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
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) |
Stephanie Grauerholz,
151 Detroit Street,
Denver, Colorado 80206
(Name and address of agent for service)
151 Detroit Street,
Denver, Colorado 80206
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-333-3863
Date of fiscal year end: 9/30
Date of reporting period: 3/31/15
Table of Contents
Item 1 — Reports to Shareholders
Table of Contents
semiannual report
March 31, 2015
Janus Balanced Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Balanced Fund (unaudited)
FUND SNAPSHOT We believe a dynamic approach to asset allocation that leverages our bottom-up, fundamental equity and fixed income research will allow us to outperform our peers over time. Our integrated equity and fixed income research team seeks an optimal balance of asset class opportunities across market cycles. |  Marc Pinto co-portfolio manager |  Gibson Smith co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Balanced Fund’s Class T Shares returned 4.69% for the six-month period ended March 31, 2015, compared with a 4.90% return by the Balanced Index, an internally calculated blended benchmark. The Balanced Index is composed of a 55% weighting in the S&P 500 Index, the Fund’s primary benchmark, and a 45% weighting in the Barclays U.S. Aggregate Bond Index, the Fund’s secondary benchmark, which returned 5.93% and 3.43%, respectively.
MARKET ENVIRONMENT
U.S. equities climbed during the period. Strong economic data, including better-than-expected U.S. GDP growth and a declining unemployment rate, were tailwinds for strong gains in the S&P 500 Index early in the period. Although mixed economic reports later in the period signaled that U.S. growth may have slowed, stocks picked up steam again in March when the Federal Reserve (Fed) indicated it would be cautious and gradual with any rate hike.
Treasury rates generally fell across the curve as the timing of the Fed’s rate hike remained uncertain. The market was also impacted by the steep decline in crude oil prices in the first half of the period. This sparked a safe-haven rotation into Treasurys out of fixed income risk assets like high yield. Given the preponderance of high-yield energy debt, the high-yield market stabilized in the second half of the period as oil prices found a range. However, high-yield and investment-grade credit spreads widened overall during the period. In the mortgage-backed securities (MBS) market, bullish technicals created by declining supply were offset by rate volatility, which was bearish as it created uncertainty around mortgage prepayments.
PERFORMANCE DISCUSSION
The Fund, which seeks to provide more consistent returns over time by allocating across the spectrum of fixed income and equity securities, underperformed the Balanced Index, its blended benchmark of the S&P 500 Index (55%) and the Barclays U.S. Aggregate Bond Index (45%). The overall Fund also underperformed its primary benchmark, the S&P 500 Index, but outperformed its secondary benchmark, the Barclays U.S. Aggregate Bond Index.
The equity-to-fixed-income allocation ended the period with an equity weighting of about 58% and fixed income of about 42%. The Fund’s equity asset allocation may vary between 35% and 65% depending on market conditions.
We believe that valuations in equities, while not cheap, are reasonable and that they offer greater risk-adjusted return potential than fixed income securities at this juncture. Adhering strictly to Janus’ philosophy of fundamental, bottom-up investing, the Fund selectively bought stocks that met our criteria of under-recognized but improving fundamentals.
The Fund’s equity sleeve outperformed its benchmark, the S&P 500 Index. Sector contributors on a relative basis were led by financials, followed by energy and health care. Stock selection drove the outperformance of the financials and health care sectors. Our underweight in energy helped drive the sector’s relative outperformance, which reflects our view that what a portfolio doesn’t own is as important as what it does.
Greater regulation of financial companies has created headwinds for the sector’s profit growth, particularly for banks, and this has created fewer investment opportunities in financial stocks, in our view. Thus, we tend to favor more diversified financial services companies. One of them, Blackstone Group, was one of the equity sleeve’s three top performers.
Blackstone’s stock rose after reporting earnings that exceeded expectations. We continue to like the company, and Blackstone remains a relatively large position size in the sleeve overall. We think the company is a best-in-class alternatives manager, and also like the company for its high dividend yield.
Looking at the equity sleeve more broadly, health insurer Aetna and airline United Continental Holdings were also top performing stocks.
Janus Investment Fund | 1
Table of Contents
Janus Balanced Fund (unaudited)
Aetna benefited from a combination of favorable cost trends and generally solid membership growth. Though we continue to believe these fundamentals will drive the company’s prospects, we are also mindful of increasing competition in its small group business and uncertainty around the impact of public and private health exchanges. We trimmed our position in the stock.
United Continental Holdings’ stock rose amid optimism that the airline company’s profits will benefit from lower oil prices as it has limited hedging. We also believe that the business still has material cost-cutting opportunities from the 2010 merger between UAL and Continental, which formed the company. The Fund added to this position during the period.
On a sector basis, materials, consumer discretionary and consumer staples were the top detractors due to stock selection.
The materials sector’s performance was weakened by one stock in particular, LyondellBasell. The stock of the chemicals maker declined in the period amid investor concern that declining oil prices would also pressure its ethylene prices. Moreover, weaker-than-expected quarterly earnings and a union strike impacted the company’s performance during the period. We trimmed our position.
Enterprise Products Partners, an energy pipeline firm, was also a drag on performance. The stock of the firm declined amid concerns that lower crude oil prices would weaken its business. Weaker-than-expected quarterly earnings and concerns about the continued increase in crude oil reserves impacted the stock later in the period. However, we believe that their diversified operations continue to make the stock a solid core energy holding. We added to our position during the period.
Microsoft was also a drag on performance as concerns about a slowing personal computer market weighed on sentiment. Still, we added to our position during the period. We have been encouraged by moves the new CEO is making to de-emphasize the company’s focus on hardware and increase its focus on productivity tools and also its public and private cloud offerings. Microsoft’s cloud-based revenues are growing at a much higher percentage than its total revenue.
The Fund’s fixed income sleeve underperformed its benchmark, the Barclays U.S. Aggregate Bond Index. On an asset class basis, our corporate credit allocation was the largest detractor from relative performance. High-yield and investment-grade corporate credit detracted about equally on a relative basis. Our out-of-index allocation to high-yield credit and our yield curve positioning in investment-grade credit drove underperformance in the asset classes. However, our security selection in high-yield credit was additive on a relative basis.
Spread carry, a measure of excess income generated by the Fund’s securities, also helped offset the underperformance in corporate credit. This is due to the Fund’s exposure to the “crossover” section of the credit market. This section includes the lowest-rated investment-grade credit and highest-rated high-yield credit. We believe this area holds many credits with the potential to be upgraded by rating agencies while balance sheet improvements by the issuing companies have yet to be recognized by the market.
On a credit sector basis, electric utilities and independent and midstream energy were the largest relative detractors. Though we continued to reduce our exposure to the energy sector opportunistically during the period, certain energy credits like California Resources and Continental Resources were a drag on relative performance. These have since been sold.
The Fund’s banking sector exposure was additive on a relative basis.
On an asset class basis, the Fund’s Treasury allocation was the largest relative contributor to performance due to yield curve positioning. We were longer duration (a measure of interest rate sensitivity) in this sector versus the index at times during the period when longer-dated Treasurys rallied. The Fund’s slightly longer overall duration versus the benchmark was additive on a relative basis.
Our MBS allocation, which we typically hold as a portfolio ballast, was also additive to performance on a relative basis. Yield curve positioning helped drive outperformance. Low and volatile rates threatened to create refinancing opportunities, and thus, sparked concern over mortgage prepayments (which deprive investors of expected interest payments). As this environment typically works against MBS in general, we were underweight the sector versus the benchmark, and that underweight also aided outperformance.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
While equity valuations are approaching the higher end of historical averages, we do not find them unreasonable in the context of the current market and economic environment. Moreover, on a risk-adjusted return basis, we
2 | MARCH 31, 2015
Table of Contents
(unaudited)
continue to believe that there are more opportunities in equities than in fixed income, so the Fund will continue with its equities overweight.
A low interest rate environment is favorable for equities. While the Fed could raise its benchmark rate before the end of 2015, it has also indicated the move will be gradual and dependent on clear signs the economy is improving. A rising rate environment that is backed by a strengthening economy should provide a constructive backdrop for equity markets.
Though it appears that U.S. economic growth softened at the start of 2015, we believe that the economy could gather momentum as the year progresses. The housing market is improving; hiring trends generally remain solid and there are even some signs of wage growth. Those factors, coupled with lower energy prices, should encourage further consumer spending. That undergirds our overweight of the consumer discretionary sector.
We also continue to be overweight the health care sector amid that sector’s broad-based productivity improvements, which are enabling quicker drug discovery. Moreover, we believe the sector will continue to benefit from merger and acquisition trends.
Within the fixed income sleeve, we are maintaining the defensive portfolio positioning that we assumed at the end of 2014. We think a more defensive fixed income sleeve is appropriate given the Fund’s larger equity weighting. It’s also in response to increased volatility in the fixed income market driven by uncertainty about the timing of the Fed’s expected rate hike.
Amid higher rate volatility, managing duration risk will be key, in our view. To that end, we are keeping our Treasury weighting generally in line with that of the benchmark’s as we use Treasurys mostly to manage duration and for capital preservation. This positioning allows us to be nimble with our Treasury weighting and to toggle the Fund’s overall duration slightly above or slightly below that of the benchmark’s.
While we are overweight in corporate credit, the allocation is at its lowest since late 2008, during the financial crisis. The reduced allocation reflects our belief that there are fewer opportunities and more downside risk in the asset class due to historically tight credit spreads, rising corporate leverage and illiquidity, especially in the high-yield market. In a market that is already suffering from lower liquidity and rate volatility, we are generally avoiding longer duration credit as it’s the most rate sensitive and tends to be the least liquid.
Our credit allocation is focused on “best ideas,” such as debt of firms which are decreasing leverage amid what we believe to be improving financial prospects. In retail, we are focused on companies with greater domestic exposure that we believe are less vulnerable to the economic slowdown abroad. Moreover, we remain overweight the banking sector, which continues to bolster its capital base amid regulatory requirements.
We are also maintaining our underweight in MBS. MBS tends to underperform in volatile rate environments, especially if new rate lows are reached, which can lead to higher prepayments and more cash flow uncertainty for the investor. We do not think MBS spreads are compensating us enough to hold a larger weighting.
It’s important to note that the market’s volatility could also create investment opportunities, and we believe that our defensive positioning gives us the flexibility to take advantage of them. However, no matter the market environment, our main focus always will be risk-adjusted returns and capital preservation, the two primary traits that we believe any fixed income portfolio should have.
Thank you for your continued investment in Janus Balanced Fund.
Janus Investment Fund | 3
Table of Contents
Janus Balanced Fund (unaudited)
Janus Balanced Fund At A Glance
5 Top Performers – Equity Holdings
| Contribution | ||||
| Blackstone Group LP | 0.83% | |||
| Aetna, Inc. | 0.74% | |||
| United Continental Holdings, Inc. | 0.71% | |||
| TE Connectivity, Ltd. (U.S. Shares) | 0.67% | |||
| Boeing Co. | 0.58% | |||
5 Bottom Performers – Equity Holdings
| Contribution | ||||
| LyondellBasell Industries NV – Class A | –0.80% | |||
| Enterprise Products Partners LP | –0.49% | |||
| Microsoft Corp. | –0.30% | |||
| Mattel, Inc. | –0.29% | |||
| Precision Castparts Corp. | –0.28% | |||
5 Top Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Financials | 0.85% | 12.85% | 16.33% | |||||||||
| Energy | 0.77% | 5.25% | 8.54% | |||||||||
| Health Care | 0.54% | 17.40% | 14.50% | |||||||||
| Industrials | 0.50% | 15.68% | 10.36% | |||||||||
| Telecommunication Services | 0.19% | 0.31% | 2.35% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Materials | –1.01% | 6.56% | 3.25% | |||||||||
| Consumer Discretionary | –0.81% | 17.43% | 12.03% | |||||||||
| Consumer Staples | –0.66% | 5.61% | 9.81% | |||||||||
| Other** | –0.29% | 1.41% | 0.00% | |||||||||
| Utilities | –0.04% | 0.00% | 3.16% | |||||||||
| 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 | MARCH 31, 2015
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 3.1% | |||
| MasterCard, Inc. – Class A Information Technology Services | 2.4% | |||
| Blackstone Group LP Capital Markets | 2.1% | |||
| EI du Pont de Nemours & Co. Chemicals | 1.9% | |||
| NIKE, Inc. – Class B Textiles, Apparel & Luxury Goods | 1.7% | |||
| 11.2% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
Janus Investment Fund | 5
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Janus Balanced Fund (unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Balanced Fund – Class A Shares | |||||||||||||
| NAV | 4.64% | 8.47% | 9.27% | 8.49% | 10.00% | 0.95% | |||||||
| MOP | –1.39% | 2.24% | 7.98% | 7.85% | 9.71% | ||||||||
| Janus Balanced Fund – Class C Shares | |||||||||||||
| NAV | 4.27% | 7.65% | 8.47% | 7.71% | 9.33% | 1.68% | |||||||
| CDSC | 3.28% | 6.65% | 8.47% | 7.71% | 9.33% | ||||||||
| Janus Balanced Fund – Class D Shares(1) | 4.76% | 8.69% | 9.51% | 8.63% | 10.07% | 0.73% | |||||||
| Janus Balanced Fund – Class I Shares | 4.77% | 8.73% | 9.58% | 8.58% | 10.04% | 0.64% | |||||||
| Janus Balanced Fund – Class N Shares | 4.85% | 8.85% | 9.40% | 8.58% | 10.04% | 0.58% | |||||||
| Janus Balanced Fund – Class R Shares | 4.45% | 8.04% | 8.85% | 8.03% | 9.62% | 1.33% | |||||||
| Janus Balanced Fund – Class S Shares | 4.56% | 8.29% | 9.12% | 8.30% | 9.84% | 1.08% | |||||||
| Janus Balanced Fund – Class T Shares | 4.69% | 8.57% | 9.40% | 8.58% | 10.04% | 0.83% | |||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 9.52% | ||||||||
| Barclays U.S. Aggregate Bond Index | 3.43% | 5.72% | 4.41% | 4.93% | 5.90% | ||||||||
| Balanced Index | 4.90% | 9.65% | 10.10% | 6.87% | 8.19% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 2nd | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Moderate Allocation Funds | – | 143/940 | 307/772 | 28/602 | 20/234 | ||||||||
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 | MARCH 31, 2015
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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.
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.
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 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, and therefore the ranking for the period.
