repurchased | (9,557) | (77,535) | ||||||||
Net Increase/(Decrease) in Fund Shares | 9,102 | 51,529 | ||||||||
Shares Outstanding, Beginning of Period | 262,462 | 210,933 | ||||||||
Shares Outstanding, End of Period | 271,564 | 262,462 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Real Return Fund | $ | 2,300,208 | $ | 4,389,113 | $ | 3,391,230 | $ | 5,005,383 | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 27
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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Additional Information (unaudited) (continued)
quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Additional Information (unaudited) (continued)
Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Additional Information (unaudited) (continued)
Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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Additional Information (unaudited) (continued)
that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81499 | 125-24-93029 02-15 |
Table of Contents
semiannual report
December 31, 2014
Janus Short-Term Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Table of Contents
Janus Short-Term Bond Fund
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Table of Contents
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 outperformance 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. | ![]() Gibson Smith co-portfolio manager | ![]() Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, Janus Short-Term Bond Fund’s Class T Shares returned -0.51%, compared with 0.21% for its benchmark, the Barclays 1-3 Year U.S. Government/Credit Index.
INVESTMENT ENVIRONMENT
The yield on the two-year Treasury rose as the U.S. economy gathered momentum and a market consensus formed that a rate hike by the Federal Reserve (Fed) was in the offing in 2015. The Fed’s benchmark rates are short-term; thus, the short end of the yield curve is typically tied to the direction of the Fed’s benchmark rates.
However, economic growth abroad deteriorated. Japan entered recession while economic growth stalled in the Eurozone’s core countries, like Germany. Disinflation dogged developed economies as crude oil prices plunged. More aggressive monetary stimulus was announced by the Bank of Japan and expectations mounted for the European Central Bank to announce some of its own. Divergent growth and monetary trajectories between the U.S. and its major trading partners drove a rally in the U.S. dollar.
PERFORMANCE DISCUSSION
We continue to believe that a bottom-up, fundamental, research-driven security selection process focused on credit-oriented investments represents the most effective way to generate consistent risk-adjusted outperformance over time. Still, the Fund underperformed its benchmark, the Barclays 1-3 Year U.S. Government/Credit Index during the six-month period.
Underperformance was primarily driven by our security selection within corporate credit, specifically energy-related credits. The sharp decline in crude oil prices later in the period sparked indiscriminate selling in energy-related corporate credit, primarily within the high-yield market. We had a material overweight in several energy-related sectors.
Our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, in our view. Many have ratings in the high-yield market’s “crossover” section, which is just beneath investment grade. We believe this section of the high-yield market, in general, offers attractive risk-adjusted returns due to the potential ratings upgrades for these companies. We also believe that many of our energy holdings can efficiently produce oil at lower prices.
But, wholesale selling of energy credits during the fourth quarter, especially in high-yield, meant individual company fundamentals were ignored, in our view. We would add that a significant portion of crude oil’s decline occurred during the fourth quarter holiday season. That is a low volume period in the high-yield market, and we believe the lower trading volume exacerbated price declines.
The independent-energy sector, in particular, significantly detracted from the Fund’s relative performance overall. California Resources, a recent spin-off from Occidental Petroleum, was the largest individual credit detractor and an out-of-index position. Historically, the company had only occasionally hedged a small amount of its oil output, and we believe the prices of its securities declined in direct sympathy with price of crude oil. Given what we perceive to be increased risk presented by the debt of the firm, we reduced our position during the period.
The automotive and technology sectors within corporate credit were additive on a relative basis. Our out-of-index high-yield exposure in corporate credit helped make spread carry, or the excess yield generated by individual securities versus the index, a relative contributor.
Our Treasury allocation was a modest detractor on a relative basis as a result of our yield curve positioning. The investment strategy uses Treasurys to manage the Fund’s duration. While we were short duration versus the benchmark when short-end rates rose, the degree to which we were short the benchmark was the detractor.
Janus Investment Fund | 1
Table of Contents
Janus Short-Term Bond Fund (unaudited)
OUTLOOK
We have reduced our corporate credit exposure and raised our Treasury exposure in an effort to preserve capital, the core focus of this Fund. The global financial markets are vulnerable to increased volatility amid higher uncertainty around economic growth abroad. Moreover, even a small rate hike by the Fed in mid-to late 2015 could create market instability given the large amount of investor leverage, specifically in the form of carry trades, in our view. In a carry trade, an investor borrows at a lower rate and invests the money at a higher rate.
The Fund’s corporate credit allocation is down nearly 10 percentage points, and we anticipate reducing it further, with a rotation into Treasurys. That said, we remain overweight corporate credit as its extra spread carry helps create attractive risk-adjusted returns in a volatile market. We are increasingly selective in credit, and we have reduced our high-yield exposure, where we remain focused on credits which are higher quality, in our view.
Given the relative stability that the U.S. economy offers versus those abroad, the portfolio’s exposure remains domestically centered. Still, this year will present challenges created by the potential for greater volatility in the global financial markets. That makes our core tenets and experience of seeking capital preservation and risk-adjusted returns all the more important.
On behalf of every member of our investment team, thank you for your investment in Janus Short-Term Bond Fund. We appreciate your entrusting your assets with us, and we look forward to continuing to serve your investment needs.
2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Janus Short-Term Bond Fund At A Glance
Fund Profile
December 31, 2014
Weighted Average Maturity | 2.1 Years | |
Average Effective Duration* | 1.6 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 0.81% | |
With Reimbursement | 0.90% | |
Class A Shares at MOP | ||
Without Reimbursement | 0.79% | |
With Reimbursement | 0.88% | |
Class C Shares*** | ||
Without Reimbursement | 0.04% | |
With Reimbursement | 0.14% | |
Class D Shares | ||
Without Reimbursement | 0.93% | |
With Reimbursement | 1.06% | |
Class I Shares | ||
Without Reimbursement | 1.05% | |
With Reimbursement | 1.15% | |
Class N Shares | ||
Without Reimbursement | 1.10% | |
With Reimbursement | 1.20% | |
Class S Shares | ||
Without Reimbursement | 0.61% | |
With Reimbursement | 0.70% | |
Class T Shares | ||
Without Reimbursement | 0.86% | |
With Reimbursement | 0.96% | |
Number of Bonds/Notes | 161 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
December 31, 2014
AAA | 1.6% | |
AA | 35.9% | |
A | 15.1% | |
BBB | 32.6% | |
BB | 10.5% | |
B | 2.4% | |
Not Rated | 1.9% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18b04.gif)
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif18p04.gif)
Janus Investment Fund | 3
Table of Contents
Janus Short-Term Bond Fund (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Short-Term Bond Fund – Class A Shares | |||||||||||||||
NAV | –0.21% | 0.51% | 2.06% | 3.20% | 3.91% | 0.85% | 0.75% | ||||||||
MOP | –2.75% | –2.04% | 1.09% | 2.70% | 3.68% | ||||||||||
Janus Short-Term Bond Fund – Class C Shares | |||||||||||||||
NAV | –0.93% | –0.28% | 1.23% | 2.52% | 3.21% | 1.68% | 1.57% | ||||||||
CDSC | –1.92% | –1.28% | 1.23% | 2.52% | 3.21% | ||||||||||
Janus Short-Term Bond Fund – Class D Shares(1) | –0.46% | 0.64% | 2.11% | 3.45% | 4.28% | 0.75% | 0.64% | ||||||||
Janus Short-Term Bond Fund – Class I Shares | –0.09% | 0.73% | 2.31% | 3.39% | 4.13% | 0.66% | 0.56% | ||||||||
Janus Short-Term Bond Fund – Class N Shares | –0.06% | 0.79% | 2.00% | 3.39% | 4.25% | 0.59% | 0.49% | ||||||||
Janus Short-Term Bond Fund – Class S Shares | –0.64% | 0.35% | 1.79% | 2.96% | 3.71% | 1.09% | 0.99% | ||||||||
Janus Short-Term Bond Fund – Class T Shares | –0.51% | 0.55% | 2.00% | 3.39% | 4.25% | 0.84% | 0.74% | ||||||||
Barclays 1-3 Year U.S. Government/Credit Index | 0.21% | 0.77% | 1.41% | 2.85% | 4.27%** | ||||||||||
Morningstar Quartile – Class T Shares | – | 3rd | 3rd | 2nd | 2nd | ||||||||||
Morningstar Ranking – based on total returns for Short-Term Bond Funds | – | 392/541 | 277/467 | 113/409 | 60/185 | ||||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 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).
See important disclosures on the next page.
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Maximum Offering Price (MOP) returns include the maximum sales charge of 2.50%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” 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.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I 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 Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – September 1, 1992 | |
** | The Barclays 1-3 Year U.S. Government/Credit Index’s since inception returns are calculated from August 31, 1992. | |
(1) | Closed to new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Short-Term Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 997.90 | $ | 4.03 | $ | 1,000.00 | $ | 1,021.17 | $ | 4.08 | 0.80% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 990.70 | $ | 7.93 | $ | 1,000.00 | $ | 1,017.24 | $ | 8.03 | 1.58% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 995.40 | $ | 3.22 | $ | 1,000.00 | $ | 1,021.98 | $ | 3.26 | 0.64% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 999.10 | $ | 2.77 | $ | 1,000.00 | $ | 1,022.43 | $ | 2.80 | 0.55% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 999.40 | $ | 2.47 | $ | 1,000.00 | $ | 1,022.74 | $ | 2.50 | 0.49% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 993.60 | $ | 5.03 | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 994.90 | $ | 3.77 | $ | 1,000.00 | $ | 1,021.42 | $ | 3.82 | 0.75% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | DECEMBER 31, 2014
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 3.0% | ||||||||||
$16,953,000 | AmeriCredit Automobile Receivables Trust 2012-2 3.3800%, 4/9/18 | $ | 17,391,455 | |||||||
15,814,000 | AmeriCredit Automobile Receivables Trust 2012-4 1.9300%, 8/8/18 | 15,911,699 | ||||||||
6,622,000 | Americredit Automobile Receivables Trust 2014-4 1.8700%, 12/9/19 | 6,605,750 | ||||||||
1,974,556 | Citigroup Commercial Mortgage Trust 2014-GC25 1.4850%, 10/10/47 | 1,966,609 | ||||||||
2,564,223 | COMM 2014-CCRE19 Mortgage Trust 1.4150%, 7/10/19 | 2,553,304 | ||||||||
1,959,992 | COMM 2014-CCRE20 Mortgage Trust 1.3240%, 11/10/47 | 1,946,576 | ||||||||
2,515,943 | COMM 2014-UBS4 Mortgage Trust 1.3090%, 8/10/47 | 2,504,891 | ||||||||
2,026,000 | Commercial Mortgage Pass Through Certificates 1.4450%, 12/10/47 | 2,017,785 | ||||||||
7,917,000 | Gracechurch Card Funding PLC 0.8608%, 6/15/17 (144A),‡ | 7,930,142 | ||||||||
1,952,580 | GS Mortgage Securities Trust 2014-GC24 1.5090%, 9/1/47 | 1,951,389 | ||||||||
3,377,000 | GS Mortgage Securities Trust 2014-GC26 1.4340%, 11/10/47 | 3,358,710 | ||||||||
2,224,000 | JPMBB Commercial Mortgage Securities Trust 2014-C26 1.5962%, 1/15/48‡ | 2,217,564 | ||||||||
12,260,000 | Santander Drive Auto Receivables Trust 1.9400%, 3/15/18 | 12,343,723 | ||||||||
2,827,676 | SMART Trust, Australia 0.9700%, 3/14/17 | 2,825,696 | ||||||||
2,023,000 | Wells Fargo Commercial Mortgage Trust 2014-LC18 1.4370%, 12/15/47 | 2,016,362 | ||||||||
1,879,919 | WFRBS Commercial Mortgage Trust 2014-C21 1.4130%, 8/15/47 | 1,876,800 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $85,460,171) | 85,418,455 | |||||||||
Bank Loans and Mezzanine Loans – 1.8% | ||||||||||
Consumer Cyclical – 0.6% | ||||||||||
17,080,263 | Hilton Worldwide Finance LLC 3.5000%, 10/26/20‡ | 16,859,586 | ||||||||
Energy – 0.1% | ||||||||||
1,880,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 1,679,460 | ||||||||
Real Estate Investment Trusts (REITs) – 0.1% | ||||||||||
4,837,000 | ESH Hospitality, Inc. 5.0000%, 6/24/19‡ | 4,821,909 | ||||||||
Technology – 1.0% | ||||||||||
29,982,335 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 29,845,016 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $53,733,875) | 53,205,971 | |||||||||
Corporate Bonds – 61.4% | ||||||||||
Banking – 14.5% | ||||||||||
21,355,000 | Abbey National Treasury Services PLC 1.3750%, 3/13/17 | 21,329,289 | ||||||||
9,500,000 | Amsouth Bank 5.2000%, 4/1/15 | 9,595,009 | ||||||||
4,605,000 | Bank of America Corp. 4.5000%, 4/1/15 | 4,648,269 | ||||||||
8,125,000 | Bank of America Corp. 1.5000%, 10/9/15 | 8,158,321 | ||||||||
16,692,000 | Bank of America Corp. 1.2500%, 1/11/16 | 16,721,278 | ||||||||
20,052,000 | Bank of America Corp. 3.6250%, 3/17/16 | 20,615,361 | ||||||||
6,346,000 | Bank of America Corp. 3.7500%, 7/12/16 | 6,572,927 | ||||||||
29,881,000 | BBVA U.S. Senior SAU 4.6640%, 10/9/15 | 30,680,705 | ||||||||
6,950,000 | Citigroup, Inc. 4.8750%, 5/7/15 | 7,042,192 | ||||||||
29,253,000 | Citigroup, Inc. 1.8500%, 11/24/17 | 29,219,388 | ||||||||
8,306,000 | First Republic Bank 2.3750%, 6/17/19 | 8,345,129 | ||||||||
30,893,000 | Goldman Sachs Group, Inc. 3.6250%, 2/7/16 | 31,698,010 | ||||||||
3,981,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 4,270,009 | ||||||||
11,897,000 | ICICI Bank, Ltd., Dubai 4.7000%, 2/21/18 (144A) | 12,546,112 | ||||||||
15,804,000 | ICICI Bank, Ltd., Dubai 3.5000%, 3/18/20 (144A) | 15,903,644 | ||||||||
5,403,000 | Intesa Sanpaolo SpA 3.6250%, 8/12/15 (144A) | 5,475,973 | ||||||||
13,333,000 | Intesa Sanpaolo SpA 3.1250%, 1/15/16 | 13,543,728 | ||||||||
49,878,000 | JPMorgan Chase & Co. 5.1500%, 10/1/15 | 51,264,858 | ||||||||
16,137,000 | Morgan Stanley 3.4500%, 11/2/15 | 16,451,881 | ||||||||
6,455,000 | Morgan Stanley 3.8000%, 4/29/16 | 6,668,138 | ||||||||
11,766,000 | Morgan Stanley 1.8750%, 1/5/18 | 11,722,936 | ||||||||
26,847,000 | Morgan Stanley 0.9706%, 7/23/19‡ | 26,739,531 | ||||||||
7,544,000 | Nordea Bank AB 0.8750%, 5/13/16 (144A) | 7,537,301 | ||||||||
3,064,000 | PNC Funding Corp. 5.2500%, 11/15/15 | 3,175,533 | ||||||||
15,719,000 | Royal Bank of Scotland Group PLC 5.0500%, 1/8/15 | 15,722,144 | ||||||||
29,983,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 30,283,190 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Banking – (continued) | ||||||||||
$4,580,000 | Synchrony Financial 1.8750%, 8/15/17 | $ | 4,588,899 | |||||||
2,152,000 | UBS AG 5.8750%, 7/15/16 | 2,302,349 | ||||||||
| ||||||||||
422,822,104 | ||||||||||
Basic Industry – 5.7% | ||||||||||
11,415,000 | Albemarle Corp. 3.0000%, 12/1/19 | 11,416,724 | ||||||||
14,618,000 | ArcelorMittal 4.2500%, 3/1/16 | 14,983,450 | ||||||||
17,706,000 | ArcelorMittal 5.0000%, 2/25/17 | 18,414,240 | ||||||||
16,967,000 | Ashland, Inc. 3.0000%, 3/15/16 | 17,051,835 | ||||||||
18,981,000 | Ashland, Inc. 3.8750%, 4/15/18 | 19,170,810 | ||||||||
1,822,000 | Cascades, Inc. 7.8750%, 1/15/20 | 1,894,880 | ||||||||
11,359,000 | Ecolab, Inc. 1.0000%, 8/9/15 | 11,388,602 | ||||||||
26,363,000 | Georgia-Pacific LLC 2.5390%, 11/15/19 (144A) | 26,353,878 | ||||||||
17,807,000 | INVISTA Finance LLC 4.2500%, 10/15/19 (144A) | 17,807,000 | ||||||||
28,407,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 29,330,227 | ||||||||
| ||||||||||
167,811,646 | ||||||||||
Brokerage – 1.8% | ||||||||||
26,691,000 | E*TRADE Financial Corp. 6.3750%, 11/15/19 | 28,292,460 | ||||||||
23,420,000 | Raymond James Financial, Inc. 4.2500%, 4/15/16 | 24,281,997 | ||||||||
| ||||||||||
52,574,457 | ||||||||||
Capital Goods – 1.7% | ||||||||||
2,898,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 2,854,530 | ||||||||
8,423,000 | Eaton Corp. 0.9500%, 11/2/15 | 8,430,463 | ||||||||
9,460,000 | Exelis, Inc. 4.2500%, 10/1/16 | 9,783,626 | ||||||||
13,576,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 14,072,067 | ||||||||
14,036,000 | Martin Marietta Materials, Inc. 1.3331%, 6/30/17‡ | 14,189,891 | ||||||||
| ||||||||||
49,330,577 | ||||||||||
Communications – 3.3% | ||||||||||
21,241,000 | British Telecommunications PLC 2.0000%, 6/22/15 | 21,369,635 | ||||||||
19,830,000 | Gannett Co., Inc. 6.3750%, 9/1/15 | 20,424,900 | ||||||||
11,102,000 | NBCUniversal Enterprise, Inc. 0.7676%, 4/15/16 (144A),‡ | 11,122,039 | ||||||||
3,300,000 | Scripps Networks Interactive, Inc. 2.7500%, 11/15/19 | 3,313,811 | ||||||||
13,463,000 | Time Warner, Inc. 3.1500%, 7/15/15 | 13,651,145 | ||||||||
9,420,000 | Verizon Communications, Inc. 2.5000%, 9/15/16 | 9,628,889 | ||||||||
16,240,000 | Verizon Communications, Inc. 1.3500%, 6/9/17 | 16,164,858 | ||||||||
| ||||||||||
95,675,277 | ||||||||||
Consumer Cyclical – 5.4% | ||||||||||
7,120,000 | Brinker International, Inc. 2.6000%, 5/15/18 | 7,106,379 | ||||||||
9,381,000 | Chrysler Group LLC / CG Co-Issuer, Inc. 8.0000%, 6/15/19 | 9,861,776 | ||||||||
21,159,000 | Ford Motor Credit Co. LLC 2.7500%, 5/15/15 | 21,300,575 | ||||||||
45,239,000 | General Motors Co. 3.5000%, 10/2/18 | 46,143,780 | ||||||||
24,711,000 | General Motors Financial Co., Inc. 2.7500%, 5/15/16 | 25,112,554 | ||||||||
7,902,000 | GLP Capital LP / GLP Financing II, Inc. 4.3750%, 11/1/18 | 8,079,795 | ||||||||
7,709,000 | Hanesbrands, Inc. 6.3750%, 12/15/20 | 8,171,540 | ||||||||
14,076,000 | MGM Resorts International 6.6250%, 7/15/15 | 14,322,330 | ||||||||
3,327,000 | MGM Resorts International 7.5000%, 6/1/16 | 3,509,985 | ||||||||
5,989,000 | MGM Resorts International 7.6250%, 1/15/17 | 6,453,148 | ||||||||
7,637,000 | PACCAR Financial Corp. 0.7500%, 8/14/15 | 7,648,242 | ||||||||
| ||||||||||
157,710,104 | ||||||||||
Consumer Non-Cyclical – 3.3% | ||||||||||
15,476,000 | GlaxoSmithKline Capital PLC 0.7500%, 5/8/15 | 15,498,796 | ||||||||
11,350,000 | Mylan, Inc. 1.3500%, 11/29/16 | 11,294,135 | ||||||||
14,727,000 | PepsiCo, Inc. 0.7000%, 8/13/15 | 14,754,701 | ||||||||
28,599,000 | Perrigo Co. PLC 1.3000%, 11/8/16 | 28,473,765 | ||||||||
24,783,000 | SABMiller Holdings, Inc. 0.9224%, 8/1/18 (144A),‡ | 24,861,513 | ||||||||
| ||||||||||
94,882,910 | ||||||||||
Electric – 0.7% | ||||||||||
1,676,000 | AES Corp. 7.7500%, 10/15/15 | 1,747,230 | ||||||||
19,463,000 | PPL WEM Holdings, Ltd. 3.9000%, 5/1/16 (144A) | 20,037,236 | ||||||||
| ||||||||||
21,784,466 | ||||||||||
Energy – 12.9% | ||||||||||
13,630,000 | California Resources Corp. 5.0000%, 1/15/20 (144A) | 11,824,025 | ||||||||
24,624,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16 | 24,562,440 | ||||||||
25,765,000 | Chesapeake Energy Corp. 7.2500%, 12/15/18 | 28,212,675 | ||||||||
34,306,000 | Chesapeake Energy Corp. 3.4806%, 4/15/19‡ | 33,619,880 | ||||||||
9,522,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 7.7500%, 4/1/19 | 9,760,050 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$23,977,000 | DCP Midstream Operating LP 3.2500%, 10/1/15 | $ | 24,322,221 | |||||||
37,142,000 | DCP Midstream Operating LP 2.5000%, 12/1/17 | 37,099,324 | ||||||||
3,291,000 | DCP Midstream Operating LP 2.7000%, 4/1/19 | 3,221,543 | ||||||||
6,171,000 | Enbridge, Inc. 0.6836%, 6/2/17‡ | 6,144,304 | ||||||||
5,540,000 | EnLink Midstream Partners LP 2.7000%, 4/1/19 | 5,455,465 | ||||||||
8,325,000 | Enterprise Products Operating LLC 1.2500%, 8/13/15 | 8,346,995 | ||||||||
43,450,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16 | 45,106,314 | ||||||||
6,758,000 | Nabors Industries, Inc. 2.3500%, 9/15/16 | 6,684,595 | ||||||||
21,027,000 | Nabors Industries, Inc. 6.1500%, 2/15/18 | 21,901,029 | ||||||||
40,887,000 | Phillips 66 1.9500%, 3/5/15 | 40,990,444 | ||||||||
17,366,000 | Plains All American Pipeline LP / PAA Finance Corp. 3.9500%, 9/15/15 | 17,721,169 | ||||||||
15,463,000 | Rowan Cos., Inc. 5.0000%, 9/1/17 | 16,112,446 | ||||||||
8,823,000 | Spectra Energy Partners LP 2.9500%, 9/25/18 | 9,029,414 | ||||||||
5,828,000 | TransCanada PipeLines, Ltd. 0.8750%, 3/2/15 | 5,831,095 | ||||||||
23,417,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 21,894,895 | ||||||||
| ||||||||||
377,840,323 | ||||||||||
Finance Companies – 2.9% | ||||||||||
31,039,000 | CIT Group, Inc. 5.0000%, 5/15/17 | 32,202,962 | ||||||||
4,297,000 | General Electric Capital Corp. 3.5000%, 6/29/15 | 4,359,723 | ||||||||
13,264,000 | General Electric Capital Corp. 2.3750%, 6/30/15 | 13,392,674 | ||||||||
17,245,000 | General Electric Capital Corp. 4.3750%, 9/21/15 | 17,681,764 | ||||||||
9,609,000 | General Electric Capital Corp. 5.0000%, 1/8/16 | 10,011,406 | ||||||||
6,646,000 | International Lease Finance Corp. 2.1906%, 6/15/16‡ | 6,637,693 | ||||||||
| ||||||||||
84,286,222 | ||||||||||
Industrial – 0.2% | ||||||||||
4,783,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 4,903,871 | ||||||||
Insurance – 1.0% | ||||||||||
12,420,000 | ACE INA Holdings, Inc. 2.6000%, 11/23/15 | 12,613,441 | ||||||||
17,817,000 | American International Group, Inc. 2.3750%, 8/24/15 | 17,961,211 | ||||||||
| ||||||||||
30,574,652 | ||||||||||
Mortgage Assets – 1.3% | ||||||||||
34,170,000 | NRAM Covered Bond LLP 5.6250%, 6/22/17 (144A) | 37,440,445 | ||||||||
Owned No Guarantee – 0.4% | ||||||||||
12,507,000 | Korea National Oil Corp. 2.7500%, 1/23/19 (144A) | 12,635,109 | ||||||||
Real Estate Investment Trusts (REITs) – 0.7% | ||||||||||
18,273,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 19,262,154 | ||||||||
Technology – 4.1% | ||||||||||
11,980,000 | Amphenol Corp. 1.5500%, 9/15/17 | 11,946,648 | ||||||||
8,930,900 | Dun & Bradstreet Corp. 3.2500%, 12/1/17 | 9,182,689 | ||||||||
5,890,000 | Fidelity National Information Services, Inc. 1.4500%, 6/5/17 | 5,857,010 | ||||||||
17,809,000 | Fiserv, Inc. 3.1250%, 10/1/15 | 18,115,724 | ||||||||
10,608,000 | Fiserv, Inc. 3.1250%, 6/15/16 | 10,891,191 | ||||||||
4,924,000 | Samsung Electronics America, Inc. 1.7500%, 4/10/17 (144A) | 4,938,925 | ||||||||
19,917,000 | Seagate HDD Cayman 3.7500%, 11/15/18 (144A) | 20,439,821 | ||||||||
15,140,000 | Total System Services, Inc. 2.3750%, 6/1/18 | 15,010,356 | ||||||||
11,225,000 | TSMC Global, Ltd. 0.9500%, 4/3/16 (144A) | 11,172,557 | ||||||||
13,134,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 12,891,284 | ||||||||
| ||||||||||
120,446,205 | ||||||||||
Transportation – 1.5% | ||||||||||
19,315,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 19,540,638 | ||||||||
2,796,000 | JB Hunt Transport Services, Inc. 3.3750%, 9/15/15 | 2,843,977 | ||||||||
5,500,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 6/15/19 (144A) | 5,466,461 | ||||||||
14,956,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 15,161,824 | ||||||||
| ||||||||||
43,012,900 | ||||||||||
Total Corporate Bonds (cost $1,794,469,406) | 1,792,993,422 | |||||||||
U.S. Treasury Notes/Bonds – 33.2% | ||||||||||
46,496,000 | 0.2500%, 1/15/15 | 46,496,000 | ||||||||
12,580,000 | 0.2500%, 2/15/15 | 12,582,453 | ||||||||
103,500,000 | 0.3750%, 4/15/15 | 103,529,683 | ||||||||
41,196,000 | 0.2500%, 7/31/15 | 41,224,961 | ||||||||
44,102,000 | 0.2500%, 8/15/15 | 44,119,244 | ||||||||
59,759,000 | 0.3750%, 8/31/15 | 59,838,360 | ||||||||
62,819,000 | 0.2500%, 11/30/15 | 62,819,000 | ||||||||
42,240,000 | 0.2500%, 12/31/15 | 42,233,411 | ||||||||
29,745,000 | 0.3750%, 1/31/16 | 29,758,950 | ||||||||
29,693,000 | 0.2500%, 2/29/16 | 29,655,884 | ||||||||
32,486,000 | 0.3750%, 3/31/16 | 32,480,932 | ||||||||
70,635,000 | 0.5000%, 6/30/16 | 70,657,038 | ||||||||
22,700,000 | 0.5000%, 8/31/16 | 22,691,124 | ||||||||
11,339,000 | 0.8750%, 9/15/16 | 11,398,348 | ||||||||
44,509,000 | 0.5000%, 9/30/16 | 44,456,835 | ||||||||
14,699,000 | 0.3750%, 10/31/16 | 14,638,131 | ||||||||
15,720,000 | 0.5000%, 11/30/16 | 15,680,700 | ||||||||
63,334,000 | 0.6250%, 12/31/16 | 63,249,892 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
U.S. Treasury Notes/Bonds – (continued) | ||||||||||
$22,700,000 | 0.8750%, 8/15/17 | $ | 22,645,021 | |||||||
17,310,000 | 1.0000%, 9/15/17 | 17,319,469 | ||||||||
17,805,000 | 0.8750%, 10/15/17 | 17,736,843 | ||||||||
65,546,000 | 0.8750%, 11/15/17 | 65,233,608 | ||||||||
25,894,000 | 1.0000%, 12/15/17 | 25,833,305 | ||||||||
1,985,000 | 3.5000%, 2/15/18 | 2,127,207 | ||||||||
72,058,000 | 1.5000%, 11/30/19 | 71,602,017 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $970,081,231) | 970,008,416 | |||||||||
Investment Companies – 0.1% | ||||||||||
Money Markets – 0.1% | ||||||||||
2,485,481 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $2,485,481) | 2,485,481 | ||||||||
Total Investments (total cost $2,906,230,164) – 99.5% | 2,904,111,745 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.5% | 15,513,287 | |||||||||
Net Assets – 100% | $ | 2,919,625,032 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 2,500,569,585 | 86 | .1% | ||||
United Kingdom | 174,435,154 | 6 | .0 | |||||
Luxembourg | 33,397,690 | 1 | .1 | |||||
Spain | 30,680,705 | 1 | .1 | |||||
Singapore | 29,845,016 | 1 | .0 | |||||
India | 28,449,756 | 1 | .0 | |||||
Taiwan | 24,063,841 | 0 | .8 | |||||
Australia | 22,366,334 | 0 | .8 | |||||
Italy | 19,019,701 | 0 | .6 | |||||
South Korea | 17,574,034 | 0 | .6 | |||||
Canada | 13,870,279 | 0 | .5 | |||||
Sweden | 7,537,301 | 0 | .3 | |||||
Switzerland | 2,302,349 | 0 | .1 | |||||
Total | $ | 2,904,111,745 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays 1-3 Year U.S. Government/Credit Index | Composed of all bonds of investment grade with a maturity between one and three years. | |
LLC | Limited Liability Company | |
LLP | Limited Liability Partnership | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Short-Term Bond Fund | $ | 301,085,927 | 10.3 | % | ||||||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
°° | Rate shown is the 7-day yield as of December 31, 2014. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | |||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | ||||||||||||||||
Janus Short-Term Bond Fund | ||||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 112,343,218 | 697,434,263 | (807,292,000) | 2,485,481 | $ | – | $ | 19,392 | $ | 2,485,481 | ||||||||||||
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||
Janus Short-Term Bond Fund | |||||||||
Assets | |||||||||
Investments in Securities: | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $– | $ | 85,418,455 | $– | |||||
Bank Loans and Mezzanine Loans | – | 53,205,971 | – | ||||||
Corporate Bonds | – | 1,792,993,422 | – | ||||||
U.S. Treasury Notes/Bonds | – | 970,008,416 | – | ||||||
Investment Companies | – | 2,485,481 | – | ||||||
Total Assets | $– | $ | 2,904,111,745 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
Janus | ||||
Short-Term | ||||
As of December 31, 2014 (unaudited) | Bond Fund | |||
Assets: | ||||
Investments at cost | $ | 2,906,230,164 | ||
Unaffiliated investments at value | $ | 2,901,626,264 | ||
Affiliated investments at value | 2,485,481 | |||
Non-interested Trustees’ deferred compensation | 59,799 | |||
Receivables: | ||||
Investments sold | 20,402,683 | |||
Fund shares sold | 4,876,732 | |||
Dividends from affiliates | 3,793 | |||
Interest | 16,345,323 | |||
Other assets | 42,758 | |||
Total Assets | 2,945,842,833 | |||
Liabilities: | ||||
Due to custodian | 1,762,874 | |||
Payables: | ||||
Investments purchased | 14,634,628 | |||
Fund shares repurchased | 7,373,173 | |||
Dividends | 368,378 | |||
Advisory fees | 1,146,007 | |||
Fund administration fees | 25,673 | |||
Transfer agent fees and expenses | 527,507 | |||
12b-1 Distribution and shareholder servicing fees | 93,955 | |||
Non-interested Trustees’ fees and expenses | 17,483 | |||
Non-interested Trustees’ deferred compensation fees | 59,799 | |||
Accrued expenses and other payables | 208,324 | |||
Total Liabilities | 26,217,801 | |||
Net Assets | $ | 2,919,625,032 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Janus | ||||
Short-Term | ||||
As of December 31, 2014 (unaudited) | Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 2,923,712,347 | ||
Undistributed net investment income/(loss)* | (186,800) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | (1,782,096) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,118,419) | |||
Total Net Assets | $ | 2,919,625,032 | ||
Net Assets - Class A Shares | $ | 171,465,208 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 56,459,707 | |||
Net Asset Value Per Share(1) | $ | 3.04 | ||
Maximum Offering Price Per Share(2) | $ | 3.12 | ||
Net Assets - Class C Shares | $ | 62,335,090 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 20,544,702 | |||
Net Asset Value Per Share(1) | $ | 3.03 | ||
Net Assets - Class D Shares | $ | 193,602,811 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 63,660,049 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class I Shares | $ | 473,635,505 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 155,958,778 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class N Shares | $ | 39,892,444 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 13,127,837 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class S Shares | $ | 3,463,083 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,141,345 | |||
Net Asset Value Per Share | $ | 3.03 | ||
Net Assets - Class T Shares | $ | 1,975,230,891 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 649,504,964 | |||
Net Asset Value Per Share | $ | 3.04 |
* | See “Federal Income Tax” 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 100/97.50 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
Janus | ||||
Short-Term | ||||
For the period ended December 31, 2014 (unaudited) | Bond Fund | |||
Investment Income: | ||||
Interest | 30,519,397 | |||
Dividends from affiliates | 19,392 | |||
Other income | 733,830 | |||
Total Investment Income | 31,272,619 | |||
Expenses: | ||||
Advisory fees | 8,305,128 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 219,518 | |||
Class C Shares | 331,622 | |||
Class S Shares | 4,507 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 121,019 | |||
Class S Shares | 4,507 | |||
Class T Shares | 2,592,141 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 40,507 | |||
Class C Shares | 20,818 | |||
Class I Shares | 114,808 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 9,767 | |||
Class C Shares | 5,176 | |||
Class D Shares | 25,511 | |||
Class I Shares | 10,197 | |||
Class N Shares | 171 | |||
Class S Shares | 57 | |||
Class T Shares | 12,726 | |||
Shareholder reports expense | 79,654 | |||
Registration fees | 110,514 | |||
Custodian fees | 6,411 | |||
Professional fees | 35,501 | |||
Non-interested Trustees’ fees and expenses | 26,456 | |||
Fund administration fees | 150,983 | |||
Other expenses | 182,610 | |||
Total Expenses | 12,410,309 | |||
Less: Excess Expense Reimbursement | (1,502,967) | |||
Net Expenses | 10,907,342 | |||
Net Investment Income/(Loss) | 20,365,277 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (1,723,522) | |||
Total Net Realized Gain/(Loss) on Investments | (1,723,522) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (28,793,802) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (28,793,802) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (10,152,047) |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Janus Short-Term | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 20,365,277 | $ | 41,519,632 | ||||
Net realized gain/(loss) on investments | (1,723,522) | 3,745,385 | ||||||
Change in unrealized net appreciation/depreciation | (28,793,802) | 25,696,546 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (10,152,047) | 70,961,563 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (1,127,339) | (2,296,713) | ||||||
Class C Shares | (169,502) | (442,250) | ||||||
Class D Shares | (1,457,127) | (3,019,842) | ||||||
Class I Shares | (3,527,097) | (5,702,007) | ||||||
Class N Shares | (305,368) | (709,136) | ||||||
Class S Shares | (19,583) | (51,950) | ||||||
Class T Shares | (13,878,218) | (29,752,834) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (201,032) | (433,722) | ||||||
Class C Shares | (73,376) | (196,250) | ||||||
Class D Shares | (226,141) | (525,894) | ||||||
Class I Shares | (557,420) | (948,223) | ||||||
Class N Shares | (46,921) | (134,248) | ||||||
Class S Shares | (4,078) | (11,203) | ||||||
Class T Shares | (2,321,742) | (5,509,095) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (23,914,944) | (49,733,367) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 44,824,148 | 88,145,967 | ||||||
Class C Shares | 6,885,525 | 20,124,753 | ||||||
Class D Shares | 18,873,513 | 45,755,880 | ||||||
Class I Shares | 216,501,649 | 292,092,856 | ||||||
Class N Shares | 6,757,411 | 18,879,679 | ||||||
Class S Shares | 210,460 | 1,022,615 | ||||||
Class T Shares | 273,114,201 | 769,344,793 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 1,198,781 | 2,452,036 | ||||||
Class C Shares | 190,785 | 503,148 | ||||||
Class D Shares | 1,643,760 | 3,462,819 | ||||||
Class I Shares | 3,227,228 | 4,901,790 | ||||||
Class N Shares | 352,289 | 843,351 | ||||||
Class S Shares | 23,637 | 61,079 | ||||||
Class T Shares | 16,008,416 | 34,897,188 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (44,026,485) | (73,437,890) | ||||||
Class C Shares | (12,854,048) | (30,631,263) | ||||||
Class D Shares | (26,240,695) | (57,676,417) | ||||||
Class I Shares | (132,189,217) | (223,595,880) | ||||||
Class N Shares | (2,461,443) | (21,957,454) | ||||||
Class S Shares | (593,870) | (2,406,133) | ||||||
Class T Shares | (414,071,070) | (905,371,379) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Short-Term | ||||||||
Bond Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (42,625,025) | (32,588,462) | ||||||
Net Increase/(Decrease) in Net Assets | (76,692,016) | (11,360,266) | ||||||
Net Assets: | ||||||||
Beginning of period | 2,996,317,048 | 3,007,677,314 | ||||||
End of period | $ | 2,919,625,032 | $ | 2,996,317,048 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (186,800) | $ | (67,843) |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | $3.06 | $3.01 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(3) | 0.04(3) | 0.05 | 0.06 | 0.07 | 0.05 | 0.04 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.03 | (0.01) | 0.01 | 0.01 | 0.03 | 0.05 | |||||||||||||||||||||||
Total from Investment Operations | (0.01) | 0.07 | 0.04 | 0.07 | 0.08 | 0.08 | 0.09 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.04) | (0.05) | (0.06) | (0.07) | (0.05) | (0.04) | |||||||||||||||||||||||
Distributions (from capital gains)* | –(4) | (0.01) | (0.02) | (0.01) | (0.02) | –(4) | – | |||||||||||||||||||||||
Total Distributions | (0.02) | (0.05) | (0.07) | (0.07) | (0.09) | (0.05) | (0.04) | |||||||||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | $3.06 | |||||||||||||||||||||||
Total Return** | (0.21)% | 2.33% | 1.24% | 2.18% | 2.65% | 2.65% | 3.05% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $171,465 | $171,464 | $153,132 | $423,210 | $374,981 | $121,254 | $43,636 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $173,250 | $164,880 | $192,733 | $387,633 | $164,464 | $82,728 | $18,271 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.90% | 0.85% | 1.07% | 1.40% | 0.88% | 0.84% | 0.88% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.80% | 0.77% | 0.81% | 0.80% | 0.80% | 0.80% | 0.81% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.28% | 1.41% | 1.49% | 1.95% | 2.12% | 2.39% | 2.78% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% | 57% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | $3.06 | $3.01 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.01(3) | 0.02(3) | 0.02 | 0.04 | 0.04 | 0.03 | 0.05 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.04) | 0.03 | (0.01) | 0.01 | 0.02 | 0.02 | 0.05 | |||||||||||||||||||||||
Total from Investment Operations | (0.03) | 0.05 | 0.01 | 0.05 | 0.06 | 0.05 | 0.10 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.01) | (0.02) | (0.02) | (0.04) | (0.04) | (0.03) | (0.05) | |||||||||||||||||||||||
Distributions (from capital gains)* | –(4) | (0.01) | (0.02) | (0.01) | (0.02) | –(4) | – | |||||||||||||||||||||||
Total Distributions | (0.01) | (0.03) | (0.04) | (0.05) | (0.06) | (0.03) | (0.05) | |||||||||||||||||||||||
Net Asset Value, End of Period | $3.03 | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | $3.06 | |||||||||||||||||||||||
Total Return** | (0.93)% | 1.52% | 0.46% | 1.44% | 2.24% | 1.82% | 3.31% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $62,335 | $68,852 | $78,276 | $75,789 | $70,507 | $63,030 | $23,567 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $65,445 | $74,487 | $78,430 | $74,993 | $69,983 | $42,824 | $8,848 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.68% | 1.68% | 1.69% | 1.66% | 1.64% | 1.59% | 1.63% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.58% | 1.56% | 1.55% | 1.53% | 1.53% | 1.55% | 1.56% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.51% | 0.60% | 0.74% | 1.23% | 1.40% | 1.64% | 2.01% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% | 57% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Janus Short-Term Bond Fund | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | $3.08 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(2) | 0.05(2) | 0.05 | 0.06 | 0.07 | 0.03 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.04) | 0.04 | (0.02) | 0.01 | 0.02 | 0.01 | ||||||||||||||||||||
Total from Investment Operations | (0.02) | 0.09 | 0.03 | 0.07 | 0.09 | 0.04 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.05) | (0.05) | (0.06) | (0.07) | (0.03) | ||||||||||||||||||||
Distributions (from capital gains)* | –(3) | (0.01) | (0.02) | (0.01) | (0.02) | – | ||||||||||||||||||||
Total Distributions | (0.02) | (0.06) | (0.07) | (0.07) | (0.09) | (0.03) | ||||||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | ||||||||||||||||||||
Total Return** | (0.46)% | 2.77% | 1.01% | 2.30% | 3.12% | 1.21% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $193,603 | $201,587 | $208,522 | $207,395 | $210,532 | $227,147 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $199,011 | $202,309 | $210,423 | $207,647 | $221,970 | $221,604 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.76% | 0.75% | 0.77% | 0.74% | 0.72% | 0.74% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.64% | 0.66% | 0.69% | 0.69% | 0.67% | 0.67% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.44% | 1.51% | 1.60% | 2.07% | 2.25% | 2.42% | ||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | $3.06 | $3.01 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(2) | 0.05(2) | 0.05 | 0.07 | 0.07 | 0.06 | 0.03 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.03 | (0.01) | 0.01 | 0.01 | 0.02 | 0.05 | |||||||||||||||||||||||
Total from Investment Operations | (0.01) | 0.08 | 0.04 | 0.08 | 0.08 | 0.08 | 0.08 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.05) | (0.05) | (0.07) | (0.07) | (0.05) | (0.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | –(3) | (0.01) | (0.02) | (0.01) | (0.02) | –(3) | – | |||||||||||||||||||||||
Total Distributions | (0.02) | (0.06) | (0.07) | (0.08) | (0.09) | (0.05) | (0.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | $3.06 | |||||||||||||||||||||||
Total Return** | (0.09)% | 2.54% | 1.48% | 2.43% | 2.91% | 2.82% | 2.75% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $473,636 | $391,360 | $315,482 | $275,345 | $543,799 | $171,201 | $69,785 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $452,381 | $356,795 | $307,611 | $387,327 | $350,062 | $115,010 | $8,399 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.65% | 0.66% | 0.66% | 0.64% | 0.63% | 0.59% | 0.79% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.55% | 0.56% | 0.55% | 0.55% | 0.56% | 0.55% | 0.57% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.54% | 1.60% | 1.73% | 2.22% | 2.39% | 2.64% | 2.85% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% | 57% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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.