© 2015 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 | |
| (1) | Closed to new investors. |
Janus Investment Fund | 7
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Janus Balanced 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,046.40 | $ | 4.74 | $ | 1,000.00 | $ | 1,020.29 | $ | 4.68 | 0.93% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,042.70 | $ | 8.45 | $ | 1,000.00 | $ | 1,016.65 | $ | 8.35 | 1.66% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,047.60 | $ | 3.73 | $ | 1,000.00 | $ | 1,021.29 | $ | 3.68 | 0.73% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,047.70 | $ | 3.32 | $ | 1,000.00 | $ | 1,021.69 | $ | 3.28 | 0.65% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,048.50 | $ | 2.91 | $ | 1,000.00 | $ | 1,022.09 | $ | 2.87 | 0.57% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,044.50 | $ | 6.73 | $ | 1,000.00 | $ | 1,018.35 | $ | 6.64 | 1.32% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,045.60 | $ | 5.46 | $ | 1,000.00 | $ | 1,019.60 | $ | 5.39 | 1.07% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,046.90 | $ | 4.18 | $ | 1,000.00 | $ | 1,020.84 | $ | 4.13 | 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 182/365 (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 | MARCH 31, 2015
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Janus Balanced Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Asset-Backed/Commercial Mortgage-Backed Securities – 2.5% | ||||||||||
| $9,890,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 9,987,684 | |||||||
| 3,875,000 | AmeriCredit Automobile Receivables Trust 2012-4 3.8200%, 2/10/20 (144A) | 3,971,379 | ||||||||
| 3,217,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 3,303,299 | ||||||||
| 35,008,000 | Applebee’s Funding LLC / IHOP Funding LLC 4.2770%, 9/5/44 (144A) | 36,234,890 | ||||||||
| 7,763,000 | Aventura Mall Trust 2013-AVM 3.7427%, 12/5/32 (144A),‡ | 7,759,918 | ||||||||
| 2,620,000 | Banc of America Commercial Mortgage Trust 2006-6 5.4210%, 10/10/45 | 2,715,182 | ||||||||
| 1,834,584 | Banc of America Commercial Mortgage Trust 2007-5 5.7720%, 2/10/51‡ | 1,956,573 | ||||||||
| 5,279,000 | Boca Hotel Portfolio Trust 2013-BOCA 3.2245%, 8/15/26 (144A),‡ | 5,272,760 | ||||||||
| 16,651,990 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 17,191,997 | ||||||||
| 5,750,042 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49‡ | 6,113,508 | ||||||||
| 803,362 | COMM 2007-C9 Mortgage Trust 5.7977%, 12/10/49‡ | 840,756 | ||||||||
| 17,624,000 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 19,078,526 | ||||||||
| 5,677,000 | DB Master Finance LLC 2015-1 3.2620%, 2/20/45 (144A) | 5,731,897 | ||||||||
| 10,710,791 | Domino’s Pizza Master Issuer LLC 5.2160%, 1/25/42 (144A) | 11,136,910 | ||||||||
| 2,418,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.5738%, 10/25/24‡ | 2,450,909 | ||||||||
| 2,901,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.8238%, 10/25/24‡ | 2,929,357 | ||||||||
| 9,864,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.3728%, 3/25/25‡ | 9,877,721 | ||||||||
| 12,565,709 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20§ | 11,223,240 | ||||||||
| 3,875,000 | GAHR Commercial Mortgage Trust 2015-NRF 3.3822%, 12/15/19 (144A) | 3,833,305 | ||||||||
| 9,415,000 | GS Mortgage Securities Corp. II 3.4356%, 12/10/27 (144A),‡ | 9,015,540 | ||||||||
| 3,856,000 | GS Mortgage Securities Corp. Trust 2013-NYC5 3.6490%, 1/10/30 (144A),‡ | 3,927,621 | ||||||||
| 4,151,000 | Hilton USA Trust 2013-HLT 4.4065%, 11/5/30 (144A) | 4,272,325 | ||||||||
| 8,020,000 | Hilton USA Trust 2013-HLT 5.2216%, 11/5/30 (144A),‡ | 8,237,799 | ||||||||
| 6,650,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.1645%, 4/15/30 (144A),‡ | 6,650,293 | ||||||||
| 2,941,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-JWRZ 3.9145%, 4/15/30 (144A),‡ | 2,941,497 | ||||||||
| 7,393,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 2.8044%, 2/16/25 (144A) | 7,513,402 | ||||||||
| 6,350,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 4.8447%, 2/16/25 (144A) | 6,654,362 | ||||||||
| 2,672,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 2.7720%, 12/15/28 (144A),‡ | 2,679,214 | ||||||||
| 2,783,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 3.6720%, 12/15/28 (144A),‡ | 2,783,100 | ||||||||
| 5,249,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 1.9815%, 1/15/32 (144A),‡ | 5,255,876 | ||||||||
| 4,577,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 4.1315%, 1/15/32 (144A),‡ | 4,582,456 | ||||||||
| 11,893,000 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 12,577,371 | ||||||||
| 3,763,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 3,790,143 | ||||||||
| 4,047,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 4,141,914 | ||||||||
| 4,528,000 | Santander Drive Auto Receivables Trust 2013-4 4.6700%, 1/15/20 (144A) | 4,731,765 | ||||||||
| 6,087,000 | Santander Drive Auto Receivables Trust 2015-1 3.2400%, 4/15/21 | 6,131,392 | ||||||||
| 10,070,000 | Starwood Retail Property Trust 2014-STAR 3.4220%, 11/15/27 (144A),‡ | 10,115,869 | ||||||||
| 5,338,000 | Starwood Retail Property Trust 2014-STAR 4.3220%, 11/15/27 (144A),‡ | 5,361,535 | ||||||||
| 15,814,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.3830%, 12/15/43 | 16,771,285 | ||||||||
| 725,792 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.5910%, 4/15/47‡ | 774,959 | ||||||||
| 13,666,621 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47‡ | 14,242,765 | ||||||||
| 4,758,526 | Wachovia Bank Commercial Mortgage Trust Series 2007-C33 5.9635%, 2/15/51‡ | 5,018,275 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| $3,115,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.9062%, 1/15/27 (144A),‡ | $ | 3,089,949 | |||||||
| 4,304,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.4062%, 2/15/27 (144A),‡ | 4,312,191 | ||||||||
| 1,557,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 3.4062%, 2/15/27 (144A),‡ | 1,553,126 | ||||||||
| Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $316,341,340) | 318,735,835 | |||||||||
| Bank Loans and Mezzanine Loans – 0.5% | ||||||||||
| Communications – 0.1% | ||||||||||
| 9,950,529 | Tribune Media Co. 4.0000%, 12/27/20‡ | 9,953,017 | ||||||||
| Consumer Non-Cyclical – 0.1% | ||||||||||
| 2,501,338 | CHS/Community Health Systems, Inc. 4.2500%, 1/27/21‡ | 2,512,969 | ||||||||
| 10,997,910 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 10,949,079 | ||||||||
| 6,546,265 | Quintiles Transnational Corp. 3.7500%, 6/8/18‡ | 6,558,572 | ||||||||
| 20,020,620 | ||||||||||
| Technology – 0.3% | ||||||||||
| 38,832,351 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 38,888,270 | ||||||||
| Total Bank Loans and Mezzanine Loans (cost $68,818,928) | 68,861,907 | |||||||||
| Common Stocks – 57.5% | ||||||||||
| Aerospace & Defense – 4.2% | ||||||||||
| 1,508,442 | Boeing Co. | 226,386,975 | ||||||||
| 1,527,586 | Honeywell International, Inc. | 159,342,496 | ||||||||
| 792,593 | Precision Castparts Corp. | 166,444,530 | ||||||||
| 552,174,001 | ||||||||||
| Airlines – 1.2% | ||||||||||
| 2,260,072 | United Continental Holdings, Inc.* | 151,989,842 | ||||||||
| Automobiles – 1.2% | ||||||||||
| 4,013,273 | General Motors Co. | 150,497,737 | ||||||||
| Beverages – 0.4% | ||||||||||
| 1,902,981 | Diageo PLC | 52,464,045 | ||||||||
| Biotechnology – 1.9% | ||||||||||
| 1,100,006 | Amgen, Inc. | 175,835,959 | ||||||||
| 145,450 | Regeneron Pharmaceuticals, Inc.* | 65,667,766 | ||||||||
| 241,503,725 | ||||||||||
| Capital Markets – 2.5% | ||||||||||
| 6,893,993 | Blackstone Group LP | 268,107,388 | ||||||||
| 1,449,758 | TD Ameritrade Holding Corp. | 54,017,983 | ||||||||
| 322,125,371 | ||||||||||
| Chemicals – 3.5% | ||||||||||
| 3,443,644 | EI du Pont de Nemours & Co. | 246,117,236 | ||||||||
| 2,338,891 | LyondellBasell Industries NV – Class A | 205,354,630 | ||||||||
| 451,471,866 | ||||||||||
| Commercial Banks – 2.3% | ||||||||||
| 1,848,264 | JPMorgan Chase & Co. | 111,967,833 | ||||||||
| 4,319,283 | U.S. Bancorp | 188,623,089 | ||||||||
| 300,590,922 | ||||||||||
| Consumer Finance – 0.6% | ||||||||||
| 1,087,914 | American Express Co. | 84,987,842 | ||||||||
| Diversified Financial Services – 0.6% | ||||||||||
| 873,265 | CME Group, Inc. | 82,706,928 | ||||||||
| Diversified Telecommunication Services – 0.2% | ||||||||||
| 474,757 | Verizon Communications, Inc. | 23,087,433 | ||||||||
| Electronic Equipment, Instruments & Components – 1.1% | ||||||||||
| 2,064,250 | TE Connectivity, Ltd. (U.S. Shares) | 147,841,585 | ||||||||
| Food Products – 0.5% | ||||||||||
| 588,824 | Hershey Co. | 59,418,230 | ||||||||
| Health Care Equipment & Supplies – 0.8% | ||||||||||
| 2,329,379 | Abbott Laboratories | 107,920,129 | ||||||||
| Health Care Providers & Services – 0.9% | ||||||||||
| 1,099,222 | Aetna, Inc. | 117,100,120 | ||||||||
| Hotels, Restaurants & Leisure – 2.3% | ||||||||||
| 2,877,321 | Las Vegas Sands Corp. | 158,367,748 | ||||||||
| 941,894 | Six Flags Entertainment Corp. | 45,597,089 | ||||||||
| 1,092,767 | Starwood Hotels & Resorts Worldwide, Inc. | 91,246,044 | ||||||||
| 295,210,881 | ||||||||||
| Industrial Conglomerates – 0.7% | ||||||||||
| 577,081 | 3M Co. | 95,189,511 | ||||||||
| Information Technology Services – 2.8% | ||||||||||
| 663,109 | Automatic Data Processing, Inc. | 56,788,655 | ||||||||
| 3,629,276 | MasterCard, Inc. – Class A | 313,533,153 | ||||||||
| 370,321,808 | ||||||||||
| Insurance – 0.9% | ||||||||||
| 4,740,465 | Prudential PLC | 117,358,717 | ||||||||
| Internet & Catalog Retail – 1.1% | ||||||||||
| 121,159 | Priceline Group, Inc.* | 141,047,250 | ||||||||
| Internet Software & Services – 1.7% | ||||||||||
| 454,996 | Alibaba Group Holding, Ltd. (ADR)* | 37,873,867 | ||||||||
| 327,506 | Google, Inc. – Class C* | 179,473,288 | ||||||||
| 217,347,155 | ||||||||||
| Leisure Products – 0.4% | ||||||||||
| 2,264,465 | Mattel, Inc. | 51,743,025 | ||||||||
| Machinery – 0.5% | ||||||||||
| 943,820 | Dover Corp. | 65,236,838 | ||||||||
| Media – 1.4% | ||||||||||
| 1,652,716 | CBS Corp. – Class B | 100,204,171 | ||||||||
| 547,666 | Time Warner Cable, Inc. | 82,084,180 | ||||||||
| 182,288,351 | ||||||||||
| Oil, Gas & Consumable Fuels – 2.8% | ||||||||||
| 1,251,429 | Chevron Corp. | 131,375,016 | ||||||||
| 5,264,697 | Enterprise Products Partners LP | 173,366,472 | ||||||||
| 2,373,243 | Marathon Oil Corp. | 61,965,375 | ||||||||
| 366,706,863 | ||||||||||
| Pharmaceuticals – 7.8% | ||||||||||
| 3,776,358 | AbbVie, Inc. | 221,067,997 | ||||||||
| 694,877 | Actavis PLC* | 206,809,293 | ||||||||
| 2,418,876 | Bristol-Myers Squibb Co. | 156,017,502 | ||||||||
| 1,502,973 | Eli Lilly & Co. | 109,190,988 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Pharmaceuticals – (continued) | ||||||||||
| $1,992,716 | Endo International PLC* | $ | 178,746,625 | |||||||
| 1,407,776 | Johnson & Johnson | 141,622,266 | ||||||||
| 1,013,454,671 | ||||||||||
| Professional Services – 0.4% | ||||||||||
| 349,463 | Towers Watson & Co. – Class A | 46,193,767 | ||||||||
| Real Estate Investment Trusts (REITs) – 0.3% | ||||||||||
| 1,311,317 | Outfront Media, Inc. | 39,234,605 | ||||||||
| Real Estate Management & Development – 0.5% | ||||||||||
| 61,628,705 | Colony American Homes Holdings III LP*,§ | 70,873,011 | ||||||||
| Road & Rail – 1.6% | ||||||||||
| 1,983,359 | Union Pacific Corp. | 214,817,613 | ||||||||
| Software – 1.7% | ||||||||||
| 5,388,214 | Microsoft Corp. | 219,057,840 | ||||||||
| Specialty Retail – 1.6% | ||||||||||
| 1,839,602 | Home Depot, Inc. | 208,997,183 | ||||||||
| Technology Hardware, Storage & Peripherals – 3.7% | ||||||||||
| 3,265,974 | Apple, Inc. | 406,385,145 | ||||||||
| 1,340,094 | Seagate Technology PLC | 69,725,091 | ||||||||
| 476,110,236 | ||||||||||
| Textiles, Apparel & Luxury Goods – 1.7% | ||||||||||
| 2,266,972 | NIKE, Inc. – Class B | 227,445,301 | ||||||||
| Tobacco – 1.7% | ||||||||||
| 2,360,922 | Altria Group, Inc. | 118,093,319 | ||||||||
| 1,333,295 | Philip Morris International, Inc. | 100,437,112 | ||||||||
| 218,530,431 | ||||||||||
| Total Common Stocks (cost $5,378,326,910) | 7,483,044,833 | |||||||||
| Corporate Bonds – 16.2% | ||||||||||
| Asset-Backed Securities – 0.1% | ||||||||||
| $11,547,000 | American Tower Trust I 1.5510%, 3/15/18 (144A) | 11,524,021 | ||||||||
| Banking – 2.5% | ||||||||||
| 2,155,000 | Ally Financial, Inc. 8.0000%, 12/31/18 | 2,435,150 | ||||||||
| 6,079,000 | Ally Financial, Inc. 8.0000%, 3/15/20 | 7,249,208 | ||||||||
| 12,207,000 | Ally Financial, Inc. 4.1250%, 3/30/20 | 12,130,706 | ||||||||
| 6,017,000 | Ally Financial, Inc. 7.5000%, 9/15/20 | 7,047,411 | ||||||||
| 12,979,000 | American Express Co. 6.8000%, 9/1/66‡ | 13,630,546 | ||||||||
| 6,352,000 | American Express Credit Corp. 1.7500%, 6/12/15 | 6,364,876 | ||||||||
| 4,959,000 | Bank of America Corp. 1.5000%, 10/9/15 | 4,980,051 | ||||||||
| 11,017,000 | Bank of America Corp. 8.0000%µ | 11,774,419 | ||||||||
| 19,294,000 | Citigroup, Inc. 5.8000%µ | 19,342,235 | ||||||||
| 4,346,000 | Discover Financial Services 3.9500%, 11/6/24 | 4,469,457 | ||||||||
| 9,129,000 | Discover Financial Services 3.7500%, 3/4/25 | 9,195,979 | ||||||||
| 20,507,000 | Goldman Sachs Capital I 6.3450%, 2/15/34 | 25,555,926 | ||||||||
| 4,456,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 4,778,089 | ||||||||
| 11,598,000 | Intesa Sanpaolo SpA 5.0170%, 6/26/24 (144A) | 11,870,437 | ||||||||
| 19,227,000 | Morgan Stanley 1.8750%, 1/5/18 | 19,358,551 | ||||||||
| 11,582,000 | Morgan Stanley 5.5500%µ | 11,697,820 | ||||||||
| 2,828,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 2,848,630 | ||||||||
| 20,780,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 23,108,544 | ||||||||
| 15,591,000 | Royal Bank of Scotland Group PLC 6.0000%, 12/19/23 | 17,342,524 | ||||||||
| 31,340,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 32,879,139 | ||||||||
| 28,659,000 | Santander UK PLC 5.0000%, 11/7/23 (144A) | 30,861,931 | ||||||||
| 12,001,000 | SVB Financial Group 5.3750%, 9/15/20 | 13,657,810 | ||||||||
| 13,416,000 | Synchrony Financial 3.0000%, 8/15/19 | 13,707,221 | ||||||||
| 6,441,000 | Synchrony Financial 4.2500%, 8/15/24 | 6,736,017 | ||||||||
| 17,863,000 | Zions Bancorporation 5.8000%µ | 17,085,960 | ||||||||
| 330,108,637 | ||||||||||
| Basic Industry – 0.8% | ||||||||||
| 15,959,000 | Albemarle Corp. 4.1500%, 12/1/24 | 16,551,478 | ||||||||
| 13,119,000 | Albemarle Corp. 5.4500%, 12/1/44 | 14,149,406 | ||||||||
| 6,413,000 | Ashland, Inc. 3.8750%, 4/15/18 | 6,573,325 | ||||||||
| 8,277,000 | Ashland, Inc. 6.8750%, 5/15/43 | 8,939,160 | ||||||||
| 19,249,000 | Georgia-Pacific LLC 3.1630%, 11/15/21 (144A) | 19,731,611 | ||||||||
| 9,700,000 | Georgia-Pacific LLC 3.6000%, 3/1/25 (144A) | 9,943,596 | ||||||||
| 13,848,000 | LyondellBasell Industries NV 4.6250%, 2/26/55 | 13,789,257 | ||||||||
| 9,897,000 | Reliance Steel & Aluminum Co. 4.5000%, 4/15/23 | 9,998,127 | ||||||||
| 8,735,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 9,095,319 | ||||||||
| 108,771,279 | ||||||||||
| Brokerage – 1.7% | ||||||||||
| 16,979,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 17,779,050 | ||||||||
| 6,929,000 | Carlyle Holdings Finance LLC 3.8750%, 2/1/23 (144A) | 7,172,721 | ||||||||
| 7,811,000 | Charles Schwab Corp. 3.0000%, 3/10/25 | 7,900,147 | ||||||||
| 10,581,000 | Charles Schwab Corp. 7.0000%µ | 12,485,580 | ||||||||
| 12,710,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 13,409,050 | ||||||||
| 17,020,000 | E*TRADE Financial Corp. 4.6250%, 9/15/23 | 17,317,850 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Brokerage – (continued) | ||||||||||
| $584,000 | Lazard Group LLC 6.8500%, 6/15/17 | $ | 648,802 | |||||||
| 13,313,000 | Lazard Group LLC 4.2500%, 11/14/20 | 14,227,989 | ||||||||
| 20,791,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.6250%, 3/15/20 (144A) | 21,674,617 | ||||||||
| 11,923,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 12,727,803 | ||||||||
| 15,749,000 | Raymond James Financial, Inc. 4.2500%, 4/15/16 | 16,352,864 | ||||||||
| 29,726,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 34,363,732 | ||||||||
| 9,001,000 | Stifel Financial Corp. 4.2500%, 7/18/24 | 9,188,176 | ||||||||
| 10,821,000 | TD Ameritrade Holding Corp. 2.9500%, 4/1/22 | 11,002,111 | ||||||||
| 22,577,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 23,636,335 | ||||||||
| 219,886,827 | ||||||||||
| Capital Goods – 0.7% | ||||||||||
| 6,818,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 6,835,045 | ||||||||
| 9,471,000 | Exelis, Inc. 4.2500%, 10/1/16 | 9,765,093 | ||||||||
| 4,279,000 | Exelis, Inc. 5.5500%, 10/1/21 | 4,726,117 | ||||||||
| 11,790,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 12,149,371 | ||||||||
| 10,940,000 | Hanson, Ltd. 6.1250%, 8/15/16 | 11,514,350 | ||||||||
| 6,364,000 | Martin Marietta Materials, Inc. 4.2500%, 7/2/24 | 6,672,100 | ||||||||
| 4,642,000 | Owens Corning 4.2000%, 12/1/24 | 4,787,123 | ||||||||
| 7,735,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 8,798,563 | ||||||||
| 4,281,000 | Vulcan Materials Co. 7.5000%, 6/15/21 | 5,137,200 | ||||||||
| 19,671,000 | Vulcan Materials Co. 4.5000%, 4/1/25 | 19,966,065 | ||||||||
| 90,351,027 | ||||||||||
| Communications – 0.3% | ||||||||||
| 5,155,000 | Nielsen Finance LLC / Nielsen Finance Co. 4.5000%, 10/1/20 | 5,245,212 | ||||||||
| 6,429,000 | SBA Tower Trust 2.9330%, 12/15/17 (144A) | 6,505,499 | ||||||||
| 9,707,000 | Sprint Corp. 7.2500%, 9/15/21 | 9,755,535 | ||||||||
| 12,622,000 | UBM PLC 5.7500%, 11/3/20 (144A) | 13,944,344 | ||||||||
| 35,450,590 | ||||||||||
| Consumer Cyclical – 1.3% | ||||||||||
| 18,486,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 18,492,803 | ||||||||
| 2,587,000 | Continental Rubber of America Corp. 4.5000%, 9/15/19 (144A) | 2,669,256 | ||||||||
| 4,115,000 | DR Horton, Inc. 4.7500%, 5/15/17 | 4,300,175 | ||||||||
| 8,899,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 9,010,238 | ||||||||
| 19,627,000 | General Motors Co. 3.5000%, 10/2/18 | 20,109,039 | ||||||||
| 50,513,000 | General Motors Co. 4.8750%, 10/2/23 | 54,691,132 | ||||||||
| 6,429,000 | General Motors Co. 6.2500%, 10/2/43 | 7,875,924 | ||||||||
| 4,763,000 | General Motors Financial Co., Inc. 3.2500%, 5/15/18 | 4,852,306 | ||||||||
| 2,643,000 | General Motors Financial Co., Inc. 4.2500%, 5/15/23 | 2,738,042 | ||||||||
| 6,057,000 | Macy’s Retail Holdings, Inc. 5.9000%, 12/1/16 | 6,533,771 | ||||||||
| 10,157,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 9,903,075 | ||||||||
| 8,730,000 | Schaeffler Finance BV 4.2500%, 5/15/21 (144A) | 8,686,350 | ||||||||
| 3,692,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 3,793,530 | ||||||||
| 3,368,000 | Toll Brothers Finance Corp. 5.8750%, 2/15/22 | 3,696,380 | ||||||||
| 1,885,000 | Toll Brothers Finance Corp. 4.3750%, 4/15/23 | 1,903,850 | ||||||||
| 5,887,000 | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 4.2500%, 5/30/23 (144A) | 5,622,085 | ||||||||
| 164,877,956 | ||||||||||
| Consumer Non-Cyclical – 2.0% | ||||||||||
| 1,124,000 | Actavis Funding SCS 2.4500%, 6/15/19 | 1,128,625 | ||||||||
| 16,439,000 | Actavis Funding SCS 3.0000%, 3/12/20 | 16,818,494 | ||||||||
| 3,320,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 3,429,357 | ||||||||
| 18,993,000 | Actavis Funding SCS 3.8000%, 3/15/25 | 19,601,346 | ||||||||
| 8,961,000 | Actavis Funding SCS 4.5500%, 3/15/35 | 9,340,212 | ||||||||
| 2,951,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 3,134,419 | ||||||||
| 6,720,000 | Actavis Funding SCS 4.7500%, 3/15/45 | 7,142,392 | ||||||||
| 10,940,000 | Becton Dickinson and Co. 1.8000%, 12/15/17 | 11,023,822 | ||||||||
| 15,608,000 | Fresenius Medical Care US Finance II, Inc. 5.8750%, 1/31/22 (144A) | 17,168,800 | ||||||||
| 6,455,000 | HCA, Inc. 3.7500%, 3/15/19 | 6,541,755 | ||||||||
| 4,301,000 | JM Smucker Co. 3.5000%, 3/15/25 (144A) | 4,421,484 | ||||||||
| 12,400,000 | Laboratory Corp. of America Holdings 3.2000%, 2/1/22 | 12,553,252 | ||||||||
| 12,381,000 | Laboratory Corp. of America Holdings 3.6000%, 2/1/25 | 12,431,527 | ||||||||
| 8,204,000 | Life Technologies Corp. 6.0000%, 3/1/20 | 9,474,742 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Consumer Non-Cyclical – (continued) | ||||||||||
| $2,859,000 | Life Technologies Corp. 5.0000%, 1/15/21 | $ | 3,192,883 | |||||||
| 5,017,000 | Omnicare, Inc. 4.7500%, 12/1/22 | 5,180,053 | ||||||||
| 6,635,000 | Omnicare, Inc. 5.0000%, 12/1/24 | 6,933,575 | ||||||||
| 1,831,000 | Smithfield Foods, Inc. 5.2500%, 8/1/18 (144A) | 1,872,198 | ||||||||
| 5,965,000 | Thermo Fisher Scientific, Inc. 3.3000%, 2/15/22 | 6,116,320 | ||||||||
| 8,642,000 | Tyson Foods, Inc. 6.6000%, 4/1/16 | 9,116,498 | ||||||||
| 6,793,000 | VRX Escrow Corp. 5.8750%, 5/15/23 (144A) | 6,962,825 | ||||||||
| 6,793,000 | VRX Escrow Corp. 6.1250%, 4/15/25 (144A) | 7,030,755 | ||||||||
| 19,820,000 | Wm Wrigley Jr Co. 2.4000%, 10/21/18 (144A) | 20,175,174 | ||||||||
| 19,803,000 | Wm Wrigley Jr Co. 3.3750%, 10/21/20 (144A) | 20,751,326 | ||||||||
| 12,344,000 | Zimmer Holdings, Inc. 2.7000%, 4/1/20 | 12,516,149 | ||||||||
| 14,589,000 | Zimmer Holdings, Inc. 3.1500%, 4/1/22 | 14,765,571 | ||||||||
| 16,810,000 | Zimmer Holdings, Inc. 3.5500%, 4/1/25 | 17,158,673 | ||||||||
| 265,982,227 | ||||||||||
| Electric – 0.2% | ||||||||||
| 5,997,000 | IPALCO Enterprises, Inc. 5.0000%, 5/1/18 | 6,356,820 | ||||||||
| 7,835,000 | PPL WEM Holdings, Ltd. 3.9000%, 5/1/16 (144A) | 8,052,116 | ||||||||
| 9,195,000 | PPL WEM Holdings, Ltd. 5.3750%, 5/1/21 (144A) | 10,582,764 | ||||||||
| 24,991,700 | ||||||||||
| Energy – 2.4% | ||||||||||
| 16,117,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 15,633,490 | ||||||||
| 21,409,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 20,070,938 | ||||||||
| 8,716,000 | Chevron Corp. 1.3450%, 11/15/17 | 8,787,062 | ||||||||
| 21,239,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 22,619,535 | ||||||||
| 15,278,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 15,163,415 | ||||||||
| 16,509,000 | DCP Midstream Operating LP 4.9500%, 4/1/22 | 16,072,634 | ||||||||
| 8,671,000 | DCP Midstream Operating LP 3.8750%, 3/15/23 | 7,805,452 | ||||||||
| 7,738,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 6,648,273 | ||||||||
| 9,861,000 | Devon Energy Corp. 2.2500%, 12/15/18 | 9,955,360 | ||||||||
| 6,106,000 | Energy Transfer Partners LP 4.1500%, 10/1/20 | 6,410,170 | ||||||||
| 8,913,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 9,369,141 | ||||||||
| 6,889,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 7,638,482 | ||||||||
| 5,849,000 | Forum Energy Technologies, Inc. 6.2500%, 10/1/21 | 5,483,438 | ||||||||
| 2,556,000 | Frontier Oil Corp. 6.8750%, 11/15/18 | 2,632,680 | ||||||||
| 8,424,000 | Helmerich & Payne International Drilling Co. 4.6500%, 3/15/25 (144A) | 8,724,012 | ||||||||
| 5,657,000 | Kinder Morgan Energy Partners LP 5.0000%, 10/1/21 | 6,068,173 | ||||||||
| 5,940,000 | Kinder Morgan Energy Partners LP 4.3000%, 5/1/24 | 6,047,425 | ||||||||
| 597,000 | Kinder Morgan, Inc. 6.5000%, 9/15/20 | 691,123 | ||||||||
| 6,696,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 8,241,075 | ||||||||
| 8,770,000 | Motiva Enterprises LLC 5.7500%, 1/15/20 (144A) | 9,701,453 | ||||||||
| 14,847,000 | Nabors Industries, Inc. 5.0000%, 9/15/20 | 14,785,964 | ||||||||
| 12,532,000 | NGL Energy Partners LP / NGL Energy Finance Corp. 5.1250%, 7/15/19 | 12,281,360 | ||||||||
| 23,685,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 23,946,364 | ||||||||
| 3,510,000 | Phillips 66 Partners LP 3.6050%, 2/15/25 | 3,515,907 | ||||||||
| 11,805,000 | Plains All American Pipeline LP / PAA Finance Corp. 3.9500%, 9/15/15 | 11,967,578 | ||||||||
| 14,313,000 | Spectra Energy Partners LP 4.7500%, 3/15/24 | 15,718,107 | ||||||||
| 10,326,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 4.1250%, 11/15/19 (144A) | 10,274,370 | ||||||||
| 20,110,000 | Western Gas Partners LP 5.3750%, 6/1/21 | 22,222,153 | ||||||||
| 9,373,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 9,208,973 | ||||||||
| 317,684,107 | ||||||||||
| Finance Companies – 0.6% | ||||||||||
| 25,290,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 25,606,125 | ||||||||
| 19,971,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 20,769,840 | ||||||||
| 4,751,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 5,142,957 | ||||||||
| 4,176,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 4,530,960 | ||||||||
| 16,600,000 | General Electric Capital Corp. 6.2500%µ | 18,675,000 | ||||||||
| 4,700,000 | General Electric Capital Corp. 7.1250%µ | 5,516,625 | ||||||||
| 80,241,507 | ||||||||||
| Financial – 0.3% | ||||||||||
| 13,346,000 | Jones Lang LaSalle, Inc. 4.4000%, 11/15/22 | 14,037,777 | ||||||||
| 23,638,000 | LeasePlan Corp. NV 2.5000%, 5/16/18 (144A) | 23,904,093 | ||||||||
| 37,941,870 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Industrial – 0.1% | ||||||||||
| $5,422,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | $ | 5,548,387 | |||||||
| 5,676,000 | Cintas Corp. No 2 4.3000%, 6/1/21 | 6,182,322 | ||||||||
| 11,730,709 | ||||||||||
| Insurance – 0.2% | ||||||||||
| 20,170,000 | Primerica, Inc. 4.7500%, 7/15/22 | 22,364,476 | ||||||||
| 8,209,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 8,578,405 | ||||||||
| 30,942,881 | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.9% | ||||||||||
| 9,416,000 | Alexandria Real Estate Equities, Inc. 2.7500%, 1/15/20 | 9,446,442 | ||||||||
| 16,517,000 | Alexandria Real Estate Equities, Inc. 4.6000%, 4/1/22 | 17,453,712 | ||||||||
| 8,611,000 | Alexandria Real Estate Equities, Inc. 4.5000%, 7/30/29 | 9,090,357 | ||||||||
| 14,712,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 14,748,780 | ||||||||
| 7,681,000 | Post Apartment Homes LP 4.7500%, 10/15/17 | 8,243,910 | ||||||||
| 4,313,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 4,513,425 | ||||||||
| 2,472,000 | Retail Opportunity Investments Partnership LP 5.0000%, 12/15/23 | 2,703,302 | ||||||||
| 4,690,000 | Retail Opportunity Investments Partnership LP 4.0000%, 12/15/24 | 4,797,706 | ||||||||
| 3,778,000 | Senior Housing Properties Trust 6.7500%, 4/15/20 | 4,307,434 | ||||||||
| 4,171,000 | Senior Housing Properties Trust 6.7500%, 12/15/21 | 4,851,432 | ||||||||
| 9,167,000 | SL Green Realty Corp. 5.0000%, 8/15/18 | 9,891,074 | ||||||||
| 17,693,000 | SL Green Realty Corp. 7.7500%, 3/15/20 | 21,477,002 | ||||||||
| 111,524,576 | ||||||||||
| Technology – 1.7% | ||||||||||
| 6,175,000 | Autodesk, Inc. 3.6000%, 12/15/22 | 6,239,658 | ||||||||
| 20,209,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 20,999,758 | ||||||||
| 2,658,000 | Fidelity National Information Services, Inc. 5.0000%, 3/15/22 | 2,818,331 | ||||||||
| 7,809,000 | Fiserv, Inc. 3.1250%, 10/1/15 | 7,902,255 | ||||||||
| 12,530,000 | National Semiconductor Corp. 3.9500%, 4/15/15 | 12,541,290 | ||||||||
| 4,335,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 4,556,237 | ||||||||
| 41,410,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 42,879,724 | ||||||||
| 13,629,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 14,567,384 | ||||||||
| 22,274,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 23,484,235 | ||||||||
| 32,015,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 31,738,198 | ||||||||
| 7,602,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 8,150,461 | ||||||||
| 28,106,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 32,350,147 | ||||||||
| 7,358,000 | Verisk Analytics, Inc. 4.1250%, 9/12/22 | 7,671,635 | ||||||||
| 215,899,313 | ||||||||||
| Transportation – 0.4% | ||||||||||
| 2,144,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 2,161,898 | ||||||||
| 11,891,000 | JB Hunt Transport Services, Inc. 3.3750%, 9/15/15 | 12,017,651 | ||||||||
| 1,491,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 1,512,590 | ||||||||
| 12,487,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 3.3750%, 3/15/18 (144A) | 12,962,767 | ||||||||
| 8,346,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 6/15/19 (144A) | 8,356,958 | ||||||||
| 1,270,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.8750%, 7/11/22 (144A) | 1,373,956 | ||||||||
| 6,846,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.2500%, 1/17/23 (144A) | 7,122,092 | ||||||||
| 8,107,000 | Southwest Airlines Co. 5.1250%, 3/1/17 | 8,668,256 | ||||||||
| 54,176,168 | ||||||||||
| Total Corporate Bonds (cost $2,039,524,468) | 2,112,085,395 | |||||||||
| Mortgage-Backed Securities – 6.4% | ||||||||||
| Fannie Mae Pool: | ||||||||||
| 2,000,706 | 5.5000%, 1/1/25 | 2,193,458 | ||||||||
| 2,803,768 | 4.0000%, 6/1/29 | 2,984,046 | ||||||||
| 6,323,305 | 4.0000%, 9/1/29 | 6,729,646 | ||||||||
| 5,153,318 | 5.0000%, 9/1/29 | 5,737,011 | ||||||||
| 2,038,607 | 5.0000%, 1/1/30 | 2,271,187 | ||||||||
| 1,346,984 | 5.5000%, 1/1/33 | 1,534,238 | ||||||||
| 5,664,353 | 6.0000%, 10/1/35 | 6,502,236 | ||||||||
| 6,323,150 | 6.0000%, 12/1/35 | 7,267,318 | ||||||||
| 1,012,650 | 6.0000%, 2/1/37 | 1,173,023 | ||||||||
| 5,505,933 | 6.0000%, 9/1/37 | 6,080,897 | ||||||||
| 4,691,970 | 6.0000%, 10/1/38 | 5,492,341 | ||||||||
| 1,703,242 | 7.0000%, 2/1/39 | 2,045,003 | ||||||||
| 6,503,479 | 5.5000%, 3/1/40 | 7,460,182 | ||||||||
| 19,099,786 | 5.5000%, 4/1/40 | 21,608,931 | ||||||||
| 1,896,217 | 4.5000%, 10/1/40 | 2,105,462 | ||||||||
| 14,453,443 | 5.0000%, 2/1/41 | 16,259,739 | ||||||||
| 3,520,234 | 5.5000%, 2/1/41 | 4,054,097 | ||||||||