18 | DECEMBER 31, 2014
Table of Contents
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | Janus Short-Term Bond Fund | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.02(2) | 0.05(2) | 0.05 | –(3) | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.03 | (0.01) | –(3) | ||||||||||||||
Total from Investment Operations | (0.01) | 0.08 | 0.04 | – | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.05) | (0.05) | –(3) | ||||||||||||||
Distributions (from capital gains)* | –(3) | (0.01) | (0.02) | – | ||||||||||||||
Total Distributions | (0.02) | (0.06) | (0.07) | – | ||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | ||||||||||||||
Total Return** | (0.06)% | 2.59% | 1.48% | 0.17% | ||||||||||||||
Net Assets, End of Period (in thousands) | $39,892 | $35,680 | $37,619 | $34,342 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $37,844 | $43,206 | $37,659 | $26,909 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.59% | 0.59% | 0.60% | 0.61% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.49% | 0.51% | 0.55% | 0.56% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.59% | 1.60% | 1.74% | 1.80% | ||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||
period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | $3.06 | $3.01 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(2) | 0.04(2) | 0.04 | 0.05 | 0.06 | 0.04 | 0.03 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.04) | 0.03 | (0.01) | 0.01 | 0.02 | 0.03 | 0.05 | |||||||||||||||||||||||
Total from Investment Operations | (0.02) | 0.07 | 0.03 | 0.06 | 0.08 | 0.07 | 0.08 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.04) | (0.04) | (0.05) | (0.06) | (0.05) | (0.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | –(3) | (0.01) | (0.02) | (0.01) | (0.02) | –(3) | – | |||||||||||||||||||||||
Total Distributions | (0.02) | (0.05) | (0.06) | (0.06) | (0.08) | (0.05) | (0.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $3.03 | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | $3.06 | |||||||||||||||||||||||
Total Return** | (0.64)% | 2.15% | 1.03% | 1.98% | 2.74% | 2.16% | 2.62% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,463 | $3,863 | $5,149 | $5,127 | $5,692 | $5,145 | $4,549 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,558 | $4,353 | $5,117 | $5,547 | $5,172 | $4,928 | $2,543 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.10% | 1.08% | 1.09% | 1.06% | 1.08% | 1.09% | 1.13% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.00% | 0.96% | 0.99% | 1.00% | 1.03% | 1.05% | 1.06% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.08% | 1.20% | 1.29% | 1.77% | 1.90% | 2.20% | 2.59% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% | 57% |
* | See “Federal Income Tax” 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 May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Period from November 1, 2009 through June 30, 2010. 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 Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class T Shares
For a share outstanding during the period | ||||||||||||||||||||||||||||||
ended December 31, 2014 (unaudited), each | ||||||||||||||||||||||||||||||
year or period ended June 30 and the year | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||
ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | $3.06 | $2.87 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(2) | 0.04(2) | 0.05 | 0.06 | 0.07 | 0.05 | 0.10 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | (0.04) | 0.04 | (0.02) | 0.01 | 0.02 | 0.03 | 0.19 | |||||||||||||||||||||||
Total from Investment Operations | (0.02) | 0.08 | 0.03 | 0.07 | 0.09 | 0.08 | 0.29 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.04) | (0.05) | (0.06) | (0.07) | (0.05) | (0.10) | |||||||||||||||||||||||
Distributions (from capital gains)* | –(3) | (0.01) | (0.02) | (0.01) | (0.02) | –(3) | – | |||||||||||||||||||||||
Total Distributions | (0.02) | (0.05) | (0.07) | (0.07) | (0.09) | (0.05) | (0.10) | |||||||||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | $3.06 | |||||||||||||||||||||||
Total Return** | (0.51)% | 2.67% | 0.90% | 2.18% | 2.99% | 2.68% | 10.35% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,975,231 | $2,123,511 | $2,209,497 | $2,022,283 | $1,953,155 | $1,956,871 | $1,212,465 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,046,092 | $2,130,299 | $2,200,413 | $1,915,783 | $1,950,013 | $1,637,559 | $588,441 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.84% | 0.84% | 0.85% | 0.84% | 0.84% | 0.83% | 0.87% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.75% | 0.76% | 0.80% | 0.80% | 0.80% | 0.79% | 0.72% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.34% | 1.37% | 1.49% | 1.95% | 2.16% | 2.44% | 3.46% | |||||||||||||||||||||||
Portfolio Turnover Rate | 36% | 78% | 100% | 93% | 100% | 33% | 57% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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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 Short-Term Bond Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
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Notes to Financial Statements (unaudited) (continued)
Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
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Dividend Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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Notes to Financial Statements (unaudited) (continued)
2. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 |
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are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related
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Notes to Financial Statements (unaudited) (continued)
industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | 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 Assets | Advisory | |||||||||
Fund | of the Fund | Fee (%) | ||||||||
Janus Short-Term Bond Fund | First $ | 300 Million | 0.64 | |||||||
Over $ | 300 Million | 0.54 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Short-Term Bond Fund | 0.49 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund,
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Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 2.50% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Short-Term Bond Fund | $ | 4,731 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Short-Term Bond Fund | $ | 7,220 | ||||
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Short-Term Bond Fund | $ | 5,870 | ||||
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As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Janus Short-Term Bond Fund - Class A Shares | – | % | – | % | ||||||
Janus Short-Term Bond Fund - Class C Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class D Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class I Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class N Shares | 85 | 1 | ||||||||
Janus Short-Term Bond Fund - Class S Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Janus Short-Term Bond Fund | $ | 2,906,552,390 | $ | 10,283,452 | $ | (12,724,097) | $ | (2,440,645) | ||||||||||
5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | Janus Short-Term Bond Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 14,648,769 | 28,723,148 | ||||||||
Reinvested dividends and distributions | 392,548 | 798,255 | ||||||||
Shares repurchased | (14,398,136) | (23,929,246) | ||||||||
Net Increase/(Decrease) in Fund Shares | 643,181 | 5,592,157 | ||||||||
Shares Outstanding, Beginning of Period | 55,816,526 | 50,224,369 | ||||||||
Shares Outstanding, End of Period | 56,459,707 | 55,816,526 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 2,255,926 | 6,569,097 | ||||||||
Reinvested dividends and distributions | 62,665 | 164,193 | ||||||||
Shares repurchased | (4,207,671) | (9,993,852) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,889,080) | (3,260,562) | ||||||||
Shares Outstanding, Beginning of Period | 22,433,782 | 25,694,344 | ||||||||
Shares Outstanding, End of Period | 20,544,702 | 22,433,782 |
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Notes to Financial Statements (unaudited) (continued)
For the period ended December 31 (unaudited) | Janus Short-Term Bond Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 6,166,095 | 14,893,837 | ||||||||
Reinvested dividends and distributions | 537,952 | 1,126,612 | ||||||||
Shares repurchased | (8,574,354) | (18,780,805) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,870,307) | (2,760,356) | ||||||||
Shares Outstanding, Beginning of Period | 65,530,356 | 68,290,712 | ||||||||
Shares Outstanding, End of Period | 63,660,049 | 65,530,356 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 70,730,451 | 95,191,849 | ||||||||
Reinvested dividends and distributions | 1,056,812 | 1,595,674 | ||||||||
Shares repurchased | (43,227,926) | (72,857,705) | ||||||||
Net Increase/(Decrease) in Fund Shares | 28,559,337 | 23,929,818 | ||||||||
Shares Outstanding, Beginning of Period | 127,399,441 | 103,469,623 | ||||||||
Shares Outstanding, End of Period | 155,958,778 | 127,399,441 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,208,660 | 6,150,005 | ||||||||
Reinvested dividends and distributions | 115,304 | 274,551 | ||||||||
Shares repurchased | (804,821) | (7,139,855) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,519,143 | (715,299) | ||||||||
Shares Outstanding, Beginning of Period | 11,608,694 | 12,323,993 | ||||||||
Shares Outstanding, End of Period | 13,127,837 | 11,608,694 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 68,887 | 333,566 | ||||||||
Reinvested dividends and distributions | 7,756 | 19,924 | ||||||||
Shares repurchased | (193,978) | (784,980) | ||||||||
Net Increase/(Decrease) in Fund Shares | (117,335) | (431,490) | ||||||||
Shares Outstanding, Beginning of Period | 1,258,680 | 1,690,170 | ||||||||
Shares Outstanding, End of Period | 1,141,345 | 1,258,680 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 89,271,170 | 250,374,476 | ||||||||
Reinvested dividends and distributions | 5,239,256 | 11,353,809 | ||||||||
Shares repurchased | (135,302,880) | (294,769,938) | ||||||||
Net Increase/(Decrease) in Fund Shares | (40,792,454) | (33,041,653) | ||||||||
Shares Outstanding, Beginning of Period | 690,297,418 | 723,339,071 | ||||||||
Shares Outstanding, End of Period | 649,504,964 | 690,297,418 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Short-Term Bond Fund | $ | 418,913,299 | $ | 667,249,531 | $ | 641,935,950 | $ | 409,567,483 | ||||||
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7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 31
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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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
32 | DECEMBER 31, 2014
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81309 | 125-24-93030 02-15 |
Table of Contents
semiannual report
December 31, 2014
Perkins Large Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Table of Contents
Perkins Large Cap Value Fund
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Perkins Large Cap Value Fund (unaudited)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | ![]() Tom Perkins co-portfolio manager | ![]() Kevin Preloger co-portfolio manager |
PERFORMANCE OVERVIEW
During the six months ended December 31, 2014, Perkins Large Cap Value Fund’s Class I Shares returned 4.01%, underperforming its benchmark, the Russell 1000 Value Index, which returned 4.78%.
Our underperformance was driven by our underweight in financials and utilities. Given the strong equity markets, our average cash position of nearly 5% hurt relative returns and was a driver of our relative underperformance for the period. Our holdings in information technology and consumer discretionary also weighed on performance. Contributors included our holdings in telecommunication services and industrials as well as our underweight in materials.
MARKET COMMENTARY
Stocks rose in the period while the U.S. economy continued to gain steam, delivering nearly 5% GDP growth in the third quarter, with the unemployment rate falling to under 6% amid signs of wage growth. Persistently high underemployment, however, remains a troubling counterweight. Corporate balance sheets remain flush with cash but companies continue to add leverage by tapping financing at record-low interest rates. Earnings growth also remained strong, coupled with equity valuations that appear buoyed by market optimism. All this occurred with central bank policy accommodation that remains very friendly to risk assets on a global basis although the Federal Reserve (Fed) could become less so in the coming year.
The recent fall in energy prices is likely a blessing, but could possibly be a curse as well. Short term, it should provide a boost in consumer spending, evidenced by early reports of healthy holiday retail activity. Long term, however, a significant portion of U.S. capital expenditures are attributable to the energy complex, and less exploration and production activity could negatively impact the earnings of those firms with exposure. In addition, the U.S. shale revolution has stimulated economic activity in places such as North Dakota and Pennsylvania with high-paying jobs and local economies that have witnessed rising oil prices. Energy companies have also been active participants in the debt markets, particularly in high-yield issuance, and risks around substantially squeezed profits could spread to financial markets. Clearly, there are winners from lower crude prices, but the collateral damage could appear later. The added variable here is the geopolitical consequences of lower oil prices on volatile countries such as Russia, Venezuela, and much of the Middle East. These risks seem to be reflected to some degree in the price of energy stocks, but the broader markets continued to march to new highs.
DETRACTORS
Our largest individual detractor was Noble Energy, which is a global independent energy exploration and production company with U.S. assets in the Rocky Mountains, Appalachia, the Gulf of Mexico as well as international operations in offshore Israel and West Africa. Shares of the company were down in the period as a precipitous fall in crude oil prices drove a sell-off across the entire energy complex. West Texas Intermediate (WTI) and Brent crude prices have traded down to lows not seen since the 2008-2009 financial crisis. During the quarter, Noble Energy reported third quarter earnings results ahead of Wall Street expectations but the stock also traded lower as Israeli antitrust authorities announced a review of a previous regulatory deal that Noble and its partners signed with the Israeli government. While the drop in crude oil prices presents a significant challenge for Noble, as well as the entire oil and gas industry, we think that Noble’s high-quality acreage, solid balance sheet and astute management team provide the company with the resources needed to weather the downturn in the industry. We added to our position on weakness in the quarter.
Ensco, a global offshore contract drilling company with a geographically diverse fleet of new ultra deepwater rigs
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Perkins Large Cap Value Fund (unaudited)
and premium jack-up rigs, was also a detractor. Ensco’s shares underperformed for the year as the company took a $1.5 billion noncash impairment charge on some of its floaters as the book value of these rigs declined given challenging market conditions. Furthermore, day rates and rig utilization continued to soften throughout the year, further hurt by the significant decline in crude oil prices in the fourth quarter. We continue to own Ensco shares as we think that the company is one of the best operators in the industry, has a solid balance sheet and is trading at a compelling valuation.
Royal Dutch Shell was also an individual detractor. Royal Dutch Shell reported strong operating results driven by its ongoing restructuring efforts and improved cost control. However, the dramatic fall in global crude oil prices more than offset these positives, leaving both near-term earnings estimates and the stock price lower. We believe the large integrated companies like Shell, with a solid balance sheet, diverse business mix, and robust dividend yield, limit our downside versus other energy stocks. We added shares at lower prices in the quarter.
CONTRIBUTORS
Berkshire Hathaway was our largest individual contributor. The company announced strong third-quarter earnings results driven by outperformance of the insurance companies and finished the period with over $20 billion in excess cash. During the quarter, Berkshire Hathaway announced the acquisition of Duracell for $4.7 billion and the acquisition of Van Tuyl auto dealerships. We expect Berkshire to continue to use its strong balance sheet and cash-flow generation to participate in opportunistic and attractive investments. Having maintained our holdings, Berkshire remains one of our largest positions in the Fund.
Procter & Gamble was also a key contributor. It announced in August that it would sell up to 100 smaller and underperforming brands over the next two years shedding 10% of revenue with the goal to have 70 to 80 core Procter & Gamble brands that represent 90% of current revenue. Procter & Gamble has already announced the sale of 5% of revenue – including its Iams pet food and Duracell brands. That, along with continued innovation should help its competitive position longer term. Given the brand rationalization program, nearly 3% dividend yield, and defensive nature of the business, we added to our holdings as we see less downside risk in Procter & Gamble shares.
Zoetis, an animal health company, was another top contributor as it continued to outperform in the period. In addition to strong fundamental performance, the stock reacted positively to both the company’s announced strategy for operational improvement and capital deployment, and the 10% ownership stake taken by activist investor, Pershing Square. Given the stable underlying fundamentals of the animal health industry, the company’s strong competitive positioning and focus on operational improvement, and the potential to be an acquisition target post the two-year anniversary of its tax-free spin-off from Pfizer, we continue to hold our position.
MARKET OUTLOOK
As we look ahead, the factors that led us to the upcoming six-year anniversary of the bull market continue to be intact, namely unbelievably loose monetary policy on a global basis. However, the Fed has stated its intention, and has initiated the process, of slowly reducing the amount of liquidity flooded into the system. When looking at economic growth and recent jobs data, one could argue that the data set indicates the U.S. economy is doing just fine and that some accommodation can be curtailed. The counterargument is that the economy is still growing at a tepid pace for this point in a normal economic recovery and given the large amount of debt in the system, central bankers fear debt deflation so interest rates can stay lower for longer. There are certainly bright spots in the market, though we believe they may not warrant the currently high level of investor optimism. While there may be more gains ahead, we believe there is also the potential for greater volatility, and therefore remain cautious in our portfolio positioning. Aside from the energy segment, another source of potential volatility could originate from the Fed both from communication to the market as well as its policy intentions. While we believe valuations are fair, if not slightly overvalued, there seems to be little room for error in equity prices.
With the U.S. equity market hitting new all-time highs this year, we are not finding compelling values. Optimism seems to be fully priced into stocks, as it has over the past few years, showing some disregard of risk and a large willingness to put more faith in market momentum instead of company fundamentals. Most troubling, in our opinion, is the broad complacency and thin trading volume lifting stock prices higher. There simply is not much real liquidity in the market to absorb prolonged selling pressures should any of the numerous macroeconomic tailwinds suddenly start to escalate and truly spook investors beyond a brief market dip. This is especially true in the fixed income markets where even the U.S. Treasury Department’s Office of Financial Research has noted excessive risk taking, declining market liquidity as a result
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(unaudited)
of recent bank regulatory changes, and some financing activities moving to less transparent areas of the financial system as potential risks.
During the period, we trimmed positions in a variety of industries where the reward-to-risk ratio was no longer compelling as the Russell 1000 Value Index increased almost 5%. We trimmed, or exited, positions in consumer discretionary, energy, and technology, to name a few. Purchases of new names were in sectors such as technology, transportation and energy as we felt the reward-to-risk trade-off was more attractive, in addition to taking advantage of price weakness in energy stocks.
Moreover, small-cap stocks have had prolonged periods of volatility over the course of the year. If, as we expect, volatility begins to move up market capitalization, it could provide additional value potential, but feel large caps overall would hold up better versus small and mid-cap stocks in that environment. With that as a backdrop, investors may want to refocus on bottom-up stock selection and downside protection. Looking ahead, we believe our portfolio remains well positioned to navigate the current market climate, in terms of both risk exposure and long-term upside potential.
Thank you for your investment with us in the Perkins Large Cap Value Fund.
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Perkins Large Cap Value Fund (unaudited)
Perkins Large Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Berkshire Hathaway, Inc. – Class B | 0.51% | |||
Zoetis, Inc. | 0.38% | |||
Procter & Gamble Co. | 0.38% | |||
CVS Caremark Corp. | 0.30% | |||
AbbVie, Inc. | 0.25% |
5 Bottom Performers – Holdings
Contribution | ||||
Noble Energy, Inc. | –0.38% | |||
Ensco PLC – Class A | –0.36% | |||
Royal Dutch Shell PLC (ADR) | –0.34% | |||
Schlumberger, Ltd. (U.S. Shares) | –0.34% | |||
Whiting Petroleum Corp. | –0.26% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Industrials | 0.46% | 8.99% | 10.23% | |||||||||
Materials | 0.11% | 0.49% | 3.28% | |||||||||
Energy | 0.10% | 8.73% | 12.68% | |||||||||
Telecommunication Services | 0.07% | 3.71% | 2.23% | |||||||||
Health Care | 0.00% | 21.86% | 13.51% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | –0.37% | 23.27% | 29.11% | |||||||||
Other** | –0.22% | 4.79% | 0.00% | |||||||||
Information Technology | –0.19% | 9.06% | 9.32% | |||||||||
Utilities | –0.19% | 1.46% | 6.17% | |||||||||
Consumer Discretionary | –0.14% | 8.47% | 6.34% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Pfizer, Inc. Pharmaceuticals | 2.7% | |||
Berkshire Hathaway, Inc. – Class B Diversified Financial Services | 2.6% | |||
American International Group, Inc. Insurance | 2.6% | |||
Procter & Gamble Co. Household Products | 2.2% | |||
Wells Fargo & Co. Commercial Banks | 2.1% | |||
12.2% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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Perkins Large Cap Value Fund (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
Perkins Large Cap Value Fund – Class A Shares | |||||||||||||
NAV | 3.85% | 11.01% | 12.07% | 14.09% | 0.90% | 0.85% | |||||||
MOP | –2.12% | 4.65% | 10.74% | 12.97% | |||||||||
Perkins Large Cap Value Fund – Class C Shares | |||||||||||||
NAV | 3.39% | 10.20% | 11.22% | 13.24% | 1.72% | 1.67% | |||||||
CDSC | 2.42% | 9.20% | 11.22% | 13.24% | |||||||||
Perkins Large Cap Value Fund – Class D Shares(1) | 3.91% | 10.99% | 12.21% | 14.04% | 0.83% | 0.78% | |||||||
Perkins Large Cap Value Fund – Class I Shares | 4.01% | 11.20% | 12.41% | 14.44% | 0.64% | 0.60% | |||||||
Perkins Large Cap Value Fund – Class N Shares | 3.98% | 11.18% | 12.41% | 14.44% | 0.64% | 0.60% | |||||||
Perkins Large Cap Value Fund – Class S Shares | 3.70% | 10.87% | 11.92% | 13.94% | 1.15% | 1.12% | |||||||
Perkins Large Cap Value Fund – Class T Shares | 3.86% | 10.94% | 12.16% | 14.09% | 0.89% | 0.85% | |||||||
Russell 1000® Value Index | 4.78% | 13.45% | 15.42% | 16.12% | |||||||||
Morningstar Quartile – Class I Shares | – | 2nd | 4th | 3rd | |||||||||
Morningstar Ranking – based on total returns for Large Value Funds | – | 537/1,336 | 902/1,155 | 783/1,146 | |||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
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(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
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 the 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 predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for the periods July 6, 2009 to February 16, 2010, reflects the performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class D Shares, without the effect of any fee and expense limitations or waivers. Performance shown for the periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares prior to the reorganization of Class I Shares of the predecessor fund into Class I Shares of the Fund, calculated using the fees and expenses of Class D Shares, without the effect of any fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class I Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The predecessor Fund’s inception date – December 31, 2008 | |
(1) | Closed to new investors. |
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Perkins Large Cap Value Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,038.50 | $ | 4.68 | $ | 1,000.00 | $ | 1,020.62 | $ | 4.63 | 0.91% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,033.90 | $ | 8.72 | $ | 1,000.00 | $ | 1,016.64 | $ | 8.64 | 1.70% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,039.10 | $ | 3.85 | $ | 1,000.00 | $ | 1,021.42 | $ | 3.82 | 0.75% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,040.10 | $ | 3.19 | $ | 1,000.00 | $ | 1,022.08 | $ | 3.16 | 0.62% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,039.80 | $ | 3.14 | $ | 1,000.00 | $ | 1,022.13 | $ | 3.11 | 0.61% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,037.00 | $ | 5.70 | $ | 1,000.00 | $ | 1,019.61 | $ | 5.65 | 1.11% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,038.60 | $ | 4.42 | $ | 1,000.00 | $ | 1,020.87 | $ | 4.38 | 0.86% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
8 | DECEMBER 31, 2014
Table of Contents
Perkins Large Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Common Stocks – 94.8% | ||||||||||
Aerospace & Defense – 3.2% | ||||||||||
3,972 | General Dynamics Corp. | $ | 546,627 | |||||||
18,336 | Honeywell International, Inc. | 1,832,133 | ||||||||
16,443 | Rockwell Collins, Inc. | 1,389,104 | ||||||||
16,700 | United Technologies Corp. | 1,920,500 | ||||||||
| ||||||||||
5,688,364 | ||||||||||
Beverages – 2.4% | ||||||||||
17,600 | Molson Coors Brewing Co. – Class B | 1,311,552 | ||||||||
31,656 | PepsiCo, Inc. | 2,993,391 | ||||||||
| ||||||||||
4,304,943 | ||||||||||
Biotechnology – 0.5% | ||||||||||
5,259 | Amgen, Inc. | 837,706 | ||||||||
Capital Markets – 1.8% | ||||||||||
19,185 | State Street Corp. | 1,506,022 | ||||||||
18,723 | T Rowe Price Group, Inc. | 1,607,557 | ||||||||
| ||||||||||
3,113,579 | ||||||||||
Commercial Banks – 10.6% | ||||||||||
20,955 | BB&T Corp. | 814,940 | ||||||||
57,838 | CIT Group, Inc. | 2,766,392 | ||||||||
56,493 | Citigroup, Inc. | 3,056,836 | ||||||||
117,297 | Fifth Third Bancorp | 2,389,926 | ||||||||
36,971 | JPMorgan Chase & Co. | 2,313,645 | ||||||||
30,363 | PNC Financial Services Group, Inc. | 2,770,017 | ||||||||
23,732 | U.S. Bancorp | 1,066,753 | ||||||||
66,795 | Wells Fargo & Co. | 3,661,702 | ||||||||
| ||||||||||
18,840,211 | ||||||||||
Commercial Services & Supplies – 2.2% | ||||||||||
41,073 | Republic Services, Inc. | 1,653,188 | ||||||||
50,572 | Tyco International PLC | 2,218,088 | ||||||||
| ||||||||||
3,871,276 | ||||||||||
Communications Equipment – 2.2% | ||||||||||
44,508 | Cisco Systems, Inc. | 1,237,990 | ||||||||
36,374 | QUALCOMM, Inc. | 2,703,679 | ||||||||
| ||||||||||
3,941,669 | ||||||||||
Construction & Engineering – 0.4% | ||||||||||
17,142 | Jacobs Engineering Group, Inc.* | 766,076 | ||||||||
Consumer Finance – 0.7% | ||||||||||
18,348 | Discover Financial Services | 1,201,611 | ||||||||
Diversified Financial Services – 2.6% | ||||||||||
30,400 | Berkshire Hathaway, Inc. – Class B* | 4,564,560 | ||||||||
Diversified Telecommunication Services – 1.2% | ||||||||||
44,207 | Verizon Communications, Inc. | 2,068,003 | ||||||||
Electric Utilities – 1.7% | ||||||||||
83,241 | PPL Corp. | 3,024,146 | ||||||||
Energy Equipment & Services – 1.5% | ||||||||||
26,941 | Ensco PLC – Class A | 806,883 | ||||||||
22,507 | Schlumberger, Ltd. (U.S. Shares) | 1,922,323 | ||||||||
| ||||||||||
2,729,206 | ||||||||||
Food & Staples Retailing – 2.0% | ||||||||||
18,643 | CVS Caremark Corp. | 1,795,507 | ||||||||
20,591 | Wal-Mart Stores, Inc. | 1,768,355 | ||||||||
| ||||||||||
3,563,862 | ||||||||||
Food Products – 3.6% | ||||||||||
38,579 | General Mills, Inc. | 2,057,418 | ||||||||
20,229 | Hershey Co. | 2,102,400 | ||||||||
57,250 | Unilever PLC (ADR) | 2,317,480 | ||||||||
| ||||||||||
6,477,298 | ||||||||||
Health Care Equipment & Supplies – 5.1% | ||||||||||
45,021 | Abbott Laboratories | 2,026,845 | ||||||||
34,270 | Baxter International, Inc. | 2,511,648 | ||||||||
15,200 | Medtronic, Inc. | 1,097,440 | ||||||||
18,597 | Stryker Corp. | 1,754,255 | ||||||||
14,261 | Zimmer Holdings, Inc. | 1,617,483 | ||||||||
| ||||||||||
9,007,671 | ||||||||||
Health Care Providers & Services – 2.2% | ||||||||||
19,180 | Laboratory Corp. of America Holdings* | 2,069,522 | ||||||||
8,436 | McKesson Corp. | 1,751,145 | ||||||||
| ||||||||||
3,820,667 | ||||||||||
Hotels, Restaurants & Leisure – 1.0% | ||||||||||
18,112 | McDonald’s Corp. | 1,697,094 | ||||||||
Household Products – 2.2% | ||||||||||
43,589 | Procter & Gamble Co. | 3,970,522 | ||||||||
Industrial Conglomerates – 0.9% | ||||||||||
66,624 | General Electric Co. | 1,683,589 | ||||||||
Information Technology Services – 0.8% | ||||||||||
16,391 | Accenture PLC – Class A (U.S. Shares) | 1,463,880 | ||||||||
Insurance – 5.6% | ||||||||||
20,800 | Allstate Corp. | 1,461,200 | ||||||||
81,411 | American International Group, Inc. | 4,559,830 | ||||||||
15,519 | Chubb Corp. | 1,605,751 | ||||||||
40,756 | Marsh & McLennan Cos., Inc. | 2,332,874 | ||||||||
| ||||||||||
9,959,655 | ||||||||||
Internet Software & Services – 0.4% | ||||||||||
1,352 | Google, Inc. – Class C* | 711,693 | ||||||||
Life Sciences Tools & Services – 1.6% | ||||||||||
31,683 | Agilent Technologies, Inc. | 1,297,102 | ||||||||
12,000 | Thermo Fisher Scientific, Inc. | 1,503,480 | ||||||||
| ||||||||||
2,800,582 | ||||||||||
Media – 5.2% | ||||||||||
43,712 | CBS Corp. – Class B | 2,419,022 | ||||||||
30,786 | Comcast Corp. – Class A | 1,785,896 | ||||||||
30,458 | Omnicom Group, Inc. | 2,359,581 | ||||||||
24,853 | Time Warner, Inc. | 2,122,943 | ||||||||
5,882 | Walt Disney Co. | 554,026 | ||||||||
| ||||||||||
9,241,468 | ||||||||||
Metals & Mining – 0.4% | ||||||||||
35,812 | Goldcorp, Inc. (U.S. Shares) | 663,238 | ||||||||
Multiline Retail – 0.8% | ||||||||||
17,781 | Target Corp. | 1,349,756 | ||||||||
Oil, Gas & Consumable Fuels – 7.1% | ||||||||||
26,918 | Anadarko Petroleum Corp. | 2,220,735 | ||||||||
19,645 | Chevron Corp. | 2,203,776 | ||||||||
4,875 | Cimarex Energy Co. | 516,750 | ||||||||
28,559 | Enterprise Products Partners LP | 1,031,551 | ||||||||
32,073 | Marathon Oil Corp. | 907,345 | ||||||||
27,154 | Noble Energy, Inc. | 1,287,915 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Large Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Oil, Gas & Consumable Fuels – (continued) | ||||||||||
12,331 | Occidental Petroleum Corp. | $ | 994,002 | |||||||
52,316 | Royal Dutch Shell PLC (ADR) | 3,502,556 | ||||||||
| ||||||||||
12,664,630 | ||||||||||
Pharmaceuticals – 12.0% | ||||||||||
25,671 | AbbVie, Inc. | 1,679,910 | ||||||||
73,561 | GlaxoSmithKline PLC (ADR) | 3,143,997 | ||||||||
24,644 | Johnson & Johnson | 2,577,023 | ||||||||
53,895 | Merck & Co., Inc. | 3,060,697 | ||||||||
33,543 | Novartis AG (ADR) | 3,108,094 | ||||||||
150,936 | Pfizer, Inc. | 4,701,657 | ||||||||
22,746 | Teva Pharmaceutical Industries, Ltd. (ADR) | 1,308,123 | ||||||||
39,591 | Zoetis, Inc. | 1,703,601 | ||||||||
| ||||||||||
21,283,102 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.5% | ||||||||||
76,046 | Weyerhaeuser Co. | 2,729,291 | ||||||||
Road & Rail – 2.1% | ||||||||||
30,599 | CSX Corp. | 1,108,602 | ||||||||
10,534 | Kansas City Southern | 1,285,464 | ||||||||
11,593 | Union Pacific Corp. | 1,381,074 | ||||||||
| ||||||||||
3,775,140 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.0% | ||||||||||
17,320 | Altera Corp. | 639,801 | ||||||||
21,338 | Analog Devices, Inc. | 1,184,686 | ||||||||
| ||||||||||
1,824,487 | ||||||||||
Software – 3.8% | ||||||||||
35,874 | CA, Inc. | 1,092,363 | ||||||||
48,176 | Microsoft Corp. | 2,237,775 | ||||||||
74,970 | Oracle Corp. | 3,371,401 | ||||||||
| ||||||||||
6,701,539 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.6% | ||||||||||
33,457 | EMC Corp. | 995,011 | ||||||||
Textiles, Apparel & Luxury Goods – 1.2% | ||||||||||
11,442 | Ralph Lauren Corp. | 2,118,601 | ||||||||
Wireless Telecommunication Services – 2.7% | ||||||||||
55,746 | Rogers Communications, Inc. – Class B | 2,166,290 | ||||||||
78,318 | Vodafone Group PLC (ADR) | 2,676,126 | ||||||||
| ||||||||||
4,842,416 | ||||||||||
Total Common Stocks (cost $129,537,332) | 168,296,542 | |||||||||
Repurchase Agreements – 5.9% | ||||||||||
$10,400,000 | Undivided interest of 13% in a joint repurchase agreement (principal amount $81,900,000 with a maturity value of $81,900,228) with ING Financial Markets LLC, 0.0500%, dated 12/31/14, maturing 1/2/15 to be repurchased at $10,400,029 collateralized by $82,714,877 in U.S. Treasuries, 0.1250% – 4.3750%, 2/29/16 – 2/15/44, with a value of $83,542,988 (cost $10,400,000) | 10,400,000 | ||||||||
Total Investments (total cost $139,937,332) – 100.7% | 178,696,542 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.7)% | (1,325,963) | |||||||||
Net Assets – 100% | $ | 177,370,579 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 159,810,638 | 89 | .4% | ||||
United Kingdom | 11,640,159 | 6 | .5 | |||||
Switzerland | 3,108,094 | 1 | .8 | |||||
Canada | 2,829,528 | 1 | .6 | |||||
Israel | 1,308,123 | 0 | .7 | |||||
Total | $ | 178,696,542 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 5.8%. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Russell 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | 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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
Perkins Large Cap Value Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Common Stocks | $ | 168,296,542 | $ | – | $– | |||||
Repurchase Agreements | – | 10,400,000 | – | |||||||
Total Assets | $ | 168,296,542 | $ | 10,400,000 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Perkins Large Cap Value Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 139,937,332 | ||
Investments at value | $ | 168,296,542 | ||
Repurchase agreements at value | 10,400,000 | |||
Cash | 242,837 | |||
Non-interested Trustees’ deferred compensation | 3,638 | |||
Receivables: | ||||
Fund shares sold | 52,236 | |||
Dividends | 299,491 | |||
Interest | 14 | |||
Other assets | 2,005 | |||
Total Assets | 179,296,763 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 1,714,879 | |||
Fund shares repurchased | 82,788 | |||
Advisory fees | 76,172 | |||
Fund administration fees | 1,365 | |||
Transfer agent fees and expenses | 6,100 | |||
12b-1 Distribution and shareholder servicing fees | 3,852 | |||
Non-interested Trustees’ fees and expenses | 868 | |||
Non-interested Trustees’ deferred compensation fees | 3,638 | |||
Accrued expenses and other payables | 36,523 | |||
Total Liabilities | 1,926,185 | |||
Net Assets | $ | 177,370,578 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | Perkins Large Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 137,521,638 | ||
Undistributed net investment income/(loss)* | (7,742) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 1,097,472 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 38,759,210 | |||
Total Net Assets | $ | 177,370,578 | ||
Net Assets - Class A Shares | $ | 3,565,245 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 216,997 | |||
Net Asset Value Per Share(2) | $ | 16.43 | ||
Maximum Offering Price Per Share(3) | $ | 17.43 | ||
Net Assets - Class C Shares | $ | 3,345,450 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 206,009 | |||
Net Asset Value Per Share(2) | $ | 16.24 | ||
Net Assets - Class D Shares | $ | 40,096,398 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,454,789 | |||
Net Asset Value Per Share | $ | 16.33 | ||
Net Assets - Class I Shares | $ | 43,399,310 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,647,934 | |||
Net Asset Value Per Share | $ | 16.39 | ||
Net Assets - Class N Shares | $ | 82,605,664 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,047,175 | |||
Net Asset Value Per Share | $ | 16.37 | ||
Net Assets - Class S Shares | $ | 258,757 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,640 | |||
Net Asset Value Per Share | $ | 16.54 | ||
Net Assets - Class T Shares | $ | 4,099,754 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 251,335 | |||
Net Asset Value Per Share | $ | 16.31 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $10,400,000. | |
(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 Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Large Cap | ||||
For the period ended December 31, 2014 (unaudited) | Value Fund | |||
Investment Income: | ||||
Interest | $ | 1,564 | ||
Dividends | 1,560,497 | |||
Other income | 11 | |||
Foreign tax withheld | (19,729) | |||
Total Investment Income | 1,542,343 | |||
Expenses: | ||||
Advisory fees | 368,994 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 4,533 | |||
Class C Shares | 17,009 | |||
Class S Shares | 318 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 24,808 | |||
Class S Shares | 318 | |||
Class T Shares | 5,088 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 693 | |||
Class C Shares | 1,123 | |||
Class I Shares | 312 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 228 | |||
Class C Shares | 313 | |||
Class D Shares | 4,088 | |||
Class I Shares | 996 | |||
Class N Shares | 121 | |||
Class T Shares | 8 | |||
Shareholder reports expense | 6,402 | |||
Registration fees | 62,713 | |||
Custodian fees | 1,708 | |||
Professional fees | 20,825 | |||
Non-interested Trustees’ fees and expenses | 1,335 | |||
Fund administration fees | 7,420 | |||
Other expenses | 3,909 | |||
Total Expenses | 533,262 | |||
Less: Excess Expense Reimbursement | (22,691) | |||
Net Expenses | 510,571 | |||
Net Investment Income/(Loss) | 1,031,772 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 4,574,408 | |||
Total Net Realized Gain/(Loss) on Investments | 4,574,408 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (418,385) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (418,385) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 5,187,795 |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Perkins Large Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 1,031,772 | $ | 2,530,928 | ||||
Net realized gain/(loss) on investments | 4,574,408 | 8,063,356 | ||||||
Change in unrealized net appreciation/depreciation | (418,385) | 14,729,864 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 5,187,795 | 25,324,148 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (49,371) | (33,203) | ||||||
Class C Shares | (22,347) | (12,752) | ||||||
Class D Shares | (542,195) | (447,705) | ||||||
Class I Shares | (660,473) | (606,845) | �� | |||||
Class N Shares | (1,271,878) | (597,499) | ||||||
Class S Shares | (3,205) | (687) | ||||||
Class T Shares | (52,796) | (37,632) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (184,022) | (319,660) | ||||||
Class C Shares | (176,155) | (297,634) | ||||||
Class D Shares | (2,050,146) | (3,150,880) | ||||||
Class I Shares | (2,224,495) | (3,917,283) | ||||||
Class N Shares | (4,205,651) | (3,881,801) | ||||||
Class S Shares | (13,057) | (19,881) | ||||||
Class T Shares | (208,456) | (287,842) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (11,664,247) | (13,611,304) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 311,708 | 666,819 | ||||||
Class C Shares | 374,472 | 787,502 | ||||||
Class D Shares | 4,020,284 | 10,187,073 | ||||||
Class I Shares | 422,856 | 751,334 | ||||||
Class N Shares | 35,668,213 | 2,715,165 | ||||||
Class S Shares | – | – | ||||||
Class T Shares | 376,114 | 1,200,003 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 182,281 | 271,005 | ||||||
Class C Shares | 171,850 | 264,949 | ||||||
Class D Shares | 2,568,390 | 3,572,796 | ||||||
Class I Shares | 2,723,685 | 4,286,982 | ||||||
Class N Shares | 5,477,529 | 4,479,300 | ||||||
Class S Shares | 16,262 | 20,568 | ||||||
Class T Shares | 259,198 | 322,293 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (431,477) | (1,016,789) | ||||||
Class C Shares | (370,468) | (1,065,967) | ||||||
Class D Shares | (7,022,893) | (7,133,206) | ||||||
Class I Shares | (6,170,100) | (1,915,597) | ||||||
Class N Shares | (3,539,278) | (11,823,825) | ||||||
Class S Shares | – | (292,320) | ||||||
Class T Shares | (511,226) | (770,424) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Perkins Large Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 34,527,400 | 5,507,661 | ||||||
Net Increase/(Decrease) in Net Assets | 28,050,948 | 17,220,505 | ||||||
Net Assets: | ||||||||
Beginning of period | 149,319,630 | 132,099,125 | ||||||
End of period | $ | 177,370,578 | $ | 149,319,630 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (7,742) | $ | 1,562,751 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Perkins Large Cap Value Fund | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.90 | $15.62 | $13.44 | $14.21 | $11.56 | $11.14 | $10.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.10(3) | 0.28(3) | 0.15 | 0.12 | 0.13 | 0.03 | 0.05 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.56 | 2.64 | 2.48 | (0.07) | 2.87 | 0.44 | 1.11 | |||||||||||||||||||||||
Total from Investment Operations | 0.66 | 2.92 | 2.63 | 0.05 | 3.00 | 0.47 | 1.16 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.24) | (0.15) | (0.18) | (0.14) | (0.03) | (0.03) | (0.02) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | (0.02) | – | |||||||||||||||||||||||
Total Distributions | (1.13) | (1.64) | (0.45) | (0.82) | (0.35) | (0.05) | (0.02) | |||||||||||||||||||||||
Net Asset Value, End of Period | $16.43 | $16.90 | $15.62 | $13.44 | $14.21 | $11.56 | $11.14 | |||||||||||||||||||||||
Total Return** | 3.85% | 19.70% | 19.96% | 0.75% | 26.21% | 4.20% | 11.64% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,565 | $3,603 | $3,390 | $2,977 | $2,265 | $1,654 | $718 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,577 | $3,600 | $3,182 | $2,598 | $1,237 | $1,514 | $530 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.94% | 0.90% | 1.15% | 1.13% | 1.18% | 1.32% | 2.19% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.91% | 0.81% | 1.14% | 1.13% | 1.18% | 1.29% | 1.23% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.19% | 1.71% | 1.05% | 1.16% | 1.40% | 0.48% | 1.19% | |||||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% | 33% |
Class C Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Perkins Large Cap Value Fund | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.67 | $15.44 | $13.28 | $14.00 | $11.48 | $11.11 | $10.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.03(3) | 0.16(3) | 0.06 | 0.04 | 0.05 | (0.03) | 0.02 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.54 | 2.62 | 2.44 | (0.08) | 2.82 | 0.42 | 1.09 | |||||||||||||||||||||||
Total from Investment Operations | 0.57 | 2.78 | 2.50 | (0.04) | 2.87 | 0.39 | 1.11 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.11) | (0.06) | (0.07) | –(4) | (0.03) | –(4) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | 0.02 | – | |||||||||||||||||||||||
Total Distributions | (1.00) | (1.55) | (0.34) | (0.68) | (0.35) | (0.02) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $16.24 | $16.67 | $15.44 | $13.28 | $14.00 | $11.48 | $11.11 | |||||||||||||||||||||||
Total Return** | 3.39% | 18.92% | 19.08% | 0.01% | 25.21% | 3.54% | 11.10% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,345 | $3,252 | $3,014 | $2,629 | $2,797 | $1,336 | $556 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,356 | $3,249 | $2,740 | $2,157 | $2,070 | $929 | $484 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.72% | 1.57% | 1.80% | 1.92% | 1.96% | 2.09% | 2.90% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.70% | 1.55% | 1.80% | 1.92% | 1.96% | 2.04% | 1.97% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.41% | 0.98% | 0.38% | 0.34% | 0.31% | (0.23)% | 0.48% | |||||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% | 33% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended December 31, | Perkins Large Cap Value Fund | |||||||||||||||||||||||||
2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.79 | $15.57 | $13.39 | $14.15 | $11.58 | $12.15 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.11(2) | 0.28(2) | 0.18 | 0.17 | 0.18 | 0.02 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.56 | 2.64 | 2.48 | (0.09) | 2.85 | (0.59) | ||||||||||||||||||||
Total from Investment Operations | 0.67 | 2.92 | 2.66 | 0.08 | 3.03 | (0.57) | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.24) | (0.21) | (0.21) | (0.16) | (0.14) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | – | ||||||||||||||||||||
Total Distributions | (1.13) | (1.70) | (0.48) | (0.84) | (0.46) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $16.33 | $16.79 | $15.57 | $13.39 | $14.15 | $11.58 | ||||||||||||||||||||
Total Return** | 3.91% | 19.77% | 20.25% | 0.96% | 26.41% | (4.69)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $40,096 | $41,764 | $32,031 | $17,997 | $15,001 | $2,437 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $40,790 | $36,849 | $24,538 | $16,727 | $7,705 | $1,548 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.79% | 0.83% | 0.84% | 0.95% | 0.92% | 1.16% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.75% | 0.80% | 0.84% | 0.95% | 0.92% | 1.16% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.35% | 1.74% | 1.36% | 1.33% | 1.26% | 0.70% | ||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Perkins Large Cap Value Fund | |||||||||||||||||||||||||||||
June 30 and the period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.86 | $15.62 | $13.42 | $14.17 | $11.58 | $11.14 | $10.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(2) | 0.31(2) | 0.31 | 0.35 | 0.19 | 0.07 | 0.04 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.55 | 2.65 | 2.37 | (0.25) | 2.85 | 0.43 | 1.13 | |||||||||||||||||||||||
Total from Investment Operations | 0.68 | 2.96 | 2.68 | 0.10 | 3.04 | 0.50 | 1.17 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.26) | (0.23) | (0.21) | (0.17) | (0.13) | (0.04) | (0.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | (0.02) | – | |||||||||||||||||||||||
Total Distributions | (1.15) | (1.72) | (0.48) | (0.85) | (0.45) | (0.06) | (0.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $16.39 | $16.86 | $15.62 | $13.42 | $14.17 | $11.58 | $11.14 | |||||||||||||||||||||||
Total Return** | 4.01% | 19.98% | 20.43% | 1.13% | 26.57% | 4.49% | 11.76% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $43,399 | $47,672 | $40,943 | $47,846 | $112,360 | $69,225 | $28,863 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $44,196 | $44,830 | $43,013 | $106,448 | $91,088 | $53,625 | $17,284 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.64% | 0.64% | 0.71% | 0.77% | 0.84% | 1.08% | 2.15% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.62% | 0.62% | 0.71% | 0.77% | 0.84% | 1.03% | 1.00% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.48% | 1.91% | 1.47% | 1.53% | 1.45% | 0.76% | 1.36% | |||||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% | 33% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(4) | Period from December 31, 2008 (inception date) through July 31, 2009. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | Perkins Large Cap Value Fund | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $16.85 | $15.61 | $13.43 | $12.91 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.12(2) | 0.31(2) | 0.16 | –(3) | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.56 | 2.65 | 2.53 | 0.52 | ||||||||||||||
Total from Investment Operations | 0.68 | 2.96 | 2.69 | 0.52 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.23) | (0.24) | – | ||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | – | ||||||||||||||
Total Distributions | (1.16) | (1.72) | (0.51) | – | ||||||||||||||
Net Asset Value, End of Period | $16.37 | $16.85 | $15.61 | $13.43 | ||||||||||||||
Total Return** | 3.98% | 19.98% | 20.45% | 4.03% | ||||||||||||||
Net Assets, End of Period (in thousands) | $82,606 | $48,684 | $49,186 | $66,766 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $50,028 | $46,719 | $69,975 | $48,137 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.64% | 0.64% | 0.68% | 0.72% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.61% | 0.62% | 0.68% | 0.72% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.47% | 1.88% | 1.52% | 0.66% | ||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% |
Class S Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Perkins Large Cap Value Fund | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.01 | $15.62 | $13.41 | $14.15 | $11.56 | $11.13 | $10.00 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.22(2) | 0.27 | 0.14 | 0.14 | 0.03 | 0.04 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.55 | 2.71 | 2.34 | (0.10) | 2.84 | 0.42 | 1.10 | |||||||||||||||||||||||
Total from Investment Operations | 0.64 | 2.93 | 2.61 | 0.04 | 2.98 | 0.45 | 1.14 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.22) | (0.05) | (0.13) | (0.10) | (0.07) | –(3) | (0.01) | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | (0.02) | – | |||||||||||||||||||||||
Total Distributions | (1.11) | (1.54) | (0.40) | (0.78) | (0.39) | (0.02) | (0.01) | |||||||||||||||||||||||
Net Asset Value, End of Period | $16.54 | $17.01 | $15.62 | $13.41 | $14.15 | $11.56 | $11.13 | |||||||||||||||||||||||
Total Return** | 3.70% | 19.68% | 19.84% | 0.67% | 26.01% | 4.07% | 11.40% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $259 | $249 | $480 | $680 | $685 | $580 | $557 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $251 | $327 | $508 | $656 | $685 | $616 | $484 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.14% | 1.15% | 1.19% | 1.25% | 1.34% | 1.65% | 2.32% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.11% | 0.98% | 1.19% | 1.19% | 1.34% | 1.53% | 1.47% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.99% | 1.32% | 0.98% | 1.08% | 0.97% | 0.28% | 0.98% | |||||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% | 33% |
* | See “Federal Income Tax” 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 May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Period from August 1, 2009 through June 30, 2010. The Fund changed its fiscal year end from July 31 to June 30. | |
(5) | Period from December 31, 2008 (inception date) through July 31, 2009. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class T Shares
For a share outstanding during the period ended December 31, | ||||||||||||||||||||||||||||||
2014 (unaudited), each year or period ended June 30 and the | Perkins Large Cap Value Fund | |||||||||||||||||||||||||||||
period ended July 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.77 | $15.55 | $13.37 | $14.13 | $11.56 | $11.13 | $10.22 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.11(3) | 0.27(3) | 0.17 | 0.16 | 0.17 | 0.04 | –(4) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.55 | 2.63 | 2.48 | (0.10) | 2.85 | 0.44 | 0.91 | |||||||||||||||||||||||
Total from Investment Operations | 0.66 | 2.90 | 2.65 | 0.06 | 3.02 | 0.48 | 0.91 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.23) | (0.19) | (0.20) | (0.14) | (0.13) | (0.03) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | (0.02) | – | |||||||||||||||||||||||
Total Distributions | (1.12) | (1.68) | (0.47) | (0.82) | (0.45) | (0.05) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $16.31 | $16.77 | $15.55 | $13.37 | $14.13 | $11.56 | $11.13 | |||||||||||||||||||||||
Total Return** | 3.86% | 19.67% | 20.21% | 0.84% | 26.37% | 4.32% | 8.90% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,100 | $4,094 | $3,055 | $2,262 | $2,211 | $594 | $1 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,015 | $3,400 | $2,531 | $2,236 | $1,402 | $142 | $1 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.89% | 0.89% | 0.94% | 1.00% | 1.05% | 1.29% | 4.49% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.86% | 0.86% | 0.94% | 1.00% | 1.05% | 1.29% | 1.25% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.24% | 1.68% | 1.25% | 1.27% | 1.16% | 0.53% | 1.39% | |||||||||||||||||||||||
Portfolio Turnover Rate | 15% | 34% | 45% | 52% | 43% | 32% | 33% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
Table of Contents
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 (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis.