| 3,468,365 | 5.0000%, 4/1/41 | 3,902,022 | ||||||||
| 8,267,207 | 5.0000%, 5/1/41 | 9,229,959 | ||||||||
| 6,277,155 | 5.5000%, 5/1/41 | 7,066,221 | ||||||||
| 10,686,955 | 5.5000%, 6/1/41 | 12,066,516 | ||||||||
| 7,428,210 | 5.0000%, 7/1/41 | 8,355,667 | ||||||||
| 5,961,609 | 4.5000%, 8/1/41 | 6,568,668 | ||||||||
| 9,043,240 | 5.5000%, 12/1/41 | 10,240,459 | ||||||||
| 9,757,103 | 4.0000%, 6/1/42 | 10,641,425 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Mortgage-Backed Securities – (continued) | ||||||||||
| Fannie Mae Pool: (continued) | ||||||||||
| $4,533,481 | 4.0000%, 8/1/42 | $ | 4,945,298 | |||||||
| 5,512,295 | 4.0000%, 9/1/42 | 6,011,693 | ||||||||
| 7,066,718 | 4.0000%, 9/1/42 | 7,708,427 | ||||||||
| 6,861,857 | 4.0000%, 11/1/42 | 7,487,574 | ||||||||
| 5,572,082 | 4.0000%, 12/1/42 | 6,058,574 | ||||||||
| 11,516,640 | 3.5000%, 1/1/43 | 12,199,609 | ||||||||
| 22,357,823 | 3.5000%, 2/1/43 | 23,677,182 | ||||||||
| 29,452,765 | 3.5000%, 2/1/43 | 31,194,348 | ||||||||
| 32,091,608 | 4.5000%, 2/1/43 | 35,638,746 | ||||||||
| 15,623,255 | 4.0000%, 5/1/43 | 17,047,040 | ||||||||
| 14,386,468 | 4.0000%, 7/1/43 | 15,689,792 | ||||||||
| 16,529,393 | 4.0000%, 8/1/43 | 18,035,067 | ||||||||
| 4,142,962 | 4.0000%, 9/1/43 | 4,518,699 | ||||||||
| 14,126,908 | 4.0000%, 9/1/43 | 15,410,102 | ||||||||
| 9,180,902 | 3.5000%, 1/1/44 | 9,740,724 | ||||||||
| 20,506,491 | 3.5000%, 1/1/44 | 21,776,573 | ||||||||
| 10,951,967 | 4.0000%, 2/1/44 | 11,947,528 | ||||||||
| 10,744,995 | 3.5000%, 4/1/44 | 11,375,586 | ||||||||
| 31,157,655 | 3.5000%, 5/1/44 | 33,054,962 | ||||||||
| 27,067,711 | 4.0000%, 7/1/44 | 29,537,104 | ||||||||
| 15,652,324 | 5.0000%, 7/1/44 | 17,877,058 | ||||||||
| 6,488,562 | 4.0000%, 8/1/44 | 7,080,515 | ||||||||
| 17,095,826 | 4.0000%, 8/1/44 | 18,655,556 | ||||||||
| 23,719,175 | 3.5000%, 2/1/45 | 25,119,018 | ||||||||
| Freddie Mac Gold Pool: | ||||||||||
| 1,376,597 | 5.0000%, 1/1/19 | 1,446,588 | ||||||||
| 1,291,178 | 5.5000%, 8/1/19 | 1,353,774 | ||||||||
| 2,014,714 | 5.0000%, 6/1/20 | 2,146,076 | ||||||||
| 4,640,094 | 5.5000%, 12/1/28 | 5,202,953 | ||||||||
| 6,385,198 | 3.5000%, 7/1/29 | 6,813,405 | ||||||||
| 3,863,146 | 5.5000%, 10/1/36 | 4,373,614 | ||||||||
| 18,033,349 | 6.0000%, 4/1/40 | 20,661,104 | ||||||||
| 4,611,045 | 4.5000%, 1/1/41 | 5,097,943 | ||||||||
| 9,650,236 | 5.0000%, 5/1/41 | 10,862,964 | ||||||||
| 5,897,638 | 5.5000%, 5/1/41 | 6,621,461 | ||||||||
| 7,926,211 | 3.5000%, 2/1/44 | 8,376,641 | ||||||||
| 5,827,231 | 4.0000%, 8/1/44 | 6,330,977 | ||||||||
| Ginnie Mae I Pool: | ||||||||||
| 5,978,144 | 5.1000%, 1/15/32 | 6,882,719 | ||||||||
| 6,488,801 | 4.9000%, 10/15/34 | 7,283,188 | ||||||||
| 774,138 | 5.5000%, 9/15/35 | 898,050 | ||||||||
| 3,805,530 | 5.5000%, 3/15/36 | 4,363,373 | ||||||||
| 5,020,562 | 5.5000%, 8/15/39 | 5,782,136 | ||||||||
| 15,200,013 | 5.5000%, 8/15/39 | 17,507,469 | ||||||||
| 3,736,130 | 5.0000%, 10/15/39 | 4,223,714 | ||||||||
| 5,691,576 | 5.5000%, 10/15/39 | 6,553,104 | ||||||||
| 5,770,648 | 5.0000%, 11/15/39 | 6,454,961 | ||||||||
| 1,815,630 | 5.0000%, 1/15/40 | 2,030,875 | ||||||||
| 613,556 | 5.0000%, 5/15/40 | 697,429 | ||||||||
| 2,037,475 | 5.0000%, 5/15/40 | 2,310,092 | ||||||||
| 1,549,343 | 5.0000%, 7/15/40 | 1,730,154 | ||||||||
| 6,198,525 | 5.0000%, 7/15/40 | 6,936,725 | ||||||||
| 6,258,868 | 5.0000%, 2/15/41 | 7,005,466 | ||||||||
| 2,384,850 | 5.0000%, 4/15/41 | 2,676,568 | ||||||||
| 2,491,333 | 5.0000%, 5/15/41 | 2,847,470 | ||||||||
| 1,831,227 | 4.5000%, 7/15/41 | 2,058,033 | ||||||||
| 5,964,430 | 4.5000%, 7/15/41 | 6,601,894 | ||||||||
| 13,532,284 | 4.5000%, 8/15/41 | 15,257,261 | ||||||||
| 1,510,325 | 5.0000%, 9/15/41 | 1,697,599 | ||||||||
| Ginnie Mae II Pool: | ||||||||||
| 3,318,041 | 6.0000%, 11/20/34 | 3,839,392 | ||||||||
| 3,908,771 | 5.5000%, 11/20/37 | 4,361,696 | ||||||||
| 1,385,126 | 6.0000%, 1/20/39 | 1,566,163 | ||||||||
| 932,793 | 7.0000%, 5/20/39 | 1,067,109 | ||||||||
| 9,275,424 | 4.5000%, 10/20/41 | 10,094,496 | ||||||||
| 590,884 | 6.0000%, 10/20/41 | 678,736 | ||||||||
| 1,854,304 | 6.0000%, 12/20/41 | 2,124,083 | ||||||||
| 4,013,060 | 5.5000%, 1/20/42 | 4,546,760 | ||||||||
| 1,931,289 | 6.0000%, 1/20/42 | 2,217,902 | ||||||||
| 1,619,309 | 6.0000%, 2/20/42 | 1,854,287 | ||||||||
| 1,500,059 | 6.0000%, 3/20/42 | 1,720,308 | ||||||||
| 5,249,855 | 6.0000%, 4/20/42 | 6,027,342 | ||||||||
| 2,978,855 | 3.5000%, 5/20/42 | 3,169,732 | ||||||||
| 4,953,826 | 5.5000%, 5/20/42 | 5,615,431 | ||||||||
| 2,428,315 | 6.0000%, 5/20/42 | 2,753,435 | ||||||||
| 7,177,828 | 5.5000%, 7/20/42 | 8,026,411 | ||||||||
| 1,560,028 | 6.0000%, 7/20/42 | 1,789,123 | ||||||||
| 1,696,867 | 6.0000%, 8/20/42 | 1,948,358 | ||||||||
| 3,633,311 | 6.0000%, 9/20/42 | 4,172,315 | ||||||||
| 1,572,539 | 6.0000%, 11/20/42 | 1,799,989 | ||||||||
| 2,139,171 | 6.0000%, 2/20/43 | 2,455,822 | ||||||||
| 9,747,578 | 3.5000%, 9/20/44 | 10,375,654 | ||||||||
| Total Mortgage-Backed Securities (cost $818,465,086) | 834,646,851 | |||||||||
| Preferred Stocks – 0.8% | ||||||||||
| Capital Markets – 0.2% | ||||||||||
| 444,850 | Morgan Stanley, 6.8750% | 12,237,823 | ||||||||
| 446,510 | Morgan Stanley, 7.1250% | 12,712,140 | ||||||||
| 13,400 | Morgan Stanley Capital Trust III, 6.2500% | 343,442 | ||||||||
| 152,475 | State Street Corp., 5.9000% | 4,161,043 | ||||||||
| 29,454,448 | ||||||||||
| Commercial Banks – 0.1% | ||||||||||
| 624,325 | Wells Fargo & Co., 6.6250% | 17,624,695 | ||||||||
| Construction & Engineering – 0.1% | ||||||||||
| 301,150 | Citigroup Capital XIII, 7.8750% | 7,986,498 | ||||||||
| Consumer Finance – 0.3% | ||||||||||
| 18,868 | Ally Financial, Inc., 7.0000% (144A) | 19,271,894 | ||||||||
| 572,900 | Discover Financial Services, 6.5000% | 14,849,568 | ||||||||
| 34,121,462 | ||||||||||
| Pharmaceuticals – 0.1% | ||||||||||
| 10,839 | Actavis PLC, 5.5000% | 10,969,068 | ||||||||
| Total Preferred Stocks (cost $94,485,874) | 100,156,171 | |||||||||
| U.S. Treasury Notes/Bonds – 15.0% | ||||||||||
| $16,335,000 | 0.6250%, 12/31/16 | 16,374,563 | ||||||||
| 256,387,000 | 0.5000%, 1/31/17 | 256,406,998 | ||||||||
| 80,694,000 | 1.0000%, 12/15/17 | 81,129,021 | ||||||||
| 71,544,000 | 1.3750%, 7/31/18 | 72,376,844 | ||||||||
| 84,828,000 | 1.5000%, 8/31/18 | 86,133,588 | ||||||||
| 283,226,000 | 1.3750%, 9/30/18 | 286,230,278 | ||||||||
| 55,868,000 | 1.2500%, 10/31/18 | 56,169,184 | ||||||||
| 48,166,000 | 1.6250%, 7/31/19 | 48,888,490 | ||||||||
| 43,085,000 | 1.7500%, 9/30/19 | 43,906,286 | ||||||||
| 64,084,000 | 1.5000%, 10/31/19 | 64,589,687 | ||||||||
| 78,327,000 | 1.5000%, 11/30/19 | 78,926,672 | ||||||||
| 65,975,000 | 1.6250%, 12/31/19 | 66,815,126 | ||||||||
| 34,657,000 | 2.1250%, 9/30/21 | 35,653,389 | ||||||||
| 48,384,000 | 2.1250%, 12/31/21 | 49,812,828 | ||||||||
| 14,839,000 | 1.7500%, 5/15/23 | 14,759,003 | ||||||||
| 54,623,000 | 2.5000%, 8/15/23 | 57,486,447 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| U.S. Treasury Notes/Bonds – (continued) | ||||||||||
| $76,289,000 | 2.7500%, 11/15/23 | $ | 81,808,052 | |||||||
| 39,540,000 | 2.5000%, 5/15/24 | 41,535,544 | ||||||||
| 10,038,000 | 2.3750%, 8/15/24 | 10,434,812 | ||||||||
| 220,584,000 | 2.2500%, 11/15/24 | 226,770,720 | ||||||||
| 70,202,000 | 2.0000%, 2/15/25 | 70,646,238 | ||||||||
| 59,559,000 | 3.7500%, 11/15/43 | 74,402,234 | ||||||||
| 11,346,000 | 3.6250%, 2/15/44 | 13,873,140 | ||||||||
| 10,978,000 | 3.3750%, 5/15/44 | 12,860,551 | ||||||||
| 5,412,000 | 3.1250%, 8/15/44 | 6,063,556 | ||||||||
| 97,896,000 | 2.5000%, 2/15/45 | 96,993,497 | ||||||||
| Total U.S. Treasury Notes/Bonds (cost $1,899,215,107) | 1,951,046,748 | |||||||||
| Investment Companies – 1.0% | ||||||||||
| Money Markets – 1.0% | ||||||||||
| 127,049,827 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $127,049,827) | 127,049,827 | ||||||||
| Total Investments (total cost $10,742,227,540) – 99.9% | 12,995,627,567 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 11,765,934 | |||||||||
| Net Assets – 100% | $ | 13,007,393,501 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 12,507,375,106 | 96 | .2% | ||||
| United Kingdom | 302,322,224 | 2 | .3 | |||||
| Singapore | 38,888,270 | 0 | .3 | |||||
| China | 37,873,867 | 0 | .3 | |||||
| Taiwan | 31,738,198 | 0 | .3 | |||||
| Germany | 28,524,406 | 0 | .2 | |||||
| Netherlands | 23,904,093 | 0 | .2 | |||||
| Italy | 11,870,437 | 0 | .1 | |||||
| Canada | 10,969,068 | 0 | .1 | |||||
| Australia | 2,161,898 | 0 | .0 | |||||
| Total | $ | 12,995,627,567 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: British Pound 4/16/15 | 19,160,000 | $ | 28,415,074 | $ | 215,259 | |||||||
| Credit Suisse International: British Pound 4/9/15 | 10,943,000 | 16,229,765 | 666,665 | |||||||||
| HSBC Securities (USA), Inc.: British Pound 4/9/15 | 6,325,000 | 9,380,724 | 228,195 | |||||||||
| JPMorgan Chase & Co.: British Pound 4/16/15 | 10,600,000 | 15,720,239 | (15,343) | |||||||||
| RBC Capital Markets Corp.: British Pound 4/16/15 | 12,900,000 | 19,131,235 | (31,494) | |||||||||
| Total | $ | 88,877,037 | $ | 1,063,282 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| Balanced Index | An internally-calculated, hypothetical combination of total returns from the S&P 500® Index (55%) and the Barclays U.S. Aggregate Bond Index (45%). | |
| Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| 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. |
| 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 March 31, 2015 is indicated in the table below: |
| Value as a % | ||||||||||
| Fund | Value | of Net Assets | ||||||||
| Janus Balanced Fund | $ | 660,083,918 | 5.1 | % | ||||||
| * | 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 March 31, 2015. | |
| 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 March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Balanced Fund | ||||||||||||||
| Colony American Homes Holdings III LP | 1/30/13 | $ | 61,705,954 | $ | 70,873,011 | 0.5 | % | |||||||
| FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 | 4/29/13 | 10,914,809 | 11,223,240 | 0.1 | ||||||||||
| Total | $ | 72,620,763 | $ | 82,096,251 | 0.6 | % | ||||||||
The Funds have registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
Janus Investment Fund | 17
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Balanced Fund | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | 196,331,633 | 2,427,821,820 | (2,497,103,626) | 127,049,827 | $ | – | $ | 60,849 | $ | 127,049,827 | |||||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Balanced Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 318,735,835 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 68,861,907 | – | ||||||||
Common Stocks | |||||||||||
| Beverages | – | 52,464,045 | – | ||||||||
| Insurance | – | 117,358,717 | – | ||||||||
| Real Estate Management & Development | – | – | 70,873,011 | ||||||||
| All Other | 7,242,349,060 | – | – | ||||||||
Corporate Bonds | – | 2,112,085,395 | – | ||||||||
Mortgage-Backed Securities | – | 834,646,851 | – | ||||||||
Preferred Stocks | – | 100,156,171 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 1,951,046,748 | – | ||||||||
Investment Companies | – | 127,049,827 | – | ||||||||
| Total Investments in Securities | $ | 7,242,349,060 | $ | 5,682,405,496 | $ | 70,873,011 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,110,119 | $ | – | |||||
Total Assets | $ | 7,242,349,060 | $ | 5,683,515,615 | $ | 70,873,011 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 46,837 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Balanced Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 10,742,227,540 | ||
| Unaffiliated investments, at value | $ | 12,868,577,740 | ||
| Affiliated investments, at value | 127,049,827 | |||
| Cash | 125,163 | |||
| Forward currency contracts | 1,110,119 | |||
| Closed foreign currency contracts | 37,751 | |||
| Non-interested Trustees’ deferred compensation | 255,788 | |||
| Receivables: | ||||
| Investments sold | 3,194,813 | |||
| Fund shares sold | 17,224,770 | |||
| Dividends | 8,925,588 | |||
| Dividends from affiliates | 10,491 | |||
| Foreign dividend tax reclaim | 318,901 | |||
| Interest | 37,116,433 | |||
| Other assets | 95,555 | |||
| Total Assets | 13,064,042,939 | |||
| Liabilities: | ||||
| Forward currency contracts | 46,837 | |||
| Payables: | ||||
| Investments purchased | 16,631,393 | |||
| Fund shares repurchased | 26,633,720 | |||
| Dividends | 2,671,250 | |||
| Advisory fees | 6,085,970 | |||
| Fund administration fees | 110,655 | |||
| Transfer agent fees and expenses | 2,093,619 | |||
| 12b-1 Distribution and shareholder servicing fees | 1,768,244 | |||
| Non-interested Trustees’ fees and expenses | 75,697 | |||
| Non-interested Trustees’ deferred compensation fees | 255,788 | |||
| Accrued expenses and other payables | 276,265 | |||
| Total Liabilities | 56,649,438 | |||
| Net Assets | $ | 13,007,393,501 | ||
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 March 31, 2015 (unaudited) | Janus Balanced Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 10,280,592,003 | ||
| Undistributed net investment income/(loss) | 2,180,811 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 470,146,905 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 2,254,473,782 | |||
| Total Net Assets | $ | 13,007,393,501 | ||
| Net Assets - Class A Shares | $ | 955,519,540 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 30,956,319 | |||
Net Asset Value Per Share(1) | $ | 30.87 | ||
Maximum Offering Price Per Share(2) | $ | 32.75 | ||
| Net Assets - Class C Shares | $ | 1,191,071,647 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 38,808,419 | |||
Net Asset Value Per Share(1) | $ | 30.69 | ||
| Net Assets - Class D Shares | $ | 1,468,467,054 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 47,495,822 | |||
| Net Asset Value Per Share | $ | 30.92 | ||
| Net Assets - Class I Shares | $ | 1,484,652,625 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 48,012,848 | |||
| Net Asset Value Per Share | $ | 30.92 | ||
| Net Assets - Class N Shares | $ | 1,789,751,107 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 57,938,451 | |||
| Net Asset Value Per Share | $ | 30.89 | ||
| Net Assets - Class R Shares | $ | 300,488,852 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,769,055 | |||
| Net Asset Value Per Share | $ | 30.76 | ||
| Net Assets - Class S Shares | $ | 838,031,673 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 27,152,107 | |||
| Net Asset Value Per Share | $ | 30.86 | ||
| Net Assets - Class T Shares | $ | 4,979,411,003 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 161,194,239 | |||
| Net Asset Value Per Share | $ | 30.89 | ||
| (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.