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Notes to Financial Statements (unaudited) (continued)
Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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.
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Dividend Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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Notes to Financial Statements (unaudited) (continued)
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting
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arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 10,400,000 | $– | $ | (10,400,000) | $– | ||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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.
3. | 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 or base fee rate, as applicable (expressed as an annual rate).
Fund | Base Fee Rate (%) | |||||
Perkins Large Cap Value Fund | 0.64 | |||||
For the Fund, the investment advisory fee rate is determined by calculating a base fee and applying a
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Notes to Financial Statements (unaudited) (continued)
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 | |||||
Perkins Large Cap Value Fund | Russell 1000® Value Index | |||||
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 the Fund 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 Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the period ended December 31, 2014 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Large Cap Value Fund | 0.50 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee 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 Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Large Cap Value Fund | 0.75 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are
26 | DECEMBER 31, 2014
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disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus 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
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Notes to Financial Statements (unaudited) (continued)
account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Large Cap Value Fund | $ | 1,618 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Perkins Large Cap Value Fund | $ | 287 | ||||
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Perkins Large Cap Value Fund - Class A Shares | - | % | - | % | ||||||
Perkins Large Cap Value Fund - Class C Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class D Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class I Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class N Shares | 97 | 45 | ||||||||
Perkins Large Cap Value Fund - Class S Shares | 100 | 0 | ||||||||
Perkins Large Cap Value Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Perkins Large Cap Value Fund | $139,883,494 | $40,480,879 | $(1,667,831) | $38,813,048 | ||||||||||||||
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5. | Capital Share Transactions |
For the period ended December 31 (unaudited) | Perkins Large Cap Value Fund | |||||||||
and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 18,363 | 40,929 | ||||||||
Reinvested dividends and distributions | 11,007 | 17,518 | ||||||||
Shares repurchased | (25,499) | (62,400) | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,871 | (3,953) | ||||||||
Shares Outstanding, Beginning of Period | 213,126 | 217,079 | ||||||||
Shares Outstanding, End of Period | 216,997 | 213,126 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 22,456 | 48,889 | ||||||||
Reinvested dividends and distributions | 10,498 | 17,306 | ||||||||
Shares repurchased | (22,082) | (66,272) | ||||||||
Net Increase/(Decrease) in Fund Shares | 10,872 | (77) | ||||||||
Shares Outstanding, Beginning of Period | 195,137 | 195,214 | ||||||||
Shares Outstanding, End of Period | 206,009 | 195,137 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 238,896 | 641,294 | ||||||||
Reinvested dividends and distributions | 156,038 | 232,301 | ||||||||
Shares repurchased | (427,048) | (443,863) | ||||||||
Net Increase/(Decrease) in Fund Shares | (32,114) | 429,732 | ||||||||
Shares Outstanding, Beginning of Period | 2,486,903 | 2,057,171 | ||||||||
Shares Outstanding, End of Period | 2,454,789 | 2,486,903 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 25,311 | 46,977 | ||||||||
Reinvested dividends and distributions | 164,872 | 277,834 | ||||||||
Shares repurchased | (369,090) | (119,014) | ||||||||
Net Increase/(Decrease) in Fund Shares | (178,907) | 205,797 | ||||||||
Shares Outstanding, Beginning of Period | 2,826,841 | 2,621,044 | ||||||||
Shares Outstanding, End of Period | 2,647,934 | 2,826,841 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,034,434 | 167,449 | ||||||||
Reinvested dividends and distributions | 332,173 | 290,486 | ||||||||
Shares repurchased | (209,127) | (720,134) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,157,480 | (262,199) | ||||||||
Shares Outstanding, Beginning of Period | 2,889,695 | 3,151,894 | ||||||||
Shares Outstanding, End of Period | 5,047,175 | 2,889,695 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 975 | 1,321 | ||||||||
Shares repurchased | – | (17,369) | ||||||||
Net Increase/(Decrease) in Fund Shares | 975 | (16,048) | ||||||||
Shares Outstanding, Beginning of Period | 14,665 | 30,713 | ||||||||
Shares Outstanding, End of Period | 15,640 | 14,665 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 22,307 | 74,047 | ||||||||
Reinvested dividends and distributions | 15,766 | 20,969 | ||||||||
Shares repurchased | (30,846) | (47,417) | ||||||||
Net Increase/(Decrease) in Fund Shares | 7,227 | 47,599 | ||||||||
Shares Outstanding, Beginning of Period | 244,108 | 196,509 | ||||||||
Shares Outstanding, End of Period | 251,335 | 244,108 |
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Notes to Financial Statements (unaudited) (continued)
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 | $ | 43,360,355 | $ | 21,938,163 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 31
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
34 | DECEMBER 31, 2014
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
Janus Investment Fund | 45
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81527 | 125-24-93031 02-15 |
Table of Contents
semiannual report
December 31, 2014
Perkins Mid Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Table of Contents
Perkins Mid Cap Value Fund
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Table of Contents
Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | ![]() Tom Perkins co-portfolio manager | ![]() Jeff Kautz co-portfolio manager | ![]() Kevin Preloger co-portfolio manager |
PERFORMANCE OVERVIEW
During the six months ended December 31, 2014, Perkins Mid Cap Value Fund’s Class T Shares returned 1.73%, underperforming the Fund’s benchmark, the Russell Midcap Value Index, which returned 3.25%.
The benchmark experienced one meaningful correction in the fall, prior to rallying to all-time highs at year-end. We were pleased to hold up better during this brief period of volatility. Equity markets, however, quickly rebounded and our more defensive positioning hurt relative returns for the period. Interest-rate sensitive industries such as utilities and real estate investment trusts (REITs) posted gains of 6.29% and 8.64%, respectively, in the index and our underweight in those areas detracted from relative performance. While our energy stocks held up better than those within the benchmark, our modest overweight hampered returns. Stock selection in consumer staples and information technology was additive.
We trimmed positions in a wide variety of industries where we felt the reward-to-risk ratio was no longer compelling, as the Russell Midcap Value Index made new highs. We exited positions in energy, retail and technology, to name a few. Purchases of new names also occurred in each of those areas as we felt the reward-to-risk trade-off was more attractive, and to take advantage of price weakness in the energy sector.
MARKET COMMENTARY
The U.S. economy continued to gain steam, delivering nearly 5% GDP growth in the third quarter, with the unemployment rate falling to under 6% amid signs of wage growth. Persistently high underemployment, however, remained a troubling counterweight. Corporate balance sheets remained flush with cash but companies continued to add leverage by tapping financing at record low interest rates. Earnings growth also remained strong, coupled with equity valuations that appear buoyed by market optimism. All this occurred with central bank policy accommodation that remains very friendly to risk assets on a global basis although the Federal Reserve (Fed) could become less so in the coming year.
The recent fall in energy prices is likely a blessing, but could possibly be a curse as well. Short term, it should provide a boost in consumer spending, evidenced by early reports of healthy holiday retail activity. Longer term, however, a significant portion of U.S. capital expenditures are attributable to the energy complex, and less exploration and production activity could negatively impact the earnings of those firms with exposure. In addition, the U.S. shale revolution has stimulated economic activity in places such as North Dakota and Pennsylvania with high-paying jobs and local economies that have witnessed rising oil prices. Energy companies have also been active participants in the debt markets, particularly in high-yield issuance, and risks around substantially squeezed profits could spread to financial markets. Clearly, there are winners from lower crude prices, but the collateral damage could appear later. The added variable here is the geopolitical consequences of lower oil prices on volatile countries such as Russia, Venezuela and much of the Middle East. These risks seem to be reflected to some degree in the price of energy stocks, but the broader markets continued to march to new highs.
DETRACTORS
Kirby Corporation weighed the most on performance. Shares in barge operator Kirby traded lower through the period following the rapid decline in global oil prices. Approximately 20% of Kirby’s annual revenues are directly tied to oil, with approximately $400 million of revenue related to diesel engines for well fracking pumps and rigs, and $200 million to the transport of crude oil in both inland river and coastal barge movements. Management guided fourth quarter results below Wall Street estimates on weakness in both the diesel engine business as well as the crude transport segment. We see fracking-related revenue continuing to be negatively pressured by weak oil
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Table of Contents
Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
prices and their negative impact on rig count in the U.S. However, we believe the recent softness in the crude transport business will ease as we move further into 2015. The core chemical business remains solid, driven by revenue gains, pricing, and strong margins.
Oil & gas producer Noble Energy also detracted from performance. Noble Energy is a global independent energy exploration and production company with U.S. assets in the Rocky Mountains, Appalachia, the Gulf of Mexico as well as international operations offshore Israel and West Africa. Shares of the company were down 38% in the period as a precipitous fall in crude oil prices drove a sell-off across the entire energy complex. West Texas Intermediate (WTI) and Brent crude prices have traded down to lows not seen since the 2008-2009 financial crisis. During the period, Noble Energy reported third quarter earnings results ahead of Wall Street expectations but the stock also traded lower as Israeli antitrust authorities announced a review of a previous regulatory deal that Noble and its partners signed with the Israeli government. While the drop in crude oil prices presents a significant challenge for Noble, as well as the entire oil and gas industry, we think that Noble’s high-quality acreage, solid balance sheet and astute management team provide the company with the resources needed to weather the downturn in the industry.
Plains GP Holdings LP (PAGP), another top detractor, is the general partner of Plains All American Pipeline LP. PAGP has increasing claims on the cash flows generated by its limited partner, which has benefited from increasing crude oil volume growth in the U.S. The shares modestly underperformed its master limited partnerships (MLP) peers as a very strong third quarter earnings report was not enough to offset conservative 2015 distribution guidance and the rapid decline in crude oil prices. The company also acquired 50% of the BridgeTex pipeline joint venture from Occidental Petroleum that should complement PAGP’s growing asset base in the Permian Basin. We eliminated our holdings in the stock as we were concerned with the clouded outlook for distribution growth given the steep decline in crude prices.
CONTRIBUTORS
Casey’s General Stores led our individual contributors. The company operates gas stations and convenience stores throughout small towns in the Midwest, and is slowly expanding into the Southeast. The steep decline in crude, and ultimately gasoline prices, were the main driver behind the stock’s rally in the fourth quarter. Gasoline margins at Casey’s typically benefit when wholesale gasoline prices decline as retail prices at the pump are stickier on the way down. Casey’s has done a solid job in executing its growth strategy – evidenced by strength in same-store sales of grocery items and prepared foods during the quarter. Over the past two years, other publicly traded convenience store chains have been acquired by MLPs, adopted MLP structures, or have been acquired by parent companies that own MLPs. Any of these outcomes could unlock further value at Casey’s should management elect to go that route. Casey’s remains one of our larger holdings in the Fund.
Allstate also aided performance. The property insurer outperformed the market and its peers in the period due to its consistently better underwriting results than prior guidance, as well as large share repurchases. Allstate achieved better margins in its core property casualty business after excluding prior year development and catastrophic losses, which resulted in upward earnings revisions throughout the year. The higher than expected earnings growth resulted in both price-to-earnings and price-to-book multiple expansions. Despite the higher valuation, we view Allstate as a core holding that provides diversification to other macro-driven financial holdings.
Zoetis, an animal health company, was another top contributor and continued to outperform in the period. In addition to strong fundamental performance, in the fourth quarter, the stock reacted positively to both the company’s announced strategy for operational improvement and capital deployment, and the 10% ownership stake taken by activist investor, Pershing Square. Given the stable underlying fundamentals of the animal health industry, the company’s strong competitive positioning and focus on operational improvement, and the potential to be an acquisition target post the two-year anniversary of its tax-free spin-off from Pfizer, we continue to hold a position.
MARKET OUTLOOK
As we look ahead, the factors that led us to the upcoming six-year anniversary of the bull market continue to be intact, namely unbelievably loose monetary policy on a global basis. However, the Fed has stated its intention, and has initiated the process, of slowly reducing the amount of liquidity flooded into the system. When looking at economic growth and recent jobs data, one could argue that the data set indicates the U.S. economy is doing just fine and that some accommodation can be curtailed. The counterargument is that the economy is still growing at a tepid pace for this point in a normal economic recovery and, given the large amount of debt in the system, central bankers fear debt deflation, so interest rates can stay lower for longer. There are certainly bright spots in the market though we believe they may not warrant the
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Table of Contents
(unaudited)
currently high level of investor optimism. While there may be more gains ahead, we believe there is also the potential for greater volatility, and therefore remain cautious in our portfolio positioning. Aside from the energy segment, another source of potential volatility could originate from the Fed, both from communication to the market as well as its policy intentions. While we believe valuations are fair, if not slightly overvalued, there seems to be little room for error in equity prices.
With the U.S. equity market hitting new all-time highs this year, we are not finding compelling values. Optimism seems to be fully priced into stocks, as it has over the past few years, showing some disregard of risk and a large willingness to put more faith in market momentum instead of company fundamentals. Most troubling, in our opinion, is the broad complacency and thin trading volume lifting stock prices higher. There simply is not much real liquidity in the market to absorb prolonged selling pressures should any of the numerous macroeconomic tailwinds suddenly start to escalate and truly spook investors beyond a brief market dip. This is especially true in the fixed income markets where even the U.S. Treasury Department’s Office of Financial Research has noted excessive risk taking, declining market liquidity as a result of recent bank regulatory changes, and some financing activities moving to less transparent areas of the financial system as potential risks.
Small-cap stocks have had prolonged periods of volatility over the course of the year. If, as we expect, volatility begins to move up market capitalization, it could provide additional value potential, especially in mid-cap stocks. However, at this point in the cycle, we believe that mid-cap stocks remain the most overpriced market segment. Therefore, investors may want to refocus on bottom-up stock selection and downside protection. Looking ahead, we believe our portfolios remain well positioned to navigate the current market climate, in terms of both risk exposure and long-term upside potential.
Thank you for your investment in Perkins Mid Cap Value Fund.
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Perkins Mid Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 0.55% | |||
Allstate Corp. | 0.39% | |||
Zoetis, Inc. | 0.30% | |||
Alliant Energy Corp. | 0.28% | |||
Dr Pepper Snapple Group, Inc. | 0.26% |
5 Bottom Performers – Holdings
Contribution | ||||
Kirby Corp. | –0.49% | |||
Noble Energy, Inc. | –0.48% | |||
Plains GP Holdings LP – Class A | –0.43% | |||
SM Energy Co. | –0.34% | |||
Weatherford International PLC | –0.30% |
5 Top Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Consumer Staples | 0.62% | 8.76% | 3.35% | |||||||||
Information Technology | 0.44% | 8.87% | 10.77% | |||||||||
Industrials | 0.06% | 13.41% | 9.53% | |||||||||
Materials | 0.03% | 2.42% | 7.01% | |||||||||
Health Care | –0.08% | 10.00% | 9.29% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Energy | –0.93% | 8.03% | 5.13% | |||||||||
Consumer Discretionary | –0.61% | 5.03% | 10.05% | |||||||||
Financials | –0.28% | 30.53% | 32.53% | |||||||||
Utilities | –0.16% | 6.51% | 12.02% | |||||||||
Other** | –0.16% | 4.84% | 0.00% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
PPL Corp. Electric Utilities | 3.1% | |||
Alliant Energy Corp. Multi-Utilities | 2.9% | |||
Republic Services, Inc. Commercial Services & Supplies | 2.5% | |||
Casey’s General Stores, Inc. Food & Staples Retailing | 2.4% | |||
Allstate Corp. Insurance | 2.3% | |||
13.2% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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Table of Contents
Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Performance
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Expense Ratios – per the | |||||||||||||
Average Annual Total Return – for the periods ended December 31, 2014 | October 28, 2014 prospectuses | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Perkins Mid Cap Value Fund – Class A Shares(1) | |||||||||||||
NAV | 1.62% | 8.80% | 10.92% | 7.95% | 12.15% | 0.93% | |||||||
MOP | –4.24% | 2.57% | 9.61% | 7.31% | 11.75% | ||||||||
Perkins Mid Cap Value Fund – Class C Shares(1) | |||||||||||||
NAV | 1.27% | 8.01% | 10.11% | 7.17% | 11.42% | 1.70% | |||||||
CDSC | 0.46% | 7.15% | 10.11% | 7.17% | 11.42% | ||||||||
Perkins Mid Cap Value Fund – Class D Shares(1) | 1.80% | 9.12% | 11.23% | 8.22% | 12.35% | 0.65% | |||||||
Perkins Mid Cap Value Fund – Class I Shares(1) | 1.82% | 9.14% | 11.26% | 8.17% | 12.32% | 0.63% | |||||||
Perkins Mid Cap Value Fund – Class L Shares(1) | 1.71% | 8.98% | 11.27% | 8.34% | 12.47% | 0.75% | |||||||
Perkins Mid Cap Value Fund – Class N Shares(1) | 1.83% | 9.25% | 11.13% | 8.17% | 12.32% | 0.49% | |||||||
Perkins Mid Cap Value Fund – Class R Shares(1) | 1.47% | 8.44% | 10.57% | 7.58% | 11.82% | 1.25% | |||||||
Perkins Mid Cap Value Fund – Class S Shares(1) | 1.61% | 8.75% | 10.85% | 7.85% | 12.06% | 0.99% | |||||||
Perkins Mid Cap Value Fund – Class T Shares(1) | 1.73% | 9.04% | 11.13% | 8.17% | 12.32% | 0.74% | |||||||
Russell Midcap® Value Index | 3.25% | 14.75% | 17.43% | 9.43% | 10.18% | ||||||||
Morningstar Quartile – Class T Shares | – | 3rd | 4th | 3rd | 1st | ||||||||
Morningstar Ranking – based on total returns for Mid-Cap Value Funds | – | 268/475 | 398/417 | 208/350 | 17/159 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
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(unaudited)
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Investments in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares), from April 21, 2003 to July 6, 2009, calculated using the fees and expenses of the corresponding class, without the effect of any fee and expense limitations or waivers. For periods prior to April 21, 2003, the performance shown for each class reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a prior reorganization of Berger Mid Cap Value Fund – Investor Shares into the Fund’s former Class J Shares), calculated using the fees and expenses of the corresponding class respectively, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010, as a result of the restructuring of Class J Shares, the predecessor share class. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares (formerly named Investor Shares). For the periods prior to April 21, 2003, the performance shown for Class D Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization).
Class I Shares commenced operations on July 6, 2009. Performance shown reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) from April 21, 2003 to July 6, 2009, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class I Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class L Shares commenced operations on April 21, 2003. Performance shown for periods following April 21, 2003, reflects the fees and expenses of Class L Shares (formerly named Institutional Shares), net of any applicable fee and expense limitations or waivers. The performance shown for Class L Shares for the periods from May 17, 2002 to April 17, 2003, reflects the historical performance of Berger Mid Cap Value Fund – Institutional Shares (as a result of a prior reorganization of Berger Mid Cap Value Fund – Institutional Shares into the Fund’s Class L Shares). For the periods prior to May 17, 2002, the performance shown reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for Class N Shares reflects the performance of the Fund’s Class T Shares from July 6, 2009 to May 31, 2012, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers. For the period from April 21, 2003 to July 6, 2009, the performance shown for Class N Shares reflects the performance of Class J Shares (formerly named Investor Shares), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class N Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares (formerly named Class J Shares) commenced operations with the Fund’s inception. Performance shown for periods following April 21, 2003, reflects the fees and expenses of Class T Shares in effect during the periods shown, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class T Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization).
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The predecessor Fund’s inception date – August 12, 1998 |
(1) Closed to certain distribution channels. Please see current prospectuses for details.
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,016.20 | $ | 4.42 | $ | 1,000.00 | $ | 1,020.82 | $ | 4.43 | 0.87% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,012.70 | $ | 7.81 | $ | 1,000.00 | $ | 1,017.44 | $ | 7.83 | 1.54% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,018.00 | $ | 3.10 | $ | 1,000.00 | $ | 1,022.13 | $ | 3.11 | 0.61% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,018.20 | $ | 2.90 | $ | 1,000.00 | $ | 1,022.33 | $ | 2.91 | 0.57% | |||||||||||||||||
Class L Shares | $ | 1,000.00 | $ | 1,017.10 | $ | 3.61 | $ | 1,000.00 | $ | 1,021.63 | $ | 3.62 | 0.71% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,018.30 | $ | 2.34 | $ | 1,000.00 | $ | 1,022.89 | $ | 2.35 | 0.46% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,014.70 | $ | 6.14 | $ | 1,000.00 | $ | 1,019.11 | $ | 6.16 | 1.21% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,016.10 | $ | 4.88 | $ | 1,000.00 | $ | 1,020.37 | $ | 4.89 | 0.96% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,017.30 | $ | 3.61 | $ | 1,000.00 | $ | 1,021.63 | $ | 3.62 | 0.71% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
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Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Common Stocks – 96.6% | ||||||||||
Aerospace & Defense – 1.1% | ||||||||||
925,104 | Rockwell Collins, Inc. | $ | 78,152,786 | |||||||
Beverages – 2.0% | ||||||||||
1,222,269 | Dr Pepper Snapple Group, Inc. | 87,612,242 | ||||||||
787,822 | Molson Coors Brewing Co. – Class B | 58,708,495 | ||||||||
| ||||||||||
146,320,737 | ||||||||||
Capital Markets – 4.3% | ||||||||||
1,159,892 | Carlyle Group LP | 31,897,030 | ||||||||
548,969 | Northern Trust Corp. | 37,000,510 | ||||||||
1,416,996 | Raymond James Financial, Inc. | 81,179,701 | ||||||||
700,000 | State Street Corp. | 54,950,000 | ||||||||
1,215,958 | T Rowe Price Group, Inc. | 104,402,154 | ||||||||
| ||||||||||
309,429,395 | ||||||||||
Chemicals – 0.6% | ||||||||||
791,869 | FMC Corp. | 45,160,289 | ||||||||
Commercial Banks – 5.2% | ||||||||||
2,353,847 | CIT Group, Inc. | 112,584,502 | ||||||||
3,045,936 | Fifth Third Bancorp | 62,060,946 | ||||||||
731,930 | First Republic Bank | 38,148,192 | ||||||||
416,882 | M&T Bank Corp. | 52,368,717 | ||||||||
3,972,748 | Zions Bancorporation | 113,263,045 | ||||||||
| ||||||||||
378,425,402 | ||||||||||
Commercial Services & Supplies – 3.6% | ||||||||||
4,405,458 | Republic Services, Inc. | 177,319,685 | ||||||||
1,940,055 | Tyco International PLC | 85,090,812 | ||||||||
| ||||||||||
262,410,497 | ||||||||||
Communications Equipment – 1.2% | ||||||||||
795,832 | Motorola Solutions, Inc. | 53,384,411 | ||||||||
1,046,078 | Ubiquiti Networks, Inc. | 31,005,752 | ||||||||
| ||||||||||
84,390,163 | ||||||||||
Construction & Engineering – 0.6% | ||||||||||
891,348 | Jacobs Engineering Group, Inc.* | 39,834,342 | ||||||||
Consumer Finance – 1.0% | ||||||||||
1,102,554 | Discover Financial Services | 72,206,261 | ||||||||
Containers & Packaging – 1.9% | ||||||||||
2,679,631 | Crown Holdings, Inc.* | 136,393,218 | ||||||||
Electric Utilities – 3.1% | ||||||||||
6,101,971 | PPL Corp. | 221,684,606 | ||||||||
Electrical Equipment – 1.7% | ||||||||||
3,942,945 | Babcock & Wilcox Co. | 119,471,234 | ||||||||
Electronic Equipment, Instruments & Components – 1.4% | ||||||||||
315,329 | IPG Photonics Corp. | 23,624,449 | ||||||||
1,293,145 | Keysight Technologies, Inc.* | 43,669,507 | ||||||||
528,332 | Tech Data Corp.* | 33,406,432 | ||||||||
| ||||||||||
100,700,388 | ||||||||||
Energy Equipment & Services – 2.0% | ||||||||||
250,852 | Dril-Quip, Inc.* | 19,247,874 | ||||||||
702,903 | Ensco PLC – Class A | 21,051,945 | ||||||||
651,906 | Oceaneering International, Inc. | 38,338,592 | ||||||||
1,157,989 | Tidewater, Inc. | 37,530,423 | ||||||||
2,245,754 | Weatherford International PLC* | 25,713,883 | ||||||||
| ||||||||||
141,882,717 | ||||||||||
Food & Staples Retailing – 3.7% | ||||||||||
1,918,702 | Casey’s General Stores, Inc.£ | 173,297,165 | ||||||||
2,316,724 | Sysco Corp. | 91,950,775 | ||||||||
| ||||||||||
265,247,940 | ||||||||||
Food Products – 4.1% | ||||||||||
892,094 | Hershey Co. | 92,715,330 | ||||||||
896,791 | JM Smucker Co. | 90,557,955 | ||||||||
1,505,061 | McCormick & Co., Inc. | 111,826,032 | ||||||||
| ||||||||||
295,099,317 | ||||||||||
Gas Utilities – 1.7% | ||||||||||
2,200,195 | AGL Resources, Inc. | 119,932,629 | ||||||||
Health Care Equipment & Supplies – 3.4% | ||||||||||
1,182,183 | Stryker Corp. | 111,515,322 | ||||||||
300,266 | Varian Medical Systems, Inc.* | 25,976,012 | ||||||||
959,994 | Zimmer Holdings, Inc. | 108,882,520 | ||||||||
| ||||||||||
246,373,854 | ||||||||||
Health Care Providers & Services – 3.2% | ||||||||||
1,201,614 | Laboratory Corp. of America Holdings* | 129,654,151 | ||||||||
233,957 | McKesson Corp. | 48,564,794 | ||||||||
1,059,484 | Patterson Cos., Inc. | 50,961,180 | ||||||||
| ||||||||||
229,180,125 | ||||||||||
Information Technology Services – 1.9% | ||||||||||
1,079,952 | Heartland Payment Systems, Inc. | 58,263,410 | ||||||||
830,017 | Teradata Corp.* | 36,255,143 | ||||||||
1,287,650 | Total System Services, Inc. | 43,728,594 | ||||||||
| ||||||||||
138,247,147 | ||||||||||
Insurance – 7.4% | ||||||||||
2,346,937 | Allstate Corp. | 164,872,324 | ||||||||
1,383,719 | Arthur J Gallagher & Co. | 65,145,491 | ||||||||
2,680,048 | Marsh & McLennan Cos., Inc. | 153,405,947 | ||||||||
454,599 | RenaissanceRe Holdings, Ltd. | 44,196,115 | ||||||||
2,048,020 | Torchmark Corp. | 110,941,243 | ||||||||
| ||||||||||
538,561,120 | ||||||||||
Life Sciences Tools & Services – 2.4% | ||||||||||
1,307,366 | Agilent Technologies, Inc. | 53,523,564 | ||||||||
792,267 | Thermo Fisher Scientific, Inc. | 99,263,133 | ||||||||
211,153 | Waters Corp.* | 23,801,166 | ||||||||
| ||||||||||
176,587,863 | ||||||||||
Machinery – 0.7% | ||||||||||
402,946 | Valmont Industries, Inc. | 51,174,142 | ||||||||
Marine – 1.1% | ||||||||||
1,025,807 | Kirby Corp.* | 82,823,657 | ||||||||
Media – 1.4% | ||||||||||
1,289,657 | Omnicom Group, Inc. | 99,909,728 | ||||||||
Metals & Mining – 0.5% | ||||||||||
1,992,682 | Goldcorp, Inc. (U.S. Shares) | 36,904,471 | ||||||||
Multi-Utilities – 2.9% | ||||||||||
3,137,970 | Alliant Energy Corp. | 208,423,967 | ||||||||
Multiline Retail – 0.5% | ||||||||||
578,262 | Macy’s, Inc. | 38,020,727 | ||||||||
Oil, Gas & Consumable Fuels – 3.5% | ||||||||||
894,325 | Anadarko Petroleum Corp. | 73,781,812 | ||||||||
170,844 | Cimarex Energy Co. | 18,109,464 | ||||||||
709,505 | HollyFrontier Corp. | 26,592,247 | ||||||||
1,352,185 | Noble Energy, Inc. | 64,134,135 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Mid Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Oil, Gas & Consumable Fuels – (continued) | ||||||||||
601,434 | SM Energy Co. | $ | 23,203,324 | |||||||
666,074 | Western Gas Partners LP | 48,656,706 | ||||||||
| ||||||||||
254,477,688 | ||||||||||
Pharmaceuticals – 1.9% | ||||||||||
1,090,890 | Teva Pharmaceutical Industries, Ltd. (ADR) | 62,737,084 | ||||||||
1,693,000 | Zoetis, Inc. | 72,849,790 | ||||||||
| ||||||||||
135,586,874 | ||||||||||
Real Estate Investment Trusts (REITs) – 11.6% | ||||||||||
834,816 | Alexandria Real Estate Equities, Inc. | 74,081,572 | ||||||||
509,141 | AvalonBay Communities, Inc. | 83,188,548 | ||||||||
1,644,048 | Equity Lifestyle Properties, Inc. | 84,750,674 | ||||||||
1,211,507 | Home Properties, Inc. | 79,474,859 | ||||||||
1,369,244 | Host Hotels & Resorts, Inc. | 32,546,930 | ||||||||
1,538,421 | Plum Creek Timber Co., Inc. | 65,829,035 | ||||||||
1,542,634 | Potlatch Corp.£ | 64,590,086 | ||||||||
622,147 | Public Storage | 115,003,873 | ||||||||
4,246,090 | Redwood Trust, Inc.£ | 83,647,973 | ||||||||
645,403 | Taubman Centers, Inc. | 49,321,697 | ||||||||
5,591,153 | Two Harbors Investment Corp. | 56,023,353 | ||||||||
1,458,333 | Weyerhaeuser Co. | 52,339,571 | ||||||||
| ||||||||||
840,798,171 | ||||||||||
Road & Rail – 2.9% | ||||||||||
549,225 | Canadian Pacific Railway, Ltd. (U.S. Shares) | 105,830,165 | ||||||||
1,064,485 | CSX Corp. | 38,566,292 | ||||||||
527,482 | Kansas City Southern | 64,368,628 | ||||||||
| ||||||||||
208,765,085 | ||||||||||
Semiconductor & Semiconductor Equipment – 2.0% | ||||||||||
774,110 | Altera Corp. | 28,595,623 | ||||||||
1,207,751 | Analog Devices, Inc. | 67,054,336 | ||||||||
1,166,068 | Microchip Technology, Inc. | 52,601,327 | ||||||||
| ||||||||||
148,251,286 | ||||||||||
Software – 3.6% | ||||||||||
502,619 | ANSYS, Inc.* | 41,214,758 | ||||||||
750,612 | CA, Inc. | 22,856,136 | ||||||||
494,332 | Check Point Software Technologies, Ltd.* | 38,839,665 | ||||||||
2,348,395 | Informatica Corp.* | 89,556,043 | ||||||||
1,633,040 | Synopsys, Inc.* | 70,988,249 | ||||||||
| ||||||||||
263,454,851 | ||||||||||
Specialty Retail – 0.4% | ||||||||||
2,399,449 | Ascena Retail Group, Inc.* | 30,137,079 | ||||||||
Technology Hardware, Storage & Peripherals – 0.4% | ||||||||||
722,073 | NetApp, Inc. | 29,929,926 | ||||||||
Textiles, Apparel & Luxury Goods – 2.9% | ||||||||||
442,633 | PVH Corp. | 56,732,272 | ||||||||
535,433 | Ralph Lauren Corp. | 99,140,774 | ||||||||
1,676,507 | Steven Madden, Ltd.* | 53,363,218 | ||||||||
| ||||||||||
209,236,264 | ||||||||||
Thrifts & Mortgage Finance – 1.1% | ||||||||||
3,530,183 | Washington Federal, Inc. | 78,193,553 | ||||||||
Wireless Telecommunication Services – 1.7% | ||||||||||
3,137,229 | Rogers Communications, Inc. – Class B | 122,004,851 | ||||||||
Total Common Stocks (cost $5,359,748,419) | 6,983,784,350 | |||||||||
Repurchase Agreements – 3.7% | ||||||||||
$44,100,000 | Undivided interest of 54% in a joint repurchase agreement (principal amount $81,900,000 with a maturity value of $81,900,228) with ING Financial Markets LLC, 0.0500%, dated 12/31/14, maturing 1/2/15 to be repurchased at $44,100,123 collateralized by $82,714,877 U.S. Treasuries, 0.1250% – 4.3750%, 2/29/16 – 2/15/44, with a value of $83,542,988 | 44,100,000 | ||||||||
220,000,000 | Undivided interest of 74% in a joint repurchase agreement (principal amount $300,000,000 with a maturity value of $300,001,000) with RBC Capital Markets Corp., 0.0600%, dated 12/31/14, maturing 1/2/15 to be repurchased at $220,000,733 collateralized by $305,423,057 U.S. Treasuries, 0% – 11.2500%, 1/29/15 – 11/15/44, with a value of $306,000,026 | 220,000,000 | ||||||||
Total Repurchase Agreements (cost $264,100,000) | 264,100,000 | |||||||||
Total Investments (total cost $5,623,848,419) – 100.3% | 7,247,884,350 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.3)% | (19,527,540) | |||||||||
Net Assets – 100% | $ | 7,228,356,810 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 6,881,568,114 | 94 | .9% | ||||
Canada | 264,739,487 | 3 | .7 | |||||
Israel | 101,576,749 | 1 | .4 | |||||
Total | $ | 7,247,884,350 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 3.6%. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Russell Midcap® Value Index | Measures the performance of those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | Non-income producing security. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Janus Perkins Mid Cap Value Fund | |||||||||||||||||||||
Casey’s General Stores, Inc.(1) | 2,123,443 | 90,871 | (295,612) | 1,918,702 | $ | 2,037,612 | $ | 828,429 | N/A | ||||||||||||
Plains GP Holdings LP – Class A | 7,165,115 | 446,128 | (7,611,243) | – | 24,828,544 | 2,108,645 | $ | – | |||||||||||||
Potlatch Corp.(1) | 2,122,871 | 156,476 | (736,713) | 1,542,634 | (373,451) | 1,314,788 | N/A | ||||||||||||||
Redwood Trust, Inc. | 4,246,090 | – | – | 4,246,090 | – | 2,377,810 | 83,647,973 | ||||||||||||||
Total | $ | 26,492,705 | $ | 6,629,672 | $ | 83,647,973 | |||||||||||||||
(1) | No longer an affiliate as of December 31, 2014. |
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
Janus Perkins Mid Cap Value Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Common Stocks | $ | 6,983,784,350 | $ | – | $– | |||||
Repurchase Agreements | – | 264,100,000 | – | |||||||
Total Assets | $ | 6,983,784,350 | $ | 264,100,000 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Perkins Mid Cap Value Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 5,623,848,419 | ||
Unaffiliated investments at value | $ | 6,900,136,377 | ||
Affiliated investments at value | 83,647,973 | |||
Repurchase agreements at value | 264,100,000 | |||
Non-interested Trustees’ deferred compensation | 148,878 | |||
Receivables: | ||||
Investments sold | 8,895,178 | |||
Fund shares sold | 4,972,751 | |||
Dividends | 14,916,932 | |||
Interest | 856 | |||
Other assets | 122,351 | |||
Total Assets | 7,276,941,296 | |||
Liabilities: | ||||
Due to custodian | 41,999 | |||
Payables: | ||||
Investments purchased | 1,232,402 | |||
Fund shares repurchased | 41,659,024 | |||
Advisory fees | 2,793,525 | |||
Fund administration fees | 65,614 | |||
Transfer agent fees and expenses | 1,328,926 | |||
12b-1 Distribution and shareholder servicing fees | 301,207 | |||
Non-interested Trustees’ fees and expenses | 48,541 | |||
Non-interested Trustees’ deferred compensation fees | 148,878 | |||
Accrued expenses and other payables | 964,370 | |||
Total Liabilities | 48,584,486 | |||
Net Assets | $ | 7,228,356,810 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | Perkins Mid Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 5,436,082,080 | ||
Undistributed net investment income/(loss)* | 2,222,489 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 165,995,262 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,624,056,979 | |||
Total Net Assets | $ | 7,228,356,810 | ||
Net Assets - Class A Shares | $ | 300,960,569 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,921,153 | |||
Net Asset Value Per Share(2) | $ | 20.17 | ||
Maximum Offering Price Per Share(3) | $ | 21.40 | ||
Net Assets - Class C Shares | $ | 142,054,207 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,131,300 | |||
Net Asset Value Per Share(2) | $ | 19.92 | ||
Net Assets - Class D Shares | $ | 904,184,851 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 45,237,299 | |||
Net Asset Value Per Share | $ | 19.99 | ||
Net Assets - Class I Shares | $ | 1,965,598,450 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 98,302,622 | |||
Net Asset Value Per Share | $ | 20.00 | ||
Net Assets - Class L Shares | $ | 18,452,519 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 909,890 | |||
Net Asset Value Per Share | $ | 20.28 | ||
Net Assets - Class N Shares | $ | 365,641,816 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 18,326,768 | |||
Net Asset Value Per Share | $ | 19.95 | ||
Net Assets - Class R Shares | $ | 106,729,799 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,331,991 | |||
Net Asset Value Per Share | $ | 20.02 | ||
Net Assets - Class S Shares | $ | 257,809,631 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 12,790,207 | |||
Net Asset Value Per Share | $ | 20.16 | ||
Net Assets - Class T Shares | $ | 3,166,924,968 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 157,981,887 | |||
Net Asset Value Per Share | $ | 20.05 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $264,100,000. | |
(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 Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Mid Cap | ||||
For the period ended December 31, 2014 (unaudited) | Value Fund | |||
Investment Income: | ||||
Interest | $ | 75,385 | ||
Dividends | 77,683,280 | |||
Dividends from affiliates | 6,629,672 | |||
Foreign tax withheld | (710,104) | |||
Total Investment Income | 83,678,233 | |||
Expenses: | ||||
Advisory fees | 17,121,023 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 459,930 | |||
Class C Shares | 762,205 | |||
Class R Shares | 289,619 | |||
Class S Shares | 386,074 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 555,033 | |||
Class L Shares | 25,679 | |||
Class R Shares | 144,810 | |||
Class S Shares | 386,074 | |||
Class T Shares | 4,438,548 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 280,454 | |||
Class C Shares | 51,334 | |||
Class I Shares | 1,209,456 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 23,367 | |||
Class C Shares | 12,840 | |||
Class D Shares | 89,858 | |||
Class I Shares | 61,208 | |||
Class L Shares | 329 | |||
Class N Shares | 2,451 | |||
Class R Shares | 1,741 | |||
Class S Shares | 3,292 | |||
Class T Shares | 32,613 | |||
Shareholder reports expense | 310,110 | |||
Registration fees | 135,013 | |||
Custodian fees | 17,328 | |||
Professional fees | 51,522 | |||
Non-interested Trustees’ fees and expenses | 59,279 | |||
Fund administration fees | 403,466 | |||
Other expenses | 157,379 | |||
Total Expenses | 27,472,035 | |||
Net Expenses | 27,472,035 | |||
Net Investment Income/(Loss) | 56,206,198 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 471,054,691 | |||
Investments in affiliates | 26,492,705 | |||
Total Net Realized Gain/(Loss) on Investments | 497,547,396 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (438,875,116) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (438,875,116) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 114,878,478 |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Perkins Mid Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 56,206,198 | $ | 131,928,615 | ||||
Net realized gain/(loss) on investments | 497,547,396 | 1,614,874,196 | ||||||
Change in unrealized net appreciation/depreciation | (438,875,116) | 118,204,237 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 114,878,478 | 1,865,007,048 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (5,940,967) | (9,460,143) | ||||||
Class C Shares | (1,728,498) | (591,359) | ||||||
Class D Shares | (26,626,446) | (13,553,210) | ||||||
Class I Shares | (60,085,448) | (40,639,172) | ||||||
Class L Shares | (525,737) | (374,891) | ||||||
Class N Shares | (11,502,967) | (4,653,498) | ||||||
Class R Shares | (1,915,197) | (1,092,655) | ||||||
Class S Shares | (4,806,203) | (5,066,067) | ||||||
Class T Shares | (87,392,023) | (65,742,480) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (59,097,635) | (98,448,877) | ||||||
Class C Shares | (27,692,822) | (21,494,905) | ||||||
Class D Shares | (170,540,333) | (106,207,159) | ||||||
Class I Shares | (387,019,885) | (315,702,767) | ||||||
Class L Shares | (3,550,347) | (2,855,788) | ||||||
Class N Shares | (68,277,150) | (32,931,987) | ||||||
Class R Shares | (20,399,307) | (16,427,530) | ||||||
Class S Shares | (49,292,220) | (63,560,399) | ||||||
Class T Shares | (615,613,262) | (572,875,929) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (1,602,006,447) | (1,371,678,816) |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Perkins Mid Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 27,006,172 | 135,701,914 | ||||||
Class C Shares | 9,502,075 | 17,805,127 | ||||||
Class D Shares | 10,135,893 | 27,043,949 | ||||||
Class I Shares | 438,332,424 | 558,475,580 | ||||||
Class L Shares | 695,017 | 570,090 | ||||||
Class N Shares | 34,875,077 | 224,605,131 | ||||||
Class R Shares | 10,901,955 | 29,333,859 | ||||||
Class S Shares | 37,009,309 | 124,116,318 | ||||||
Class T Shares | 127,689,642 | 434,486,155 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 54,491,054 | 94,620,795 | ||||||
Class C Shares | 23,551,202 | 17,312,154 | ||||||
Class D Shares | 192,312,707 | 117,024,460 | ||||||
Class I Shares | 401,213,809 | 305,228,651 | ||||||
Class L Shares | 3,335,352 | 2,710,316 | ||||||
Class N Shares | 79,154,920 | 37,585,485 | ||||||
Class R Shares | 20,663,587 | 16,025,663 | ||||||
Class S Shares | 53,969,494 | 68,482,737 | ||||||
Class T Shares | 686,112,906 | 624,423,622 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (195,076,308) | (668,363,965) | ||||||
Class C Shares | (23,815,076) | (72,006,015) | ||||||
Class D Shares | (56,197,760) | (118,775,476) | ||||||
Class I Shares | (756,510,491) | (1,737,229,929) | ||||||
Class L Shares | (4,642,239) | (5,881,090) | ||||||
Class N Shares | (72,875,127) | (104,895,907) | ||||||
Class R Shares | (31,368,809) | (89,164,865) | ||||||
Class S Shares | (170,448,729) | (541,589,593) | ||||||
Class T Shares | (985,313,833) | (2,881,588,559) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (85,295,777) | (3,383,943,393) | ||||||
Net Increase/(Decrease) in Net Assets | (1,572,423,746) | (2,890,615,161) | ||||||
Net Assets: | ||||||||
Beginning of period | 8,800,780,556 | 11,691,395,717 | ||||||
End of period | $ | 7,228,356,810 | $ | 8,800,780,556 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 2,222,489 | $ | 146,539,777 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or | ||||||||||||||||||||||||||||||
period ended June 30 and the period ended | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $25.00 | $23.96 | $20.93 | $23.66 | $19.04 | $18.66 | $16.07 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.14(3) | 0.26(3) | 0.28 | 0.18 | 0.19 | 0.04 | (0.01) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.27 | 4.14 | 3.66 | (1.15) | 4.57 | 0.36 | 2.60 | |||||||||||||||||||||||
Total from Investment Operations | 0.41 | 4.40 | 3.94 | (0.97) | 4.76 | 0.40 | 2.59 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.48) | (0.29) | (0.13) | (0.13) | (0.14) | (0.02) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | – | |||||||||||||||||||||||
Total Distributions | (5.24) | (3.36) | (0.91) | (1.76) | (0.14) | (0.02) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.17 | $25.00 | $23.96 | $20.93 | $23.66 | $19.04 | $18.66 | |||||||||||||||||||||||
Total Return** | 1.62% | 19.72% | 19.33% | (3.84)% | 25.04% | 2.17% | 16.12% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $300,961 | $476,695 | $896,589 | $1,157,423 | $1,358,791 | $1,011,334 | $781,960 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $363,263 | $729,640 | $996,195 | $1,198,373 | $1,228,239 | $966,540 | $736,402 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.87% | 0.93% | 1.00% | 1.06% | 1.20% | 1.17% | 1.27% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.87% | 0.93% | 0.95% | 1.02% | 1.17% | 1.17% | 1.22% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.15% | 1.06% | 0.98% | 0.98% | 0.82% | 0.33% | 0.35% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
Class C Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $24.66 | $23.65 | $20.74 | $23.50 | $18.93 | $18.62 | $16.07 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.07(3) | 0.08(3) | 0.03 | 0.01 | 0.04 | (0.04) | (0.05) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.25 | 4.08 | 3.70 | (1.14) | 4.53 | 0.35 | 2.60 | |||||||||||||||||||||||
Total from Investment Operations | 0.32 | 4.16 | 3.73 | (1.13) | 4.57 | 0.31 | 2.55 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.30) | (0.08) | (0.04) | –(4) | –(4) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | – | |||||||||||||||||||||||
Total Distributions | (5.06) | (3.15) | (0.82) | (1.63) | – | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $19.92 | $24.66 | $23.65 | $20.74 | $23.50 | $18.93 | $18.62 | |||||||||||||||||||||||
Total Return** | 1.27% | 18.83% | 18.45% | (4.58)% | 24.17% | 1.66% | 15.87% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $142,054 | $160,595 | $189,096 | $210,874 | $242,324 | $168,093 | $121,166 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $150,414 | $177,414 | $203,923 | $217,116 | $211,474 | $155,180 | $107,362 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.54% | 1.70% | 1.72% | 1.79% | 1.87% | 1.91% | 2.00% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.54% | 1.68% | 1.71% | 1.77% | 1.87% | 1.91% | 1.97% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.55% | 0.35% | 0.24% | 0.23% | 0.11% | (0.41)% | (0.41)% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||
December 31, 2014 (unaudited) and each year or period | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||
ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $25.04 | $24.03 | $20.96 | $23.71 | $19.06 | $19.52 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.18(2) | 0.34(2) | 0.30 | 0.24 | 0.26 | 0.04 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.27 | 4.13 | 3.72 | (1.16) | 4.57 | (0.50) | ||||||||||||||||||||
Total from Investment Operations | 0.45 | 4.47 | 4.02 | (0.92) | 4.83 | (0.46) | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.74) | (0.39) | (0.17) | (0.20) | (0.18) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | ||||||||||||||||||||
Total Distributions | (5.50) | (3.46) | (0.95) | (1.83) | (0.18) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $19.99 | $25.04 | $24.03 | $20.96 | $23.71 | $19.06 | ||||||||||||||||||||
Total Return** | 1.80% | 20.00% | 19.72% | (3.57)% | 25.40% | (2.36)% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $904,185 | $939,775 | $869,066 | $818,836 | $936,795 | $796,330 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $912,542 | $905,095 | $840,920 | $848,059 | $896,522 | $868,198 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.61% | 0.65% | 0.68% | 0.74% | 0.88% | 0.93% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.61% | 0.65% | 0.68% | 0.74% | 0.88% | 0.93% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.50% | 1.39% | 1.27% | 1.26% | 1.14% | 0.49% | ||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% |
Class I Shares
For a share outstanding during the period | ||||||||||||||||||||||||||||||
ended December 31, 2014 (unaudited), each | ||||||||||||||||||||||||||||||
year or period ended June 30 and the period | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $25.04 | $24.02 | $20.95 | $23.71 | $19.07 | $18.68 | $16.07 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.19(2) | 0.34(2) | 0.34 | 0.23 | 0.25 | 0.08 | 0.01 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.27 | 4.15 | 3.68 | (1.15) | 4.59 | 0.37 | 2.60 | |||||||||||||||||||||||
Total from Investment Operations | 0.46 | 4.49 | 4.02 | (0.92) | 4.84 | 0.45 | 2.61 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.74) | (0.40) | (0.17) | (0.21) | (0.20) | (0.06) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | – | |||||||||||||||||||||||
Total Distributions | (5.50) | (3.47) | (0.95) | (1.84) | (0.20) | (0.06) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.00 | $25.04 | $24.02 | $20.95 | $23.71 | $19.07 | $18.68 | |||||||||||||||||||||||
Total Return** | 1.82% | 20.07% | 19.71% | (3.58)% | 25.46% | 2.40% | 16.24% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,965,598 | $2,290,695 | $3,033,537 | $3,412,395 | $3,385,626 | $2,223,203 | $1,258,548 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,225,110 | $2,674,830 | $3,245,850 | $3,277,486 | $2,900,600 | $1,712,121 | $1,058,484 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.57% | 0.63% | 0.63% | 0.73% | 0.84% | 0.83% | 0.81% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.57% | 0.63% | 0.63% | 0.73% | 0.84% | 0.83% | 0.81% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.54% | 1.39% | 1.32% | 1.28% | 1.14% | 0.63% | 0.75% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class L Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $25.31 | $24.26 | $21.12 | $23.90 | $19.18 | $18.79 | $16.75 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.34(2) | 2.82 | 1.89 | 0.73 | 1.72 | 0.23 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.26 | 4.18 | 1.25 | (2.82) | 4.18 | (1.28) | 2.93 | |||||||||||||||||||||||
Total from Investment Operations | 0.43 | 4.52 | 4.07 | (0.93) | 4.91 | 0.44 | 3.16 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.70) | (0.40) | (0.15) | (0.22) | (0.19) | (0.05) | (0.33) | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | –(3) | – | (0.79) | |||||||||||||||||||||||
Total Distributions | (5.46) | (3.47) | (0.93) | (1.85) | (0.19) | (0.05) | (1.12) | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.28 | $25.31 | $24.26 | $21.12 | $23.90 | $19.18 | $18.79 | |||||||||||||||||||||||
Total Return** | 1.71% | 20.02% | 19.77% | (3.59)% | 25.66% | 2.36% | 20.67% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $18,453 | $22,872 | $24,332 | $33,875 | $63,549 | $61,880 | $350,003 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $20,282 | $24,042 | $29,252 | $54,047 | $66,281 | $347,623 | $298,741 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.71% | 0.75% | 0.77% | 0.84% | 0.99% | 1.02% | 1.13% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.71% | 0.68% | 0.60% | 0.77% | 0.74% | 0.76% | 0.87% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.37% | 1.36% | 1.38% | 1.27% | 1.32% | 0.85% | 1.11% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) | Perkins Mid Cap Value Fund | |||||||||||||||||
and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(4) | ||||||||||||||
Net Asset Value, Beginning of Period | $25.05 | $24.03 | $20.95 | $20.44 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.20(2) | 0.38(2) | 0.31 | (0.04) | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.26 | 4.14 | 3.74 | 0.55 | ||||||||||||||
Total from Investment Operations | 0.46 | 4.52 | 4.05 | 0.51 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.80) | (0.43) | (0.19) | – | ||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | – | ||||||||||||||
Total Distributions | (5.56) | (3.50) | (0.97) | – | ||||||||||||||
Net Asset Value, End of Period | $19.95 | $25.05 | $24.03 | $20.95 | ||||||||||||||
Total Return** | 1.83% | 20.25% | 19.89% | 2.50% | ||||||||||||||
Net Assets, End of Period (in thousands) | $365,642 | $398,115 | $222,244 | $21,405 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $368,380 | $306,197 | $129,631 | $8,142 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.46% | 0.49% | 0.52% | 0.58% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.46% | 0.49% | 0.52% | 0.57% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.65% | 1.57% | 1.44% | (3.02)% | ||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Period from May 31, 2012 (inception date) through June 30, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class R Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $24.86 | $23.83 | $20.86 | $23.59 | $19.00 | $18.64 | $16.07 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.11(3) | 0.19(3) | 0.16 | 0.10 | 0.12 | –(4) | (0.03) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.26 | 4.11 | 3.69 | (1.14) | 4.56 | 0.36 | 2.60 | |||||||||||||||||||||||
Total from Investment Operations | 0.37 | 4.30 | 3.85 | (1.04) | 4.68 | 0.36 | 2.57 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.45) | (0.20) | (0.10) | (0.06) | (0.09) | –(4) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | – | |||||||||||||||||||||||
Total Distributions | (5.21) | (3.27) | (0.88) | (1.69) | (0.09) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.02 | $24.86 | $23.83 | $20.86 | $23.59 | $19.00 | $18.64 | |||||||||||||||||||||||
Total Return** | 1.47% | 19.35% | 18.97% | (4.15)% | 24.64% | 1.93% | 15.99% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $106,730 | $127,464 | $163,302 | $161,056 | $170,602 | $103,961 | $71,203 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $114,313 | $143,754 | $162,747 | $157,701 | $146,674 | $94,163 | $64,070 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.21% | 1.25% | 1.26% | 1.34% | 1.49% | 1.52% | 1.53% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.21% | 1.25% | 1.26% | 1.34% | 1.49% | 1.52% | 1.53% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.88% | 0.77% | 0.69% | 0.66% | 0.47% | (0.04)% | 0.03% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
Class S Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $24.98 | $23.91 | $20.90 | $23.64 | $19.03 | $18.66 | $16.07 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.25(3) | 0.23 | 0.16 | 0.17 | 0.03 | (0.02) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.27 | 4.13 | 3.69 | (1.15) | 4.56 | 0.36 | 2.61 | |||||||||||||||||||||||
Total from Investment Operations | 0.40 | 4.38 | 3.92 | (0.99) | 4.73 | 0.39 | 2.59 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.46) | (0.24) | (0.13) | (0.12) | (0.12) | (0.02) | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | – | – | – | |||||||||||||||||||||||
Total Distributions | (5.22) | (3.31) | (0.91) | (1.75) | (0.12) | (0.02) | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.16 | $24.98 | $23.91 | $20.90 | $23.64 | $19.03 | $18.66 | |||||||||||||||||||||||
Total Return** | 1.61% | 19.65% | 19.27% | (3.90)% | 24.91% | 2.09% | 16.12% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $257,810 | $387,978 | $709,171 | $794,421 | $834,778 | $569,777 | $434,615 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $304,911 | $536,193 | $770,990 | $795,213 | $742,692 | $559,518 | $397,613 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.96% | 0.99% | 1.02% | 1.09% | 1.24% | 1.27% | 1.28% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.96% | 0.99% | 1.01% | 1.09% | 1.24% | 1.27% | 1.28% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.08% | 1.00% | 0.93% | 0.92% | 0.74% | 0.22% | 0.28% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
* | See “Federal Income Tax” 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. | |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Period from November 1, 2009 through June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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Class T Shares
For a share outstanding during the period | ||||||||||||||||||||||||||||||
ended December 31, 2014 (unaudited), each | ||||||||||||||||||||||||||||||
year or period ended June 30 and the year | Perkins Mid Cap Value Fund | |||||||||||||||||||||||||||||
ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $25.05 | $24.01 | $20.96 | $23.70 | $19.06 | $18.67 | $16.63 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.32(2) | 0.32 | 0.23 | 0.24 | 0.06 | 0.11 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.27 | 4.14 | 3.67 | (1.17) | 4.56 | 0.37 | 2.97 | |||||||||||||||||||||||
Total from Investment Operations | 0.44 | 4.46 | 3.99 | (0.94) | 4.80 | 0.43 | 3.08 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.68) | (0.35) | (0.16) | (0.17) | (0.16) | (0.04) | (0.25) | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.76) | (3.07) | (0.78) | (1.63) | –(3) | – | (0.79) | |||||||||||||||||||||||
Total Distributions | (5.44) | (3.42) | (0.94) | (1.80) | (0.16) | (0.04) | (1.04) | |||||||||||||||||||||||
Net Asset Value, End of Period | $20.05 | $25.05 | $24.01 | $20.96 | $23.70 | $19.06 | $18.67 | |||||||||||||||||||||||
Total Return** | 1.73% | 19.96% | 19.56% | (3.66)% | 25.24% | 2.27% | 20.27% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,166,925 | $3,996,592 | $5,584,059 | $6,202,441 | $7,796,637 | $6,830,168 | $7,321,160 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,504,317 | $4,815,160 | $6,004,535 | $6,737,743 | $7,597,129 | $7,518,444 | $5,907,999 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.71% | 0.74% | 0.77% | 0.84% | 0.99% | 1.03% | 1.11% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.71% | 0.73% | 0.76% | 0.83% | 0.99% | 1.03% | 1.11% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.37% | 1.29% | 1.19% | 1.16% | 1.02% | 0.49% | 0.84% | |||||||||||||||||||||||
Portfolio Turnover Rate | 18% | 51% | 60% | 54% | 66% | 44% | 88% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 21
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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 Mid Cap Value Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is
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no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
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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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The
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Notes to Financial Statements (unaudited) (continued)
Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 44,100,000 | $– | $ | (44,100,000) | $– | ||||||||||||
RBC Capital Markets Corp. | 220,000,000 | – | (220,000,000) | – | ||||||||||||||
Total | $ | 264,100,000 | $– | $ | (264,100,000) | $– | ||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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
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bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | 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 or base fee rate, as applicable (expressed as an annual rate).
Fund | Base Fee Rate (%) | |||||
Perkins Mid Cap Value Fund | 0.64 | |||||
For the 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 | |||||
Perkins Mid Cap Value Fund | Russell Midcap® Value Index | |||||
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 the Fund 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 Fund’s prospectuses and statements of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the period ended December 31, 2014 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Mid Cap Value Fund | 0.42 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee 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 Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Mid Cap Value Fund | 0.77 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services receives an administrative fee based on the average daily net assets Class L Shares of the Fund based on the average proportion of the Fund’s total net assets sold directly and the average proportion of the Fund’s net assets sold through financial intermediaries on a monthly basis. The asset-weighted fee is calculated by applying a blended annual fee rate of 0.12% on average net assets for the proportion of assets sold directly and 0.25% on average net assets for the proportion of assets sold through financial intermediaries. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations. Janus Services has agreed to waive all or a portion of this fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Services or Janus Capital 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 Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, 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. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in
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“12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Mid Cap Value Fund | $ | 5,590 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Mid Cap Value Fund | $ | 1,712 | ||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
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, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Perkins Mid Cap Value Fund | $ | 5,624,181,658 | $ | 1,728,223,794 | $ | (104,521,102) | $ | 1,623,702,692 | ||||||||||
5. | Capital Share Transactions |
Perkins Mid Cap Value Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 1,190,417 | 5,594,564 | ||||||||
Reinvested dividends and distributions | 2,702,929 | 4,146,398 | ||||||||
Shares repurchased | (8,040,908) | (28,091,375) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,147,562) | (18,350,413) | ||||||||
Shares Outstanding, Beginning of Period | 19,068,715 | 37,419,128 | ||||||||
Shares Outstanding, End of Period | 14,921,153 | 19,068,715 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 443,754 | 750,159 | ||||||||
Reinvested dividends and distributions | 1,182,289 | 766,364 | ||||||||
Shares repurchased | (1,008,094) | (2,999,642) | ||||||||
Net Increase/(Decrease) in Fund Shares | 617,949 | (1,483,119) | ||||||||
Shares Outstanding, Beginning of Period | 6,513,351 | 7,996,470 | ||||||||
Shares Outstanding, End of Period | 7,131,300 | 6,513,351 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 419,839 | 1,112,198 | ||||||||
Reinvested dividends and distributions | 9,625,260 | 5,125,907 | ||||||||
Shares repurchased | (2,333,750) | (4,885,340) | ||||||||
Net Increase/(Decrease) in Fund Shares | 7,711,349 | 1,352,765 | ||||||||
Shares Outstanding, Beginning of Period | 37,525,950 | 36,173,185 | ||||||||
Shares Outstanding, End of Period | 45,237,299 | 37,525,950 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 18,208,203 | 23,049,685 | ||||||||
Reinvested dividends and distributions | 20,070,726 | 13,375,489 | ||||||||
Shares repurchased | (31,447,093) | (71,226,785) | ||||||||
Net Increase/(Decrease) in Fund Shares | 6,831,836 | (34,801,611) | ||||||||
Shares Outstanding, Beginning of Period | 91,470,786 | 126,272,397 | ||||||||
Shares Outstanding, End of Period | 98,302,622 | 91,470,786 | ||||||||
Transactions in Fund Shares – Class L Shares: | ||||||||||
Shares sold | 33,892 | 24,139 | ||||||||
Reinvested dividends and distributions | 164,546 | 117,431 | ||||||||
Shares repurchased | (192,269) | (240,733) | ||||||||
Net Increase/(Decrease) in Fund Shares | 6,169 | (99,163) | ||||||||
Shares Outstanding, Beginning of Period | 903,721 | 1,002,884 | ||||||||
Shares Outstanding, End of Period | 909,890 | 903,721 |
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Perkins Mid Cap Value Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 1,420,859 | 9,263,844 | ||||||||
Reinvested dividends and distributions | 3,969,655 | 1,647,764 | ||||||||
Shares repurchased | (2,958,547) | (4,264,457) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,431,967 | 6,647,151 | ||||||||
Shares Outstanding, Beginning of Period | 15,894,801 | 9,247,650 | ||||||||
Shares Outstanding, End of Period | 18,326,768 | 15,894,801 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 466,193 | 1,208,749 | ||||||||
Reinvested dividends and distributions | 1,032,663 | 705,044 | ||||||||
Shares repurchased | (1,294,589) | (3,638,728) | ||||||||
Net Increase/(Decrease) in Fund Shares | 204,267 | (1,724,935) | ||||||||
Shares Outstanding, Beginning of Period | 5,127,724 | 6,852,659 | ||||||||
Shares Outstanding, End of Period | 5,331,991 | 5,127,724 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 1,515,507 | 5,098,037 | ||||||||
Reinvested dividends and distributions | 2,678,386 | 3,002,312 | ||||||||
Shares repurchased | (6,935,576) | (22,223,782) | ||||||||
Net Increase/(Decrease) in Fund Shares | (2,741,683) | (14,123,433) | ||||||||
Shares Outstanding, Beginning of Period | 15,531,890 | 29,655,323 | ||||||||
Shares Outstanding, End of Period | 12,790,207 | 15,531,890 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 5,392,007 | 17,778,672 | ||||||||
Reinvested dividends and distributions | 34,237,171 | 27,339,038 | ||||||||
Shares repurchased | (41,209,642) | (118,113,969) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,580,464) | (72,996,259) | ||||||||
Shares Outstanding, Beginning of Period | 159,562,351 | 232,558,610 | ||||||||
Shares Outstanding, End of Period | 157,981,887 | 159,562,351 |
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Mid Cap Value Fund | $ | 1,388,555,013 | $ | 2,911,253,153 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Useful Information About Your Fund Report (unaudited) (continued)
Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81211 | 125-24-93032 02-15 |
Table of Contents
semiannual report
December 31, 2014
Perkins Select Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Perkins Select Value Fund
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Perkins Select Value Fund (unaudited)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward to risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | ![]() Robert Perkins co-portfolio manager | ![]() Alec Perkins co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended December 31, 2014, Perkins Select Value Fund’s Class I Shares returned 1.43%, while the Fund’s primary benchmark, the Russell 3000 Value Index, returned 4.39%. Our holdings in energy weighed on relative performance, although our slight underweight in energy was additive on a relative basis. Our holdings in financials and industrials were also detractors from relative performance. Our underweight in materials and telecommunication services, as well as our holdings in consumer staples, were contributors to relative performance.
MARKET COMMENTARY
Stocks rose in the period while the U.S. economy continued to gain steam, delivering nearly 5% GDP growth in the third quarter, with the unemployment rate falling to under 6% amid continued indications of wage growth. Persistently high underemployment, however, remains a troubling counterweight. Corporate balance sheets remain flush with cash but companies continue to add leverage by tapping financing at record low interest rates. Earnings growth also remained strong, coupled with equity valuations that appear buoyed by market optimism. All this occurred with central bank policy accommodation that remains very friendly to risk assets on a global basis although the Federal Reserve (Fed) could become less so in the coming year.
The recent fall in energy prices is likely a blessing for the U.S. consumer, but does not come without risk to the market as well. Short term, it should provide a boost in consumer spending, evidenced by early reports of healthy holiday retail activity. Long term, however, a significant portion of U.S. capital expenditures are attributable to the energy complex, and less exploration and production activity could negatively impact the earnings of those firms with exposure. In addition, the U.S. shale revolution has stimulated economic activity in places such as North Dakota and Pennsylvania with high paying jobs and local economies that have witnessed rising oil prices. We are just now starting to experience layoffs at energy companies and companies that generate meaningful revenue from energy company capital spending. Energy companies have also been active participants in the debt markets, particularly in high-yield issuance, and risks around substantially squeezed profits could spread to financial markets. Clearly, there are winners from lower crude prices, but the collateral damage could appear later. The added variable here is the geopolitical consequences of lower oil prices on volatile countries such as Russia, Venezuela, and much of the Middle East. These risks seem to be reflected to some degree in the price of energy stocks, but the broader markets continued to march to new highs.
DETRACTORS
QEP Midstream Partners LP weighed the most on performance. QEP Midstream Partners LP owns, operates, acquires and develops midstream gathering systems and pipelines. The shares of the company fell in the period as the company’s general partner, QEP Resources, sold its Field Services midstream business and its 58% ownership in QEP Midstream Partners LP’s shares to Tesoro Logistics LP for approximately $2.5 billion. QEP Midstream Partners LP distribution growth outlook effectively dissolved as its new general partner, Tesoro Logistics LP, did not have the same incentive as QEP Resources to drop down accretive assets and grow the distribution at QEP Midstream. Furthermore, the steep decline in global commodity prices led to a sell-off across master limited partnerships (MLPs). We exited our position with a loss in the stock as we believed that QEP’s deal with Tesoro Logistics LP was not in the best long-term interest of QEP shareholders.
Plains GP Holdings LP (PAGP) was also a top detractor. PAGP is the general partner of Plains All American Pipeline LP. PAGP has increasing claims on the cash flows generated by its limited partner, which has benefited
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Perkins Select Value Fund (unaudited)
from increasing crude oil volume growth in the U.S. The shares modestly underperformed its MLP peers as a very strong third quarter earnings report was not enough to offset conservative 2015 distribution guidance and the rapid decline in crude oil prices. The company also acquired 50% of the BridgeTex pipeline joint venture from Occidental Petroleum that should complement PAGP’s growing asset base in the Permian Basin.
CONTRIBUTORS
Casey’s General Stores was our most significant individual contributor. Casey’s General Stores operates gas stations and convenience stores throughout small towns in the Midwest, and is slowly expanding into the Southeast. The steep decline in crude, and ultimately gasoline prices, were the main driver behind the stock’s rally in the quarter. Gasoline margins at Casey’s typically benefit when wholesale gasoline prices decline as retail prices at the pump are stickier on the way down. Casey’s has done a solid job in executing its growth strategy – evidenced by strength in same-store sales of grocery items and prepared foods during the quarter. Over the past two years, other publicly traded convenience store chains have been acquired by MLPs, adopted MLP structures, or have been acquired by parent companies that own MLPs, any of which could unlock further value at Casey’s should management elect to go that route. While we did trim some of our holdings on price strength, Casey’s remains our largest holding in the Fund.
Zoetis, an animal health company, was another top contributor as it continued to outperform in the fourth quarter. In addition to strong fundamental performance, the stock reacted positively to both the company’s announced strategy for operational improvement and capital deployment, and the 10% ownership stake taken by activist investor, Pershing Square. Given the stable underlying fundamentals of the animal health industry, the company’s strong competitive positioning and focus on operational improvement, and the potential to be an acquisition target post the two-year anniversary of its tax-free spinoff from Pfizer, we continue to hold a position.
MARKET OUTLOOK
As we look ahead, the factors that led us to the upcoming six-year anniversary of the bull market continue to be intact, namely extremely loose monetary policy on a global basis. With the 10-year Treasury Bond at record-low yields and macroeconomic concerns plaguing international markets, it seems to us that the U.S. equity market could continue to be “the best house on a bad block.” That said, the Fed has stated its intention, and has initiated the process, of slowly reducing the amount of liquidity flooded into the system while other central banks are committed to easing. When looking at economic growth and recent jobs data, one could argue that the data set indicates the U.S. economy is doing just fine and that some accommodation can be curtailed. The counterargument is that the economy is still growing at a tepid pace for this point in a normal economic recovery and that, given the large amount of debt in the system, central bankers fear debt deflation, so interest rates can stay lower for longer. In addition, the strengthening dollar adds another element of risk to the equation for the U.S. economy.
Although there are certainly bright spots in the market, we believe they may not warrant the current high level of investor optimism. While there may be more gains ahead, we believe there is also the potential for greater volatility, and therefore remain cautious in our portfolio positioning. Aside from the energy segment, increased volatility could originate from the Fed, both from communication to the market as well as from its policy intentions. With valuations at what we believe are overvalued levels, there seems to be little room for error in equity prices.
With the U.S. equity market hitting new all-time highs this year, we are not finding compelling values on an absolute basis, but we are seeking to deploy capital in relatively less risky, high-quality companies that we believe will perform respectably in any macroeconomic environment. Optimism seems to be fully priced into stocks, as it has over the past few years, showing some disregard of risk and a large willingness to put more faith in market momentum instead of company fundamentals. Most troubling, in our opinion, is the broad complacency and thin trading volume lifting stock prices higher. There simply is not much real liquidity in the market to absorb prolonged selling pressures should any of the numerous macroeconomic issues suddenly start to escalate and truly spook investors beyond a brief market dip. This is especially true in fixed income markets where even the U.S. Treasury Department’s Office of Financial Research has noted excessive risk taking, declining market liquidity as a result of recent bank regulatory changes, and some financing activities moving to less transparent areas of the financial system as potential risks.
Similar to much of this year, in the period we trimmed positions in a wide variety of industries where we felt the reward-to-risk ratio was no longer attractive. We exited positions in energy after reevaluating the downside scenario in a lower oil price environment and trimmed a handful of financial stocks to name a few. Purchases of new names also occurred in each of those areas as we
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(unaudited)
felt the reward-to-risk trade-off was more attractive and to take advantage of price weakness in the energy sector.
If, as we expect, volatility begins to move up market capitalization, it could provide additional value potential. In this environment, investors may want to refocus on bottom-up stock selection and downside protection. Looking ahead, we believe our portfolio remains well positioned to navigate the current market climate, in terms of both risk exposure and long-term upside potential.
Thank you for your investment with us in Perkins Select Value Fund.