20 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Balanced Fund | |||
| Investment Income: | ||||
| Interest | $ | 82,000,005 | ||
| Dividends | 84,228,406 | |||
| Dividends from affiliates | 60,849 | |||
| Other income | 681,603 | |||
| Foreign tax withheld | (19,996) | |||
| Total Investment Income | 166,950,867 | |||
| Expenses: | ||||
| Advisory fees | 34,251,656 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 1,124,745 | |||
| Class C Shares | 5,427,934 | |||
| Class R Shares | 747,147 | |||
| Class S Shares | 1,047,605 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 865,895 | |||
| Class R Shares | 373,573 | |||
| Class S Shares | 1,047,605 | |||
| Class T Shares | 5,954,774 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 423,118 | |||
| Class C Shares | 413,110 | |||
| Class I Shares | 533,327 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 51,733 | |||
| Class C Shares | 79,268 | |||
| Class D Shares | 132,050 | |||
| Class I Shares | 27,251 | |||
| Class N Shares | 3,862 | |||
| Class R Shares | 1,542 | |||
| Class S Shares | 2,869 | |||
| Class T Shares | 16,954 | |||
| Shareholder reports expense | 243,395 | |||
| Registration fees | 196,803 | |||
| Custodian fees | 34,637 | |||
| Professional fees | 79,983 | |||
| Non-interested Trustees’ fees and expenses | 144,575 | |||
| Fund administration fees | 516,916 | |||
| Other expenses | 343,213 | |||
| Total Expenses | 54,085,540 | |||
| Net Expenses | 54,085,540 | |||
| Net Investment Income/(Loss) | 112,865,327 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 521,721,916 | |||
| Total Net Realized Gain/(Loss) on Investments | 521,721,916 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (70,942,997) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (70,942,997) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 563,644,246 | ||
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Statements of Changes in Net Assets
| Janus | ||||||||
| Balanced Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 112,865,327 | $ | 191,117,742 | ||||
| Net realized gain/(loss) on investments | 521,721,916 | 489,458,718 | ||||||
| Change in unrealized net appreciation/depreciation | (70,942,997) | 538,347,032 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 563,644,246 | 1,218,923,492 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (9,080,579) | (12,901,179) | ||||||
| Class C Shares | (7,298,270) | (8,130,273) | ||||||
| Class D Shares | (15,767,593) | (24,016,718) | ||||||
| Class I Shares | (16,307,457) | (21,537,975) | ||||||
| Class N Shares | (20,116,272) | (29,097,852) | ||||||
| Class R Shares | (2,407,993) | (3,579,618) | ||||||
| Class S Shares | (7,732,671) | (12,040,711) | ||||||
| Class T Shares | (50,228,730) | (72,575,574) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (36,613,767) | (22,326,273) | ||||||
| Class C Shares | (44,392,134) | (22,100,124) | ||||||
| Class D Shares | (59,186,126) | (37,740,218) | ||||||
| Class I Shares | (58,796,781) | (30,277,961) | ||||||
| Class N Shares | (69,741,720) | (42,049,258) | ||||||
| Class R Shares | (12,357,019) | (8,020,188) | ||||||
| Class S Shares | (34,600,124) | (23,889,686) | ||||||
| Class T Shares | (194,276,900) | (117,336,667) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (638,904,136) | (487,620,275) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 189,921,176 | 287,423,878 | ||||||
| Class C Shares | 243,595,107 | 326,767,890 | ||||||
| Class D Shares | 67,851,584 | 115,719,488 | ||||||
| Class I Shares | 390,468,113 | 578,836,306 | ||||||
| Class N Shares | 145,158,204 | 285,323,466 | ||||||
| Class R Shares | 40,544,924 | 87,834,648 | ||||||
| Class S Shares | 87,716,836 | 162,185,684 | ||||||
| Class T Shares | 736,013,981 | 873,364,234 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 38,283,079 | 29,489,372 | ||||||
| Class C Shares | 40,790,345 | 23,545,164 | ||||||
| Class D Shares | 73,546,372 | 60,650,327 | ||||||
| Class I Shares | 57,712,652 | 39,867,474 | ||||||
| Class N Shares | 89,857,563 | 71,147,110 | ||||||
| Class R Shares | 13,573,186 | 10,716,613 | ||||||
| Class S Shares | 42,128,841 | 35,861,404 | ||||||
| Class T Shares | 241,620,788 | 187,912,147 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (103,277,433) | (302,150,859) | ||||||
| Class C Shares | (82,352,525) | (116,261,652) | ||||||
| Class D Shares | (79,289,858) | (141,381,145) | ||||||
| Class I Shares | (260,237,654) | (350,958,703) | ||||||
| Class N Shares | (83,708,623) | (239,719,640) | ||||||
| Class R Shares | (61,521,080) | (87,775,026) | ||||||
| Class S Shares | (124,534,539) | (254,321,039) | ||||||
| Class T Shares | (512,002,993) | (783,459,489) | ||||||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
22 | MARCH 31, 2015
Table of Contents
| Janus | ||||||||
| Balanced Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 1,191,858,046 | 900,617,652 | ||||||
| Net Increase/(Decrease) in Net Assets | 1,116,598,156 | 1,631,920,869 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 11,890,795,345 | 10,258,874,476 | ||||||
| End of period | $ | 13,007,393,501 | $ | 11,890,795,345 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 2,180,811 | $ | 18,255,049 | ||||
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Balanced Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $31.10 | $29.11 | $27.01 | $23.19 | $25.10 | $23.43 | $21.31 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.27(3) | 0.49(3) | 0.51 | 0.50 | 0.51 | 0.56 | (0.05) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.83 | 2.90 | 4.22 | (1.14) | 1.60 | 2.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.39 | 3.32 | 3.41 | 4.72 | (0.63) | 2.16 | 2.23 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.31) | (0.47) | (0.50) | (0.49) | (0.50) | (0.49) | (0.11) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(4) | |||||||||||||||||||||||
| Total Distributions | (1.62) | (1.33) | (1.31) | (0.90) | (1.28) | (0.49) | (0.11) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.87 | $31.10 | $29.11 | $27.01 | $23.19 | $25.10 | $23.43 | |||||||||||||||||||||||
| Total Return* | 4.64% | 11.65% | 13.12% | 20.70% | (2.85)% | 9.30% | 10.43% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $955,520 | $835,681 | $765,049 | $656,171 | $526,178 | $513,494 | $314,935 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $902,268 | $839,360 | $690,266 | $610,115 | $566,145 | $436,234 | $288,992 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.93% | 0.95% | 0.94% | 0.98% | 0.91% | 0.93% | 0.89% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.93% | 0.95% | 0.94% | 0.98% | 0.91% | 0.93% | 0.89% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.75% | 1.61% | 1.66% | 1.87% | 2.03% | 2.37% | 2.35% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Balanced Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $30.93 | $29.00 | $26.93 | $23.15 | $25.08 | $23.40 | $21.31 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.16(3) | 0.27(3) | 0.32 | 0.31 | 0.33 | 0.39 | (0.09) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.80 | 2.88 | 4.22 | (1.15) | 1.61 | 2.25 | |||||||||||||||||||||||
| Total from Investment Operations | 1.28 | 3.07 | 3.20 | 4.53 | (0.82) | 2.00 | 2.16 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.21) | (0.28) | (0.32) | (0.34) | (0.33) | (0.32) | (0.07) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(4) | |||||||||||||||||||||||
| Total Distributions | (1.52) | (1.14) | (1.13) | (0.75) | (1.11) | (0.32) | (0.07) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.69 | $30.93 | $29.00 | $26.93 | $23.15 | $25.08 | $23.40 | |||||||||||||||||||||||
| Total Return* | 4.27% | 10.78% | 12.30% | 19.84% | (3.57)% | 8.58% | 10.13% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,191,072 | $996,498 | $708,673 | $538,591 | $435,691 | $412,414 | $248,071 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,088,569 | $874,136 | $597,677 | $491,552 | $463,476 | $343,327 | $208,912 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.66% | 1.68% | 1.70% | 1.72% | 1.65% | 1.64% | 1.70% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.66% | 1.68% | 1.70% | 1.72% | 1.65% | 1.63% | 1.69% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.02% | 0.88% | 0.90% | 1.13% | 1.29% | 1.66% | 1.54% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
24 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Balanced Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $31.14 | $29.15 | $27.03 | $23.19 | $25.10 | $24.09 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.30(2) | 0.56(2) | 0.56 | 0.56 | 0.56 | 0.41 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.82 | 2.92 | 4.23 | (1.15) | 1.03 | ||||||||||||||||||||
| Total from Investment Operations | 1.43 | 3.38 | 3.48 | 4.79 | (0.59) | 1.44 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.34) | (0.53) | (0.55) | (0.54) | (0.54) | (0.43) | ||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | ||||||||||||||||||||
| Total Distributions | (1.65) | (1.39) | (1.36) | (0.95) | (1.32) | 0.43 | ||||||||||||||||||||
| Net Asset Value, End of Period | $30.92 | $31.14 | $29.15 | $27.03 | $23.19 | $25.10 | ||||||||||||||||||||
| Total Return* | 4.76% | 11.86% | 13.40% | 21.03% | (2.69)% | 6.04% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,468,467 | $1,414,364 | $1,288,565 | $1,157,251 | $962,089 | $983,757 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,447,123 | $1,383,412 | $1,212,029 | $1,089,153 | $1,039,223 | $960,754 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.73% | 0.73% | 0.73% | 0.72% | 0.72% | 0.73% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.73% | 0.73% | 0.73% | 0.72% | 0.72% | 0.73% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.95% | 1.83% | 1.87% | 2.13% | 2.22% | 2.72% | ||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | ||||||||||||||||||||||||||||||
| ended September 30 and the period ended | Janus Balanced Fund | |||||||||||||||||||||||||||||
| October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $31.15 | $29.15 | $27.02 | $23.19 | $25.09 | $23.43 | $21.31 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.31(2) | 0.59(2) | 0.45 | 0.57 | 0.53 | 0.62 | 0.04 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.83 | 3.05 | 4.22 | (1.09) | 1.60 | 2.20 | |||||||||||||||||||||||
| Total from Investment Operations | 1.44 | 3.42 | 3.50 | 4.79 | (0.56) | 2.22 | 2.24 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.36) | (0.56) | (0.56) | (0.55) | (0.56) | (0.56) | (0.12) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(5) | |||||||||||||||||||||||
| Total Distributions | (1.67) | (1.42) | (1.37) | (0.96) | (1.34) | (0.56) | (0.12) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.92 | $31.15 | $29.15 | $27.02 | $23.19 | $25.09 | $23.43 | |||||||||||||||||||||||
| Total Return* | 4.77% | 11.99% | 13.47% | 21.02% | (2.56)% | 9.57% | 10.50% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,484,653 | $1,306,391 | $966,885 | $1,990,129 | $1,631,889 | $304,168 | $104,063 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,424,869 | $1,167,616 | $1,148,507 | $1,846,745 | $530,094 | $223,843 | $56,942 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.65% | 0.64% | 0.69% | 0.69% | 0.62% | 0.65% | 0.63% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.65% | 0.64% | 0.69% | 0.69% | 0.62% | 0.65% | 0.62% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.03% | 1.92% | 2.02% | 2.16% | 2.32% | 2.67% | 2.57% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
| (5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 25
Table of Contents
Financial Highlights (continued)
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Balanced Fund | |||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $31.11 | $29.12 | $27.01 | $25.46 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.33(2) | 0.60(2) | 0.77 | 0.17 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.13 | 2.83 | 2.74 | 1.67 | ||||||||||||||
| Total from Investment Operations | 1.46 | 3.43 | 3.51 | 1.84 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.37) | (0.58) | (0.59) | (0.29) | ||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | – | ||||||||||||||
| Total Distributions | (1.68) | (1.44) | (1.40) | (0.29) | ||||||||||||||
| Net Asset Value, End of Period | $30.89 | $31.11 | $29.12 | $27.01 | ||||||||||||||
| Total Return* | 4.85% | 12.03% | 13.52% | 7.25% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $1,789,751 | $1,648,665 | $1,432,413 | $7,610 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,709,563 | $1,532,107 | $1,029,152 | $483 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.57% | 0.58% | 0.58% | 0.82% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.57% | 0.58% | 0.58% | 0.77% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.11% | 1.98% | 1.89% | 2.98% | ||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Balanced Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $30.99 | $29.03 | $26.95 | $23.15 | $25.08 | $23.41 | $21.31 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.21(2) | 0.37(2) | 0.40 | 0.41 | 0.41 | 0.47 | (0.06) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.82 | 2.89 | 4.22 | (1.15) | 1.60 | 2.24 | |||||||||||||||||||||||
| Total from Investment Operations | 1.33 | 3.19 | 3.29 | 4.63 | (0.74) | 2.07 | 2.18 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.25) | (0.37) | (0.40) | (0.42) | (0.41) | (0.40) | (0.08) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(5) | |||||||||||||||||||||||
| Total Distributions | (1.56) | (1.23) | (1.21) | (0.83) | (1.19) | (0.40) | (0.08) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.76 | $30.99 | $29.03 | $26.95 | $23.15 | $25.08 | $23.41 | |||||||||||||||||||||||
| Total Return* | 4.45% | 11.20% | 12.68% | 20.32% | (3.28)% | 8.90% | 10.25% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $300,489 | $309,887 | $279,905 | $235,356 | $156,098 | $120,585 | $49,678 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $299,680 | $296,348 | $258,708 | $202,808 | $150,156 | $83,466 | $39,380 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.32% | 1.33% | 1.33% | 1.33% | 1.33% | 1.34% | 1.35% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.32% | 1.33% | 1.33% | 1.33% | 1.33% | 1.34% | 1.34% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.35% | 1.23% | 1.27% | 1.51% | 1.62% | 1.96% | 1.88% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
| (5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
26 | MARCH 31, 2015
Table of Contents
Class S Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Balanced Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $31.09 | $29.11 | $27.01 | $23.19 | $25.11 | $23.42 | $21.31 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.25(3) | 0.45(3) | 0.47 | 0.47 | 0.47 | 0.51 | (0.06) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.83 | 2.90 | 4.23 | (1.15) | 1.62 | 2.26 | |||||||||||||||||||||||
| Total from Investment Operations | 1.37 | 3.28 | 3.37 | 4.70 | (0.68) | 2.13 | 2.20 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.29) | (0.44) | (0.46) | (0.47) | (0.46) | (0.44) | (0.09) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(4) | |||||||||||||||||||||||
| Total Distributions | (1.60) | (1.30) | (1.27) | (0.88) | (1.24) | (0.44) | (0.09) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.86 | $31.09 | $29.11 | $27.01 | $23.19 | $25.11 | $23.42 | |||||||||||||||||||||||
| Total Return* | 4.56% | 11.49% | 12.97% | 20.60% | (3.03)% | 9.17% | 10.33% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $838,032 | $837,505 | $837,535 | $789,572 | $614,608 | $618,469 | $502,602 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $840,386 | $844,760 | $811,115 | $722,713 | $664,970 | $583,340 | $480,565 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.07% | 1.08% | 1.08% | 1.08% | 1.08% | 1.09% | 1.10% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.07% | 1.08% | 1.08% | 1.08% | 1.08% | 1.09% | 1.09% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.61% | 1.47% | 1.52% | 1.77% | 1.86% | 2.20% | 2.15% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the year | Janus Balanced Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $31.12 | $29.13 | $27.02 | $23.19 | $25.10 | $23.42 | $20.58 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.29(3) | 0.53(3) | 0.53 | 0.54 | 0.51 | 0.58 | 0.36 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 2.83 | 2.92 | 4.22 | (1.13) | 1.61 | 3.80 | |||||||||||||||||||||||
| Total from Investment Operations | 1.41 | 3.36 | 3.45 | 4.76 | (0.62) | 2.19 | 4.16 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.33) | (0.51) | (0.53) | (0.52) | (0.51) | (0.51) | (0.74) | |||||||||||||||||||||||
| Distributions (from capital gains) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | – | (0.58) | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | –(4) | |||||||||||||||||||||||
| Total Distributions | (1.64) | (1.37) | (1.34) | (0.93) | (1.29) | (0.51) | (1.32) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.89 | $31.12 | $29.13 | $27.02 | $23.19 | $25.10 | $23.42 | |||||||||||||||||||||||
| Total Return* | 4.69% | 11.77% | 13.27% | 20.88% | (2.78)% | 9.43% | 21.56% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $4,979,411 | $4,541,805 | $3,979,849 | $3,548,410 | $3,066,279 | $2,957,642 | $3,438,753 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $4,776,906 | $4,375,206 | $3,721,640 | $3,387,942 | $3,227,273 | $3,136,111 | $2,749,762 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.82% | 0.83% | 0.83% | 0.83% | 0.83% | 0.82% | 0.82% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.82% | 0.82% | 0.83% | 0.83% | 0.83% | 0.82% | 0.82% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.86% | 1.73% | 1.77% | 2.02% | 2.11% | 2.43% | 2.72% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 46% | 72% | 78% | 84% | 94% | 76% | 158% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 27
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Balanced 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 securities selected for growth potential and fixed-income securities selected for income potential. 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 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
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more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
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)
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed quarterly, 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 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.
| 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
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derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
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Notes to Financial Statements (unaudited) (continued)
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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Balanced Fund | $ | 86,826,204 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Balanced Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 1,110,119 | Forward currency contracts | $ | 46,837 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Janus Balanced Fund | ||||
| Currency Contracts | $ | 7,094,374 | ||
| 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 | |||
Janus Balanced Fund | ||||
| Currency Contracts | $ | 8,208 | ||
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 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
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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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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 March 31, 2015.
| • | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and |
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Notes to Financial Statements (unaudited) (continued)
| 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. |
| • | 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, which means that the U.S. Government guarantees that the interest and principal will be paid when due. Fannie Maes and Freddie Macs are not backed by the full faith and credit of the U.S. Government. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Since that time, 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 also 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.
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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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ | 215,259 | $ | – | $ | – | $ | 215,259 | ||||||||||
| Credit Suisse International | 666,665 | – | – | 666,665 | ||||||||||||||
| HSBC Securities (USA), Inc. | 228,195 | – | – | 228,195 | ||||||||||||||
| Total | $ | 1,110,119 | $ | – | $ | – | $ | 1,110,119 | ||||||||||
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. | $ | 15,343 | $ | – | $ | – | $ | 15,343 | ||||||||||
| RBC Capital Markets Corp. | 31,494 | – | – | 31,494 | ||||||||||||||
| Total | $ | 46,837 | $ | – | $ | – | $ | 46,837 | ||||||||||
| (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 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.
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Notes to Financial Statements (unaudited) (continued)
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 Balanced Fund | All Asset Levels | 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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Balanced 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 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
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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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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
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Notes to Financial Statements (unaudited) (continued)
$135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Balanced Fund | $ | 238,677 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Balanced Fund | $ | 62,108 | ||||
| 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 March 31, 2015 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 Balanced Fund | $ | 10,725,949,488 | $ | 2,276,529,263 | $ | (6,851,184) | $ | 2,269,678,079 | ||||||||||
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| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Balanced Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 6,135,438 | 9,469,276 | ||||||||
| Reinvested dividends and distributions | 1,272,705 | 992,298 | ||||||||
| Shares repurchased | (3,326,331) | (9,863,868) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,081,812 | 597,706 | ||||||||
| Shares Outstanding, Beginning of Period | 26,874,507 | 26,276,801 | ||||||||
| Shares Outstanding, End of Period | 30,956,319 | 26,874,507 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 7,905,672 | 10,814,005 | ||||||||
| Reinvested dividends and distributions | 1,363,968 | 797,863 | ||||||||
| Shares repurchased | (2,673,988) | (3,836,572) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 6,595,652 | 7,775,296 | ||||||||
| Shares Outstanding, Beginning of Period | 32,212,767 | 24,437,471 | ||||||||
| Shares Outstanding, End of Period | 38,808,419 | 32,212,767 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 2,185,985 | 3,815,715 | ||||||||
| Reinvested dividends and distributions | 2,440,776 | 2,037,292 | ||||||||
| Shares repurchased | (2,549,450) | (4,640,191) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,077,311 | 1,212,816 | ||||||||
| Shares Outstanding, Beginning of Period | 45,418,511 | 44,205,695 | ||||||||
| Shares Outstanding, End of Period | 47,495,822 | 45,418,511 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 12,531,972 | 18,890,033 | ||||||||
| Reinvested dividends and distributions | 1,914,972 | 1,336,773 | ||||||||
| Shares repurchased | (8,375,703) | (11,450,127) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 6,071,241 | 8,776,679 | ||||||||
| Shares Outstanding, Beginning of Period | 41,941,607 | 33,164,928 | ||||||||
| Shares Outstanding, End of Period | 48,012,848 | 41,941,607 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 4,662,809 | 9,296,224 | ||||||||
| Reinvested dividends and distributions | 2,984,364 | 2,390,289 | ||||||||
| Shares repurchased | (2,696,686) | (7,886,085) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,950,487 | 3,800,428 | ||||||||
| Shares Outstanding, Beginning of Period | 52,987,964 | 49,187,536 | ||||||||
| Shares Outstanding, End of Period | 57,938,451 | 52,987,964 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 1,311,724 | 2,894,763 | ||||||||
| Reinvested dividends and distributions | 452,846 | 362,365 | ||||||||
| Shares repurchased | (1,994,685) | (2,899,091) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (230,115) | 358,037 | ||||||||
| Shares Outstanding, Beginning of Period | 9,999,170 | 9,641,133 | ||||||||
| Shares Outstanding, End of Period | 9,769,055 | 9,999,170 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 2,826,281 | 5,331,729 | ||||||||
| Reinvested dividends and distributions | 1,401,001 | 1,208,498 | ||||||||
| Shares repurchased | (4,013,130) | (8,370,636) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 214,152 | (1,830,409) | ||||||||
| Shares Outstanding, Beginning of Period | 26,937,955 | 28,768,364 | ||||||||
| Shares Outstanding, End of Period | 27,152,107 | 26,937,955 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| For the period ended March 31 (unaudited) | Janus Balanced Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 23,743,541 | 28,751,536 | ||||||||
| Reinvested dividends and distributions | 8,026,740 | 6,317,242 | ||||||||
| Shares repurchased | (16,541,567) | (25,726,991) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 15,228,714 | 9,341,787 | ||||||||
| Shares Outstanding, Beginning of Period | 145,965,525 | 136,623,738 | ||||||||
| Shares Outstanding, End of Period | 161,194,239 | 145,965,525 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Balanced Fund | $ | 3,279,530,278 | $ | 3,521,173,930 | $ | 3,156,656,119 | $ | 2,207,435,723 | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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.
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Useful Information About Your Fund Report (unaudited)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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Useful Information About Your Fund Report (unaudited) (continued)
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
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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).
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-0515-87740 | 125-24-93037 05-15 |
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semiannual report
March 31, 2015
Janus Global Technology Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Global Technology Fund
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Janus Global Technology Fund (unaudited)
FUND SNAPSHOT Our mission is to find companies that benefit from the high pace of change in technology. We believe technology markets are complex, adaptive systems that demonstrate emergent properties and inherently unpredictable changes. We construct a portfolio with special attention to downside risk that seeks to balance resilience and optionality. Combined with deep fundamental industry analysis and thoughtful valuation and scenario analysis, we seek to invest in stocks that have the potential to outperform without relying on difficult predictions about the future. |  Brinton Johns co-portfolio manager |  Brad Slingerlend co-portfolio manager |
PERFORMANCE
Janus Global Technology Fund’s Class T Shares returned 9.08% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the S&P 500 Index, returned 5.93%, and its secondary benchmark, the MSCI All Country World Information Technology Index, returned 6.78% during the period.
MARKET ENVIRONMENT
Volatility returned to global equity markets during the early part of the period, driven by a collapse in crude oil prices and a surging U.S. dollar. The fall in crude gave investors concern over global growth prospects, and the strong dollar was considered to be a potential threat to earnings of U.S. multinationals. Monetary easing in China and Japan, followed by the European Central Bank’s foray into quantitative easing, helped calm investors’ nerves, which pushed major indices higher for much of the rest of the period.
Technology stocks, as measured by the MSCI All Country World Information Technology Index, largely outpaced broader indices for the period. Among the best performing subsectors were home entertainment software, followed by data processing and outsourced services. Systems software along with IT consulting and other services were the two lone subsectors to register negative performance. Merger and acquisition (M&A) activity remained healthy with some of our leading contributors participating in industry consolidation. More specifically, we are seeing M&A activity in market segments such as semiconductors that are experiencing slowing growth and, consequently, diminishing needs to invest heavily in groundbreaking research and development. Reallocating budget away from capital-intensive research activity and toward takeovers may be a plausible way to generate future growth for these legacy companies.
PERFORMANCE DISCUSSION
Since we believe technology markets are complex, we construct a portfolio with special attention to downside risk that seeks to balance resilience and optionality. We believe our focus on less-volatile stocks than the secondary benchmark’s holdings and in companies that can benefit from the high pace of change in technology can provide superior performance longer term.
On a relative basis, our selection of semiconductor and application software stocks contributed most to relative performance. Our Internet software and services holdings, led by leading detractor Google, weighed most on performance, followed by our lack of exposure to data processing and outsources services, which was a strong contributor to the benchmark.
Apple contributed the most to performance. The electronic-device company benefited from positive sentiment in the aftermath of its astounding fourth quarter earnings results, which was the first full quarter in which the highly popular iPhone 6 was available. In February, the company’s stock reached a new record, pushing its market capitalization above $700 billion. March saw a slight retracement in the stock price, but, as evidenced by the iPhone 6’s rollout, we believe the company’s continued strength in combining hardware, software and services act as an important differentiator from competitors. While we have confidence in Apple’s product line, management’s ability to grow its ecosystem and its commitment to increasing shareholder value, given its massive representation in the benchmark, we are underweight the stock.
Another stock to benefit from a consensus-beating earnings report was Freescale Semiconductor. At the same time, the company raised guidance for the first quarter. In March it was announced that the company would merge with NXP Semiconductors, creating a powerhouse in the automotive segment. Even before the
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Janus Global Technology Fund (unaudited)
transaction’s announcement, we believed that Freescale was well positioned in attractive end markets such as automotive, communications infrastructure and industrials.
Electronic components maker Belden registered strong gains as investors were receptive to a recent takeover. In December the company announced its acquisition of Tripwire, a software security company concentrating on monitoring network traffic. Management stated that it sees synergies selling Tripwire’s services into markets where Belden already has a presence.
Internet giant Google endured a tough late 2014, and despite seeing shares recover in early 2015, the company remained a leading detractor to Fund performance. Google endured a bout of headline risk, mainly emanating from Europe as regulators complained about its purported market power. Despite these perceived risks, we remain excited about owning the company, perhaps more so than in a long time. This is in part due to its strong position in the mobile search market, which is augmented by its Android mobile device software. The 2015 rebound may be indicative that investors recognize that last autumn’s underperformance may have been overdone. Other catalysts recently driving the stock were a slightly better than expected earnings report and the appointment of a new chief financial officer who the company lured away from Morgan Stanley.
Hardware provider EMC Corp suffered from weakness in a key business segment, namely on-premises enterprise IT spending. Also, investors had hoped that the company would take steps to split itself up, a move which does not seem to be within its near-term plans. Another detractor was software giant Microsoft. Personal computer sales remain under pressure and the company revised earnings guidance to the downside.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
We are witnessing an apparent bifurcation of technology stocks between highly valued, fast-growing companies and legacy firms attempting to adapt to a rapidly changing landscape. Among the fast growers, we remain positive on the long-term prospects of companies offering cloud-based solutions, especially now that the value proposition of off-premises services has been largely accepted. It has long been clear that the earnings growth of many large-cap giants has slowed as markets mature and user demand transitions to new, often cloud-based or mobile, platforms. In addition to attempting to reinvent their businesses, managers of legacy companies have also resorted to increasing value by implementing shareholder-friendly capital allocation strategies, either by returning cash to shareholders or through value-building acquisitions.
We continue to monitor advances in the Internet of Things (IoT), which we expect could be as transformational as the introduction of the Internet itself. Driving developments are inexpensive sensors, ubiquitous connectivity and breakthroughs in analytics. Governments are leading the charge, in part due to them being accustomed to investing in systems whose near-term benefits are difficult to quantify. It may be fortuitous that public institutions are early adapters of IoT, as this could lead to the creation of massive data sets, which will catalyze novel applications in the private sector.
While we recognize the promise of innovative companies, we believe that many trade at multiples difficult to justify. When compared to the rich valuations of late-stage privately held companies, however, many small-cap firms may be attractive acquisition candidates. We constantly canvass the sector for such potential targets. Valuations of legacy firms face questions as well since we consider the downside risk to earnings growth potentially underpriced. Still, we are identifying opportunities for investing in large-cap companies that, in our view, have the best chance of adapting to the demands of a shifting marketplace.
Thank you for your investment in Janus Global Technology Fund.
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(unaudited)
Janus Global Technology Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Apple, Inc. | 2.70% | |||
| Freescale Semiconductor, Ltd. | 0.96% | |||
| Belden, Inc. | 0.80% | |||
| TE Connectivity, Ltd. (U.S. Shares) | 0.67% | |||
| Oracle Corp. | 0.52% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Google, Inc. – Class C | –0.49% | |||
| EMC Corp. | –0.45% | |||
| Microsoft Corp. | –0.42% | |||
| Stratasys, Ltd. | –0.25% | |||
| ChannelAdvisor Corp. | –0.24% | |||
5 Top Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Information Technology | 3.64% | 83.44% | 19.67% | |||||||||
| Energy | 1.88% | 0.00% | 8.54% | |||||||||
| Telecommunication Services | 0.26% | 0.35% | 2.35% | |||||||||
| Industrials | 0.25% | 1.85% | 10.36% | |||||||||
| Materials | 0.24% | 0.00% | 3.25% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Health Care | –1.25% | 0.54% | 14.50% | |||||||||
| Consumer Discretionary | –0.74% | 7.69% | 12.03% | |||||||||
| Financials | –0.33% | 4.53% | 16.34% | |||||||||
| Consumer Staples | –0.28% | 0.07% | 9.81% | |||||||||
| Other** | –0.07% | 1.53% | 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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Janus Global Technology Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Google, Inc. – Class C Internet Software & Services | 8.6% | |||
| Apple, Inc. Technology Hardware, Storage & Peripherals | 7.9% | |||
| Oracle Corp. Software | 4.6% | |||
| ARM Holdings PLC Semiconductor & Semiconductor Equipment | 4.5% | |||
| QUALCOMM, Inc. Communications Equipment | 3.7% | |||
| 29.3% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 9.3% of total net assets.
*Includes Securities Sold Short of (0.6)% and Other of (4.6)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Global Technology Fund – Class A Shares | |||||||||||||
| NAV | 8.96% | 13.21% | 14.12% | 11.12% | 6.77% | 1.11% | |||||||
| MOP | 2.68% | 6.71% | 12.78% | 10.46% | 6.38% | ||||||||
| Janus Global Technology Fund – Class C Shares | |||||||||||||
| NAV | 8.55% | 12.37% | 13.31% | 10.34% | 6.00% | 1.82% | |||||||
| CDSC | 7.64% | 11.43% | 13.31% | 10.34% | 6.00% | ||||||||
| Janus Global Technology Fund – Class D Shares(1) | 9.06% | 13.42% | 14.36% | 11.27% | 6.93% | 0.88% | |||||||
| Janus Global Technology Fund – Class I Shares | 9.12% | 13.55% | 14.44% | 11.24% | 6.91% | 0.82% | |||||||
| Janus Global Technology Fund – Class S Shares | 8.93% | 13.12% | 14.02% | 10.98% | 6.63% | 1.20% | |||||||
| Janus Global Technology Fund – Class T Shares | 9.08% | 13.35% | 14.31% | 11.24% | 6.91% | 0.95% | |||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 5.20% | ||||||||
| MSCI All Country World Information Technology Index | 6.78% | 15.94% | 12.23% | 8.60% | 3.34% | ||||||||
| MSCI World Information Technology Index | 6.26% | 16.13% | 12.36% | 8.45% | 2.95% | ||||||||
| Morningstar Quartile – Class T Shares | – | 2nd | 2nd | 2nd | 2nd | ||||||||
| Morningstar Ranking – based on total return for Technology Funds | – | 82/211 | 90/203 | 61/195 | 54/129 | ||||||||
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 | 5
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Janus Global Technology Fund (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.