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Perkins Select Value Fund (unaudited)
Perkins Select Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 1.19% | |||
Zoetis, Inc. | 0.50% | |||
AbbVie, Inc. | 0.43% | |||
Abbott Laboratories | 0.36% | |||
Union Pacific Corp. | 0.31% |
5 Bottom Performers – Holdings
Contribution | ||||
QEP Midstream Partners LP | –0.92% | |||
Pfeiffer Vacuum Technology AG | –0.63% | |||
Plains GP Holdings LP – Class A | –0.52% | |||
Whiting Petroleum Corp. | –0.50% | |||
Occidental Petroleum Corp. | –0.43% |
5 Top Performers – Sectors*
Fund Weighting | Russell 3000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Materials | 0.18% | 1.42% | 3.38% | |||||||||
Telecommunication Services | 0.12% | 0.42% | 2.11% | |||||||||
Information Technology | 0.03% | 12.23% | 9.37% | |||||||||
Consumer Staples | 0.03% | 6.28% | 6.79% | |||||||||
Health Care | –0.24% | 26.09% | 12.85% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 3000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | –0.71% | 19.50% | 29.95% | |||||||||
Energy | –0.68% | 10.75% | 12.16% | |||||||||
Utilities | –0.37% | 1.85% | 6.20% | |||||||||
Industrials | –0.34% | 11.64% | 10.46% | |||||||||
Other** | –0.31% | 7.89% | 0.00% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Casey’s General Stores, Inc. Food & Staples Retailing | 5.2% | |||
Abbott Laboratories Health Care Equipment & Supplies | 3.4% | |||
Irish Continental Group PLC Marine | 3.1% | |||
Johnson & Johnson Pharmaceuticals | 2.7% | |||
Weyerhaeuser Co. Real Estate Investment Trusts (REITs) | 2.6% | |||
17.0% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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Perkins Select Value Fund (unaudited)
Performance
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Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Perkins Select Value Fund – Class A Shares | |||||||||||
NAV | 1.23% | 6.97% | 14.36% | 1.34% | 1.08% | ||||||
MOP | –4.57% | 0.83% | 12.16% | ||||||||
Perkins Select Value Fund – Class C Shares | |||||||||||
NAV | 0.86% | 6.20% | 13.51% | 2.10% | 1.83% | ||||||
CDSC | –0.10% | 5.20% | 13.51% | ||||||||
Perkins Select Value Fund – Class D Shares(1) | 1.34% | 7.25% | 14.60% | 1.06% | 0.81% | ||||||
Perkins Select Value Fund – Class I Shares | 1.43% | 7.42% | 14.78% | 0.89% | 0.64% | ||||||
Perkins Select Value Fund – Class S Shares | 1.20% | 7.02% | 14.13% | 1.40% | 1.17% | ||||||
Perkins Select Value Fund – Class T Shares | 1.24% | 7.15% | 14.48% | 1.16% | 0.90% | ||||||
Russell 3000® Value Index | 4.39% | 12.70% | 21.96% | ||||||||
Morningstar Quartile – Class I Shares | – | 3rd | 4th | ||||||||
Morningstar Ranking – based on total returns for Mid-Cap Value Funds | – | 340/475 | 437/451 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
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(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
The expense ratios for Class S Shares are estimated.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
Holding a meaningful portion of assets in cash or cash equivalents may negatively affect performance.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 15, 2011 | |
(1) | Closed to new investors. |
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Perkins Select Value Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,012.30 | $ | 5.33 | $ | 1,000.00 | $ | 1,019.91 | $ | 5.35 | 1.05% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,008.60 | $ | 9.26 | $ | 1,000.00 | $ | 1,015.98 | $ | 9.30 | 1.83% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,013.40 | $ | 4.11 | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,014.30 | $ | 3.30 | $ | 1,000.00 | $ | 1,021.93 | $ | 3.31 | 0.65% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,012.00 | $ | 5.78 | $ | 1,000.00 | $ | 1,019.46 | $ | 5.80 | 1.14% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,012.40 | $ | 4.57 | $ | 1,000.00 | $ | 1,020.67 | $ | 4.58 | 0.90% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
8 | DECEMBER 31, 2014
Table of Contents
Perkins Select Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Common Stocks – 94.3% | ||||||||||
Chemicals – 1.0% | ||||||||||
14,000 | FMC Corp. | $ | 798,420 | |||||||
Commercial Banks – 6.6% | ||||||||||
15,000 | Bank of Marin Bancorp | 788,850 | ||||||||
20,000 | FCB Financial Holdings, Inc. – Class A* | 492,800 | ||||||||
84,000 | Heritage Financial Corp. | 1,474,200 | ||||||||
14,000 | PNC Financial Services Group, Inc. | 1,277,220 | ||||||||
22,000 | Wells Fargo & Co. | 1,206,040 | ||||||||
| ||||||||||
5,239,110 | ||||||||||
Commercial Services & Supplies – 2.6% | ||||||||||
24,000 | Tyco International PLC | 1,052,640 | ||||||||
22,000 | Waste Connections, Inc. | 967,780 | ||||||||
| ||||||||||
2,020,420 | ||||||||||
Communications Equipment – 1.1% | ||||||||||
12,000 | QUALCOMM, Inc. | 891,960 | ||||||||
Electric Utilities – 1.7% | ||||||||||
28,000 | NRG Yield, Inc. – Class A | 1,319,920 | ||||||||
Electrical Equipment – 1.5% | ||||||||||
40,000 | Babcock & Wilcox Co. | 1,212,000 | ||||||||
Energy Equipment & Services – 1.3% | ||||||||||
6,000 | Dril-Quip, Inc.* | 460,380 | ||||||||
10,000 | Oceaneering International, Inc. | 588,100 | ||||||||
| ||||||||||
1,048,480 | ||||||||||
Food & Staples Retailing – 5.2% | ||||||||||
45,000 | Casey’s General Stores, Inc. | 4,064,400 | ||||||||
Food Products – 1.2% | ||||||||||
140,000 | Orkla ASA | 954,793 | ||||||||
Health Care Equipment & Supplies – 8.3% | ||||||||||
60,000 | Abbott Laboratories | 2,701,200 | ||||||||
25,000 | Baxter International, Inc. | 1,832,250 | ||||||||
21,000 | Stryker Corp. | 1,980,930 | ||||||||
| ||||||||||
6,514,380 | ||||||||||
Health Care Providers & Services – 3.6% | ||||||||||
12,000 | Laboratory Corp. of America Holdings* | 1,294,800 | ||||||||
25,000 | Landauer, Inc. | 853,500 | ||||||||
20,000 | Premier, Inc. – Class A* | 670,600 | ||||||||
| ||||||||||
2,818,900 | ||||||||||
Health Care Technology – 1.3% | ||||||||||
30,000 | Omnicell, Inc.* | 993,600 | ||||||||
Household Products – 0.9% | ||||||||||
8,000 | Procter & Gamble Co. | 728,720 | ||||||||
Information Technology Services – 2.2% | ||||||||||
28,000 | Jack Henry & Associates, Inc. | 1,739,920 | ||||||||
Life Sciences Tools & Services – 1.5% | ||||||||||
5,000 | Thermo Fisher Scientific, Inc. | 626,450 | ||||||||
5,000 | Waters Corp.* | 563,600 | ||||||||
| ||||||||||
1,190,050 | ||||||||||
Machinery – 2.3% | ||||||||||
22,000 | Pfeiffer Vacuum Technology AG | 1,825,958 | ||||||||
Marine – 3.1% | ||||||||||
620,000 | Irish Continental Group PLC | 2,424,919 | ||||||||
Media – 0.6% | ||||||||||
8,000 | CBS Corp. – Class B | 442,720 | ||||||||
Oil, Gas & Consumable Fuels – 7.9% | ||||||||||
5,000 | Anadarko Petroleum Corp. | 412,500 | ||||||||
212,919 | Lone Pine Resources Canada, Ltd.*,§ | 129,229 | ||||||||
212,919 | Lone Pine Resources, Inc.*,§ | 135,493 | ||||||||
16,000 | Noble Energy, Inc. | 758,880 | ||||||||
20,000 | Occidental Petroleum Corp. | 1,612,200 | ||||||||
60,000 | Plains GP Holdings LP – Class A | 1,540,800 | ||||||||
24,000 | Royal Dutch Shell PLC (ADR) | 1,606,800 | ||||||||
| ||||||||||
6,195,902 | ||||||||||
Pharmaceuticals – 12.7% | ||||||||||
25,000 | AbbVie, Inc. | 1,636,000 | ||||||||
16,000 | GlaxoSmithKline PLC (ADR) | 683,840 | ||||||||
20,000 | Johnson & Johnson | 2,091,400 | ||||||||
25,000 | Merck & Co., Inc. | 1,419,750 | ||||||||
18,000 | Novartis AG (ADR) | 1,667,880 | ||||||||
18,000 | Teva Pharmaceutical Industries, Ltd. (ADR) | 1,035,180 | ||||||||
35,000 | Zoetis, Inc. | 1,506,050 | ||||||||
| ||||||||||
10,040,100 | ||||||||||
Real Estate Investment Trusts (REITs) – 10.1% | ||||||||||
12,000 | Alexandria Real Estate Equities, Inc. | 1,064,880 | ||||||||
25,000 | Home Properties, Inc. | 1,640,000 | ||||||||
27,000 | Plum Creek Timber Co., Inc. | 1,155,330 | ||||||||
28,000 | Potlatch Corp. | 1,172,360 | ||||||||
12,000 | Ventas, Inc. | 860,400 | ||||||||
58,000 | Weyerhaeuser Co. | 2,081,620 | ||||||||
| ||||||||||
7,974,590 | ||||||||||
Road & Rail – 3.0% | ||||||||||
8,000 | Kansas City Southern | 976,240 | ||||||||
12,000 | Union Pacific Corp. | 1,429,560 | ||||||||
| ||||||||||
2,405,800 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.8% | ||||||||||
32,000 | Microchip Technology, Inc. | 1,443,520 | ||||||||
Software – 8.0% | ||||||||||
16,000 | Check Point Software Technologies, Ltd.* | 1,257,120 | ||||||||
45,000 | Informatica Corp.* | 1,716,075 | ||||||||
15,000 | Microsoft Corp. | 696,750 | ||||||||
32,000 | Oracle Corp. | 1,439,040 | ||||||||
28,000 | Synopsys, Inc.* | 1,217,160 | ||||||||
| ||||||||||
6,326,145 | ||||||||||
Specialty Retail – 1.5% | ||||||||||
60,000 | MarineMax, Inc.* | 1,203,000 | ||||||||
Technology Hardware, Storage & Peripherals – 1.1% | ||||||||||
30,000 | EMC Corp. | 892,200 | ||||||||
Thrifts & Mortgage Finance – 2.2% | ||||||||||
100,000 | OceanFirst Financial Corp. | 1,714,000 | ||||||||
Total Common Stocks (cost $61,597,468) | 74,423,927 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Select Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Repurchase Agreements – 6.6% | ||||||||||
$5,200,000 | Undivided interest of 6% in a joint repurchase agreement (principal amount $81,900,000 with a maturity value of $81,900,228) with ING Financial Markets LLC, 0.0500%, dated 12/31/14, maturing 1/2/15 to be repurchased at $5,200,014 collateralized by $82,714,877 in U.S. Treasuries, 0.1250% – 4.3750%, 2/29/16 – 2/15/44, with a value of $83,542,988 (cost $5,200,000) | $ | 5,200,000 | |||||||
Total Investments (total cost $66,797,468) – 100.9% | 79,623,927 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.9)% | (733,951) | |||||||||
Net Assets – 100% | $ | 78,889,976 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 67,902,715 | 85 | .3% | ||||
Ireland | 2,424,919 | 3 | .0 | |||||
Israel | 2,292,300 | 2 | .9 | |||||
United Kingdom | 2,290,640 | 2 | .9 | |||||
Germany | 1,825,958 | 2 | .3 | |||||
Switzerland | 1,667,880 | 2 | .1 | |||||
Norway | 954,793 | 1 | .2 | |||||
Canada | 264,722 | 0 | .3 | |||||
Total | $ | 79,623,927 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 6.5%. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Russell 3000® Value Index | Measures the performance of the broad value segment of the U.S. equity universe. The index includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
* | Non-income producing security. |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Perkins Select Value Fund | ||||||||||||||
Lone Pine Resources Canada, Ltd. | 2/4/14 | $ | 135,493 | $ | 129,229 | 0.2 | % | |||||||
Lone Pine Resources, Inc. | 2/4/14 | 135,493 | 135,493 | 0.2 | ||||||||||
Total | $ | 270,986 | $ | 264,722 | 0.4 | % | ||||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Perkins Select Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
Food Products | $ | – | $ | 954,793 | $ | – | |||||
Machinery | – | 1,825,958 | – | ||||||||
Marine | – | 2,424,919 | – | ||||||||
Oil, Gas & Consumable Fuels | 5,931,180 | – | 264,722 | ||||||||
All Other | 63,022,355 | – | – | ||||||||
Repurchase Agreements | – | 5,200,000 | – | ||||||||
Total Assets | $ | 68,953,535 | $ | 10,405,670 | $ | 264,722 | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Perkins Select Value Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 66,797,468 | ||
Investments at value | $ | 74,423,927 | ||
Repurchase agreements at value | 5,200,000 | |||
Cash | 37,311 | |||
Non-interested Trustees’ deferred compensation | 1,615 | |||
Receivables: | ||||
Fund shares sold | 173,208 | |||
Dividends | 90,395 | |||
Foreign dividend tax reclaim | 29,087 | |||
Interest | 15 | |||
Other assets | 1,118 | |||
Total Assets | 79,956,676 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 1,003,105 | |||
Fund shares repurchased | 12,251 | |||
Advisory fees | 9,232 | |||
Fund administration fees | 707 | |||
Transfer agent fees and expenses | 1,555 | |||
12b-1 Distribution and shareholder servicing fees | 160 | |||
Non-interested Trustees’ fees and expenses | 495 | |||
Non-interested Trustees’ deferred compensation fees | 1,615 | |||
Accrued expenses and other payables | 37,580 | |||
Total Liabilities | 1,066,700 | |||
Net Assets | $ | 78,889,976 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | Perkins Select Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 65,665,569 | ||
Undistributed net investment income/(loss)* | (4,529) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 404,309 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 12,824,627 | |||
Total Net Assets | $ | 78,889,976 | ||
Net Assets - Class A Shares | $ | 113,891 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,293 | |||
Net Asset Value Per Share(2) | $ | 12.26 | ||
Maximum Offering Price Per Share(3) | $ | 13.01 | ||
Net Assets - Class C Shares | $ | 137,529 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 11,275 | |||
Net Asset Value Per Share(2) | $ | 12.20 | ||
Net Assets - Class D Shares | $ | 6,453,079 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 526,004 | |||
Net Asset Value Per Share | $ | 12.27 | ||
Net Assets - Class I Shares | $ | 69,408,621 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,653,778 | |||
Net Asset Value Per Share | $ | 12.28 | ||
Net Assets - Class S Shares | $ | 50,705 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,139 | |||
Net Asset Value Per Share | $ | 12.25 | ||
Net Assets - Class T Shares | $ | 2,726,151 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 222,486 | |||
Net Asset Value Per Share | $ | 12.25 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $5,200,000. | |
(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 Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Select | ||||
For the period ended December 31, 2014 (unaudited) | Value Fund | |||
Investment Income: | ||||
Interest | $ | 1,204 | ||
Dividends | 788,891 | |||
Foreign tax withheld | (2,054) | |||
Total Investment Income | 788,041 | |||
Expenses: | ||||
Advisory fees | 234,952 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 162 | |||
Class C Shares | 778 | |||
Class S Shares | 43 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 3,819 | |||
Class S Shares | 43 | |||
Class T Shares | 2,958 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 91 | |||
Class C Shares | 122 | |||
Class I Shares | 42 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 8 | |||
Class C Shares | 16 | |||
Class D Shares | 1,355 | |||
Class I Shares | 1,519 | |||
Class T Shares | 60 | |||
Shareholder reports expense | 1,381 | |||
Registration fees | 68,353 | |||
Custodian fees | 2,307 | |||
Professional fees | 20,761 | |||
Non-interested Trustees’ fees and expenses | 737 | |||
Fund administration fees | 4,133 | |||
Other expenses | 4,067 | |||
Total Expenses | 347,707 | |||
Less: Excess Expense Reimbursement | (72,805) | |||
Net Expenses | 274,902 | |||
Net Investment Income/(Loss) | 513,139 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 1,485,837 | |||
Total Net Realized Gain/(Loss) on Investments | 1,485,837 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (1,146,641) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (1,146,641) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 852,335 |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Perkins Select Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 513,139 | $ | 1,416,924 | ||||
Net realized gain/(loss) on investments | 1,485,837 | 5,114,788 | ||||||
Change in unrealized net appreciation/depreciation | (1,146,641) | 6,460,223 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 852,335 | 12,991,935 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (1,512) | (1,024) | ||||||
Class C Shares | (556) | (724) | ||||||
Class D Shares | (101,067) | (52,894) | ||||||
Class I Shares | (1,246,284) | (938,011) | ||||||
Class S Shares | (768) | (74) | ||||||
Class T Shares | (41,774) | (16,472) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (5,161) | (6,792) | ||||||
Class C Shares | (6,232) | (9,674) | ||||||
Class D Shares | (284,474) | (284,167) | ||||||
Class I Shares | (3,184,240) | (4,299,776) | ||||||
Class S Shares | (2,260) | (812) | ||||||
Class T Shares | (119,583) | (92,153) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (4,993,911) | (5,702,573) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 33,004 | 55,607 | ||||||
Class C Shares | – | 45,573 | ||||||
Class D Shares | 698,387 | 3,175,088 | ||||||
Class I Shares | 353,012 | 7,830,035 | ||||||
Class S Shares | 35,000 | – | ||||||
Class T Shares | 1,147,642 | 715,577 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 6,673 | 7,816 | ||||||
Class C Shares | 6,788 | 10,398 | ||||||
Class D Shares | 380,054 | 328,758 | ||||||
Class I Shares | 4,430,524 | 5,237,787 | ||||||
Class S Shares | 3,028 | 886 | ||||||
Class T Shares | 161,208 | 108,625 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (52,202) | (51,190) | ||||||
Class C Shares | (45,956) | (8,750) | ||||||
Class D Shares | (1,152,114) | (3,025,431) | ||||||
Class I Shares | (11,931,131) | (3,953,189) | ||||||
Class S Shares | – | – | ||||||
Class T Shares | (484,329) | (301,453) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (6,410,412) | 10,176,137 | ||||||
Net Increase/(Decrease) in Net Assets | (10,551,988) | 17,465,499 | ||||||
Net Assets: | ||||||||
Beginning of period | 89,441,964 | 71,976,465 | ||||||
End of period | $ | 78,889,976 | $ | 89,441,964 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (4,529) | $ | 874,293 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and each | Perkins Select Value Fund | |||||||||||||||||
year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.85 | $11.76 | $10.82 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.06(2) | 0.17(2) | 0.11 | 0.04 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.10 | 1.79 | 1.66 | 0.78 | ||||||||||||||
Total from Investment Operations | 0.16 | 1.96 | 1.77 | 0.82 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.17) | (0.11) | (0.10) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.75) | (0.87) | (0.83) | – | ||||||||||||||
Net Asset Value, End of Period | $12.26 | $12.85 | $11.76 | $10.82 | ||||||||||||||
Total Return** | 1.23% | 17.25% | 17.16% | 8.20% | ||||||||||||||
Net Assets, End of Period (in thousands) | $114 | $132 | $109 | $89 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $128 | $114 | $108 | $48 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.22% | 1.34% | 1.35% | 1.51% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.05% | 1.23% | 1.21% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.89% | 1.39% | 1.13% | 1.43% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
Class C Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) and | Perkins Select Value Fund | |||||||||||||||||
each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.72 | $11.68 | $10.78 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | –(2)(3) | 0.08(2) | 0.03 | 0.02 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.11 | 1.78 | 1.65 | 0.76 | ||||||||||||||
Total from Investment Operations | 0.11 | 1.86 | 1.68 | 0.78 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.05) | (0.06) | (0.05) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.63) | (0.82) | (0.78) | – | ||||||||||||||
Net Asset Value, End of Period | $12.20 | $12.72 | $11.68 | $10.78 | ||||||||||||||
Total Return** | 0.86% | 16.38% | 16.24% | 7.80% | ||||||||||||||
Net Assets, End of Period (in thousands) | $138 | $183 | $124 | $77 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $154 | $157 | $103 | $34 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.00% | 2.10% | 2.05% | 2.40% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.83% | 1.95% | 1.97% | 1.99% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.08% | 0.65% | 0.36% | 0.68% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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Class D Shares
For a share outstanding during the period ended | Perkins Select Value Fund | |||||||||||||||||
December 31, 2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.88 | $11.78 | $10.83 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.07(2) | 0.19(2) | 0.13 | 0.04 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.11 | 1.81 | 1.66 | 0.79 | ||||||||||||||
Total from Investment Operations | 0.18 | 2.00 | 1.79 | 0.83 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.21) | (0.14) | (0.11) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.79) | (0.90) | (0.84) | – | ||||||||||||||
Net Asset Value, End of Period | $12.27 | $12.88 | $11.78 | $10.83 | ||||||||||||||
Total Return** | 1.34% | 17.56% | 17.34% | 8.30% | ||||||||||||||
Net Assets, End of Period (in thousands) | $6,453 | $6,830 | $5,742 | $3,004 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $6,278 | $5,827 | $4,266 | $1,593 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.00% | 1.06% | 1.01% | 1.74% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.81% | 0.97% | 1.01% | 1.19% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.11% | 1.57% | 1.43% | 1.37% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
Class I Shares
For a share outstanding during the period ended | Perkins Select Value Fund | |||||||||||||||||
December 31, 2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.90 | $11.80 | $10.83 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.08(2) | 0.22(2) | 0.15 | 0.07 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.11 | 1.81 | 1.67 | 0.76 | ||||||||||||||
Total from Investment Operations | 0.19 | 2.03 | 1.82 | 0.83 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.23) | (0.17) | (0.12) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.81) | (0.93) | (0.85) | – | ||||||||||||||
Net Asset Value, End of Period | $12.28 | $12.90 | $11.80 | $10.83 | ||||||||||||||
Total Return** | 1.43% | 17.76% | 17.61% | 8.30% | ||||||||||||||
Net Assets, End of Period (in thousands) | $69,409 | $80,260 | $64,631 | $58,880 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $72,631 | $72,827 | $61,876 | $58,109 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.82% | 0.89% | 0.87% | 1.26% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.65% | 0.79% | 0.87% | 1.02% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.27% | 1.78% | 1.46% | 1.30% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 17
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Financial Highlights (continued)
Class S Shares
For a share outstanding during the period ended | Perkins Select Value Fund | |||||||||||||||||
December 31, 2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.87 | $11.77 | $10.81 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.04(2) | 0.14(2) | 0.09 | 0.04 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.12 | 1.79 | 1.66 | 0.77 | ||||||||||||||
Total from Investment Operations | 0.16 | 1.93 | 1.75 | 0.81 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.20) | (0.07) | (0.06) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.78) | (0.83) | (0.79) | – | ||||||||||||||
Net Asset Value, End of Period | $12.25 | $12.87 | $11.77 | $10.81 | ||||||||||||||
Total Return** | 1.20% | 16.91% | 16.91% | 8.10% | ||||||||||||||
Net Assets, End of Period (in thousands) | $51 | $15 | $13 | $11 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $34 | $14 | $12 | $11 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.35% | 1.65% | 1.52% | 1.70% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.14% | 1.45% | 1.40% | 1.47% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.67% | 1.11% | 0.94% | 0.78% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
Class T Shares
For a share outstanding during the period ended | Perkins Select Value Fund | |||||||||||||||||
December 31, 2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.87 | $11.77 | $10.82 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.07(2) | 0.19(2) | 0.13 | 0.04 | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.09 | 1.81 | 1.65 | 0.78 | ||||||||||||||
Total from Investment Operations | 0.16 | 2.00 | 1.78 | 0.82 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.20) | (0.14) | (0.10) | – | ||||||||||||||
Distributions (from capital gains)* | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Distributions | (0.78) | (0.90) | (0.83) | – | ||||||||||||||
Net Asset Value, End of Period | $12.25 | $12.87 | $11.77 | $10.82 | ||||||||||||||
Total Return** | 1.24% | 17.52% | 17.25% | 8.20% | ||||||||||||||
Net Assets, End of Period (in thousands) | $2,726 | $2,022 | $1,357 | $1,049 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,333 | $1,595 | $1,274 | $649 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.09% | 1.16% | 1.11% | 1.44% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.90% | 1.04% | 1.11% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.03% | 1.53% | 1.25% | 1.32% | ||||||||||||||
Portfolio Turnover Rate | 25% | 76% | 62% | 80% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
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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 Select Value Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their
20 | DECEMBER 31, 2014
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shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of December 31, 2014.
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
The following table shows the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Transfers Out | ||||||
of Level 1 | ||||||
Fund | to Level 2 | |||||
Perkins Select Value Fund | $ | 6,124,577 | ||||
Financial assets were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current period and no factor was applied at the end of the prior fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The
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Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 5,200,000 | $ | – | $ | (5,200,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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 Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
3. | 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 or base fee rate, as applicable (expressed as an annual rate).
Base | ||||||
Fund | Fee Rate (%) | |||||
Perkins Select Value Fund | 0.70 | |||||
For the 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 | |||||
Perkins Select Value Fund | Russell 3000® Value Index | |||||
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 the Fund 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 Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the period ended December 31, 2014 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Select Value Fund | 0.57 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee 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 Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Select Value Fund | 0.77 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that
24 | DECEMBER 31, 2014
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may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
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 included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Select Value Fund | $ | 106 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Perkins Select Value Fund - Class A Shares | - | % | - | % | ||||||
Perkins Select Value Fund - Class C Shares | - | - | ||||||||
Perkins Select Value Fund - Class D Shares | - | - | ||||||||
Perkins Select Value Fund - Class I Shares | - | - | ||||||||
Perkins Select Value Fund - Class S Shares | 100 | 0 | ||||||||
Perkins Select Value Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2014 are noted below.
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Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Perkins Select Value Fund | $ | 66,610,448 | $ | 13,978,970 | $ | (965,491) | $ | 13,013,479 | ||||||||||
5. | Capital Share Transactions |
Perkins Select | ||||||||||
Value Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 2,605 | 4,457 | ||||||||
Reinvested dividends and distributions | 542 | 656 | ||||||||
Shares repurchased | (4,135) | (4,130) | ||||||||
Net Increase/(Decrease) in Fund Shares | (988) | 983 | ||||||||
Shares Outstanding, Beginning of Period | 10,281 | 9,298 | ||||||||
Shares Outstanding, End of Period | 9,293 | 10,281 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | – | 3,618 | ||||||||
Reinvested dividends and distributions | 554 | 878 | ||||||||
Shares repurchased | (3,696) | (687) | ||||||||
Net Increase/(Decrease) in Fund Shares | (3,142) | 3,809 | ||||||||
Shares Outstanding, Beginning of Period | 14,417 | 10,608 | ||||||||
Shares Outstanding, End of Period | 11,275 | 14,417 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 55,888 | 257,460 | ||||||||
Reinvested dividends and distributions | 30,824 | 27,557 | ||||||||
Shares repurchased | (91,070) | (242,161) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,358) | 42,856 | ||||||||
Shares Outstanding, Beginning of Period | 530,362 | 487,506 | ||||||||
Shares Outstanding, End of Period | 526,004 | 530,362 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 28,419 | 627,941 | ||||||||
Reinvested dividends and distributions | 359,329 | 438,676 | ||||||||
Shares repurchased | (956,732) | (321,944) | ||||||||
Net Increase/(Decrease) in Fund Shares | (568,984) | 744,673 | ||||||||
Shares Outstanding, Beginning of Period | 6,222,762 | 5,478,089 | ||||||||
Shares Outstanding, End of Period | 5,653,778 | 6,222,762 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 2,745 | – | ||||||||
Reinvested dividends and distributions | 246 | 74 | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,991 | 74 | ||||||||
Shares Outstanding, Beginning of Period | 1,148 | 1,074 | ||||||||
Shares Outstanding, End of Period | 4,139 | 1,148 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 90,655 | 57,101 | ||||||||
Reinvested dividends and distributions | 13,096 | 9,113 | ||||||||
Shares repurchased | (38,406) | (24,379) | ||||||||
Net Increase/(Decrease) in Fund Shares | 65,345 | 41,835 | ||||||||
Shares Outstanding, Beginning of Period | 157,141 | 115,306 | ||||||||
Shares Outstanding, End of Period | 222,486 | 157,141 |
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Select Value Fund | $ | 19,184,778 | $ | 30,990,073 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 29
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
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Notes
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81528 | 125-24-93033 02-15 |
Table of Contents
semiannual report
December 31, 2014
Perkins Small Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Perkins Small Cap Value Fund
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Perkins Small Cap Value Fund (unaudited)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities that we believe to have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | ![]() Robert Perkins co-portfolio manager | ![]() Justin Tugman co-portfolio manager | ![]() Tom Reynolds co-portfolio manager |
PERFORMANCE OVERVIEW
During the six months ended December 31, 2014, Perkins Small Cap Value Fund’s Class T Shares returned 2.02%, versus a 0.01% return for the Fund’s benchmark, the Russell 2000 Value Index.
Small-cap stocks were volatile with the benchmark experiencing multiple declines of 5% or more throughout the period. Due to its more defensive positioning and quality bias, the Fund outperformed in all of these sharp declines, leading to overall outperformance for the period. Stock selection drove the outperformance, as we held up better than the index in energy, industrials and materials, where the index posted negative returns. Our consumer and technology holdings also outpaced the benchmark. Interest rate sensitive industries, such as utilities and financials, posted strong returns in the index and our underweight detracted.
MARKET ENVIRONMENT
The U.S. economy continued to gain steam, delivering nearly 5% GDP growth in the third quarter, impressive given the negative growth we experienced during the first quarter of 2014. The unemployment rate continued to decline, falling to under 6% amid signs wage growth continues to percolate. Persistently high underemployment, however, remained a troubling counterweight. Corporate balance sheets remained flush with cash but companies continued to add leverage by tapping financing at record low interest rates. Earnings growth also remained strong, coupled with equity valuations that appear buoyed by market optimism. All this occurred with central bank policy accommodation that remains very friendly to risk assets on a global basis, although the Federal Reserve (Fed) could become less so in the coming year.
The recent fall in energy prices is likely a blessing, but could possibly be a curse as well. Short term, it should provide a boost in consumer spending, as evidenced by early reports of healthy holiday retail activity. Long term, however, a significant portion of U.S. capital expenditures are attributable to the energy complex, and less exploration and production activity will negatively impact the earnings of those firms with exposure. In addition, the U.S. shale revolution has stimulated economic activity in places such as North Dakota, Texas and Pennsylvania with high-paying jobs and local economies that have witnessed rising oil prices. Energy companies have also been active participants in the debt markets, particularly in high-yield issuance, and risks around substantially squeezed profits could spread to financial markets beyond energy related names. Clearly, there are winners from lower crude prices, but there will also be collateral damage as we have begun to see numerous layoff announcements from energy companies. The added variable here is the geopolitical consequences of lower oil prices on volatile countries such as Russia, Venezuela, and much of the Middle East – will some of these countries begin to act more conciliatory on the geopolitical stage or become more irrational? The equity market has been indicating the former is more likely.
CONTRIBUTORS
Casey’s General Stores was our top contributor. Casey’s operates gas stations and convenience stores throughout small towns in the Midwest, and is slowly expanding into the Southeast. The steep decline in crude oil, and ultimately gasoline prices, were a significant reason for the stock’s strong performance this period. Gasoline margins at Casey’s typically benefit when wholesale gasoline prices decline as retail prices at the pump are stickier on the way down. Casey’s has done a solid job in executing its growth strategy – evidenced by strength in same-store sales of grocery items and prepared foods during the quarter. Over the past two years, other publicly traded convenience store chains have been acquired by master limited partnerships (MLPs), adopted MLP structures, or have been acquired by parent companies that own MLPs, any of which would unlock further value at Casey’s should
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Perkins Small Cap Value Fund (unaudited)
management elect to go that route. While we did trim some of our holdings on price strength, Casey’s remains our largest holding in the Fund.
Steris Corporation, a sterilization equipment provider, also aided performance as the company continued to report strong results and raised full-year guidance driven by both organic and acquired growth. Importantly, the company was executing very well in 2014 after stumbles in recent years. We remain attracted to Steris’ exposure to the consumables market within health care and the recurring nature of its revenue stream. In October, the company announced the strategic acquisition of Synergy Health, a sterilization company based in the UK. The deal expands the company’s global footprint while adding breadth and depth to their product offering, and has the potential to significantly lower the effective tax rate. The transaction is expected to close in the first quarter of 2015, and be accretive in fiscal 2016.
Phibro Animal Health Company was another top contributor as the company continued to report stronger than expected results, driven by strong demand for animal health products. Phibro is well positioned to benefit from the growing global demand for animal protein consumption. We believe the reward-to-risk remains favorable despite the recent stock outperformance. Additionally, the valuation discount that Phibro receives relative to its larger peer Zoetis provides a level of downside protection in the share price. Furthermore, we believe recent transactions in the animal health industry support a positive outlook for the stock.
DETRACTORS
QEP Midstream Partners, LP weighed the most on performance. QEP Midstream Partners owns, operates, acquires and develops midstream gathering systems and pipelines. Shares of the company were a negative performer as the company’s general partner, QEP Resources, sold its Field Services midstream business and its 58% ownership in QEP Midstream Partners, LP’s shares to Tesoro Logistics LP for approximately $2.5 billion. QEP Midstream Partners, LP distribution growth outlook effectively dissolved as its new general partner, Tesoro Logistics LP, did not have the same incentive as QEP Resources to drop down accretive assets and grow the distribution at QEP Midstream. Further pressuring QEP’s shares were the steep decline in global commodity prices which led to a sell-off across MLPs. We exited our position in QEP Midstream Partners at a loss as we believed that QEP’s deal with Tesoro Logistics LP was not in the best long-term interest of QEP shareholders.
Kirby Corporation also detracted from performance. Approximately 20% of Kirby’s annual revenues are directly tied to oil, with approximately $400 million of revenue related to diesel engines for well fracking pumps and rigs, and $200 million to the transport of crude oil in both inland river and coastal barge movements. Management guided fourth quarter results below Street estimates on weakness in both the diesel engine business as well as the crude transport segment. We see fracking-related revenue continuing to be negatively pressured by weak oil prices and their negative impact on rig count in the U.S. However, we believe the recent softness in the crude transport business will ease as we move further into 2015. The core chemical business remains solid, driven by revenue gains, pricing, and strong margins. Although we like the long-term outlook for Kirby, we meaningfully trimmed our position during the period on concerns about the depth and duration of the weak oil prices and their impact on results for the company.
Another top detractor, Plains All American, owns and operates a geographically diverse collection of midstream assets that traverse some of the most prolific oil and gas basins in North America. The shares sold off with the entire energy complex given the precipitous fall in global crude oil prices. Plains reported a very strong third-quarter earnings report but that was not enough to offset its conservative 2015 distribution guidance. The decline in oil prices will negatively impact some of the company’s operations in 2015, but we feel confident that the company’s 2015 distribution growth guidance is achievable. However, we were worried that if crude oil prices didn’t move sharply higher relatively soon, drastic cuts to energy capital expenditures, and therefore oil production growth, would negatively impact the company’s future distribution growth. Thus, we exited our position in shares of Plains All American.
MARKET OUTLOOK
As we look ahead, the factors that led us to the upcoming six-year anniversary of the bull market continue to be intact, namely unbelievably loose monetary policy on a global basis. However, the Fed has stated its intention, and has initiated the process, of slowly reducing the amount of liquidity flooded into the system. When looking at economic growth and recent jobs data, one could argue that the data set indicates the U.S. economy is doing just fine and that some accommodation can be curtailed. The counterargument is that the economy is still growing at a tepid pace for this point in a normal economic recovery, and given the large amount of debt in the system, central bankers fear debt deflation, so interest rates can stay
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(unaudited)
lower for longer. There are certainly bright spots in the market, though we believe many of these positive signs may be priced into equity valuations. While there may be more gains ahead, we believe there is also the potential for greater volatility, and therefore remain committed to owning quality companies with defensive characteristics within our portfolio. There are certainly benefits from lower energy prices, particularly to the consumer, but there will also be some negative consequences to the economy including layoffs at companies that are partly dependent on capital spending from energy companies. Aside from the energy segment, another source of potential volatility could originate from the Fed both from communication to the market as well as its policy intentions. With above-average valuations there seems to be little room for error in equity prices.
With the U.S. equity market hitting new all-time highs this year, we are not finding compelling values. Optimism seems to be fully priced into stocks, as it has over the past few years, showing some disregard of risk and a large willingness to put more faith in market momentum instead of company fundamentals. Most troubling, in our opinion, is the broad complacency and thin trading volume lifting stock prices higher. There simply is not much real liquidity in the market to absorb prolonged selling pressures should any of the numerous macroeconomic tailwinds suddenly start to escalate and truly spook investors beyond a brief market dip. This is especially true in the fixed income markets where even the U.S. Treasury Department’s Office of Financial Research has noted excessive risk taking, declining market liquidity as a result of recent bank regulatory changes and some financing activities moving to less transparent areas of the financial system as potential risks. Although we consistently focus on downside protection, we believe it prudent for investors to increase their focus on risk-disciplined approaches to investing as we enter the next stage of the cycle.
We have been cautious for some time on the small-cap universe given their expensive valuations relative to large-cap equities. That said, during the fourth quarter and particularly at the beginning of the quarter as the broad market declined, we did find some interesting values in the small-cap space and added to or began new positions while trimming our exposure to larger market caps in our portfolio. Following a large year-end rally in small caps, which took the group into the black after being in the red for the first three quarters of 2014, reward-to-risk ratios remain lackluster. We have reduced our exposure to energy as we exited several MLPs. We reduced our overweight in banks. For the most part, our sector weightings have remained unchanged with overweights in consumer staples, health care, materials, technology and industrials. We remain underweight financials, utilities and consumer discretionary, although we have increased our exposure and added new names within this group.
We are opening the Fund to new investors at this time as we believe our focus on reward-to-risk, quality balance sheets, and defensive companies may be a style that rewards our investors relative to the benchmark given a pickup in volatility and high valuations.
Thank you for your investment in Perkins Small Cap Value Fund.
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Perkins Small Cap Value Fund (unaudited)
Perkins Small Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 0.89% | |||
STERIS Corp. | 0.43% | |||
Phibro Animal Health Corp. – Class A | 0.42% | |||
J&J Snack Foods Corp. | 0.25% | |||
NICE Systems, Ltd. (ADR) | 0.25% |
5 Bottom Performers – Holdings
Contribution | ||||
QEP Midstream Partners LP | –0.62% | |||
Kirby Corp. | –0.58% | |||
Plains All American Pipeline LP | –0.30% | |||
Key Energy Services, Inc. | –0.28% | |||
Prosperity Bancshares, Inc. | –0.26% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Energy | 1.56% | 6.62% | 5.97% | |||||||||
Consumer Staples | 1.03% | 6.39% | 2.65% | |||||||||
Health Care | 0.87% | 13.18% | 5.03% | |||||||||
Information Technology | 0.60% | 11.45% | 10.02% | |||||||||
Materials | 0.40% | 5.29% | 4.58% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Financials | –1.70% | 30.07% | 39.98% | |||||||||
Consumer Discretionary | –0.32% | 4.69% | 11.33% | |||||||||
Utilities | –0.17% | 1.57% | 6.52% | |||||||||
Other** | 0.00% | 4.40% | 0.00% | |||||||||
Telecommunication Services | 0.04% | 0.00% | 0.78% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Casey’s General Stores, Inc. Food & Staples Retailing | 3.7% | |||
CLARCOR, Inc. Machinery | 2.7% | |||
STERIS Corp. Health Care Equipment & Supplies | 2.6% | |||
Potlatch Corp. Real Estate Investment Trusts (REITs) | 2.4% | |||
Owens & Minor, Inc. Health Care Providers & Services | 2.4% | |||
13.8% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
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Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
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Janus Investment Fund | 5
Table of Contents
Perkins Small Cap Value Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif30m02.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Five | Ten | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Year | Operating Expenses | |||||||
Perkins Small Cap Value Fund – Class A Shares(1) | |||||||||||
NAV | 1.84% | 7.00% | 11.33% | 8.54% | 1.05% | ||||||
MOP | –4.03% | 0.83% | 10.02% | 7.90% | |||||||
Perkins Small Cap Value Fund – Class C Shares(1) | |||||||||||
NAV | 1.57% | 6.32% | 10.51% | 7.77% | 1.79% | ||||||
CDSC | 0.77% | 5.49% | 10.51% | 7.77% | |||||||
Perkins Small Cap Value Fund – Class D Shares(1) | 2.05% | 7.37% | 11.63% | 8.84% | 0.74% | ||||||
Perkins Small Cap Value Fund – Class I Shares(1) | 2.11% | 7.42% | 11.70% | 8.80% | 0.73% | ||||||
Perkins Small Cap Value Fund – Class L Shares(1) | 2.14% | 7.53% | 11.80% | 9.04% | 0.80% | ||||||
Perkins Small Cap Value Fund – Class N Shares(1) | 2.18% | 7.58% | 11.54% | 8.80% | 0.58% | ||||||
Perkins Small Cap Value Fund – Class R Shares(1) | 1.75% | 6.75% | 10.99% | 8.26% | 1.33% | ||||||
Perkins Small Cap Value Fund – Class S Shares(1) | 1.85% | 6.99% | 11.25% | 8.53% | 1.08% | ||||||
Perkins Small Cap Value Fund – Class T Shares(1) | 2.02% | 7.30% | 11.54% | 8.80% | 0.83% | ||||||
Russell 2000® Value Index | 0.01% | 4.22% | 14.26% | 6.89% | |||||||
Morningstar Quartile – Class T Shares | – | 1st | 4th | 1st | |||||||
Morningstar Ranking – based on total returns for Small Value Funds | – | 40/420 | 297/338 | 48/303 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
6 | DECEMBER 31, 2014
Table of Contents
(unaudited)
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
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 all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares and Class S Shares commenced operations on July 6, 2009. Performance shown for each class reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) for periods prior to July 6, 2009, calculated using the fees and expenses of the corresponding class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010, as a result of the restructuring of Class J Shares, the predecessor share class. Performance shown for periods prior to February 16, 2010 reflects the performance of the Fund’s former Class J Shares (formerly named Investor Shares).