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 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.
© 2015 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.
Effective January 28, 2015, the Fund’s secondary benchmark index changed from the MSCI World Information Technology Index to the MSCI All Country World Information Technology Index. Janus Capital believes that the change provides a more appropriate comparison for the Fund’s investment strategy.
See “Useful Information About Your Fund Report.”
| * | The Fund’s inception date – December 31, 1998 | |
| (1) | Closed to new investors. |
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,089.60 | $ | 5.63 | $ | 1,000.00 | $ | 1,019.55 | $ | 5.44 | 1.08% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,085.50 | $ | 9.41 | $ | 1,000.00 | $ | 1,015.91 | $ | 9.10 | 1.81% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,090.60 | $ | 4.69 | $ | 1,000.00 | $ | 1,020.44 | $ | 4.53 | 0.90% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,091.20 | $ | 4.17 | $ | 1,000.00 | $ | 1,020.94 | $ | 4.03 | 0.80% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,089.30 | $ | 6.25 | $ | 1,000.00 | $ | 1,018.95 | $ | 6.04 | 1.20% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,090.80 | $ | 4.95 | $ | 1,000.00 | $ | 1,020.19 | $ | 4.78 | 0.95% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Global Technology Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 99.0% | ||||||||||
| Automobiles – 0.2% | ||||||||||
| 10,412 | Tesla Motors, Inc.*,# | $ | 1,965,473 | |||||||
| Communications Equipment – 4.4% | ||||||||||
| 272,931 | CommScope Holding Co., Inc.* | 7,789,451 | ||||||||
| 600,377 | QUALCOMM, Inc. | 41,630,141 | ||||||||
| 49,419,592 | ||||||||||
| Consumer Finance – 1.9% | ||||||||||
| 276,174 | American Express Co. | 21,574,713 | ||||||||
| Electrical Equipment – 1.0% | ||||||||||
| 173,738 | Sensata Technologies Holding NV* | 9,981,248 | ||||||||
| 21,724 | SolarCity Corp.*,# | 1,114,007 | ||||||||
| 11,095,255 | ||||||||||
| Electronic Equipment, Instruments & Components – 8.9% | ||||||||||
| 450,324 | Amphenol Corp. – Class A | 26,537,593 | ||||||||
| 258,954 | Belden, Inc. | 24,227,736 | ||||||||
| 717,748 | National Instruments Corp. | 22,996,646 | ||||||||
| 358,856 | TE Connectivity, Ltd. (U.S. Shares) | 25,701,267 | ||||||||
| 99,463,242 | ||||||||||
| Health Care Technology – 0.3% | ||||||||||
| 29,779 | athenahealth, Inc.*,# | 3,555,315 | ||||||||
| Household Durables – 0.5% | ||||||||||
| 215,600 | Sony Corp.* | 5,764,715 | ||||||||
| Information Technology Services – 2.4% | ||||||||||
| 171,066 | Amdocs, Ltd. (U.S. Shares) | 9,305,990 | ||||||||
| 99,119 | Cognizant Technology Solutions Corp. – Class A* | 6,184,035 | ||||||||
| 131,660 | Gartner, Inc.* | 11,039,691 | ||||||||
| 26,529,716 | ||||||||||
| Internet & Catalog Retail – 3.2% | ||||||||||
| 17,153 | Amazon.com, Inc.* | 6,382,631 | ||||||||
| 146,730 | Ctrip.com International, Ltd. (ADR)* | 8,601,313 | ||||||||
| 130,217 | MakeMyTrip, Ltd.* | 2,859,565 | ||||||||
| 17,171 | Netflix, Inc.* | 7,154,984 | ||||||||
| 7,734 | Priceline Group, Inc.* | 9,003,536 | ||||||||
| 52,213 | Qunar Cayman Islands, Ltd. (ADR)*,# | 2,153,786 | ||||||||
| 36,155,815 | ||||||||||
| Internet Software & Services – 20.6% | ||||||||||
| 95,240 | Alibaba Group Holding, Ltd. (ADR)*,# | 7,927,778 | ||||||||
| 144,016 | Box, Inc. – Class A* | 2,844,316 | ||||||||
| 612,829 | Care.com, Inc.*,# | 4,645,244 | ||||||||
| 360,599 | ChannelAdvisor Corp.*,# | 3,494,204 | ||||||||
| 154,678 | Coupons.com, Inc.*,# | 1,815,920 | ||||||||
| 93,795 | Demandware, Inc.*,# | 5,712,115 | ||||||||
| 447,343 | Endurance International Group Holdings, Inc.*,# | 8,526,357 | ||||||||
| 35,027 | Equinix, Inc. | 8,156,037 | ||||||||
| 305,244 | Facebook, Inc. – Class A* | 25,095,635 | ||||||||
| 176,150 | Google, Inc. – Class C* | 96,530,200 | ||||||||
| 207,680 | HomeAway, Inc.* | 6,265,706 | ||||||||
| 19,705 | LinkedIn Corp. – Class A* | 4,923,491 | ||||||||
| 58,106 | MercadoLibre, Inc.# | 7,119,147 | ||||||||
| 369,848 | Okta, Inc.*,§ | 4,387,063 | ||||||||
| 115,799 | Shutterstock, Inc.*,# | 7,951,917 | ||||||||
| 597,900 | Tencent Holdings, Ltd. | 11,303,445 | ||||||||
| 119,120 | Twitter, Inc.* | 5,965,530 | ||||||||
| 159,478 | Yandex NV – Class A* | 2,418,484 | ||||||||
| 305,208 | Youku Tudou, Inc. (ADR)*,# | 3,815,100 | ||||||||
| 120,849 | Zillow Group, Inc. – Class A*,# | 12,121,155 | ||||||||
| 231,018,844 | ||||||||||
| Media – 3.6% | ||||||||||
| 240,648 | Comcast Corp. – Class A | 13,589,393 | ||||||||
| 95,779 | Time Warner Cable, Inc. | 14,355,356 | ||||||||
| 116,119 | Walt Disney Co. | 12,179,722 | ||||||||
| 40,124,471 | ||||||||||
| Professional Services – 0.9% | ||||||||||
| 68,309 | Corporate Executive Board Co. | 5,455,157 | ||||||||
| 44,566 | IHS, Inc. – Class A* | 5,069,828 | ||||||||
| 10,524,985 | ||||||||||
| Real Estate Investment Trusts (REITs) – 2.9% | ||||||||||
| 352,253 | American Tower Corp. | 33,164,620 | ||||||||
| Semiconductor & Semiconductor Equipment – 12.9% | ||||||||||
| 3,100,336 | ARM Holdings PLC | 50,753,473 | ||||||||
| 1,278,638 | Atmel Corp. | 10,523,191 | ||||||||
| 82,371 | Avago Technologies, Ltd. | 10,459,469 | ||||||||
| 257,526 | Freescale Semiconductor, Ltd.* | 10,496,760 | ||||||||
| 228,883 | Intersil Corp. – Class A | 3,277,604 | ||||||||
| 55,423 | KLA-Tencor Corp. | 3,230,607 | ||||||||
| 140,091 | Microchip Technology, Inc. | 6,850,450 | ||||||||
| 106,884 | NVIDIA Corp. | 2,236,548 | ||||||||
| 856,084 | ON Semiconductor Corp.* | 10,367,177 | ||||||||
| 74,235 | Silicon Laboratories, Inc.* | 3,768,911 | ||||||||
| 159,104 | SK Hynix, Inc. | 6,506,507 | ||||||||
| 5,689,999 | Taiwan Semiconductor Manufacturing Co., Ltd. | 26,401,951 | ||||||||
| 144,872,648 | ||||||||||
| Software – 19.9% | ||||||||||
| 128,823 | ANSYS, Inc.* | 11,360,900 | ||||||||
| 188,929 | Apptio, Inc.*,§ | 4,287,668 | ||||||||
| 212,341 | AVEVA Group PLC | 4,645,227 | ||||||||
| 171,404 | Blackbaud, Inc. | 8,121,122 | ||||||||
| 1,165,054 | Cadence Design Systems, Inc.* | 21,483,596 | ||||||||
| 159,352 | Informatica Corp.* | 6,988,382 | ||||||||
| 770,370 | Microsoft Corp. | 31,319,392 | ||||||||
| 94,108 | NetSuite, Inc.*,# | 8,729,458 | ||||||||
| 135,118 | NICE Systems, Ltd. (ADR) | 8,232,740 | ||||||||
| 71,960 | Nintendo Co., Ltd. | 10,591,458 | ||||||||
| 1,207,458 | Oracle Corp.† | 52,101,813 | ||||||||
| 233,889 | PROS Holdings, Inc.* | 5,779,397 | ||||||||
| 264,359 | RealPage, Inc.* | 5,324,190 | ||||||||
| 115,682 | ServiceNow, Inc.* | 9,113,428 | ||||||||
| 102,939 | Solera Holdings, Inc. | 5,317,829 | ||||||||
| 127,333 | SS&C Technologies Holdings, Inc. | 7,932,846 | ||||||||
| 28,381 | Tyler Technologies, Inc.* | 3,420,762 | ||||||||
| 51,613 | Ultimate Software Group, Inc.* | 8,771,887 | ||||||||
| 62,586 | Workday, Inc. – Class A* | 5,282,884 | ||||||||
| 198,822 | Zendesk, Inc.* | 4,511,271 | ||||||||
| 223,316,250 | ||||||||||
| Technology Hardware, Storage & Peripherals – 15.0% | ||||||||||
| 712,748 | Apple, Inc.† | 88,687,233 | ||||||||
| 1,400,621 | EMC Corp. | 35,799,873 | ||||||||
| 25,054 | Samsung Electronics Co., Ltd. | 32,484,884 | ||||||||
| 54,001 | Seagate Technology PLC | 2,809,672 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Technology Hardware, Storage & Peripherals – (continued) | ||||||||||
| 52,054 | Stratasys, Ltd.*,# | $ | 2,747,410 | |||||||
| 66,697 | Western Digital Corp. | 6,070,094 | ||||||||
| 168,599,166 | ||||||||||
| Wireless Telecommunication Services – 0.4% | ||||||||||
| 271,587 | RingCentral, Inc. – Class A* | 4,163,429 | ||||||||
| Total Common Stocks (cost $864,800,121) | 1,111,308,249 | |||||||||
| Investment Companies – 6.2% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 5.1% | ||||||||||
| 57,483,484 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 57,483,484 | ||||||||
| Money Markets – 1.1% | ||||||||||
| 11,546,841 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 11,546,841 | ||||||||
| Total Investment Companies (cost $69,030,325) | 69,030,325 | |||||||||
| Total Investments (total cost $933,830,446) – 105.2% | 1,180,338,574 | |||||||||
| Securities Sold Short – (0.6)% | ||||||||||
| Common Stocks Sold Short – (0.6)% | ||||||||||
| Commercial Services & Supplies – (0.1)% | ||||||||||
| 34,230 | ADT Corp. | (1,421,230) | ||||||||
| Communications Equipment – (0.1)% | ||||||||||
| 16,041 | Arista Networks, Inc.* | (1,131,372) | ||||||||
| Household Durables – (0.2)% | ||||||||||
| 113,200 | Nikon Corp. | (1,786,135) | ||||||||
| Semiconductor & Semiconductor Equipment – (0.1)% | ||||||||||
| 20,723 | Synaptics, Inc.* | (1,684,883) | ||||||||
| Software – (0.1)% | ||||||||||
| 113,685 | MobileIron, Inc.* | (1,052,723) | ||||||||
| Total Securities Sold Short (proceeds $6,200,642) | (7,076,343) | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (4.6)% | (51,042,346) | |||||||||
| Net Assets – 100% | $ | 1,122,219,885 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 995,878,148 | 84 | .4% | ||||
| United Kingdom | 55,398,700 | 4 | .7 | |||||
| South Korea | 38,991,391 | 3 | .3 | |||||
| China | 33,801,422 | 2 | .9 | |||||
| Taiwan | 26,401,951 | 2 | .2 | |||||
| Japan | 16,356,173 | 1 | .4 | |||||
| Israel | 8,232,740 | 0 | .7 | |||||
| India | 2,859,565 | 0 | .2 | |||||
| Russia | 2,418,484 | 0 | .2 | |||||
| Total | $ | 1,180,338,574 | 100 | .0% | ||||
Summary of Investments by Country – (Short Positions) (unaudited)
| % of Securities | ||||||||
| Country | Value | Sold Short | ||||||
| United States | $ | (5,290,208) | 74 | .8% | ||||
| Japan | (1,786,135) | 25 | .2 | |||||
| Total | $ | (7,076,343) | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 1,870,000 | $ | 2,773,288 | $ | 21,876 | |||||||
| Japanese Yen 4/16/15 | 383,455,000 | 3,198,369 | (32,028) | |||||||||
| 5,971,657 | (10,152) | |||||||||||
| Credit Suisse International: | ||||||||||||
| British Pound 4/9/15 | 3,452,000 | 5,119,725 | 192,626 | |||||||||
| Japanese Yen 4/9/15 | 248,500,000 | 2,072,467 | 9,653 | |||||||||
| 7,192,192 | 202,279 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| British Pound 4/9/15 | 1,490,000 | 2,209,846 | 62,121 | |||||||||
| Japanese Yen 4/9/15 | 270,000,000 | 2,251,775 | (7,628) | |||||||||
| 4,461,621 | 54,493 | |||||||||||
| JPMorgan Chase & Co.: | ||||||||||||
| British Pound 4/16/15 | 880,000 | 1,305,077 | (1,274) | |||||||||
| Japanese Yen 4/16/15 | 53,000,000 | 442,069 | 2,797 | |||||||||
| 1,747,146 | 1,523 | |||||||||||
| RBC Capital Markets Corp.: | ||||||||||||
| British Pound 4/16/15 | 1,565,000 | 2,320,960 | (3,821) | |||||||||
| Japanese Yen 4/16/15 | 381,300,000 | 3,180,394 | (27,852) | |||||||||
| 5,501,354 | (31,673) | |||||||||||
| Total | $ | 24,873,970 | $ | 216,470 | ||||||||
Schedule of OTC Written Options – Puts
| Counterparty/Reference Asset | Value | |||
| Credit Suisse International: | ||||
| Priceline Group, Inc. expires April 2015 10 contracts exercise price $1,040.00 | $ | (745) | ||
| Tesla Motors, Inc. expires June 2015 119 contracts exercise price $185.00 | (175,182) | |||
| Total OTC Written Options – Puts (premiums received $230,165) | $ | (175,927) | ||
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 All Country World Information Technology Index | Measures the performance of information technology stocks from developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| MSCI World Information Technology Index | A capitalization weighted index that monitors the performance of information technology stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| 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. | |
| † | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Global Technology Fund | $ | 27,447,130 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Technology Fund | �� | |||||||||||||
| Apptio, Inc. | 5/2/13 | $ | 4,287,668 | $ | 4,287,668 | 0.4 | % | |||||||
| Okta, Inc. | 5/23/14 | 4,387,063 | 4,387,063 | 0.4 | ||||||||||
| Total | $ | 8,674,731 | $ | 8,674,731 | 0.8 | % | ||||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||
Janus Global Technology Fund | ||||||||||||||||
| Janus Cash Collateral Fund LLC | 57,871,589 | 166,330,492 | (166,718,597) | 57,483,484 | $– | $207,502(1) | $57,483,484 | |||||||||
| Janus Cash Liquidity Fund LLC | 31,761,750 | 65,144,166 | (85,359,075) | 11,546,841 | – | 5,315 | 11,546,841 | |||||||||
| Total | $– | $212,817 | $69,030,325 | |||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Global Technology Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Household Durables | $ | – | $ | 5,764,715 | $ | – | |||||
| Internet Software & Services | 215,328,336 | 11,303,445 | 4,387,063 | ||||||||
| Semiconductor & Semiconductor Equipment | 61,210,717 | 83,661,931 | – | ||||||||
| Software | 203,791,897 | 15,236,685 | 4,287,668 | ||||||||
| Technology Hardware, Storage & Peripherals | 136,114,282 | 32,484,884 | – | ||||||||
| All Other | 337,736,626 | – | – | ||||||||
Investment Companies | – | 69,030,325 | – | ||||||||
| Total Investments in Securities | $ | 954,181,858 | $ | 217,481,985 | $ | 8,674,731 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 289,073 | $ | – | |||||
Total Assets | $ | 954,181,858 | $ | 217,771,058 | $ | 8,674,731 | |||||
Liabilities | |||||||||||
Investments in Securities Sold Short: | |||||||||||
Common Stocks | |||||||||||
| Household Durables | $ | – | $ | 1,786,135 | $ | – | |||||
| All Other | 5,290,208 | – | – | ||||||||
| Total Investments in Securities Sold Short | $ | 5,290,208 | $ | 1,786,135 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 72,603 | $ | – | |||||
Options Written, at Value | – | 175,927 | – | ||||||||
Total Liabilities | $ | 5,290,208 | $ | 2,034,665 | $ | – | |||||
| (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 | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Global Technology Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 933,830,446 | ||
Unaffiliated investments, at value(1) | $ | 1,111,308,249 | ||
| Affiliated investments, at value | 69,030,325 | |||
| Cash | 699 | |||
| Restricted cash (Note 1) | 300,000 | |||
| Deposits with broker for short sales | 6,200,642 | |||
| Forward currency contracts | 289,073 | |||
| Closed foreign currency contracts | 14,028 | |||
| Non-interested Trustees’ deferred compensation | 22,048 | |||
| Receivables: | ||||
| Fund shares sold | 372,645 | |||
| Dividends | 601,945 | |||
| Dividends from affiliates | 1,113 | |||
| Foreign dividend tax reclaim | 255,745 | |||
| Other assets | 8,897 | |||
| Total Assets | 1,188,405,409 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 3) | 57,483,484 | |||
Short sales, at value(2) | 7,076,343 | |||
| Forward currency contracts | 72,603 | |||
| Closed foreign currency contracts | 7,856 | |||
Options written, at value(3) | 175,927 | |||
| Payables: | ||||
| Fund shares repurchased | 269,047 | |||
| Advisory fees | 617,229 | |||
| Fund administration fees | 9,644 | |||
| Transfer agent fees and expenses | 250,191 | |||
| 12b-1 Distribution and shareholder servicing fees | 8,150 | |||
| Non-interested Trustees’ fees and expenses | 6,636 | |||
| Non-interested Trustees’ deferred compensation fees | 22,048 | |||
| Accrued expenses and other payables | 186,366 | |||
| Total Liabilities | 66,185,524 | |||
| Net Assets | $ | 1,122,219,885 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Global Technology Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 809,303,682 | ||
| Undistributed net investment income/(loss) | 692,368 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 66,378,134 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 245,845,701 | |||
| Total Net Assets | $ | 1,122,219,885 | ||
| Net Assets - Class A Shares | $ | 10,646,571 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 477,508 | |||
Net Asset Value Per Share(4) | $ | 22.30 | ||
Maximum Offering Price Per Share(5) | $ | 23.66 | ||
| Net Assets - Class C Shares | $ | 4,231,961 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 199,807 | |||
Net Asset Value Per Share(4) | $ | 21.18 | ||
| Net Assets - Class D Shares | $ | 742,193,502 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 32,837,142 | |||
| Net Asset Value Per Share | $ | 22.60 | ||
| Net Assets - Class I Shares | $ | 19,969,006 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 878,687 | |||
| Net Asset Value Per Share | $ | 22.73 | ||
| Net Assets - Class S Shares | $ | 3,054,619 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 138,157 | |||
| Net Asset Value Per Share | $ | 22.11 | ||
| Net Assets - Class T Shares | $ | 342,124,226 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,185,529 | |||