Class I Shares commenced operations on July 6, 2009. Performance shown reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) for periods prior to July 6, 2009, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for Class N Shares reflects the performance of the Fund’s Class T Shares from July 6, 2009 to May 31, 2012, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers. For periods prior to July 6, 2009, the performance shown for Class N Shares reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares (formerly named Class J Shares) commenced operations with the Fund’s inception. Performance shown for Class T Shares reflects the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
(1) | Closed to new investors. Effective January 1, 2015, all share classes except Class D and Class L Shares reopen to new investors. |
Janus Investment Fund | 7
Table of Contents
Perkins Small Cap Value Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,018.40 | $ | 5.34 | $ | 1,000.00 | $ | 1,019.91 | $ | 5.35 | 1.05% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,015.70 | $ | 8.48 | $ | 1,000.00 | $ | 1,016.79 | $ | 8.49 | 1.67% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,020.50 | $ | 3.62 | $ | 1,000.00 | $ | 1,021.63 | $ | 3.62 | 0.71% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,021.10 | $ | 3.31 | $ | 1,000.00 | $ | 1,021.93 | $ | 3.31 | 0.65% | |||||||||||||||||
Class L Shares | $ | 1,000.00 | $ | 1,021.40 | $ | 3.01 | $ | 1,000.00 | $ | 1,022.23 | $ | 3.01 | 0.59% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,021.80 | $ | 2.85 | $ | 1,000.00 | $ | 1,022.38 | $ | 2.85 | 0.56% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,017.50 | $ | 6.71 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.72 | 1.32% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,018.50 | $ | 5.44 | $ | 1,000.00 | $ | 1,019.81 | $ | 5.45 | 1.07% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,020.20 | $ | 4.12 | $ | 1,000.00 | $ | 1,021.12 | $ | 4.13 | 0.81% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
8 | DECEMBER 31, 2014
Table of Contents
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Common Stocks – 97.4% | ||||||||||
Air Freight & Logistics – 0.7% | ||||||||||
1,027,531 | UTi Worldwide, Inc. (U.S. Shares) | $ | 12,402,299 | |||||||
Building Products – 0.9% | ||||||||||
457,516 | Simpson Manufacturing Co., Inc. | 15,830,054 | ||||||||
Capital Markets – 3.9% | ||||||||||
394,837 | AllianceBernstein Holding LP | 10,198,639 | ||||||||
840,236 | Ares Capital Corp. | 13,111,883 | ||||||||
446,856 | Evercore Partners, Inc. – Class A | 23,401,849 | ||||||||
1,359,436 | Fortress Investment Group LLC – Class A | 10,902,677 | ||||||||
229,944 | Waddell & Reed Financial, Inc. – Class A | 11,455,810 | ||||||||
| ||||||||||
69,070,858 | ||||||||||
Chemicals – 0.6% | ||||||||||
551,279 | Kraton Performance Polymers, Inc.* | 11,461,090 | ||||||||
Commercial Banks – 14.3% | ||||||||||
555,754 | Bank of Hawaii Corp. | 32,961,770 | ||||||||
590,569 | BankUnited, Inc. | 17,108,784 | ||||||||
284,494 | BOK Financial Corp. | 17,081,020 | ||||||||
144,813 | City National Corp. | 11,702,338 | ||||||||
1,116,142 | Columbia Banking System, Inc. | 30,816,681 | ||||||||
386,894 | FCB Financial Holdings, Inc. – Class A* | 9,533,068 | ||||||||
896,983 | First Interstate BancSystem, Inc. – Class A | 24,954,067 | ||||||||
2,501,205 | Investors Bancorp, Inc. | 28,076,026 | ||||||||
462,157 | Prosperity Bancshares, Inc. | 25,585,011 | ||||||||
1,186,111 | Sterling Bancorp | 17,056,276 | ||||||||
1,070,872 | Umpqua Holdings Corp. | 18,215,533 | ||||||||
1,146,400 | United Community Banks, Inc. | 21,712,816 | ||||||||
| ||||||||||
254,803,390 | ||||||||||
Commercial Services & Supplies – 3.0% | ||||||||||
352,451 | Copart, Inc.* | 12,860,937 | ||||||||
398,598 | Interface, Inc. | 6,564,909 | ||||||||
211,510 | UniFirst Corp. | 25,687,890 | ||||||||
182,362 | Waste Connections, Inc. | 8,022,104 | ||||||||
| ||||||||||
53,135,840 | ||||||||||
Communications Equipment – 0.5% | ||||||||||
289,920 | Ubiquiti Networks, Inc. | 8,593,229 | ||||||||
Construction & Engineering – 0.7% | ||||||||||
113,619 | EMCOR Group, Inc. | 5,054,909 | ||||||||
206,041 | Granite Construction, Inc. | 7,833,679 | ||||||||
| ||||||||||
12,888,588 | ||||||||||
Consumer Finance – 1.2% | ||||||||||
455,782 | Nelnet, Inc. – Class A | 21,116,380 | ||||||||
Containers & Packaging – 4.1% | ||||||||||
231,631 | AptarGroup, Inc. | 15,482,216 | ||||||||
334,152 | Silgan Holdings, Inc. | 17,910,547 | ||||||||
918,260 | Sonoco Products Co. | 40,127,962 | ||||||||
| ||||||||||
73,520,725 | ||||||||||
Electrical Equipment – 2.5% | ||||||||||
850,413 | Babcock & Wilcox Co. | 25,767,514 | ||||||||
243,088 | Regal-Beloit Corp. | 18,280,217 | ||||||||
| ||||||||||
44,047,731 | ||||||||||
Electronic Equipment, Instruments & Components – 2.4% | ||||||||||
261,358 | IPG Photonics Corp. | 19,580,942 | ||||||||
368,288 | Tech Data Corp.* | 23,286,850 | ||||||||
| ||||||||||
42,867,792 | ||||||||||
Energy Equipment & Services – 1.5% | ||||||||||
85,524 | Dril-Quip, Inc.* | 6,562,256 | ||||||||
652,543 | Tidewater, Inc. | 21,148,919 | ||||||||
| ||||||||||
27,711,175 | ||||||||||
Food & Staples Retailing – 3.7% | ||||||||||
724,203 | Casey’s General Stores, Inc. | 65,410,015 | ||||||||
Food Products – 3.1% | ||||||||||
990,593 | Boulder Brands, Inc.* | 10,955,959 | ||||||||
293,621 | J&J Snack Foods Corp. | 31,937,156 | ||||||||
132,230 | Lancaster Colony Corp. | 12,382,017 | ||||||||
| ||||||||||
55,275,132 | ||||||||||
Gas Utilities – 1.1% | ||||||||||
321,008 | Southwest Gas Corp. | 19,841,504 | ||||||||
Health Care Equipment & Supplies – 5.4% | ||||||||||
128,497 | Analogic Corp. | 10,872,131 | ||||||||
206,536 | Cyberonics, Inc.* | 11,499,925 | ||||||||
390,083 | Globus Medical, Inc. – Class A* | 9,272,273 | ||||||||
380,712 | Hill-Rom Holdings, Inc. | 17,368,081 | ||||||||
722,173 | STERIS Corp. | 46,832,919 | ||||||||
| ||||||||||
95,845,329 | ||||||||||
Health Care Providers & Services – 3.7% | ||||||||||
1,232,038 | Owens & Minor, Inc. | 43,256,854 | ||||||||
705,208 | Premier, Inc. – Class A* | 23,645,624 | ||||||||
| ||||||||||
66,902,478 | ||||||||||
Health Care Technology – 1.4% | ||||||||||
738,948 | Omnicell, Inc.* | 24,473,958 | ||||||||
Hotels, Restaurants & Leisure – 0.5% | ||||||||||
189,773 | Cheesecake Factory, Inc. | 9,547,480 | ||||||||
Information Technology Services – 3.1% | ||||||||||
646,566 | Jack Henry & Associates, Inc. | 40,177,611 | ||||||||
455,758 | Total System Services, Inc. | 15,477,542 | ||||||||
| ||||||||||
55,655,153 | ||||||||||
Insurance – 2.8% | ||||||||||
242,442 | First American Financial Corp. | 8,218,784 | ||||||||
296,679 | Hanover Insurance Group, Inc. | 21,159,146 | ||||||||
285,688 | StanCorp Financial Group, Inc. | 19,958,164 | ||||||||
| ||||||||||
49,336,094 | ||||||||||
Life Sciences Tools & Services – 1.6% | ||||||||||
946,695 | Bruker Corp.* | 18,574,156 | ||||||||
182,054 | ICON PLC* | 9,282,933 | ||||||||
| ||||||||||
27,857,089 | ||||||||||
Machinery – 6.8% | ||||||||||
600,756 | Astec Industries, Inc. | 23,615,718 | ||||||||
717,741 | CLARCOR, Inc. | 47,830,260 | ||||||||
357,152 | Lincoln Electric Holdings, Inc. | 24,675,632 | ||||||||
139,448 | RBC Bearings, Inc. | 8,998,580 | ||||||||
129,021 | Valmont Industries, Inc. | 16,385,667 | ||||||||
| ||||||||||
121,505,857 | ||||||||||
Marine – 0.9% | ||||||||||
206,281 | Kirby Corp.* | 16,655,128 | ||||||||
Media – 1.4% | ||||||||||
253,031 | Morningstar, Inc. | 16,373,636 | ||||||||
345,725 | Time, Inc. | 8,508,292 | ||||||||
| ||||||||||
24,881,928 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Small Cap Value Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Metals & Mining – 0.6% | ||||||||||
642,000 | Horsehead Holding Corp.* | $ | 10,162,860 | |||||||
Multiline Retail – 1.0% | ||||||||||
143,261 | Dillard’s, Inc. – Class A | 17,933,412 | ||||||||
Oil, Gas & Consumable Fuels – 2.0% | ||||||||||
291,931 | SM Energy Co. | 11,262,698 | ||||||||
327,042 | Western Gas Partners LP | 23,890,418 | ||||||||
| ||||||||||
35,153,116 | ||||||||||
Paper & Forest Products – 0.6% | ||||||||||
444,921 | PH Glatfelter Co. | 11,376,630 | ||||||||
Personal Products – 0.6% | ||||||||||
428,758 | Inter Parfums, Inc. | 11,769,407 | ||||||||
Pharmaceuticals – 1.1% | ||||||||||
614,501 | Phibro Animal Health Corp. – Class A | 19,387,507 | ||||||||
Real Estate Investment Trusts (REITs) – 7.4% | ||||||||||
590,856 | BioMed Realty Trust, Inc. | 12,727,038 | ||||||||
386,116 | Healthcare Realty Trust, Inc. | 10,548,689 | ||||||||
475,666 | Home Properties, Inc. | 31,203,690 | ||||||||
1,033,605 | Potlatch Corp. | 43,277,042 | ||||||||
402,797 | Sovran Self Storage, Inc. | 35,131,954 | ||||||||
| ||||||||||
132,888,413 | ||||||||||
Road & Rail – 1.4% | ||||||||||
138,090 | Genesee & Wyoming, Inc. – Class A* | 12,417,053 | ||||||||
262,784 | Heartland Express, Inc. | 7,097,796 | ||||||||
194,510 | Swift Transportation Co.* | 5,568,821 | ||||||||
| ||||||||||
25,083,670 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.2% | ||||||||||
1,065,459 | Teradyne, Inc. | 21,085,434 | ||||||||
Software – 5.3% | ||||||||||
131,096 | CommVault Systems, Inc.* | 6,776,352 | ||||||||
726,483 | Informatica Corp.* | 27,704,429 | ||||||||
476,438 | NetScout Systems, Inc.* | 17,409,045 | ||||||||
356,160 | NICE Systems, Ltd. (ADR) | 18,039,504 | ||||||||
564,710 | Synopsys, Inc.* | 24,547,944 | ||||||||
| ||||||||||
94,477,274 | ||||||||||
Specialty Retail – 1.5% | ||||||||||
239,423 | Finish Line, Inc. – Class A | 5,820,373 | ||||||||
696,947 | Sally Beauty Holdings, Inc.* | 21,424,151 | ||||||||
| ||||||||||
27,244,524 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.9% | ||||||||||
72,431 | Fossil Group, Inc.* | 8,021,009 | ||||||||
474,363 | Movado Group, Inc. | 13,457,678 | ||||||||
408,493 | Steven Madden, Ltd.* | 13,002,332 | ||||||||
| ||||||||||
34,481,019 | ||||||||||
Thrifts & Mortgage Finance – 1.0% | ||||||||||
1,385,001 | Capitol Federal Financial, Inc. | 17,700,313 | ||||||||
Total Common Stocks (cost $1,403,259,349) | 1,739,379,875 | |||||||||
Repurchase Agreements – 2.9% | ||||||||||
$40,000,000 | Undivided interest of 13% in a joint repurchase agreement (principal amount $300,000,000 with a maturity value of $300,001,000) with RBC Capital Markets Corp., 0.0600%, dated 12/31/14, maturing 1/2/15 to be repurchased at $40,000,133 collateralized by $305,423,057 in U.S. Treasuries, 0% – 11.2500%, 1/29/15 – 11/15/44, with a value of $306,000,026 | 40,000,000 | ||||||||
11,600,000 | Undivided interest of 14% in a joint repurchase agreement (principal amount $81,900,000 with a maturity value of $81,900,228) with ING Financial Markets LLC, 0.0500%, dated 12/31/14, maturing 1/2/15 to be repurchased at $11,600,032 collateralized by $82,714,877 in U.S. Treasuries, 0.1250% – 4.3750%, 2/29/16 – 2/15/44, with a value of $83,542,988 | 11,600,000 | ||||||||
Total Repurchase Agreements (cost $51,600,000) | 51,600,000 | |||||||||
Total Investments (total cost $1,454,859,349) – 100.3% | 1,790,979,875 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.3)% | (4,537,078) | |||||||||
Net Assets – 100% | $ | 1,786,442,797 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 1,763,657,438 | 98 | .5% | ||||
Israel | 18,039,504 | 1 | .0 | |||||
Ireland | 9,282,933 | 0 | .5 | |||||
Total | $ | 1,790,979,875 | 100 | .0% | ||||
†† | Includes Cash Equivalents of 2.9%. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Russell 2000® Value Index | Measures the performance of those Russell 2000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | 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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
Perkins Small Cap Value Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Common Stocks | $ | 1,739,379,875 | $ | – | $– | |||||
Repurchase Agreements | – | 51,600,000 | – | |||||||
Total Assets | $ | 1,739,379,875 | $ | 51,600,000 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Perkins Small Cap Value Fund | |||
Assets: | ||||
Investments at cost(1) | $ | 1,454,859,349 | ||
Investments at value | $ | 1,739,379,875 | ||
Repurchase agreements at value | 51,600,000 | |||
Cash | 745,930 | |||
Non-interested Trustees’ deferred compensation | 36,737 | |||
Receivables: | ||||
Investments sold | 9,573,745 | |||
Fund shares sold | 1,236,576 | |||
Dividends | 1,301,444 | |||
Interest | 165 | |||
Other assets | 28,282 | |||
Total Assets | 1,803,902,754 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 9,434,598 | |||
Fund shares repurchased | 6,579,754 | |||
Advisory fees | 827,285 | |||
Fund administration fees | 15,807 | |||
Transfer agent fees and expenses | 255,455 | |||
12b-1 Distribution and shareholder servicing fees | 47,317 | |||
Non-interested Trustees’ fees and expenses | 11,198 | |||
Non-interested Trustees’ deferred compensation fees | 36,737 | |||
Accrued expenses and other payables | 251,806 | |||
Total Liabilities | 17,459,957 | |||
Net Assets | $ | 1,786,442,797 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
As of December 31, 2014 (unaudited) | Perkins Small Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 1,386,859,599 | ||
Undistributed net investment income/(loss)* | 10,205,046 | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 53,249,971 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 336,128,181 | |||
Total Net Assets | $ | 1,786,442,797 | ||
Net Assets - Class A Shares | $ | 52,233,623 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,407,679 | |||
Net Asset Value Per Share(2) | $ | 21.69 | ||
Maximum Offering Price Per Share(3) | $ | 23.01 | ||
Net Assets - Class C Shares | $ | 14,036,465 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 668,430 | |||
Net Asset Value Per Share(2) | $ | 21.00 | ||
Net Assets - Class D Shares | $ | 77,533,460 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,592,658 | |||
Net Asset Value Per Share | $ | 21.58 | ||
Net Assets - Class I Shares | $ | 548,552,835 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 25,331,130 | |||
Net Asset Value Per Share | $ | 21.66 | ||
Net Assets - Class L Shares | $ | 191,247,645 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,658,809 | |||
Net Asset Value Per Share | $ | 22.09 | ||
Net Assets - Class N Shares | $ | 204,339,874 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,453,337 | |||
Net Asset Value Per Share | $ | 21.62 | ||
Net Assets - Class R Shares | $ | 19,086,854 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 894,395 | |||
Net Asset Value Per Share | $ | 21.34 | ||
Net Assets - Class S Shares | $ | 64,999,727 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,024,082 | |||
Net Asset Value Per Share | $ | 21.49 | ||
Net Assets - Class T Shares | $ | 614,412,314 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 28,436,934 | |||
Net Asset Value Per Share | $ | 21.61 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Includes cost of repurchase agreements of $51,600,000. | |
(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 Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Small Cap | ||||
For the period ended December 31, 2014 (unaudited) | Value Fund | |||
Investment Income: | ||||
Interest | $ | 17,191 | ||
Dividends | 17,190,142 | |||
Foreign tax withheld | (37,922) | |||
Total Investment Income | 17,169,411 | |||
Expenses: | ||||
Advisory fees | 4,863,257 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 85,605 | |||
Class C Shares | 76,452 | |||
Class R Shares | 52,012 | |||
Class S Shares | 83,353 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 46,914 | |||
Class L Shares | 213,705 | |||
Class R Shares | 26,006 | |||
Class S Shares | 83,353 | |||
Class T Shares | 816,811 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 78,320 | |||
Class C Shares | 6,760 | |||
Class I Shares | 258,888 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 4,114 | |||
Class C Shares | 1,243 | |||
Class D Shares | 7,238 | |||
Class I Shares | 13,463 | |||
Class L Shares | 1,394 | |||
Class N Shares | 798 | |||
Class R Shares | 302 | |||
Class S Shares | 517 | |||
Class T Shares | 3,630 | |||
Shareholder reports expense | 53,433 | |||
Registration fees | 131,058 | |||
Custodian fees | 8,183 | |||
Professional fees | 29,382 | |||
Non-interested Trustees’ fees and expenses | 13,173 | |||
Fund administration fees | 94,213 | |||
Other expenses | 64,319 | |||
Total Expenses | 7,117,896 | |||
Less: Excess Expense Reimbursement | (194,497) | |||
Net Expenses | 6,923,399 | |||
Net Investment Income/(Loss) | 10,246,012 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 107,250,846 | |||
Total Net Realized Gain/(Loss) on Investments | 107,250,846 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (86,954,094) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (86,954,094) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 30,542,764 |
See Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Statements of Changes in Net Assets
Perkins Small Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 10,246,012 | $ | 16,765,366 | ||||
Net realized gain/(loss) on investments | 107,250,846 | 419,912,638 | ||||||
Change in unrealized net appreciation/depreciation | (86,954,094) | 17,039,212 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 30,542,764 | 453,717,216 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (30,376) | (661,136) | ||||||
Class C Shares | – | – | ||||||
Class D Shares | (642,141) | (702,673) | ||||||
Class I Shares | (4,351,572) | (7,037,624) | ||||||
Class L Shares | (1,840,239) | (2,213,331) | ||||||
Class N Shares | (2,002,806) | (3,381,754) | ||||||
Class R Shares | – | (76,782) | ||||||
Class S Shares | (246,086) | (463,407) | ||||||
Class T Shares | (4,264,368) | (5,959,638) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (11,586,504) | (5,613,977) | ||||||
Class C Shares | (3,141,838) | (858,944) | ||||||
Class D Shares | (16,278,472) | (3,921,587) | ||||||
Class I Shares | (118,290,192) | (39,500,677) | ||||||
Class L Shares | (40,404,537) | (10,934,160) | ||||||
Class N Shares | (42,587,290) | (15,910,304) | ||||||
Class R Shares | (4,127,037) | (1,467,343) | ||||||
Class S Shares | (13,784,366) | (4,262,162) | ||||||
Class T Shares | (130,671,136) | (38,735,620) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (394,248,960) | (141,701,119) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Perkins Small Cap | ||||||||
Value Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 9,484,205 | 24,593,811 | ||||||
Class C Shares | 646,340 | 821,182 | ||||||
Class D Shares | 1,280,284 | 3,313,453 | ||||||
Class I Shares | 50,870,227 | 116,353,755 | ||||||
Class L Shares | 2,693,429 | 11,532,121 | ||||||
Class N Shares | 35,474,831 | 89,718,263 | ||||||
Class R Shares | 1,805,088 | 5,010,404 | ||||||
Class S Shares | 11,369,677 | 19,123,620 | ||||||
Class T Shares | 27,364,373 | 67,005,260 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 6,777,098 | 4,622,584 | ||||||
Class C Shares | 2,635,653 | 696,019 | ||||||
Class D Shares | 16,606,427 | 4,540,822 | ||||||
Class I Shares | 106,570,257 | 38,553,701 | ||||||
Class L Shares | 40,639,152 | 12,588,319 | ||||||
Class N Shares | 44,590,096 | 19,292,058 | ||||||
Class R Shares | 3,660,918 | 1,338,394 | ||||||
Class S Shares | 14,028,679 | 4,713,307 | ||||||
Class T Shares | 133,556,205 | 44,313,130 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (41,501,463) | (69,867,352) | ||||||
Class C Shares | (2,652,711) | (4,679,735) | ||||||
Class D Shares | (6,070,265) | (12,197,313) | ||||||
Class I Shares | (113,578,497) | (458,380,380) | ||||||
Class L Shares | (25,949,723) | (72,743,764) | ||||||
Class N Shares | (36,209,354) | (194,782,065) | ||||||
Class R Shares | (6,202,050) | (16,857,399) | ||||||
Class S Shares | (19,475,697) | (43,231,146) | ||||||
Class T Shares | (129,309,597) | (355,194,810) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 129,103,582 | (759,803,761) | ||||||
Net Increase/(Decrease) in Net Assets | (234,602,614) | (447,787,664) | ||||||
Net Assets: | ||||||||
Beginning of period | 2,021,045,411 | 2,468,833,075 | ||||||
End of period | $ | 1,786,442,797 | $ | 2,021,045,411 | ||||
Undistributed Net Investment Income/(Loss)* | $ | 10,205,046 | $ | 13,336,622 |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
ended June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.99 | $23.62 | $21.02 | $24.89 | $20.92 | $19.48 | $16.47 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.10(3) | 0.11(3) | 0.15 | 0.21 | –(4) | 0.09 | (0.07) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.37 | 4.71 | 3.56 | (1.30) | 4.68 | 1.35 | 3.08 | |||||||||||||||||||||||
Total from Investment Operations | 0.47 | 4.82 | 3.71 | (1.09) | 4.68 | 1.44 | 3.01 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.02) | (0.15) | (0.21) | (0.02) | (0.10) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | – | |||||||||||||||||||||||
Total Distributions | (5.77) | (1.45) | (1.11) | (2.78) | (0.71) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.69 | $26.99 | $23.62 | $21.02 | $24.89 | $20.92 | $19.48 | |||||||||||||||||||||||
Total Return** | 1.84% | 20.92% | 18.27% | (4.08)% | 22.53% | 7.39% | 18.28% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $52,234 | $89,450 | $115,675 | $141,049 | $223,229 | $86,403 | $20,039 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $67,635 | $108,703 | $128,765 | $170,483 | $181,662 | $52,788 | $13,537 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.05% | 1.05% | 1.00% | 1.40% | 1.25% | 1.21% | 1.02% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.05% | 1.05% | 1.00% | 1.25% | 1.25% | 1.21% | 0.96% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.75% | 0.43% | 0.64% | 0.96% | 0.23% | 0.06% | 0.62% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
Class C Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.37 | $23.13 | $20.57 | $24.57 | $20.75 | $19.43 | $16.47 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.02(3) | (0.07)(3) | (0.15) | 0.01 | (0.18) | 0.05 | (0.10) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.36 | 4.61 | 3.61 | (1.25) | 4.63 | 1.27 | 3.06 | |||||||||||||||||||||||
Total from Investment Operations | 0.38 | 4.54 | 3.46 | (1.24) | 4.45 | 1.32 | 2.96 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | –(4) | – | (0.02) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | – | |||||||||||||||||||||||
Total Distributions | (5.75) | (1.30) | (0.90) | (2.76) | (0.63) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.00 | $26.37 | $23.13 | $20.57 | $24.57 | $20.75 | $19.43 | |||||||||||||||||||||||
Total Return** | 1.57% | 20.06% | 17.31% | (4.78)% | 21.55% | 6.79% | 17.97% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $14,036 | $16,390 | $17,316 | $21,434 | $29,444 | $26,768 | $6,196 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $15,088 | $16,844 | $18,953 | $24,453 | $29,169 | $16,540 | $3,739 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.67% | 1.79% | 1.85% | 2.05% | 2.05% | 1.96% | 2.13% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.67% | 1.77% | 1.80% | 1.99% | 2.05% | 1.96% | 1.95% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.16% | (0.29)% | (0.16)% | 0.25% | (0.52)% | (0.69)% | (0.39)% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
For a share outstanding during the period ended December 31, | Perkins Small Cap Value Fund | |||||||||||||||||||||||||
2014 (unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.04 | $23.66 | $21.10 | $24.96 | $20.92 | $20.79 | ||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | 0.15(2) | 0.19(2) | 0.20 | 0.28 | 0.09 | 0.07 | ||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.37 | 4.72 | 3.57 | (1.30) | 4.65 | 0.06 | ||||||||||||||||||||
Total from Investment Operations | 0.52 | 4.91 | 3.77 | (1.02) | 4.74 | 0.13 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.23) | (0.23) | (0.31) | (0.08) | (0.09) | – | ||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | ||||||||||||||||||||
Total Distributions | (5.98) | (1.53) | (1.21) | (2.84) | (0.70) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $21.58 | $27.04 | $23.66 | $21.10 | $24.96 | $20.92 | ||||||||||||||||||||
Total Return** | 2.05% | 21.30% | 18.53% | (3.75)% | 22.83% | 0.63% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $77,533 | $81,194 | $74,980 | $72,646 | $86,402 | $78,237 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $77,128 | $78,901 | $72,194 | $75,800 | $84,313 | $74,758 | ||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.71% | 0.74% | 0.77% | 0.95% | 0.99% | 0.98% | ||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.71% | 0.74% | 0.77% | 0.95% | 0.99% | 0.98% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.12% | 0.73% | 0.85% | 1.30% | 0.54% | 0.12% | ||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% |
Class I Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or | ||||||||||||||||||||||||||||||
period ended June 30 and the period ended | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.09 | $23.70 | $21.13 | $25.01 | $20.97 | $19.49 | $16.47 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.16(2) | 0.19(2) | 0.25 | 0.29 | 0.04 | 0.11 | (0.02) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.37 | 4.73 | 3.54 | (1.31) | 4.73 | 1.37 | 3.04 | |||||||||||||||||||||||
Total from Investment Operations | 0.53 | 4.92 | 3.79 | (1.02) | 4.77 | 1.48 | 3.02 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.21) | (0.23) | (0.32) | (0.10) | (0.12) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | – | |||||||||||||||||||||||
Total Distributions | (5.96) | (1.53) | (1.22) | (2.86) | (0.73) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.66 | $27.09 | $23.70 | $21.13 | $25.01 | $20.97 | $19.49 | |||||||||||||||||||||||
Total Return** | 2.11% | 21.31% | 18.62% | (3.74)% | 22.89% | 7.59% | 18.34% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $548,553 | $617,119 | $821,829 | $1,195,217 | $1,317,183 | $532,188 | $236,437 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $572,702 | $767,593 | $1,114,888 | $1,214,236 | $1,091,334 | $408,417 | $42,710 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.65% | 0.74% | 0.71% | 0.89% | 0.93% | 0.85% | 0.77% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.65% | 0.74% | 0.71% | 0.89% | 0.93% | 0.85% | 0.75% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.19% | 0.75% | 0.94% | 1.37% | 0.55% | 0.52% | 0.80% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. | |
(1) | Period from February 16, 2010 (inception date) through June 30, 2010. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from November 1, 2009 through June 30, 2010. 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. |
See Notes to Financial Statements.
18 | DECEMBER 31, 2014
Table of Contents
Class L Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
ended June 30 and the year ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.55 | $24.08 | $21.45 | $25.34 | $21.21 | $19.72 | $18.24 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.23(2) | 0.53 | 0.31 | 0.51 | 0.18 | 0.09 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.38 | 4.80 | 3.34 | (1.33) | 4.34 | 1.31 | 3.45 | |||||||||||||||||||||||
Total from Investment Operations | 0.55 | 5.03 | 3.87 | (1.02) | 4.85 | 1.49 | 3.54 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.26) | (0.26) | (0.34) | (0.11) | (0.11) | – | (0.38) | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | (1.62) | |||||||||||||||||||||||
Return of capital | – | – | – | – | – | – | (0.06) | |||||||||||||||||||||||
Total Distributions and Other | (6.01) | (1.56) | (1.24) | (2.87) | (0.72) | – | (2.06) | |||||||||||||||||||||||
Net Asset Value, End of Period | $22.09 | $27.55 | $24.08 | $21.45 | $25.34 | $21.21 | $19.72 | |||||||||||||||||||||||
Total Return** | 2.14% | 21.45% | 18.74% | (3.67)% | 23.03% | 7.56% | 23.12% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $191,248 | $212,533 | $230,021 | $280,294 | $325,503 | $657,562 | $706,873 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $198,791 | $226,789 | $251,154 | $287,560 | $419,652 | $706,615 | $613,826 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.78% | 0.80% | 0.83% | 1.02% | 1.08% | 1.08% | 1.10% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.59% | 0.61% | 0.63% | 0.79% | 0.84% | 0.83% | 0.85% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.24% | 0.87% | 1.00% | 1.45% | 0.76% | 0.70% | 1.28% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
Class N Shares
For a share outstanding during the period ended December 31, 2014 (unaudited) | Perkins Small Cap Value Fund | |||||||||||||||||
and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012(3) | ||||||||||||||
Net Asset Value, Beginning of Period | $27.09 | $23.71 | $21.14 | $20.63 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.24(2) | 0.33 | (0.03) | ||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.38 | 4.72 | 3.49 | 0.54 | ||||||||||||||
Total from Investment Operations | 0.55 | 4.96 | 3.82 | 0.51 | ||||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends (from net investment income)* | (0.27) | (0.28) | (0.35) | – | ||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | – | ||||||||||||||
Total Distributions | (6.02) | (1.58) | (1.25) | – | ||||||||||||||
Net Asset Value, End of Period | $21.62 | $27.09 | $23.71 | $21.14 | ||||||||||||||
Total Return** | 2.18% | 21.47% | 18.78% | 2.47% | ||||||||||||||
Net Assets, End of Period (in thousands) | $204,340 | $200,869 | $251,691 | $12,300 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $196,676 | $279,014 | $64,999 | $8,788 | ||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.56% | 0.58% | 0.60% | 0.63% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.56% | 0.58% | 0.60% | 0.63% | ||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.27% | 0.92% | 0.92% | (1.65)% | ||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Period from May 31, 2012 (inception date) through June 30, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class R Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.66 | $23.34 | $20.81 | $24.71 | $20.83 | $19.46 | $16.47 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.07(3) | 0.04(3) | 0.04 | 0.15 | (0.04) | 0.11 | (0.12) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.36 | 4.65 | 3.56 | (1.29) | 4.61 | 1.26 | 3.11 | |||||||||||||||||||||||
Total from Investment Operations | 0.43 | 4.69 | 3.60 | (1.14) | 4.57 | 1.37 | 2.99 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (0.07) | (0.17) | –(4) | (0.08) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | – | |||||||||||||||||||||||
Total Distributions | (5.75) | (1.37) | (1.07) | (2.76) | (0.69) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.34 | $26.66 | $23.34 | $20.81 | $24.71 | $20.83 | $19.46 | |||||||||||||||||||||||
Total Return** | 1.75% | 20.56% | 17.87% | (4.32)% | 22.10% | 7.04% | 18.15% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $19,087 | $23,700 | $30,415 | $31,997 | $38,302 | $21,450 | $3,734 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $20,530 | $28,330 | $31,106 | $34,159 | $32,917 | $8,368 | $3,362 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.32% | 1.33% | 1.34% | 1.53% | 1.60% | 1.57% | 1.54% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.32% | 1.33% | 1.34% | 1.53% | 1.60% | 1.57% | 1.54% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.51% | 0.16% | 0.29% | 0.73% | (0.10)% | (0.28)% | 0.10% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
Class S Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period ended | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
June 30 and the period ended October 31, 2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.88 | $23.53 | $20.97 | $24.84 | $20.88 | $19.47 | $16.47 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.10(3) | 0.10(3) | 0.12 | 0.20 | –(4) | 0.11 | (0.10) | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.36 | 4.69 | 3.57 | (1.30) | 4.65 | 1.30 | 3.10 | |||||||||||||||||||||||
Total from Investment Operations | 0.46 | 4.79 | 3.69 | (1.10) | 4.65 | 1.41 | 3.00 | |||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.10) | (0.14) | (0.23) | (0.01) | (0.08) | – | – | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | – | |||||||||||||||||||||||
Total Distributions | (5.85) | (1.44) | (1.13) | (2.77) | (0.69) | – | – | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.49 | $26.88 | $23.53 | $20.97 | $24.84 | $20.88 | $19.47 | |||||||||||||||||||||||
Total Return** | 1.85% | 20.86% | 18.19% | (4.11)% | 22.40% | 7.24% | 18.21% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $65,000 | $72,148 | $80,862 | $93,910 | $106,549 | $51,460 | $26,401 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $65,779 | $80,958 | $86,346 | $94,960 | $83,981 | $44,047 | $24,792 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.07% | 1.08% | 1.10% | 1.28% | 1.35% | 1.32% | 1.29% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.07% | 1.08% | 1.10% | 1.28% | 1.35% | 1.32% | 1.20% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.77% | 0.40% | 0.53% | 0.97% | 0.14% | 0.07% | 0.46% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
* | See “Federal Income Tax” 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 June 30, 2010. 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) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
20 | DECEMBER 31, 2014
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Class T Shares
For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
December 31, 2014 (unaudited), each year or period | ||||||||||||||||||||||||||||||
ended June 30 and the year ended October 31, | Perkins Small Cap Value Fund | |||||||||||||||||||||||||||||
2009 | 2014 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.04 | $23.65 | $21.08 | $24.93 | $20.92 | $19.47 | $17.98 | |||||||||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | 0.13(2) | 0.17(2) | 0.20 | 0.27 | 0.05 | 0.12 | 0.08 | |||||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.38 | 4.72 | 3.55 | (1.31) | 4.66 | 1.33 | 3.39 | |||||||||||||||||||||||
Total from Investment Operations | 0.51 | 4.89 | 3.75 | (1.04) | 4.71 | 1.45 | 3.47 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.20) | (0.28) | (0.05) | (0.09) | – | (0.31) | |||||||||||||||||||||||
Distributions (from capital gains)* | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | – | (1.62) | |||||||||||||||||||||||
Return of capital | – | – | – | – | – | – | (0.05) | |||||||||||||||||||||||
Total Distributions and Other | (5.94) | (1.50) | (1.18) | (2.81) | (0.70) | – | (1.98) | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.61 | $27.04 | $23.65 | $21.08 | $24.93 | $20.92 | $19.47 | |||||||||||||||||||||||
Total Return** | 2.02% | 21.20% | 18.44% | (3.86)% | 22.65% | 7.45% | 22.87% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $614,412 | $707,642 | $846,044 | $923,132 | $1,257,481 | $1,010,405 | $659,087 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $644,746 | $773,664 | $880,189 | $1,023,747 | $1,219,414 | $936,037 | $441,820 | |||||||||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 0.81% | 0.83% | 0.85% | 1.05% | 1.10% | 1.08% | 1.11% | |||||||||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.81% | 0.83% | 0.84% | 1.04% | 1.10% | 1.08% | 1.11% | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.02% | 0.65% | 0.79% | 1.20% | 0.42% | 0.35% | 1.06% | |||||||||||||||||||||||
Portfolio Turnover Rate | 46% | 62% | 60% | 62% | 64% | 39% | 85% |
* | See “Federal Income Tax” 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 June 30, 2010. The Fund changed its fiscal year end from October 31 to June 30. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
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 Small Cap Value Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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 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 N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans.
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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is
22 | DECEMBER 31, 2014
Table of Contents
no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally
Janus Investment Fund | 23
Table of Contents
Notes to Financial Statements (unaudited) (continued)
related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
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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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
2. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 11,600,000 | $ | – | $ | (11,600,000) | $ | – | ||||||||||
RBC Capital Markets Corp. | 40,000,000 | – | (40,000,000) | – | ||||||||||||||
Total | $ | 51,600,000 | $ | – | $ | (51,600,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value 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
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bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | 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 or base fee rate, as applicable (expressed as an annual rate).
Base Fee | ||||||
Fund | Rate (%) | |||||
Perkins Small Cap Value Fund | 0.72 | |||||
For the 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 | |||||
Perkins Small Cap Value Fund | Russell 2000® Value Index | |||||
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 the Fund 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 Fund’s prospectuses and statements of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the period ended December 31, 2014 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Small Cap Value Fund | 0.52 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee 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 Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Small Cap Value Fund | 0.96 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services receives an administrative fee based on the average daily net assets Class L Shares of the Fund based on the average proportion of the Fund’s total net assets sold directly and the average proportion of the Fund’s net assets sold through financial intermediaries on a monthly basis. The asset-weighted fee is calculated by applying a blended annual fee rate of 0.12% on average net assets for the proportion of assets sold directly and 0.25% on average net assets for the proportion of assets sold through financial intermediaries. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations. Janus Services has agreed to waive all or a portion of this fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Services or Janus Capital 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 Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, 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. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the
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payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Small Cap Value Fund | $ | 54 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2014, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Small Cap Value Fund | $ | 74 | ||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
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, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Perkins Small Cap Value Fund | $ | 1,446,455,544 | $ | 346,128,354 | $ | (1,604,023) | $ | 344,524,331 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Losses incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2014
For the year ended June 30, 2014
No Expiration | Accumulated | |||||||||||||||||
Fund | June 30, 2016 | Short-Term | Long-Term | Capital Losses | ||||||||||||||
Perkins Small Cap Value Fund(1) | $ | (3,975,324) | $ | – | $ | – | $ | (3,975,324) | ||||||||||
(1) | Capital loss carryovers subject to annual limitations, $(1,987,662) should be avaiable in the next fiscal year. |
5. | Capital Share Transactions |
Perkins Small Cap Value Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 402,686 | 964,548 | ||||||||
Reinvested dividends and distributions | 314,191 | 184,756 | ||||||||
Shares repurchased | (1,623,401) | (2,731,934) | ||||||||
Net Increase/(Decrease) in Fund Shares | (906,524) | (1,582,630) | ||||||||
Shares Outstanding, Beginning of Period | 3,314,203 | 4,896,833 | ||||||||
Shares Outstanding, End of Period | 2,407,679 | 3,314,203 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 29,423 | 32,880 | ||||||||
Reinvested dividends and distributions | 126,229 | 28,363 | ||||||||
Shares repurchased | (108,764) | (188,239) | ||||||||
Net Increase/(Decrease) in Fund Shares | 46,888 | (126,996) | ||||||||
Shares Outstanding, Beginning of Period | 621,542 | 748,538 | ||||||||
Shares Outstanding, End of Period | 668,430 | 621,542 |
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Perkins Small Cap Value Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 49,008 | 131,584 | ||||||||
Reinvested dividends and distributions | 774,192 | 181,415 | ||||||||
Shares repurchased | (233,680) | (478,596) | ||||||||
Net Increase/(Decrease) in Fund Shares | 589,520 | (165,597) | ||||||||
Shares Outstanding, Beginning of Period | 3,003,138 | 3,168,735 | ||||||||
Shares Outstanding, End of Period | 3,592,658 | 3,003,138 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 1,997,266 | 4,589,312 | ||||||||
Reinvested dividends and distributions | 4,952,149 | 1,537,842 | ||||||||
Shares repurchased | (4,400,341) | (18,017,316) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,549,074 | (11,890,162) | ||||||||
Shares Outstanding, Beginning of Period | 22,782,056 | 34,672,218 | ||||||||
Shares Outstanding, End of Period | 25,331,130 | 22,782,056 | ||||||||
Transactions in Fund Shares – Class L Shares: | ||||||||||
Shares sold | 101,047 | 443,573 | ||||||||
Reinvested dividends and distributions | 1,851,442 | 494,047 | ||||||||
Shares repurchased | (1,007,942) | (2,774,405) | ||||||||
Net Increase/(Decrease) in Fund Shares | 944,547 | (1,836,785) | ||||||||
Shares Outstanding, Beginning of Period | 7,714,262 | 9,551,047 | ||||||||
Shares Outstanding, End of Period | 8,658,809 | 7,714,262 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 1,339,369 | 3,494,784 | ||||||||
Reinvested dividends and distributions | 2,075,889 | 770,142 | ||||||||
Shares repurchased | (1,376,124) | (7,466,652) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,039,134 | (3,201,726) | ||||||||
Shares Outstanding, Beginning of Period | 7,414,203 | 10,615,929 | ||||||||
Shares Outstanding, End of Period | 9,453,337 | 7,414,203 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 74,252 | 199,684 | ||||||||
Reinvested dividends and distributions | 172,603 | 54,077 | ||||||||
Shares repurchased | (241,456) | (668,025) | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,399 | (414,264) | ||||||||
Shares Outstanding, Beginning of Period | 888,996 | 1,303,260 | ||||||||
Shares Outstanding, End of Period | 894,395 | 888,996 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 438,121 | 756,511 | ||||||||
Reinvested dividends and distributions | 656,773 | 189,138 | ||||||||
Shares repurchased | (755,200) | (1,698,306) | ||||||||
Net Increase/(Decrease) in Fund Shares | 339,694 | (752,657) | ||||||||
Shares Outstanding, Beginning of Period | 2,684,388 | 3,437,045 | ||||||||
Shares Outstanding, End of Period | 3,024,082 | 2,684,388 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,058,543 | 2,630,440 | ||||||||
Reinvested dividends and distributions | 6,220,596 | 1,769,694 | ||||||||
Shares repurchased | (5,015,238) | (13,995,877) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,263,901 | (9,595,743) | ||||||||
Shares Outstanding, Beginning of Period | 26,173,033 | 35,768,776 | ||||||||
Shares Outstanding, End of Period | 28,436,934 | 26,173,033 |
Janus Investment Fund | 31
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Notes to Financial Statements (unaudited) (continued)
6. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Small Cap Value Fund | $ | 824,418,941 | $ | 1,062,547,772 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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Additional Information (unaudited) (continued)
underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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Additional Information (unaudited) (continued)
noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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Additional Information (unaudited) (continued)
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 43
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
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Notes
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81504 | 125-24-93034 02-15 |
Table of Contents
semiannual report
December 31, 2014
Perkins Value Plus Income Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Perkins Value Plus Income Fund
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Perkins Value Plus Income Fund (unaudited)
FUND SNAPSHOT The Fund seeks high-quality equity and credit-oriented fixed income selected to drive portfolio income. The allocation has the flexibility to move between 40% to 60% in equity securities and the remainder in fixed-income securities and cash equivalents. Both the Perkins equity team and the Janus fixed income team focus on minimizing downside risk using their own unique approach to fundamental, bottom-up investing. | ![]() Gibson Smith co-portfolio manager | ![]() Darrell Watters co-portfolio manager | ![]() Jeff Kautz co-portfolio manager | ![]() Ted Thome co-portfolio manager |
PERFORMANCE OVERVIEW
For the six-months ended December 31, 2014, Perkins Value Plus Income Fund’s Class I Shares returned 2.38%, while the Fund’s primary benchmark, the Russell 1000 Value Index, returned 4.78%. Its hypothetical internally-calculated benchmark, the Value Income Index, which combines the total returns from the Russell 1000 Value Index (50%) and the Barclays U.S. Aggregate Bond Index (50%), returned 3.38%. The Fund’s secondary benchmark, the Barclays U.S. Aggregate Bond Index, returned 1.96% during the period.
MARKET ENVIRONMENT
The U.S. economy continued to gain steam during the period, delivering nearly 5% GDP growth in the third quarter, with the unemployment rate falling to under 6% amid signs of wage growth. Persistently high underemployment, however, remains a troubling counterweight. Corporate balance sheets remain flush with cash but companies continue to add leverage by tapping financing at record low interest rates. Earnings growth also remained strong, coupled with equity valuations that appear buoyed by market optimism. All this occurred with central bank policy accommodation that remains very friendly to risk assets on a global basis although the Federal Reserve (Fed) could become less so in the coming year.
The recent fall in energy prices is likely a blessing, but could possibly be a curse as well. Short-term, it should provide a boost in consumer spending, evidenced by early reports of healthy holiday retail activity. Long-term, however, a significant portion of U.S. capital expenditures are attributable to the energy complex, and less exploration and production activity could negatively impact the earnings of those firms with exposure. In addition, the U.S. shale revolution has stimulated economic activity in places such as North Dakota and Pennsylvania with high paying jobs and local economies that have only witnessed rising oil prices. Energy companies have also been active participants in the debt markets, particularly in high-yield issuance, and risks around substantially squeezed profits could spread to financial markets. Clearly, there are winners from lower crude prices, but the collateral damage could appear later. The added variable here is the geopolitical consequences of lower oil prices on volatile countries such as Russia, Venezuela, and much of the Middle East. These risks seem to be reflected to some degree in the price of energy stocks, but the broader markets continued to march to new highs.
Although equities ended the period up, sinking oil prices and the subsequent market volatility raised fears that global growth may be slowing. This sparked a safe-haven rotation in the bond market into Treasurys out of fixed income risk assets, like high yield. The prices of long-end Treasurys rallied in particular, and yields on the 10-year and 30-year Treasurys declined materially. The Fed signaled that it remained on track to raise rates in 2015, and that pushed short-end rates higher, flattening the yield curve.
PORTFOLIO OVERVIEW
We were overweight in equities, which aided relative performance, given equity’s significant outperformance relative to fixed income.
Our equity sleeve in aggregate underperformed the Russell 1000 Value Index. Our holdings in financials, consumer staples and consumer discretionary weighed the most on relative performance, while our holdings in health care and industrials contributed. Our underweight in materials also aided relative performance.
The fixed income sleeve underperformed the Barclays U.S. Aggregate Bond Index. An overweight to corporate
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Perkins Value Plus Income Fund (unaudited)
credit drove the sleeve’s underperformance. Sector detractors were led by independent and midstream energy and metals and mining. From a sector standpoint, credit contributors included automotive, technology, and banking.
In our joint management of the Fund, both Perkins and Janus investment teams are at least as focused on absolute total returns as we are on relative returns, and therefore, are focused on the long-term.
EQUITY DETRACTORS
Tesco weighed the most on performance. Tesco is a grocery and general merchandise retailer based in the UK. For nearly three years, Tesco has been in the process of fixing some long-standing problems in its core UK business, which represents the majority of its profits but has been contracting of late. During the period, the company announced a raft of negative news. First, it admitted that management’s strategy for turning the business around has largely failed, leading the board to bring in its first ever “outsider” to take over as CEO and leaving investors with great uncertainty about the path forward. Second, the company announced three separate profit warnings, the last of which entailed accounting irregularities discovered by new management. Third, the company cut its interim dividend and is thought to be mulling a rights issue to more easily deal with this period of reduced profitability. We trimmed our position. This investment has been a costly mistake for us thus far, but as we examine the current market price relative to asset value and our reduced view of long-term earnings power, we believe the near-term headwinds are more than reflected in the stock.
Ensco, a global offshore contract drilling company with a geographically diverse fleet of new ultra deepwater rigs and premium jack-up rigs, was also a detractor. Ensco’s shares underperformed for the year as the company took a $1.5 billion noncash impairment charge on some of its floaters as the book value of these rigs declined given challenging market conditions. Furthermore, day rates and rig utilization continued to soften throughout the year, further hurt by the significant decline in crude oil prices in the fourth quarter. We added to our position as we think that the company is one of the best operators in the industry, has a solid balance sheet and is trading at a compelling valuation.
EQUITY CONTRIBUTORS
Our largest individual contributor was Phibro Animal Health as it outperformed this period as the company continued to report stronger than expected results, driven by strong demand for the animal health products. Phibro is well positioned to benefit from the growing global demand for animal protein consumption. We trimmed our position into strength, but believe the reward-to-risk ratio remains favorable despite the recent stock outperformance. Furthermore, we believe the valuation discount that Phibro receives relative to its larger peer Zoetis and recent transactions in the animal health industry support current valuation of the stock.
Casey’s General Stores also aided performance. Casey’s operates gas stations and convenience stores throughout small towns in the Midwest, and is slowly expanding into the Southeast. The steep decline in crude, and ultimately gasoline prices, were the main driver behind the stock’s rally in the quarter. Gasoline margins at Casey’s typically benefit when wholesale gasoline prices decline as retail prices at the pump are stickier on the way down. Casey’s has done a solid job in executing its growth strategy – evidenced by strength in same-store sales of grocery items and prepared foods during the quarter. Over the past two years, other publicly traded convenience store chains have been acquired by master limited partnerships (MLPs), adopted MLP structures, or have been acquired by parent companies that own MLPs, any of which could unlock further value at Casey’s should management elect to go that route. We trimmed the stock on strength as the reward-to-risk ratio became less favorable.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
FIXED INCOME CONTRIBUTORS AND DETRACTORS
The Fund’s fixed income sleeve underperformance was driven by our security selection within corporate credit, specifically energy-related credits, as well as by an overweight to corporate credit in general. Furthermore, we had a material overweight in several energy-related sectors. Our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, in our view. Many have ratings in the high-yield market’s “crossover” section, which is just beneath investment grade. We believe this section of the high-yield market, in general, offers attractive risk-adjusted returns due to the potential ratings upgrades for these companies. We also believe many of our energy holdings can efficiently produce oil at lower prices.
We believe it is important to note that the sharp decline in crude oil prices in the period sparked indiscriminate selling in energy-related corporate credit, primarily within the high-yield market. In our view, this led to individual
2 | DECEMBER 31, 2014
Table of Contents
(unaudited)
company fundamentals being ignored. We would add that a significant portion of crude oil’s quarterly decline occurred during the holiday season. That is a low volume period in the high-yield market, and we believe the lower trading volume exacerbated price declines.
One energy sector in particular, independent energy, significantly detracted from the Fund’s relative performance overall. The midstream energy sector was another top relative detractor.
The automobile and technology sectors within corporate credit were additive on a relative basis. Our out-of-index high-yield exposure in corporate credit helped make spread carry, or the excess yield generated by individual securities versus the index, a relative contributor.
MARKET OUTLOOK
As we look ahead, the factors that led us to the upcoming six-year anniversary of the bull market continue to be intact, namely the unbelievably loose monetary policy on a global basis. However, the Fed has stated its intention, and has initiated the process, of slowly reducing the amount of liquidity flooded into the system. When looking at economic growth and recent jobs data, one could argue that the data set indicates the U.S. economy is doing just fine and that some accommodation can be curtailed. The counterargument is that the economy is still growing at a tepid pace for this point in a normal economic recovery and given the large amount of debt in the system, central bankers fear debt deflation so interest rates can stay lower for longer. There are certainly bright spots in the market, though we believe they may not warrant the current high level of investor optimism. While there may be more gains ahead, we believe there is also the potential for greater volatility, and therefore remain cautious in our portfolio positioning. Aside from the energy segment, another source of potential volatility could originate from the Fed both from communication to the market as well as its policy intentions. While we believe valuations are fair, if not slightly overvalued, there seems to be little room for error in equity prices. Looking ahead, we believe our portfolio remains well positioned to navigate the current market climate, in terms of both risk exposure and long-term upside potential.
As our sector positioning did not materially change in the period, the Fund’s equity sleeve is overweight areas that we believe have less absolute downside price risk. In health care, we added to our positions in companies that we believe have great franchises or those that meet our definitions of high quality: strong balance sheets, healthy free cash flow, stable earnings as well as having less absolute downside price risk should the market correct. Several other stocks we added to in the period had traded well off of their highs and we took advantage of price weakness to initiate positions. We believe these opportunities should continue to present themselves if volatility increases, as we have the patience to wait for reward-to-risk ratios to be in our favor.
On the fixed income side, after decreasing our Treasury weighting through much of the period, we began to definitively increase it toward the end of the period as a defensive measure in light of market conditions. Our Treasury allocation remained underweight the benchmark. We remain overweight in our corporate credit allocation. Solid U.S. economic growth bodes well for corporate prospects, and at this stage in the credit cycle, companies are re-leveraging their balance sheets through share repurchases and expensive acquisitions. Selectivity is key, which plays to our bottom-up, fundamental process of focusing on strong balance sheets and managements.
Thank you for your investment with us in Perkins Value Plus Income Fund.
Janus Investment Fund | 3
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Perkins Value Plus Income Fund At A Glance
5 Top Performers – Equity Holdings
Contribution | ||||
Phibro Animal Health Corp. – Class A | 0.44% | |||
Casey’s General Stores, Inc. | 0.36% | |||
AbbVie, Inc. | 0.31% | |||
Zoetis, Inc. | 0.29% | |||
Patterson Cos., Inc. | 0.29% |
5 Bottom Performers – Equity Holdings
Contribution | ||||
Tesco PLC | –0.57% | |||
Ensco PLC – Class A | –0.37% | |||
Anadarko Petroleum Corp. | –0.36% | |||
Plains GP Holdings LP – Class A | –0.32% | |||
Schlumberger, Ltd. (U.S. Shares) | –0.32% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Industrials | 0.43% | 9.56% | 10.23% | |||||||||
Health Care | 0.38% | 18.67% | 13.51% | |||||||||
Materials | 0.25% | 1.16% | 3.28% | |||||||||
Information Technology | 0.03% | 12.07% | 9.32% | |||||||||
Energy | 0.02% | 9.10% | 12.68% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Financials | –1.19% | 17.72% | 29.11% | |||||||||
Consumer Staples | –1.15% | 11.74% | 7.13% | |||||||||
Other** | –0.26% | 2.08% | 0.00% | |||||||||
Consumer Discretionary | –0.18% | 9.17% | 6.34% | |||||||||
Utilities | –0.16% | 4.48% | 6.17% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
4 | DECEMBER 31, 2014
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of December 31, 2014
Pfizer, Inc. Pharmaceuticals | 1.5% | |||
Wells Fargo & Co. Commercial Banks | 1.5% | |||
Oracle Corp. Software | 1.4% | |||
JPMorgan Chase & Co. Commercial Banks | 1.3% | |||
PPL Corp. Electric Utilities | 1.2% | |||
6.9% |
Asset Allocation – (% of Net Assets)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif30p04.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of December 31, 2014
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif30t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif30c04.gif)
Janus Investment Fund | 5
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983jif30m04.gif)
Average Annual Total Return – for the periods ended December 31, 2014 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Perkins Value Plus Income Fund – Class A Shares | |||||||||||
NAV | 2.33% | 9.13% | 10.60% | 1.35% | 1.02% | ||||||
MOP | –3.57% | 2.84% | 9.13% | ||||||||
Perkins Value Plus Income Fund – Class C Shares | |||||||||||
NAV | 2.05% | 8.36% | 9.89% | 2.04% | 1.70% | ||||||
CDSC | 1.12% | 7.38% | 9.89% | ||||||||
Perkins Value Plus Income Fund – Class D Shares(1) | 2.50% | 9.32% | 10.76% | 1.15% | 0.83% | ||||||
Perkins Value Plus Income Fund – Class I Shares | 2.38% | 9.34% | 10.86% | 1.02% | 0.68% | ||||||
Perkins Value Plus Income Fund – Class S Shares | 2.29% | 9.13% | 10.43% | 1.50% | 1.18% | ||||||
Perkins Value Plus Income Fund – Class T Shares | 2.35% | 9.27% | 10.68% | 1.25% | 0.93% | ||||||
Russell 1000® Value Index | 4.78% | 13.45% | 17.26% | ||||||||
Barclays U.S. Aggregate Bond Index | 1.96% | 5.97% | 3.57% | ||||||||
Value Income Index | 3.38% | 9.74% | 10.46% | ||||||||
Morningstar Quartile – Class I Shares | – | 1st | 2nd | ||||||||
Morningstar Ranking – based on total returns for Moderate Allocation Funds | – | 126/892 | 276/738 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 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).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
6 | DECEMBER 31, 2014
Table of Contents
(unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility and differing financial and information reporting standards, all of which are magnified in emerging markets.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2014 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – July 30, 2010 | |
(1) | Closed to new investors. |
Janus Investment Fund | 7
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14) | (12/31/14) | (7/1/14 - 12/31/14)† | (7/1/14 - 12/31/14) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,023.30 | $ | 5.10 | $ | 1,000.00 | $ | 1,020.16 | $ | 5.09 | 1.00% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,020.50 | $ | 8.81 | $ | 1,000.00 | $ | 1,016.48 | $ | 8.79 | 1.73% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,025.00 | $ | 4.24 | $ | 1,000.00 | $ | 1,021.02 | $ | 4.23 | 0.83% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,023.80 | $ | 3.67 | $ | 1,000.00 | $ | 1,021.58 | $ | 3.67 | 0.72% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,022.90 | $ | 6.07 | $ | 1,000.00 | $ | 1,019.21 | $ | 6.06 | 1.19% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,023.50 | $ | 4.79 | $ | 1,000.00 | $ | 1,020.47 | $ | 4.79 | 0.94% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
8 | DECEMBER 31, 2014
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 1.8% | ||||||||||
$69,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 69,553 | |||||||
25,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 25,408 | ||||||||
148,983 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 151,078 | ||||||||
35,176 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49 | 37,349 | ||||||||
168,000 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 182,088 | ||||||||
79,729 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20 (144A),§ | 69,131 | ||||||||
100,000 | GS Mortgage Securities Corp. II 3.4350%, 12/10/27 (144A),‡ | 94,087 | ||||||||
78,000 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 82,206 | ||||||||
27,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 27,127 | ||||||||
28,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 28,838 | ||||||||
21,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.5910%, 4/15/47‡ | 22,412 | ||||||||
47,610 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47 | 49,311 | ||||||||
23,638 | Wachovia Bank Commercial Mortgage Trust Series 2007-C33 5.9413%, 2/15/51‡ | 24,767 | ||||||||
25,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.9050%, 1/15/27 (144A),‡ | 24,986 | ||||||||
25,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.4050%, 2/15/27 (144A),‡ | 24,985 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $919,709) | 913,326 | |||||||||
Bank Loans and Mezzanine Loans – 1.2% | ||||||||||
Communications – 0.1% | ||||||||||
74,691 | Tribune Media Co. 4.0000%, 12/27/20‡ | 73,431 | ||||||||
Consumer Cyclical – 0.2% | ||||||||||
96,040 | MGM Resorts International 3.5000%, 12/20/19‡ | 93,339 | ||||||||
Consumer Non-Cyclical – 0.3% | ||||||||||
17,820 | CHS/Community Health Systems, Inc. 4.2500%, 1/27/21‡ | 17,757 | ||||||||
73,445 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 71,609 | ||||||||
47,402 | Quintiles Transnational Corp. 3.7500%, 6/8/18‡ | 46,770 | ||||||||
| ||||||||||
136,136 | ||||||||||
Technology – 0.6% | ||||||||||
316,410 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 314,961 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $625,203) | 617,867 | |||||||||
Common Stocks – 58.1% | ||||||||||
Aerospace & Defense – 0.8% | ||||||||||
3,500 | United Technologies Corp. | 402,500 | ||||||||
Beverages – 0.4% | ||||||||||
2,400 | PepsiCo, Inc.† | 226,944 | ||||||||
Capital Markets – 0.7% | ||||||||||
4,500 | T Rowe Price Group, Inc. | 386,370 | ||||||||
Commercial Banks – 4.7% | ||||||||||
3,400 | BB&T Corp. | 132,226 | ||||||||
3,100 | BOK Financial Corp. | 186,124 | ||||||||
11,600 | Fifth Third Bancorp | 236,350 | ||||||||
10,900 | JPMorgan Chase & Co. | 682,122 | ||||||||
2,200 | M&T Bank Corp.† | 276,364 | ||||||||
1,700 | PNC Financial Services Group, Inc. | 155,091 | ||||||||
14,800 | Wells Fargo & Co.† | 811,336 | ||||||||
| ||||||||||
2,479,613 | ||||||||||
Commercial Services & Supplies – 1.5% | ||||||||||
59,300 | G4S PLC | 255,170 | ||||||||
9,600 | Republic Services, Inc. | 386,400 | ||||||||
3,300 | Tyco International PLC | 144,738 | ||||||||
| ||||||||||
786,308 | ||||||||||
Communications Equipment – 1.2% | ||||||||||
5,900 | Cisco Systems, Inc. | 164,108 | ||||||||
6,400 | QUALCOMM, Inc. | 475,712 | ||||||||
| ||||||||||
639,820 | ||||||||||
Diversified Telecommunication Services – 1.1% | ||||||||||
6,700 | Telenor ASA | 135,187 | ||||||||
9,500 | Verizon Communications, Inc. | 444,410 | ||||||||
| ||||||||||
579,597 | ||||||||||
Electric Utilities – 1.6% | ||||||||||
4,200 | NRG Yield, Inc. – Class A | 197,988 | ||||||||
17,500 | PPL Corp. | 635,775 | ||||||||
| ||||||||||
833,763 | ||||||||||
Energy Equipment & Services – 1.9% | ||||||||||
6,000 | Ensco PLC – Class A | 179,700 | ||||||||
5,200 | Oceaneering International, Inc. | 305,812 | ||||||||
4,500 | Schlumberger, Ltd. (U.S. Shares)† | 384,345 | ||||||||
4,600 | Tidewater, Inc. | 149,086 | ||||||||
| ||||||||||
1,018,943 | ||||||||||
Food & Staples Retailing – 2.9% | ||||||||||
4,600 | Casey’s General Stores, Inc. | 415,472 | ||||||||
12,600 | Sysco Corp. | 500,094 | ||||||||
83,900 | Tesco PLC | 244,113 | ||||||||
7,300 | Weis Markets, Inc. | 349,086 | ||||||||
| ||||||||||
1,508,765 | ||||||||||
Food Products – 1.8% | ||||||||||
1,800 | Danone SA | 118,402 | ||||||||
2,400 | JM Smucker Co. | 242,352 | ||||||||
2,700 | McCormick & Co., Inc. | 200,610 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Food Products – (continued) | ||||||||||
$2,200 | Nestle SA | $ | 161,312 | |||||||
35,600 | Orkla ASA | 242,790 | ||||||||
| ||||||||||
965,466 | ||||||||||
Health Care Equipment & Supplies – 2.7% | ||||||||||
4,100 | Baxter International, Inc. | 300,489 | ||||||||
1,900 | Covidien PLC (U.S. Shares) | 194,332 | ||||||||
4,000 | Medtronic, Inc.† | 288,800 | ||||||||
21,500 | Meridian Bioscience, Inc. | 353,890 | ||||||||
3,100 | Stryker Corp.† | 292,423 | ||||||||
| ||||||||||
1,429,934 | ||||||||||
Health Care Providers & Services – 2.5% | ||||||||||
9,300 | Landauer, Inc. | 317,502 | ||||||||
7,300 | Owens & Minor, Inc. | 256,303 | ||||||||
8,900 | Patterson Cos., Inc. | 428,090 | ||||||||
4,900 | Quest Diagnostics, Inc. | 328,594 | ||||||||
| ||||||||||
1,330,489 | ||||||||||
Hotels, Restaurants & Leisure – 0.9% | ||||||||||
1,900 | Darden Restaurants, Inc. | 111,397 | ||||||||
4,100 | McDonald’s Corp. | 384,170 | ||||||||
| ||||||||||
495,567 | ||||||||||
Household Durables – 0.6% | ||||||||||
12,100 | MDC Holdings, Inc. | 320,287 | ||||||||
Household Products – 0.6% | ||||||||||
3,300 | Procter & Gamble Co.† | 300,597 | ||||||||
Information Technology Services – 0.5% | ||||||||||
3,000 | Accenture PLC – Class A (U.S. Shares)† | 267,930 | ||||||||
Insurance – 1.5% | ||||||||||
2,800 | Allstate Corp. | 196,700 | ||||||||
5,600 | Arthur J Gallagher & Co. | 263,648 | ||||||||
5,400 | Marsh & McLennan Cos., Inc. | 309,096 | ||||||||
| ||||||||||
769,444 | ||||||||||
Leisure Products – 0.6% | ||||||||||
9,500 | Mattel, Inc. | 293,977 | ||||||||
Life Sciences Tools & Services – 0.6% | ||||||||||
7,600 | Agilent Technologies, Inc. | 311,144 | ||||||||
Machinery – 0.4% | ||||||||||
2,700 | Pfeiffer Vacuum Technology AG | 224,095 | ||||||||
Marine – 0.6% | ||||||||||
74,100 | Irish Continental Group PLC | 289,817 | ||||||||
Media – 2.6% | ||||||||||
6,500 | Comcast Corp. – Class A† | 377,065 | ||||||||
7,000 | Lamar Advertising Co. – Class A | 375,480 | ||||||||
3,800 | Omnicom Group, Inc.† | 294,386 | ||||||||
6,500 | Time, Inc. | 159,965 | ||||||||
23,040 | UBM PLC | 171,939 | ||||||||
| ||||||||||
1,378,835 | ||||||||||
Multi-Utilities – 0.5% | ||||||||||
3,500 | Alliant Energy Corp.† | 232,470 | ||||||||
Multiline Retail – 0.4% | ||||||||||
3,000 | Target Corp.† | 227,730 | ||||||||
Oil, Gas & Consumable Fuels – 4.2% | ||||||||||
5,000 | Anadarko Petroleum Corp. | 412,500 | ||||||||
6,700 | BP PLC (ADR) | 255,404 | ||||||||
3,100 | Chevron Corp. | 347,758 | ||||||||
3,500 | HollyFrontier Corp. | 131,180 | ||||||||
2,900 | Occidental Petroleum Corp. | 233,769 | ||||||||
15,100 | Plains GP Holdings LP – Class A | 387,768 | ||||||||
6,500 | Royal Dutch Shell PLC (ADR) | 435,175 | ||||||||
| ||||||||||
2,203,554 | ||||||||||
Paper & Forest Products – 0.7% | ||||||||||
14,300 | PH Glatfelter Co. | 365,651 | ||||||||
Pharmaceuticals – 6.0% | ||||||||||
7,000 | AbbVie, Inc.† | 458,080 | ||||||||
2,900 | Johnson & Johnson† | 303,253 | ||||||||
4,400 | Novartis AG (ADR) | 407,704 | ||||||||
26,200 | Pfizer, Inc.† | 816,130 | ||||||||
11,000 | Phibro Animal Health Corp. – Class A | 347,050 | ||||||||
8,900 | Teva Pharmaceutical Industries, Ltd. (ADR)† | 511,839 | ||||||||
7,600 | Zoetis, Inc. | 327,028 | ||||||||
| ||||||||||
3,171,084 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.5% | ||||||||||
2,200 | Home Properties, Inc. | 144,320 | ||||||||
8,000 | Paramount Group, Inc.* | 148,720 | ||||||||
4,800 | Plum Creek Timber Co., Inc. | 205,392 | ||||||||
8,200 | Weyerhaeuser Co. | 294,298 | ||||||||
| ||||||||||
792,730 | ||||||||||
Road & Rail – 2.6% | ||||||||||
2,900 | Canadian Pacific Railway, Ltd. (U.S. Shares) | 558,801 | ||||||||
6,400 | CSX Corp. | 231,872 | ||||||||
2,700 | Kansas City Southern† | 329,481 | ||||||||
2,200 | Union Pacific Corp.† | 262,086 | ||||||||
| ||||||||||
1,382,240 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.4% | ||||||||||
4,100 | Altera Corp.† | 151,454 | ||||||||
3,500 | Analog Devices, Inc. | 194,320 | ||||||||
5,400 | Microchip Technology, Inc. | 243,594 | ||||||||
3,800 | Xilinx, Inc.† | 164,502 | ||||||||
| ||||||||||
753,870 | ||||||||||
Software – 2.4% | ||||||||||
9,900 | CA, Inc. | 301,455 | ||||||||
4,900 | Microsoft Corp.† | 227,605 | ||||||||
16,500 | Oracle Corp.† | 742,005 | ||||||||
| ||||||||||
1,271,065 | ||||||||||
Technology Hardware, Storage & Peripherals – 1.3% | ||||||||||
2,600 | Apple, Inc.† | 286,988 | ||||||||
9,200 | EMC Corp. | 273,608 | ||||||||
3,000 | NetApp, Inc. | 124,350 | ||||||||
| ||||||||||
684,946 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.5% | ||||||||||
4,000 | Coach, Inc. | 150,240 | ||||||||
7,800 | Movado Group, Inc. | 221,286 | ||||||||
2,300 | Ralph Lauren Corp.† | 425,868 | ||||||||
| ||||||||||
797,394 | ||||||||||
Tobacco – 0.7% | ||||||||||
2,300 | Altria Group, Inc. | 113,321 | ||||||||
8,200 | Swedish Match AB | 255,936 | ||||||||
| ||||||||||
369,257 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Transportation Infrastructure – 0.6% | ||||||||||
$29,700 | BBA Aviation PLC | $ | 165,588 | |||||||
6,700 | Hamburger Hafen und Logistik AG | 139,280 | ||||||||
| ||||||||||
304,868 | ||||||||||
Wireless Telecommunication Services – 1.6% | ||||||||||
223,900 | America Movil SAB de CV – Series L | 248,938 | ||||||||
8,900 | Rogers Communications, Inc. – Class B | 346,115 | ||||||||
7,000 | Vodafone Group PLC (ADR) | 239,190 | ||||||||
| ||||||||||
834,243 | ||||||||||
Total Common Stocks (cost $26,611,807) | 30,631,307 | |||||||||
Corporate Bonds – 18.3% | ||||||||||
Banking – 3.0% | ||||||||||
$29,000 | Ally Financial, Inc. 8.0000%, 3/15/20 | 34,220 | ||||||||
29,000 | Ally Financial, Inc. 7.5000%, 9/15/20 | 34,002 | ||||||||
67,000 | American Express Co. 6.8000%, 9/1/66‡ | 70,182 | ||||||||
21,000 | American Express Co. 5.2000%µ | 21,327 | ||||||||
80,000 | Bank of America Corp. 8.0000%µ | 85,900 | ||||||||
87,000 | Citigroup, Inc. 5.9000%, 12/29/49 | 84,825 | ||||||||
92,000 | Citigroup, Inc. 5.8000%µ | 92,000 | ||||||||
54,000 | Discover Financial Services 3.9500%, 11/6/24 | 54,283 | ||||||||
70,000 | Goldman Sachs Capital I 6.3450%, 2/15/34 | 83,272 | ||||||||
34,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 36,468 | ||||||||
20,000 | Goldman Sachs Group, Inc. 5.7000%µ | 20,230 | ||||||||
91,000 | Morgan Stanley 1.8750%, 1/5/18 | 90,667 | ||||||||
35,000 | Morgan Stanley 5.0000%, 11/24/25 | 37,349 | ||||||||
15,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 15,150 | ||||||||
53,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 57,484 | ||||||||
155,000 | Royal Bank of Scotland Group PLC 6.0000%, 12/19/23 | 167,772 | ||||||||
245,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 249,212 | ||||||||
56,000 | SVB Financial Group 5.3750%, 9/15/20 | 62,970 | ||||||||
61,000 | Synchrony Financial 3.0000%, 8/15/19 | 61,668 | ||||||||
83,000 | Synchrony Financial 4.2500%, 8/15/24 | 85,169 | ||||||||
139,000 | Zions Bancorporation 5.8000%µ | 131,216 | ||||||||
| ||||||||||
1,575,366 | ||||||||||
Basic Industry – 0.9% | ||||||||||
77,000 | Albemarle Corp. 4.1500%, 12/1/24 | 78,232 | ||||||||
62,000 | Albemarle Corp. 5.4500%, 12/1/44 | 66,715 | ||||||||
49,000 | Ashland, Inc. 3.8750%, 4/15/18 | 49,490 | ||||||||
40,000 | Ashland, Inc. 6.8750%, 5/15/43 | 42,600 | ||||||||
91,000 | Georgia-Pacific LLC 3.1630%, 11/15/21 (144A) | 91,544 | ||||||||
85,000 | Georgia-Pacific LLC 3.6000%, 3/1/25 (144A) | 85,363 | ||||||||
59,000 | Reliance Steel & Aluminum Co. 4.5000%, 4/15/23 | 57,823 | ||||||||
| ||||||||||
471,767 | ||||||||||
Brokerage – 2.0% | ||||||||||
65,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 69,550 | ||||||||
53,000 | Carlyle Holdings Finance LLC 3.8750%, 2/1/23 (144A) | 54,296 | ||||||||
45,000 | Charles Schwab Corp. 7.0000%µ | 52,003 | ||||||||
94,000 | E*TRADE Financial Corp. 6.3750%, 11/15/19 | 99,640 | ||||||||
36,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 36,810 | ||||||||
13,000 | Lazard Group LLC 6.8500%, 6/15/17 | 14,472 | ||||||||
60,000 | Lazard Group LLC 4.2500%, 11/14/20 | 63,237 | ||||||||
135,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.6250%, 3/15/20 (144A) | 141,075 | ||||||||
90,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 94,725 | ||||||||
215,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 244,881 | ||||||||
62,000 | Stifel Financial Corp. 4.2500%, 7/18/24 | 62,368 | ||||||||
108,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 109,459 | ||||||||
| ||||||||||
1,042,516 | ||||||||||
Capital Goods – 0.5% | ||||||||||
53,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 52,205 | ||||||||
61,000 | Exelis, Inc. 4.2500%, 10/1/16 | 63,087 | ||||||||
28,000 | Exelis, Inc. 5.5500%, 10/1/21 | 30,219 | ||||||||
36,000 | KLX, Inc. 5.8750%, 12/1/22 (144A) | 36,360 | ||||||||
43,000 | Martin Marietta Materials, Inc. 4.2500%, 7/2/24 | 44,079 | ||||||||
22,000 | Owens Corning 4.2000%, 12/1/24 | 21,711 | ||||||||
| ||||||||||
247,661 | ||||||||||
Communications – 0.4% | ||||||||||
40,000 | Nielsen Finance LLC / Nielsen Finance Co. 4.5000%, 10/1/20 | 40,200 | ||||||||
36,000 | Nielsen Finance LLC / Nielsen Finance Co. 5.0000%, 4/15/22 (144A) | 36,180 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Communications – (continued) | ||||||||||
$50,000 | SBA Tower Trust 2.9330%, 12/15/17 (144A) | $ | 50,639 | |||||||
58,000 | UBM PLC 5.7500%, 11/3/20 (144A) | 63,270 | ||||||||
| ||||||||||
190,289 | ||||||||||
Consumer Cyclical – 2.0% | ||||||||||
144,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 143,599 | ||||||||
31,000 | DR Horton, Inc. 4.7500%, 5/15/17 | 32,395 | ||||||||
63,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 62,370 | ||||||||
133,000 | General Motors Co. 3.5000%, 10/2/18 | 135,660 | ||||||||
297,000 | General Motors Co. 4.8750%, 10/2/23 | 316,107 | ||||||||
42,000 | General Motors Co. 6.2500%, 10/2/43 | 50,173 | ||||||||
43,000 | General Motors Co. 5.2000%, 4/1/45 | 45,365 | ||||||||
72,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 69,660 | ||||||||
35,000 | MGM Resorts International 8.6250%, 2/1/19 | 39,681 | ||||||||
50,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.1500%, 12/1/19 | 58,928 | ||||||||
28,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 28,140 | ||||||||
15,000 | Toll Brothers Finance Corp. 4.3750%, 4/15/23 | 14,700 | ||||||||
46,000 | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 4.2500%, 5/30/23 (144A) | 43,700 | ||||||||
| ||||||||||
1,040,478 | ||||||||||
Consumer Non-Cyclical – 1.0% | ||||||||||
16,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 16,082 | ||||||||
14,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 14,206 | ||||||||
52,000 | Becton Dickinson and Co. 1.8000%, 12/15/17 | 52,192 | ||||||||
117,000 | Fresenius Medical Care U.S. Finance II, Inc. 5.8750%, 1/31/22 (144A) | 126,945 | ||||||||
22,000 | Omnicare, Inc. 4.7500%, 12/1/22 | 22,275 | ||||||||
30,000 | Omnicare, Inc. 5.0000%, 12/1/24 | 30,750 | ||||||||
59,000 | Safeway, Inc. 4.7500%, 12/1/21 | 59,737 | ||||||||
23,000 | Smithfield Foods, Inc. 5.2500%, 8/1/18 (144A) | 23,403 | ||||||||
28,000 | Thermo Fisher Scientific, Inc. 3.3000%, 2/15/22 | 28,046 | ||||||||
24,000 | Tyson Foods, Inc. 6.6000%, 4/1/16 | 25,584 | ||||||||
103,000 | Wm Wrigley Jr Co. 3.3750%, 10/21/20 (144A) | 105,279 | ||||||||
| ||||||||||
504,499 | ||||||||||
Electric – 0.3% | ||||||||||
45,000 | IPALCO Enterprises, Inc. 5.0000%, 5/1/18 | 47,475 | ||||||||
46,000 | PPL WEM Holdings, Ltd. 3.9000%, 5/1/16 (144A) | 47,357 | ||||||||
62,000 | PPL WEM Holdings, Ltd. 5.3750%, 5/1/21 (144A) | 69,681 | ||||||||
| ||||||||||
164,513 | ||||||||||
Energy – 3.2% | ||||||||||
94,000 | California Resources Corp. 5.5000%, 9/15/21 (144A) | 80,370 | ||||||||
77,000 | California Resources Corp. 6.0000%, 11/15/24 (144A) | 65,065 | ||||||||
62,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 61,961 | ||||||||
91,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 88,498 | ||||||||
110,000 | Chevron Corp. 1.3450%, 11/15/17 | 110,089 | ||||||||
150,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 156,000 | ||||||||
97,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 92,635 | ||||||||
63,000 | Continental Resources, Inc. 5.0000%, 9/15/22 | 60,953 | ||||||||
65,000 | DCP Midstream Operating LP 4.9500%, 4/1/22 | 68,994 | ||||||||
43,000 | DCP Midstream Operating LP 3.8750%, 3/15/23 | 41,148 | ||||||||
36,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 36,805 | ||||||||
43,000 | El Paso Pipeline Partners Operating Co. LLC 4.3000%, 5/1/24 | 43,083 | ||||||||
44,000 | Energy Transfer Partners LP 4.1500%, 10/1/20 | 45,108 | ||||||||
44,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 44,574 | ||||||||
32,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 33,427 | ||||||||
22,000 | Ensco PLC 4.5000%, 10/1/24 | 21,383 | ||||||||
20,000 | Frontier Oil Corp. 6.8750%, 11/15/18 | 20,400 | ||||||||
90,000 | Kinder Morgan, Inc. 7.0000%, 6/15/17 | 99,225 | ||||||||
5,000 | Kinder Morgan, Inc. 6.5000%, 9/15/20 | 5,657 | ||||||||
32,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 39,360 | ||||||||
67,000 | NGL Energy Partners LP / NGL Energy Finance Corp. 5.1250%, 7/15/19 (144A) | 64,320 | ||||||||
115,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 112,603 | ||||||||
98,000 | Spectra Energy Partners LP 4.7500%, 3/15/24 | 105,048 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$99,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 4.1250%, 11/15/19 (144A) | $ | 95,288 | |||||||
121,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 113,135 | ||||||||
| ||||||||||
1,705,129 | ||||||||||
Finance Companies – 1.0% | ||||||||||
97,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 98,940 | ||||||||
8,000 | CIT Group, Inc. 6.6250%, 4/1/18 (144A) | 8,680 | ||||||||
134,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 141,370 | ||||||||
44,000 | CIT Group, Inc. 3.8750%, 2/19/19 | 43,890 | ||||||||
33,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 35,543 | ||||||||
100,000 | General Electric Capital Corp. 6.2500%µ | 108,875 | ||||||||
100,000 | General Electric Capital Corp. 7.1250%µ | 116,375 | ||||||||
| ||||||||||
553,673 | ||||||||||
Financial – 0.6% | ||||||||||
102,000 | Jones Lang LaSalle, Inc. 4.4000%, 11/15/22 | 105,857 | ||||||||
200,000 | LeasePlan Corp. NV 2.5000%, 5/16/18 (144A) | 200,086 | ||||||||
| ||||||||||
305,943 | ||||||||||
Industrial – 0.1% | ||||||||||
31,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 31,784 | ||||||||
34,000 | Cintas Corp. No 2 4.3000%, 6/1/21 | 36,641 | ||||||||
| ||||||||||
68,425 | ||||||||||
Insurance – 0.4% | ||||||||||
152,000 | Primerica, Inc. 4.7500%, 7/15/22 | 165,798 | ||||||||
63,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 62,370 | ||||||||
| ||||||||||
228,168 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.0% | ||||||||||
63,000 | Alexandria Real Estate Equities, Inc. 2.7500%, 1/15/20 | 62,398 | ||||||||
120,000 | Alexandria Real Estate Equities, Inc. 4.6000%, 4/1/22 | 127,639 | ||||||||
70,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 70,175 | ||||||||
37,000 | Post Apartment Homes LP 4.7500%, 10/15/17 | 39,783 | ||||||||
18,000 | Retail Opportunity Investments Partnership LP 5.0000%, 12/15/23 | 19,512 | ||||||||
22,000 | Retail Opportunity Investments Partnership LP 4.0000%, 12/15/24 | 22,046 | ||||||||
27,000 | Senior Housing Properties Trust 6.7500%, 12/15/21 | 31,173 | ||||||||
130,000 | SL Green Realty Corp. 5.0000%, 8/15/18 | 139,435 | ||||||||
| ||||||||||
512,161 | ||||||||||
Technology – 1.7% | ||||||||||
57,000 | Autodesk, Inc. 3.6000%, 12/15/22 | 56,363 | ||||||||
98,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 99,572 | ||||||||
14,000 | Fidelity National Information Services, Inc. 5.0000%, 3/15/22 | 14,848 | ||||||||
40,000 | Fidelity National Information Services, Inc. 3.8750%, 6/5/24 | 40,404 | ||||||||
20,000 | Motorola Solutions, Inc. 4.0000%, 9/1/24 | 20,120 | ||||||||
24,000 | MSCI, Inc. 5.2500%, 11/15/24 (144A) | 24,840 | ||||||||
15,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 15,580 | ||||||||
215,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 221,485 | ||||||||
12,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 12,656 | ||||||||
107,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 109,632 | ||||||||
49,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 52,603 | ||||||||
214,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 241,110 | ||||||||
| ||||||||||
909,213 | ||||||||||
Transportation – 0.2% | ||||||||||
7,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 7,082 | ||||||||
13,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 13,179 | ||||||||
52,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.2500%, 1/17/23 (144A) | 53,975 | ||||||||
53,000 | Southwest Airlines Co. 5.1250%, 3/1/17 | 56,775 | ||||||||
| ||||||||||
131,011 | ||||||||||
Total Corporate Bonds (cost $9,430,015) | 9,650,812 | |||||||||
Mortgage-Backed Securities – 6.8% | ||||||||||
Fannie Mae Pool: | ||||||||||
13,538 | 5.5000%, 1/1/25 | 14,877 | ||||||||
46,113 | 5.0000%, 9/1/29 | 51,094 | ||||||||
15,316 | 5.0000%, 1/1/30 | 16,969 | ||||||||
8,611 | 5.5000%, 1/1/33 | 9,713 | ||||||||
41,191 | 6.0000%, 12/1/35 | 47,040 | ||||||||
6,541 | 6.0000%, 2/1/37 | 7,561 | ||||||||
49,559 | 6.0000%, 9/1/37 | 54,380 | ||||||||
39,719 | 6.0000%, 10/1/38 | 46,292 | ||||||||
12,809 | 7.0000%, 2/1/39 | 14,294 | ||||||||
52,802 | 5.5000%, 3/1/40 | 60,208 | ||||||||
146,286 | 5.5000%, 4/1/40 | 164,266 | ||||||||
11,892 | 4.5000%, 10/1/40 | 13,051 | ||||||||
123,789 | 5.0000%, 2/1/41 | 137,525 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Shares or Principal Amount | Value | |||||||||
Mortgage-Backed Securities – (continued) | ||||||||||
Fannie Mae Pool: (continued) | ||||||||||
$28,693 | 5.5000%, 2/1/41 | $ | 32,719 | |||||||
25,886 | 5.0000%, 4/1/41 | 28,755 | ||||||||
20,542 | 5.0000%, 5/1/41 | 22,816 | ||||||||
54,876 | 5.0000%, 7/1/41 | 60,960 | ||||||||
25,462 | 5.0000%, 10/1/41 | 28,314 | ||||||||
45,507 | 5.5000%, 12/1/41 | 51,145 | ||||||||
67,968 | 4.0000%, 6/1/42 | 73,317 | ||||||||
28,340 | 4.0000%, 8/1/42 | 30,569 | �� | |||||||
34,270 | 4.0000%, 9/1/42 | 36,950 | ||||||||
53,566 | 4.0000%, 11/1/42 | 57,794 | ||||||||
28,454 | 4.0000%, 9/1/43 | 30,700 | ||||||||
92,341 | 4.0000%, 9/1/43 | 99,605 | ||||||||
70,512 | 3.5000%, 1/1/44 | 73,952 | ||||||||
150,116 | 3.5000%, 1/1/44 | 157,439 | ||||||||
72,599 | 4.0000%, 2/1/44 | 78,305 | ||||||||
76,380 | 3.5000%, 4/1/44 | 80,013 | ||||||||
35,429 | 4.0000%, 8/1/44 | 38,295 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
10,468 | 5.0000%, 1/1/19 | 11,002 | ||||||||
9,459 | 5.5000%, 8/1/19 | 10,005 | ||||||||
17,867 | 5.0000%, 6/1/20 | 19,037 | ||||||||
35,525 | 5.5000%, 12/1/28 | 39,714 | ||||||||
33,208 | 3.5000%, 2/1/29 | 35,047 | ||||||||
29,138 | 5.5000%, 10/1/36 | 32,842 | ||||||||
147,076 | 6.0000%, 4/1/40 | 167,603 | ||||||||
34,627 | 4.5000%, 1/1/41 | 37,904 | ||||||||
72,240 | 5.0000%, 5/1/41 | 80,604 | ||||||||
401,281 | 4.5000%, 9/1/44 | 444,367 | ||||||||
Ginnie Mae I Pool: | ||||||||||
46,018 | 5.1000%, 1/15/32 | 52,413 | ||||||||
54,452 | 4.9000%, 10/15/34 | 60,451 | ||||||||
7,342 | 5.5000%, 9/15/35 | 8,428 | ||||||||
119,344 | 5.5000%, 8/15/39 | 137,716 | ||||||||
25,758 | 5.0000%, 10/15/39 | 28,584 | ||||||||
40,677 | 5.0000%, 11/15/39 | 45,039 | ||||||||
12,284 | 5.0000%, 1/15/40 | 13,598 | ||||||||
14,445 | 5.0000%, 5/15/40 | 16,049 | ||||||||
5,233 | 5.0000%, 7/15/40 | 5,781 | ||||||||
43,111 | 5.0000%, 7/15/40 | 47,728 | ||||||||
42,579 | 5.0000%, 2/15/41 | 47,361 | ||||||||
15,851 | 5.0000%, 5/15/41 | 17,866 | ||||||||
11,477 | 4.5000%, 7/15/41 | 12,627 | ||||||||
47,312 | 4.5000%, 7/15/41 | 51,859 | ||||||||
106,408 | 4.5000%, 8/15/41 | 118,751 | ||||||||
13,251 | 5.0000%, 9/15/41 | 14,795 | ||||||||
Ginnie Mae II Pool: | ||||||||||
23,005 | 6.0000%, 11/20/34 | 26,377 | ||||||||
25,508 | 5.5000%, 11/20/37 | 28,444 | ||||||||
12,154 | 6.0000%, 1/20/39 | 13,650 | ||||||||
58,768 | 4.5000%, 10/20/41 | 64,465 | ||||||||
4,923 | 6.0000%, 10/20/41 | 5,621 | ||||||||
15,067 | 6.0000%, 12/20/41 | 17,163 | ||||||||
15,748 | 6.0000%, 1/20/42 | 17,983 | ||||||||
16,117 | 6.0000%, 2/20/42 | 18,386 | ||||||||
9,430 | 6.0000%, 3/20/42 | 10,767 | ||||||||
25,534 | 6.0000%, 4/20/42 | 29,116 | ||||||||
20,546 | 3.5000%, 5/20/42 | 21,699 | ||||||||
20,045 | 6.0000%, 5/20/42 | 22,545 | ||||||||
54,811 | 5.5000%, 7/20/42 | 61,091 | ||||||||
13,403 | 6.0000%, 7/20/42 | 15,283 | ||||||||
14,421 | 6.0000%, 8/20/42 | 16,453 | ||||||||
17,339 | 6.0000%, 9/20/42 | 19,790 | ||||||||
13,124 | 6.0000%, 11/20/42 | 14,936 | ||||||||
16,943 | 6.0000%, 2/20/43 | 19,315 | ||||||||
Total Mortgage-Backed Securities (cost $3,548,328) | 3,599,173 | |||||||||
Preferred Stocks – 0.9% | ||||||||||
Capital Markets – 0.3% | ||||||||||
1,925 | Morgan Stanley, 6.8750% | 51,224 | ||||||||
2,675 | Morgan Stanley, 7.1250% | 73,643 | ||||||||
1,200 | State Street Corp., 5.9000% | 31,032 | ||||||||
| ||||||||||
155,899 | ||||||||||
Commercial Banks – 0.2% | ||||||||||
3,150 | Wells Fargo & Co., 6.6250% | 87,381 | ||||||||
Construction & Engineering – 0.1% | ||||||||||
2,075 | Citigroup Capital XIII, 7.8750% | 55,154 | ||||||||
Consumer Finance – 0.3% | ||||||||||
115 | Ally Financial, Inc., 7.0000% (144A) | 114,953 | ||||||||
2,850 | Discover Financial Services, 6.5000% | 72,219 | ||||||||
| ||||||||||
187,172 | ||||||||||
Total Preferred Stocks (cost $467,682) | 485,606 | |||||||||
U.S. Treasury Notes/Bonds – 11.9% | ||||||||||
$235,000 | 0.3750%, 5/31/16 | 234,853 | ||||||||
848,000 | 0.3750%, 10/31/16 | 844,488 | ||||||||
672,000 | 0.5000%, 11/30/16 | 670,320 | ||||||||
399,000 | 0.6250%, 12/31/16 | 398,470 | ||||||||
5,000 | 1.0000%, 9/15/17 | 5,003 | ||||||||
60,000 | 0.8750%, 10/15/17 | 59,770 | ||||||||
228,000 | 1.0000%, 12/15/17 | 227,466 | ||||||||
425,000 | 1.3750%, 7/31/18 | 425,432 | ||||||||
192,000 | 1.5000%, 8/31/18† | 192,930 | ||||||||
104,000 | 1.3750%, 9/30/18 | 103,903 | ||||||||
33,000 | 1.6250%, 7/31/19 | 33,052 | ||||||||
7,000 | 1.7500%, 9/30/19 | 7,041 | ||||||||
165,000 | 1.5000%, 10/31/19 | 163,995 | ||||||||
481,000 | 1.5000%, 11/30/19 | 477,956 | ||||||||
331,000 | 2.7500%, 11/15/23† | 348,455 | ||||||||
47,000 | 2.3750%, 8/15/24 | 47,870 | ||||||||
1,120,000 | 2.2500%, 11/15/24 | 1,127,525 | ||||||||
282,000 | 3.7500%, 11/15/43 | 338,995 | ||||||||
102,000 | 3.6250%, 2/15/44 | 120,033 | ||||||||
145,000 | 3.3750%, 5/15/44 | 163,238 | ||||||||
87,000 | 3.1250%, 8/15/44 | 93,661 | ||||||||
192,000 | 3.0000%, 11/15/44 | 201,780 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $6,163,279) | 6,286,236 | |||||||||
Investment Companies – 0.5% | ||||||||||
Money Markets – 0.5% | ||||||||||
272,000 | Janus Cash Liquidity Fund LLC, 0.1008%°°,£ (cost $272,000) | 272,000 | ||||||||
Total Investments (total cost $48,038,023) – 99.5% | 52,456,327 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.5% | 288,064 | |||||||||
Net Assets – 100% | $ | 52,744,391 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
14 | DECEMBER 31, 2014
Table of Contents
Schedule of Investments (unaudited)
As of December 31, 2014
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 45,847,570 | 87 | .4% | ||||
United Kingdom | 2,319,467 | 4 | .4 | |||||
Canada | 904,916 | 1 | .7 | |||||
Switzerland | 569,016 | 1 | .1 | |||||
Israel | 511,839 | 1 | .0 | |||||
Germany | 490,320 | 0 | .9 | |||||
Norway | 377,977 | 0 | .7 | |||||
Singapore | 314,961 | 0 | .6 | |||||
Ireland | 289,817 | 0 | .6 | |||||
Sweden | 255,936 | 0 | .5 | |||||
Mexico | 248,938 | 0 | .5 | |||||
Netherlands | 200,086 | 0 | .4 | |||||
France | 118,402 | 0 | .2 | |||||
Australia | 7,082 | 0 | .0 | |||||
Total | $ | 52,456,327 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Unrealized | ||||||||||||||
Currency | Currency | Appreciation/ | ||||||||||||
Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||||
Credit Suisse International: | ||||||||||||||
British Pound 1/8/15 | 443,000 | $ | 690,357 | $ | 3,151 | |||||||||
Canadian Dollar 1/8/15 | 794,000 | 683,551 | 18,464 | |||||||||||
Euro 1/8/15 | 184,000 | 222,630 | 6,477 | |||||||||||
Israeli Shekel 1/8/15 | 1,515,000 | 389,044 | 3,994 | |||||||||||
Mexican Peso 1/8/15 | 2,725,000 | 184,703 | 13,594 | |||||||||||
Norwegian Krone 1/8/15 | 2,163,000 | 290,391 | 26,904 | |||||||||||
Swedish Krona 1/8/15 | 1,520,000 | 195,115 | 9,230 | |||||||||||
Swiss Franc 1/8/15 | 422,500 | 425,111 | 11,506 | |||||||||||
3,080,902 | 93,320 | |||||||||||||
HSBC Securities (USA), Inc.: | ||||||||||||||
British Pound 1/15/15 | 414,000 | 645,124 | 6,367 | |||||||||||
Euro 1/15/15 | 195,000 | 235,957 | 7,467 | |||||||||||
881,081 | 13,834 | |||||||||||||
RBC Capital Markets Corp.: Euro 1/29/15 | 95,000 | 114,971 | 2,877 | |||||||||||
Total | $ | 4,076,954 | $ | 110,031 | ||||||||||
Schedule of Exchange-Traded Written Options – Calls
Description | Value | |||||
AbbVie, Inc. expires January 2015 9 contracts exercise price $72.50 | $ | (40) | ||||
Accenture PLC – Class A (U.S. Shares) expires January 2015 7 contracts exercise price $90.00 | (519) | |||||
Alliant Energy Corp. expires January 2015 10 contracts exercise price $65.00 | (2,356) | |||||
Altera Corp. expires January 2015 17 contracts exercise price $40.00 | (80) | |||||
Apple, Inc. expires January 2015 6 contracts exercise price $120.71 | (76) | |||||
Comcast Corp. – Class A expires January 2015 11 contracts exercise price $57.50 | (1,281) | |||||
Johnson & Johnson expires January 2015 6 contracts exercise price $110.00 | (70) | |||||
Kansas City Southern expires January 2015 5 contracts exercise price $125.00 | (782) | |||||
Medtronic, Inc. expires January 2015 9 contracts exercise price $77.50 | (79) | |||||
Microsoft Corp. expires January 2015 14 contracts exercise price $50.00 | (46) | |||||
Oracle Corp. expires January 2015 15 contracts exercise price $45.00 | (752) | |||||
PepsiCo, Inc. expires January 2015 7 contracts exercise price $97.50 | (103) | |||||
Pfizer, Inc. expires January 2015 20 contracts exercise price $33.00 | (77) | |||||
Procter & Gamble Co. expires January 2015 7 contracts exercise price $95.00 | (24) | |||||
Ralph Lauren Corp. expires January 2015 4 contracts exercise price $195.00 | (231) | |||||
Stryker Corp. expires January 2015 7 contracts exercise price $97.50 | (503) | |||||
Target Corp. expires January 2015 8 contracts exercise price $77.50 | (453) |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments (unaudited)
As of December 31, 2014
Description | Value | |||||
Teva Pharmaceutical Industries, Ltd. (ADR) expires January 2015 11 contracts exercise price $60.00 | $ | (413) | ||||
Union Pacific Corp. expires January 2015 5 contracts exercise price $125.00 | (184) | |||||
Wells Fargo & Co. expires January 2015 12 contracts exercise price $57.50 | (110) | |||||
Xilinx, Inc. expires January 2015 14 contracts exercise price $47.00 | (40) | |||||
Total Exchange-Traded Written Options – Calls (premiums received $5,384) | $ | (8,219) | ||||
Schedule of OTC Written Options – Puts
Counterparty/Reference Asset | Value | |||||
Goldman Sachs International: | ||||||
Anadarko Petroleum Corp. expires January 2015 4 contracts exercise price $65.00 | $ | (35) | ||||
QUALCOMM, Inc. expires January 2015 4 contracts exercise price $65.00 | (20) | |||||
Royal Dutch Shell PLC (ADR) expires January 2015 5 contracts exercise price $60.00 | (30) | |||||
Schlumberger, Ltd. (U.S. Shares) expires January 2015 4 contracts exercise price $70.00 | (29) | |||||
Total OTC Written Options – Puts (premiums received $987) | $ | (114) | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
16 | DECEMBER 31, 2014
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
Barclays U.S. Aggregate Bond Index | Made up of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
Russell 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
Value Income Index | An internally-calculated, hypothetical combination of total returns from the Russell 1000® Value Index (50%) and the Barclays U.S. Aggregate Bond Index (50%). | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
OTC | Over-the-Counter | |
PLC | Public Limited Company | |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2014 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Perkins Value Plus Income Fund | $ | 2,537,433 | 4.8 | % | ||||||
* | Non-income producing security. | |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2014, is noted below. |
Fund | Aggregate Value | ||||
Perkins Value Plus Income Fund | $ | 2,307,081 | |||
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of period end. | |
°° | Rate shown is the 7-day yield as of December 31, 2014. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of December 31, 2014) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Perkins Value Plus Income Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20 | 4/29/13 | $ | 67,676 | $ | 69,131 | 0.1 | % | |||||||
The Fund has registration rights for certain restricted securities held as of December 31, 2014. The issuer incurs all registration costs.
Janus Investment Fund | 17
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the period ended December 31, 2014. Unless otherwise indicated, all information in the table is for the period ended December 31, 2014. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 12/31/14 | Gain/(Loss) | Income | at 12/31/14 | |||||||||||||||
Perkins Value Plus Income Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 787,285 | 11,821,346 | (12,336,631) | 272,000 | $ | – | $ | 301 | $ | 272,000 | |||||||||||
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, 2014. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of December 31, 2014)
Level 2 – Other Significant | Level 3 – Significant | |||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||
Perkins Value Plus Income Fund | ||||||||||
Assets | ||||||||||
Investments in Securities: | ||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 913,326 | $– | |||||
Bank Loans and Mezzanine Loans | – | 617,867 | – | |||||||
Common Stocks | ||||||||||
Commercial Services & Supplies | 531,138 | 255,170 | – | |||||||
Diversified Telecommunication Services | 444,410 | 135,187 | – | |||||||
Food & Staples Retailing | 1,264,652 | 244,113 | – | |||||||
Food Products | 442,962 | 522,504 | – | |||||||
Machinery | – | 224,095 | – | |||||||
Marine | – | 289,817 | – | |||||||
Media | 1,206,896 | 171,939 | – | |||||||
Tobacco | 113,321 | 255,936 | – | |||||||
Transportation Infrastructure | – | 304,868 | – | |||||||
All Other | 24,224,299 | – | – | |||||||
Corporate Bonds | – | 9,650,812 | – | |||||||
Mortgage-Backed Securities | – | 3,599,173 | – | |||||||
Preferred Stocks | – | 485,606 | – | |||||||
U.S. Treasury Notes/Bonds | – | 6,286,236 | – | |||||||
Investment Companies | – | 272,000 | – | |||||||
Total Investments in Securities | $ | 28,227,678 | $ | 24,228,649 | $– | |||||
Other Financial Instruments(a): | ||||||||||
Forward Currency Contracts | $ | – | $ | 110,031 | $– | |||||
Total Assets | $ | 28,227,678 | $ | 24,338,680 | $– | |||||
Liabilities | ||||||||||
Other Financial Instruments(a): | ||||||||||
Options Written, at Value | $ | – | $ | 8,333 | $– | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
18 | DECEMBER 31, 2014
Table of Contents
Statement of Assets and Liabilities
As of December 31, 2014 (unaudited) | Perkins Value Plus Income Fund | |||
Assets: | ||||
Investments at cost | $ | 48,038,023 | ||
Unaffiliated investments at value | $ | 52,184,327 | ||
Affiliated investments at value | 272,000 | |||
Forward currency contracts | 110,031 | |||
Closed foreign currency contracts | 4,659 | |||
Non-interested Trustees’ deferred compensation | 1,081 | |||
Receivables: | ||||
Investments sold | 179,195 | |||
Fund shares sold | 34,612 | |||
Dividends | 49,785 | |||
Dividends from affiliates | 7 | |||
Foreign dividend tax reclaim | 6,212 | |||
Interest | 138,662 | |||
Other assets | 1,210 | |||
Total Assets | 52,981,781 | |||
Liabilities: | ||||
Due to custodian | 3,450 | |||
Closed foreign currency contracts | 74 | |||
Options written, at value(1) | 8,333 | |||
Payables: | ||||
Investments purchased | 116,894 | |||
Fund shares repurchased | 9,028 | |||
Dividends | 5,231 | |||
Advisory fees | 19,406 | |||
Fund administration fees | 461 | |||
Transfer agent fees and expenses | 7,932 | |||
12b-1 Distribution and shareholder servicing fees | 8,011 | |||
Non-interested Trustees’ fees and expenses | 354 | |||
Non-interested Trustees’ deferred compensation fees | 1,081 | |||
Accrued expenses and other payables | 57,135 | |||
Total Liabilities | 237,390 | |||
Net Assets | $ | 52,744,391 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Statement of Assets and Liabilities (continued)
As of December 31, 2014 (unaudited) | Perkins Value Plus Income Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus)* | $ | 47,861,624 | ||
Undistributed net investment income/(loss)* | (245,679) | |||
Undistributed net realized gain/(loss) from investment and foreign currency transactions* | 602,663 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 4,525,783 | |||
Total Net Assets | $ | 52,744,391 | ||
Net Assets - Class A Shares | $ | 6,665,991 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 585,090 | |||
Net Asset Value Per Share(2) | $ | 11.39 | ||
Maximum Offering Price Per Share(3) | $ | 12.08 | ||
Net Assets - Class C Shares | $ | 7,011,453 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 614,099 | |||
Net Asset Value Per Share(2) | $ | 11.42 | ||
Net Assets - Class D Shares | $ | 28,780,243 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,525,462 | |||
Net Asset Value Per Share | $ | 11.40 | ||
Net Assets - Class I Shares | $ | 3,954,225 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 346,714 | |||
Net Asset Value Per Share | $ | 11.40 | ||
Net Assets - Class S Shares | $ | 2,067,667 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 181,365 | |||
Net Asset Value Per Share | $ | 11.40 | ||
Net Assets - Class T Shares | $ | 4,264,812 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 374,076 | |||
Net Asset Value Per Share | $ | 11.40 |
* | See “Federal Income Tax” in Notes to Financial Statements. | |
(1) | Premiums received $6,371. | |
(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.
20 | DECEMBER 31, 2014
Table of Contents
Statement of Operations
Perkins Value Plus | ||||
For the period ended December 31, 2014 (unaudited) | Income Fund | |||
Investment Income: | ||||
Interest | $ | 384,299 | ||
Dividends | 417,009 | |||
Dividends from affiliates | 301 | |||
Other income | 8,910 | |||
Foreign tax withheld | (3,199) | |||
Total Investment Income | 807,320 | |||
Expenses: | ||||
Advisory fees | 170,763 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 8,276 | |||
Class C Shares | 33,495 | |||
Class S Shares | 3,492 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 17,824 | |||
Class S Shares | 3,492 | |||
Class T Shares | 6,639 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 1,710 | |||
Class C Shares | 854 | |||
Class I Shares | 760 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 399 | |||
Class C Shares | 534 | |||
Class D Shares | 4,342 | |||
Class I Shares | 214 | |||
Class S Shares | 11 | |||
Class T Shares | 83 | |||
Shareholder reports expense | 3,892 | |||
Registration fees | 103,571 | |||
Custodian fees | 4,949 | |||
Professional fees | 24,588 | |||
Non-interested Trustees’ fees and expenses | 515 | |||
Fund administration fees | 2,846 | |||
Other expenses | 19,090 | |||
Total Expenses | 412,339 | |||
Less: Excess Expense Reimbursement | (136,599) | |||
Net Expenses | 275,740 | |||
Net Investment Income/(Loss) | 531,580 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 2,521,202 | |||
Written options contracts | 20,916 | |||
Total Net Realized Gain/(Loss) on Investments | 2,542,118 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,062,414) | |||
Written options contracts | 389 | |||
Total Change in Unrealized Net Appreciation/Depreciation | (2,062,025) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,011,673 |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Statements of Changes in Net Assets
Perkins Value Plus | ||||||||
Income Fund | ||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 531,580 | $ | 1,222,415 | ||||
Net realized gain/(loss) on investments | 2,542,118 | 3,871,812 | ||||||
Change in unrealized net appreciation/depreciation | (2,062,025) | 2,787,822 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,011,673 | 7,882,049 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income* | ||||||||
Class A Shares | (91,661) | (158,389) | ||||||
Class C Shares | (68,925) | (107,878) | ||||||
Class D Shares | (429,096) | (732,744) | ||||||
Class I Shares | (81,278) | (279,044) | ||||||
Class S Shares | (32,290) | (114,609) | ||||||
Class T Shares | (68,955) | (178,114) | ||||||
Net Realized Gain from Investment Transactions* | ||||||||
Class A Shares | (531,013) | (333,609) | ||||||
Class C Shares | (551,851) | (319,098) | ||||||
Class D Shares | (2,296,570) | (1,386,346) | ||||||
Class I Shares | (312,655) | (567,430) | ||||||
Class S Shares | (163,955) | (245,920) | ||||||
Class T Shares | (344,279) | (332,511) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (4,972,528) | (4,755,692) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 142,651 | 366,960 | ||||||
Class C Shares | 452,888 | 676,381 | ||||||
Class D Shares | 2,511,397 | 10,196,885 | ||||||
Class I Shares | 220,454 | 2,614,911 | ||||||
Class S Shares | 1,163 | 112 | ||||||
Class T Shares | 835,141 | 3,234,721 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 609,198 | 480,503 | ||||||
Class C Shares | 615,359 | 419,392 | ||||||
Class D Shares | 2,563,282 | 2,009,635 | ||||||
Class I Shares | 385,292 | 836,110 | ||||||
Class S Shares | 196,245 | 360,529 | ||||||
Class T Shares | 411,094 | 509,392 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (219,407) | (758,902) | ||||||
Class C Shares | (86,617) | (361,448) | ||||||
Class D Shares | (7,261,311) | (5,469,241) | ||||||
Class I Shares | (7,106,182) | (2,926,425) | ||||||
Class S Shares | (3,000,000) | – | ||||||
Class T Shares | (5,643,450) | (900,258) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (14,372,803) | 11,289,257 | ||||||
Net Increase/(Decrease) in Net Assets | (18,333,658) | 14,415,614 | ||||||
Net Assets: | ||||||||
Beginning of period | 71,078,049 | 56,662,435 | ||||||
End of period | $ | 52,744,391 | $ | 71,078,049 | ||||
Undistributed Net Investment Income/(Loss)* | $ | (245,679) | $ | (5,054) |
* | See “Federal Income Tax” in Notes to Financial Statements. |
See Notes to Financial Statements.
22 | DECEMBER 31, 2014
Table of Contents
Financial Highlights
Class A Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.68 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.12(2) | 0.23(2) | 0.30 | 0.31 | 0.29 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.16 | 1.29 | 1.07 | 0.10 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.28 | 1.52 | 1.37 | 0.41 | 1.43 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.17) | (0.30) | (0.29) | (0.33) | (0.24) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.15) | (0.94) | (0.55) | (0.70) | (0.28) | |||||||||||||||||
Net Asset Value, End of Period | $11.39 | $12.26 | $11.68 | $10.86 | $11.15 | |||||||||||||||||
Total Return** | 2.33% | 13.61% | 12.82% | 3.97% | 14.49% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $6,666 | $6,603 | $6,200 | $5,057 | $4,861 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,530 | $6,341 | $5,545 | $4,848 | $3,951 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.47% | 1.35% | 1.36% | 1.50% | 1.86% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.00% | 1.01% | 1.01% | 1.02% | 0.94% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.89% | 1.94% | 2.39% | 2.83% | 3.05% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
Class C Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.29 | $11.71 | $10.89 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.07(2) | 0.15(2) | 0.21 | 0.27 | 0.22 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.24 | 1.43 | 1.29 | 0.36 | 1.36 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.13) | (0.21) | (0.21) | (0.25) | (0.17) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.11) | (0.85) | (0.47) | (0.62) | (0.21) | |||||||||||||||||
Net Asset Value, End of Period | $11.42 | $12.29 | $11.71 | $10.89 | $11.15 | |||||||||||||||||
Total Return** | 1.96% | 12.78% | 12.03% | 3.55% | 13.74% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $7,011 | $6,519 | $5,485 | $4,815 | $4,128 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,606 | $6,035 | $5,223 | $4,453 | $3,701 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 2.20% | 2.04% | 2.13% | 1.87% | 2.62% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.73% | 1.72% | 1.76% | 1.38% | 1.69% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.16% | 1.23% | 1.64% | 2.48% | 2.27% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
* | See “Federal Income Tax” 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 July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Financial Highlights (continued)
Class D Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.12(2) | 0.25(2) | 0.31 | 0.32 | 0.29 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.18 | 1.28 | 1.08 | 0.10 | 1.16 | |||||||||||||||||
Total from Investment Operations | 0.30 | 1.53 | 1.39 | 0.42 | 1.45 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.18) | (0.32) | (0.30) | (0.34) | (0.26) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.16) | (0.96) | (0.56) | (0.71) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $11.40 | $12.26 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return** | 2.50% | 13.68% | 13.02% | 4.08% | 14.62% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $28,780 | $33,071 | $24,811 | $19,581 | $12,627 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $29,307 | $27,575 | $22,457 | $16,050 | $7,656 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.32% | 1.15% | 1.24% | 1.41% | 1.73% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.83% | 0.85% | 0.91% | 0.91% | 0.79% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.04% | 2.10% | 2.50% | 2.97% | 3.33% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
Class I Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.28 | $11.70 | $10.87 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.13(2) | 0.27(2) | 0.33 | 0.33 | 0.30 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.16 | 1.28 | 1.07 | 0.11 | 1.15 | |||||||||||||||||
Total from Investment Operations | 0.29 | 1.55 | 1.40 | 0.44 | 1.45 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.19) | (0.33) | (0.31) | (0.35) | (0.26) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.17) | (0.97) | (0.57) | (0.72) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $11.40 | $12.28 | $11.70 | $10.87 | $11.15 | |||||||||||||||||
Total Return** | 2.38% | 13.92% | 13.16% | 4.25% | 14.66% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,954 | $10,794 | $9,903 | $9,227 | $7,860 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,721 | $9,694 | $9,764 | $8,365 | $6,004 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.23% | 1.02% | 1.10% | 1.25% | 1.61% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.72% | 0.71% | 0.76% | 0.77% | 0.77% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.04% | 2.23% | 2.63% | 3.09% | 3.27% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
* | See “Federal Income Tax” 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 July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
24 | DECEMBER 31, 2014
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Class S Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.10(2) | 0.22(2) | 0.28 | 0.29 | 0.27 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.27 | 1.50 | 1.36 | 0.38 | 1.41 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.15) | (0.29) | (0.27) | (0.30) | (0.22) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.13) | (0.93) | (0.53) | (0.67) | (0.26) | |||||||||||||||||
Net Asset Value, End of Period | $11.40 | $12.26 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return** | 2.29% | 13.42% | 12.79% | 3.74% | 14.24% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,068 | $5,054 | $4,453 | $3,950 | $3,808 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,760 | $4,725 | $4,258 | $3,784 | $3,596 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.66% | 1.50% | 1.59% | 1.73% | 2.12% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 1.19% | 1.09% | 1.15% | 1.21% | 1.20% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.58% | 1.87% | 2.25% | 2.64% | 2.75% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
Class T Shares
Perkins Value Plus | ||||||||||||||||||||||
For a share outstanding during the period ended December 31, 2014 | Income Fund | |||||||||||||||||||||
(unaudited) and each year or period ended June 30 | 2014 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.27 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.11(2) | 0.25(2) | 0.31 | 0.32 | 0.29 | |||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | 0.17 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.28 | 1.53 | 1.39 | 0.41 | 1.43 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||
Dividends (from net investment income)* | (0.17) | (0.31) | (0.30) | (0.33) | (0.24) | |||||||||||||||||
Distributions (from capital gains)* | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Distributions | (1.15) | (0.95) | (0.56) | (0.70) | (0.28) | |||||||||||||||||
Net Asset Value, End of Period | $11.40 | $12.27 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return** | 2.35% | 13.75% | 13.01% | 3.97% | 14.49% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,265 | $9,037 | $5,810 | $4,919 | $5,030 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,245 | $6,739 | $5,470 | $4,702 | $4,002 | |||||||||||||||||
Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets*** | 1.41% | 1.25% | 1.33% | 1.48% | 1.86% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets*** | 0.94% | 0.87% | 0.92% | 0.97% | 0.94% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.85% | 2.08% | 2.48% | 2.87% | 3.08% | |||||||||||||||||
Portfolio Turnover Rate | 46% | 95% | 97% | 100% | 85% |
* | See “Federal Income Tax” 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 July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 25
Table of Contents
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 Value Plus Income Fund (the “Fund”) is a series fund. 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, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests in a combination of equity and fixed-income securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class 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 D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, 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, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Securities for which market quotations or
26 | DECEMBER 31, 2014
Table of Contents
evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
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
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. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and equity 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 of net investment income are generally declared and distributed monthly, and realized capital gains (if any) are distributed annually.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their
Janus Investment Fund | 27
Table of Contents
Notes to Financial Statements (unaudited) (continued)
shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Valuation Inputs Summary
In accordance with FASB standard guidance, the Fund utilizes the “Fair Value Measurements” 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 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.
Debt securities may be valued in accordance with the evaluated bid price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Securities traded on OTC 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 Trustees and are categorized as Level 2 in the hierarchy. Short-term securities with maturities of 60 days or less are valued at amortized cost, which approximates market value and are categorized as Level 2 in the hierarchy. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE. These are generally categorized as Level 2 in the hierarchy.
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.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for 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, 2014 to value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The following table shows the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Transfers Out | ||||||
of Level 1 | ||||||
Fund | to Level 2 | |||||
Perkins Value Plus Income Fund | $ | 3,386,495 | ||||
Financial assets were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current
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period and no factor was applied at the end of the prior fiscal year.
2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2014 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative (to earn income and seek to enhance returns) purposes. When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets in which it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks, including, but not limited to, counterparty risk, credit risk, currency risk, equity risk, index risk, interest rate risk, leverage risk, and liquidity risk, as described below.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC, such as options and structured notes, are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs.
OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk. In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
• | Counterparty Risk – Counterparty risk is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
• | Credit Risk – Credit risk is the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
• | Currency Risk – Currency risk is the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
• | Equity Risk – Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market. | |
• | Index Risk – If the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
• | Interest Rate Risk – Interest rate risk is the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
• | Leverage Risk – Leverage risk is the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can |
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. |
• | Liquidity Risk – Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk in the normal course of pursuing its investment objective through its 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 investments and foreign currency transactions” on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on sold forward contracts during the period ended December 31, 2014.
Fund | Sold | |||||
Perkins Value Plus Income Fund | $ | 3,050,338 | ||||
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 is subject to interest rate risk, liquidity risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts. The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund 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 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 generally invests in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
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 Fund may also purchase and write exchange-listed and OTC 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 OTC
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expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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 written options contracts” on the Statement of Operations (if applicable).
The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Fund may recognize due to written call options.
During the period, the Fund wrote call options on various equity securities for the purpose of decreasing exposure to individual equity risk and/or generating income.
During the period, the Fund wrote put options on various equity securities for the purpose of increasing exposure to individual equity risk and/or generating income.
The following table provides average ending monthly market value amounts on written call and put options during the period ended December 31, 2014.
Written Call | Written Put | |||||||||
Fund | Options | Options | ||||||||
Perkins Value Plus Income Fund | $ | 7,481 | $ | 33 | ||||||
Written option activity for the period ended December 31, 2014 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Perkins Value Plus Income Fund | ||||||||
Options outstanding at June 30, 2014 | 102 | $ | 3,066 | |||||
Options written | 1,199 | 33,835 | ||||||
Options closed | (81) | (2,451) | ||||||
Options expired | (840) | (22,262) | ||||||
Options exercised | (176) | (6,804) | ||||||
Options outstanding at December 31, 2014 | 204 | $ | 5,384 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Perkins Value Plus Income Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 35 | 2,051 | ||||||
Options closed | – | – | ||||||
Options expired | (18) | (1,064) | ||||||
Options exercised | – | – | ||||||
Options outstanding at December 31, 2014 | 17 | $ | 987 | |||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2014.
Fair Value of Derivative Instruments as of December 31, 2014
Derivatives not accounted for as | Asset Derivatives | Liability Derivatives | ||||||||||
hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Perkins Value Plus Income Fund | ||||||||||||
Currency Contracts | Forward currency contracts | $ | 110,031 | |||||||||
Equity Contracts | Options written, at value | $ | 8,333 | |||||||||
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Notes to Financial Statements (unaudited) (continued)
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2014.
The effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2014
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||||||
Investments and foreign | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | currency transactions | Written options contracts | Total | |||||||||||||||||
Perkins Value Plus Income Fund | ||||||||||||||||||||
Currency Contracts | $ | 172,659 | $ | – | $ | 172,659 | ||||||||||||||
Equity Contracts | – | 20,916 | 20,916 | |||||||||||||||||
Total | $ | 172,659 | $ | 20,916 | $ | 193,575 | ||||||||||||||
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | ||||||||||||||||||||
Investments, foreign | ||||||||||||||||||||
currency translations and | ||||||||||||||||||||
non-interested Trustees’ | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | deferred compensation | Written options contracts | Total | |||||||||||||||||
Perkins Value Plus Income Fund | ||||||||||||||||||||
Currency Contracts | $ | 140,199 | $ | – | $ | 140,199 | ||||||||||||||
Equity Contracts | – | 389 | 389 | |||||||||||||||||
Total | $ | 140,199 | $ | 389 | $ | 140,588 | ||||||||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The 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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient each could negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in July 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expands federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
During the recent global financial crisis, a number of countries in the European Union (“EU”) experienced severe economic and financial difficulties. As a result, financial markets in the EU have experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other
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weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of December 31, 2014.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“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 Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. |
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Notes to Financial Statements (unaudited) (continued)
Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
The Fund 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. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government. Historically, Fannie Maes and Freddie Macs were not backed by the full faith and credit of the U.S. Government, and may not be in the future. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Under the conservatorship, the management of Fannie Mae and Freddie Mac was replaced. Since 2008, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund 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 assets fail to perform, these investment vehicles could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return.
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 at a faster pace than expected, may shorten the effective maturities of these securities and may result in the 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 the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of December 31, 2014” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
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Offsetting of Financial Assets and Derivative Assets
Counterparty | Gross Amounts of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Credit Suisse International | $ | 93,320 | $ | – | $ | – | $ | 93,320 | ||||||||||
HSBC Securities (USA), Inc. | 13,834 | – | – | 13,834 | ||||||||||||||
RBC Capital Markets Corp. | 2,877 | – | – | 2,877 | ||||||||||||||
Total | $ | 110,031 | $ | – | $ | – | $ | 110,031 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Counterparty | Gross Amounts of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Goldman Sachs International | $ | 114 | $ | – | $ | – | $ | 114 | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund will segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund 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 Fund 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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further
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Notes to Financial Statements (unaudited) (continued)
loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. 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 Fund may hold liquid assets as collateral with the Fund’s 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).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Perkins Value Plus Income Fund | All Asset Levels | 0.60 | ||||||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the equity portion of the Fund’s investment operations subject to the general oversight of Janus Capital. Janus Capital is responsible for the day-to-day management of the fixed income portion of the Fund’s investment portfolio. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the advisory fee payable by the equity portion of the Fund to Janus Capital (net of any fee waivers, and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Value Plus Income Fund | 0.68 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to
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investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $263,617 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2014. The Fund’s portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2014 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/
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Notes to Financial Statements (unaudited) (continued)
(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2014 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $133,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended December 31, 2014.
Pursuant to the provisions of the 1940 Act, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Fund”). 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. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2014 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended December 31, 2014, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Value Plus Income Fund | $ | 999 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended December 31, 2014.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended December 31, 2014.
As of December 31, 2014, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
% of Class | % of Fund | |||||||||
Fund | Owned | Owned | ||||||||
Perkins Value Plus Income Fund - Class A Shares | 78 | % | 10 | % | ||||||
Perkins Value Plus Income Fund - Class C Shares | 72 | 10 | ||||||||
Perkins Value Plus Income Fund - Class D Shares | - | - | ||||||||
Perkins Value Plus Income Fund - Class I Shares | - | - | ||||||||
Perkins Value Plus Income Fund - Class S Shares | 100 | 4 | ||||||||
Perkins Value Plus Income Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s), may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
5. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
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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, 2014 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships, and investments in passive foreign investment companies.
Net Tax | ||||||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
Perkins Value Plus Income Fund | $ | 48,103,734 | $ | 5,418,218 | $ | (1,065,625) | $ | 4,352,593 | ||||||||||
6. | Capital Share Transactions |
Perkins Value Plus | ||||||||||
Income Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 11,702 | 30,571 | ||||||||
Reinvested dividends and distributions | 52,933 | 41,380 | ||||||||
Shares repurchased | (18,051) | (64,110) | ||||||||
Net Increase/(Decrease) in Fund Shares | 46,584 | 7,841 | ||||||||
Shares Outstanding, Beginning of Period | 538,506 | 530,665 | ||||||||
Shares Outstanding, End of Period | 585,090 | 538,506 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 37,247 | 56,341 | ||||||||
Reinvested dividends and distributions | 53,478 | 36,146 | ||||||||
Shares repurchased | (7,276) | (30,356) | ||||||||
Net Increase/(Decrease) in Fund Shares | 83,449 | 62,131 | ||||||||
Shares Outstanding, Beginning of Period | 530,650 | 468,519 | ||||||||
Shares Outstanding, End of Period | 614,099 | 530,650 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 205,798 | 859,867 | ||||||||
Reinvested dividends and distributions | 222,573 | 172,745 | ||||||||
Shares repurchased | (599,291) | (459,110) | ||||||||
Net Increase/(Decrease) in Fund Shares | (170,920) | 573,502 | ||||||||
Shares Outstanding, Beginning of Period | 2,696,382 | 2,122,880 | ||||||||
Shares Outstanding, End of Period | 2,525,462 | 2,696,382 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 18,060 | 214,485 | ||||||||
Reinvested dividends and distributions | 33,337 | 71,868 | ||||||||
Shares repurchased | (583,962) | (253,647) | ||||||||
Net Increase/(Decrease) in Fund Shares | (532,565) | 32,706 | ||||||||
Shares Outstanding, Beginning of Period | 879,279 | 846,573 | ||||||||
Shares Outstanding, End of Period | 346,714 | 879,279 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 95 | 9 | ||||||||
Reinvested dividends and distributions | 17,022 | 31,050 | ||||||||
Shares repurchased | (247,934) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (230,817) | 31,059 | ||||||||
Shares Outstanding, Beginning of Period | 412,182 | 381,123 | ||||||||
Shares Outstanding, End of Period | 181,365 | 412,182 |
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Notes to Financial Statements (unaudited) (continued)
Perkins Value Plus | ||||||||||
Income Fund | ||||||||||
For the period ended December 31 (unaudited) and the year ended June 30 | 2014 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 68,918 | 271,504 | ||||||||
Reinvested dividends and distributions | 35,656 | 43,779 | ||||||||
Shares repurchased | (467,120) | (75,650) | ||||||||
Net Increase/(Decrease) in Fund Shares | (362,546) | 239,633 | ||||||||
Shares Outstanding, Beginning of Period | 736,622 | 496,989 | ||||||||
Shares Outstanding, End of Period | 374,076 | 736,622 |
7. | Purchases and Sales of Investment Securities |
For the period ended December 31, 2014, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) 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 Value Plus Income Fund | $ | 16,076,146 | $ | 28,152,634 | $ | 9,849,921 | $ | 14,608,040 | ||||||
8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to December 31, 2014 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (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
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, 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 either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
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quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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 by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with 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.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
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, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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 their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that 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, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 51
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Useful Information About Your Fund Report (unaudited)
1. | Management Commentary |
The Management Commentary in this report includes valuable insight from the Fund’s managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. The Fund’s managers may allocate a company to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2014. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
2. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices.
When comparing the performance of the Fund with an index, keep in mind that market indices 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 quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
3. | Schedule of Investments |
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
4. | 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 securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
5. | Statement of Operations |
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
6. | Statements of Changes in Net Assets |
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
7. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. The total return may include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the total return may differ from the total return reflected for individual shareholder transactions. Also included are ratios of expenses and net investment income to average net assets.
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume
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Useful Information About Your Fund Report (unaudited) (continued)
of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio managers. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Notes
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Notes
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Notes
Janus Investment Fund | 57
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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.
Fixed Income
Janus fixed income 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 & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical 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
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
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).
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-15-003674/d30983janus.gif)
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary 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.
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC.
Funds distributed by Janus Distributors LLC
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||||
C-0215-81505 | 125-24-93035 02-15 |
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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.
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Item 6 | — | Investments |
(a) | Schedule of Investments is contained in the Reports to Shareholders included under Item 1 of this Form N-CSR. | ||
(b) | Not applicable. |
Item 7 | — | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Not applicable to this Registrant.
Item 8 | — | Portfolio Managers of Closed-End Management Investment Companies |
Not applicable to this Registrant.
Item 9 | — | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not applicable to this Registrant.
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 have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12 | — | Exhibits |
(a)(1) | Not applicable because the Registrant has posted its Code of Ethics (as defined in Item 2(b) of Form N-CSR) on its website pursuant to paragraph (f)(2) of Item 2 of Form N-CSR. | ||
(a)(2) | Separate certifications for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required under Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached as Ex99.CERT. | ||
(a)(3) | Not applicable to this Registrant. | ||
(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. |
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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/ Bruce Koepfgen | |||
Bruce Koepfgen, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) |
Date: February 27, 2015
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/ Bruce Koepfgen | |||
Bruce Koepfgen, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) |
Date: February 27, 2015
By: | /s/ Jesper Nergaard | |||
Jesper Nergaard, | ||||
Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer of Janus Investment Fund (Principal Accounting Officer and Principal Financial Officer) |
Date: February 27, 2015