| Net Asset Value Per Share | $ | 22.53 | ||
| (1) | Includes $56,197,642 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Proceeds $6,200,642. | |
| (3) | Premiums received $230,165. | |
| (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 March 31, 2015 (unaudited) | Janus Global Technology Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 207,502 | ||
| Interest proceeds from short sales | 641 | |||
| Dividends | 5,530,015 | |||
| Dividends from affiliates | 5,315 | |||
| Foreign tax withheld | (24,462) | |||
| Total Investment Income | 5,719,011 | |||
| Expenses: | ||||
| Advisory fees | 3,475,324 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 11,917 | |||
| Class C Shares | 17,872 | |||
| Class S Shares | 3,429 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 433,714 | |||
| Class S Shares | 3,429 | |||
| Class T Shares | 411,043 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 5,866 | |||
| Class C Shares | 1,702 | |||
| Class I Shares | 8,870 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 613 | |||
| Class C Shares | 277 | |||
| Class D Shares | 149,910 | |||
| Class I Shares | 387 | |||
| Class S Shares | 54 | |||
| Class T Shares | 4,150 | |||
| Shareholder reports expense | 174,963 | |||
| Registration fees | 47,248 | |||
| Custodian fees | 13,954 | |||
| Professional fees | 33,154 | |||
| Non-interested Trustees’ fees and expenses | 12,446 | |||
| Short sales dividend expense | 36,317 | |||
| Stock loan fees | 47,899 | |||
| Fund administration fees | 44,998 | |||
| Other expenses | 32,488 | |||
| Total Expenses | 4,972,024 | |||
| Net Expenses | 4,972,024 | |||
| Net Investment Income/(Loss) | 746,987 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 66,289,871 | |||
| Short sales | 479,540 | |||
| Written options contracts | 255,912 | |||
| Total Net Realized Gain/(Loss) on Investments | 67,025,323 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 27,072,108 | |||
| Short sales | (772,672) | |||
| Written options contracts | 54,238 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 26,353,674 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 94,125,984 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Global | ||||||||
| Technology Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 746,987 | $ | 1,027,478 | ||||
| Net realized gain/(loss) on investments | 67,025,323 | 163,636,400 | ||||||
| Change in unrealized net appreciation/depreciation | 26,353,674 | (25,671,126) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 94,125,984 | 138,992,752 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | – | – | ||||||
| Class C Shares | – | – | ||||||
| Class D Shares | (761,155) | – | ||||||
| Class I Shares | (35,565) | – | ||||||
| Class S Shares | – | – | ||||||
| Class T Shares | (204,075) | – | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (1,359,893) | (492,418) | ||||||
| Class C Shares | (520,994) | (201,608) | ||||||
| Class D Shares | (108,947,034) | (50,487,334) | ||||||
| Class I Shares | (2,719,239) | (846,669) | ||||||
| Class S Shares | (420,773) | (135,582) | ||||||
| Class T Shares | (50,040,139) | (22,268,656) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (165,008,867) | (74,432,267) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 2,524,412 | 3,101,666 | ||||||
| Class C Shares | 1,418,831 | 1,115,525 | ||||||
| Class D Shares | 17,346,672 | 28,086,194 | ||||||
| Class I Shares | 3,623,629 | 10,127,562 | ||||||
| Class S Shares | 755,726 | 1,398,708 | ||||||
| Class T Shares | 32,338,523 | 53,570,136 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 1,178,971 | 432,165 | ||||||
| Class C Shares | 454,052 | 176,738 | ||||||
| Class D Shares | 107,571,968 | 49,453,122 | ||||||
| Class I Shares | 2,488,291 | 713,164 | ||||||
| Class S Shares | 420,773 | 135,582 | ||||||
| Class T Shares | 49,187,854 | 21,777,646 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (1,091,442) | (1,219,499) | ||||||
| Class C Shares | (441,596) | (535,853) | ||||||
| Class D Shares | (41,173,906) | (72,500,964) | ||||||
| Class I Shares | (2,347,686) | (3,922,156) | ||||||
| Class S Shares | (294,830) | (509,005) | ||||||
| Class T Shares | (34,334,104) | (60,928,361) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 139,626,138 | 30,472,370 | ||||||
| Net Increase/(Decrease) in Net Assets | 68,743,255 | 95,032,855 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 1,053,476,630 | 958,443,775 | ||||||
| End of period | $ | 1,122,219,885 | $ | 1,053,476,630 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 692,368 | $ | 946,176 | ||||
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 March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Global Technology Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $24.21 | $22.84 | $18.47 | $15.05 | $15.25 | $12.56 | $10.96 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | –(3)(4) | (0.02)(3) | 0.01 | (0.03) | (0.02) | (0.03) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.94 | 3.18 | 4.43 | 3.45 | (0.18) | 2.72 | 1.59 | |||||||||||||||||||||||
| Total from Investment Operations | 1.94 | 3.16 | 4.44 | 3.42 | (0.20) | 2.69 | 1.60 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | – | |||||||||||||||||||||||
| Total Distributions | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.30 | $24.21 | $22.84 | $18.47 | $15.05 | $15.25 | $12.56 | |||||||||||||||||||||||
| Total Return* | 8.96% | 14.49% | 24.11% | 22.72% | (1.31)% | 21.42% | 14.60% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $10,647 | $8,617 | $5,849 | $3,550 | $2,150 | $1,273 | $232 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $9,560 | $7,596 | $4,439 | $3,262 | $2,070 | $818 | $88 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.08% | 1.11% | 1.09% | 1.18% | 1.12% | 1.26% | 1.07% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.08% | 1.11% | 1.09% | 1.18% | 1.11% | 1.26% | 0.99% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.04)% | (0.08)% | (0.10)% | (0.35)% | (0.39)% | (0.66)% | (0.45)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | 111% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Global Technology Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.26 | $22.16 | $18.04 | $14.79 | $15.12 | $12.53 | $10.96 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.08)(3) | (0.18)(3) | (0.02) | (0.16) | (0.11) | (0.09) | –(4) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.85 | 3.07 | 4.21 | 3.41 | (0.22) | 2.68 | 1.57 | |||||||||||||||||||||||
| Total from Investment Operations | 1.77 | 2.89 | 4.19 | 3.25 | (0.33) | 2.59 | 1.57 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | – | |||||||||||||||||||||||
| Total Distributions | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $21.18 | $23.26 | $22.16 | $18.04 | $14.79 | $15.12 | $12.53 | |||||||||||||||||||||||
| Total Return* | 8.55% | 13.67% | 23.29% | 21.97% | (2.18)% | 20.67% | 14.32% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $4,232 | $3,031 | $2,152 | $1,234 | $995 | $613 | $36 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,584 | $2,672 | $1,506 | $1,063 | $1,037 | $441 | $14 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.81% | 1.82% | 1.82% | 1.99% | 1.84% | 1.98% | 1.82% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.81% | 1.82% | 1.81% | 1.99% | 1.84% | 1.98% | 1.75% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.78)% | (0.81)% | (0.83)% | (1.17)% | (1.11)% | (1.35)% | (1.20)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | 111% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or period | Janus Global Technology Fund | |||||||||||||||||||||||||
| ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $24.49 | $23.04 | $18.60 | $15.10 | $15.29 | $13.46 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.02(2) | 0.03(2) | 0.02 | –(3) | –(3) | 0.02 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.97 | 3.21 | 4.49 | 3.50 | (0.19) | 1.81 | ||||||||||||||||||||
| Total from Investment Operations | 1.99 | 3.24 | 4.51 | 3.50 | (0.19) | 1.83 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.03) | – | – | – | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | ||||||||||||||||||||
| Total Distributions | (3.88) | (1.79) | (0.07) | – | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $22.60 | $24.49 | $23.04 | $18.60 | $15.10 | $15.29 | ||||||||||||||||||||
| Total Return* | 9.06% | 14.73% | 24.31% | 23.18% | (1.24)% | 13.60% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $742,194 | $705,264 | $655,911 | $574,770 | $507,871 | $546,899 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $724,842 | $699,807 | $596,429 | $562,124 | $603,592 | $526,770 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.90% | 0.88% | 0.92% | 0.94% | 0.91% | 1.08% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.90% | 0.88% | 0.92% | 0.94% | 0.91% | 1.08% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.16% | 0.12% | 0.06% | (0.12)% | (0.22)% | (0.39)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Technology Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(5) | 2009(6) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $24.62 | $23.13 | $18.66 | $15.15 | $15.32 | $12.57 | $10.96 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(2) | 0.05(2) | 0.04 | –(3) | –(3) | –(3) | –(3) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.98 | 3.23 | 4.50 | 3.51 | (0.17) | 2.74 | 1.61 | |||||||||||||||||||||||
| Total from Investment Operations | 2.01 | 3.28 | 4.54 | 3.51 | (0.17) | 2.74 | 1.61 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.05) | – | – | – | – | �� | – | – | ||||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | 0.01 | – | |||||||||||||||||||||||
| Total Distributions | (3.90) | (1.79) | (0.07) | – | – | 0.01 | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.73 | $24.62 | $23.13 | $18.66 | $15.15 | $15.32 | $12.57 | |||||||||||||||||||||||
| Total Return* | 9.12% | 14.84% | 24.40% | 23.17% | (1.11)% | 21.88% | 14.69% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $19,969 | $17,322 | $9,679 | $7,737 | $6,562 | $5,959 | $973 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $18,548 | $13,502 | $8,188 | $7,067 | $7,506 | $1,876 | $123 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.80% | 0.82% | 0.81% | 0.92% | 0.87% | 1.10% | 0.85% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.80% | 0.82% | 0.81% | 0.92% | 0.86% | 1.10% | 0.63% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.25% | 0.21% | 0.16% | (0.10)% | (0.16)% | (0.52)% | (1.27)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | 111% | |||||||||||||||||||||||
| * | 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 September 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) | Period from November 1, 2009 through September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (6) | Period from July 6, 2009 (inception date) through October 31, 2009. |
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 March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Global Technology Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $24.04 | $22.71 | $18.39 | $14.99 | $15.22 | $12.55 | $10.96 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(3) | (0.04)(3) | 0.01 | –(4) | (0.05) | (0.05) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.94 | 3.16 | 4.38 | 3.40 | (0.18) | 2.72 | 1.58 | |||||||||||||||||||||||
| Total from Investment Operations | 1.92 | 3.12 | 4.39 | 3.40 | (0.23) | 2.67 | 1.59 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | – | |||||||||||||||||||||||
| Total Distributions | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.11 | $24.04 | $22.71 | $18.39 | $14.99 | $15.22 | $12.55 | |||||||||||||||||||||||
| Total Return* | 8.93% | 14.39% | 23.94% | 22.68% | (1.51)% | 21.27% | 14.51% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,055 | $2,357 | $1,226 | $532 | $259 | $213 | $67 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,751 | $2,040 | $772 | $340 | $268 | $165 | $38 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.20% | 1.20% | 1.22% | 1.26% | 1.25% | 1.43% | 1.31% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.20% | 1.20% | 1.22% | 1.26% | 1.25% | 1.42% | 1.26% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.15)% | (0.18)% | (0.24)% | (0.40)% | (0.54)% | (0.80)% | (0.61)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | 111% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Global Technology Fund | |||||||||||||||||||||||||||||
| September 30 and each year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $24.41 | $22.99 | $18.56 | $15.09 | $15.28 | $12.57 | $9.29 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.01(3) | 0.01(3) | –(4) | (0.02) | (0.03) | (0.05) | –(4) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.98 | 3.20 | 4.50 | 3.49 | (0.16) | 2.76 | 3.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.99 | 3.21 | 4.50 | 3.47 | (0.19) | 2.71 | 3.28 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.02) | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (3.85) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | –(5) | |||||||||||||||||||||||
| Total Distributions | (3.87) | (1.79) | (0.07) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.53 | $24.41 | $22.99 | $18.56 | $15.09 | $15.28 | $12.57 | |||||||||||||||||||||||
| Total Return* | 9.08% | 14.62% | 24.31% | 23.00% | (1.24)% | 21.56% | 35.31% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $342,124 | $316,886 | $283,627 | $247,798 | $225,429 | $265,438 | $713,536 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $329,738 | $308,011 | $255,617 | $244,166 | $283,158 | $424,663 | $584,300 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.95% | 0.95% | 0.97% | 1.01% | 1.00% | 1.13% | 1.06% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.95% | 0.94% | 0.96% | 1.01% | 1.00% | 1.13% | 1.05% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.11% | 0.06% | 0.02% | (0.19)% | (0.31)% | (0.66)% | (0.32)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 57% | 36% | 49% | 89% | 70% | 111% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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. |
See Notes to Financial Statements.
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Global Technology 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in
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Notes to Financial Statements (unaudited) (continued)
good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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 March 31, 2015, the Fund had restricted cash in the amount of $300,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each
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Notes to Financial Statements (unaudited) (continued)
derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing
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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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Global Technology Fund | $ | 20,829,304 | ||||
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. When an option is written, the Fund receives a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written, at value” (if applicable). The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
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Notes to Financial Statements (unaudited) (continued)
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 put options during the period ended March 31, 2015.
| Fund | Written Put Options | |||||
| Janus Global Technology Fund | $ | 154,153 | ||||
Written option activity for the period ended March 31, 2015 is indicated in the table below:
| Number of | Premiums | |||||||||
| Put Options | Contracts | Received | ||||||||
Janus Global Technology Fund | ||||||||||
| Options outstanding at September 30, 2014 | – | $ | – | |||||||
| Options written | 825 | 486,077 | ||||||||
| Options closed | – | – | ||||||||
| Options expired | (696) | (255,912) | ||||||||
| Options exercised | – | – | ||||||||
| Options outstanding at March 31, 2015 | 129 | $ | 230,165 | |||||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Technology Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 289,073 | Forward currency contracts | $ | 72,603 | ||||||
| Equity Contracts | Options written, at value | 175,927 | ||||||||||
| Total | $ | 289,073 | $ | 248,530 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| 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 | |||||||||
Janus Global Technology Fund | ||||||||||||
| Currency Contracts | $ | 2,038,536 | $ | – | $ | 2,038,536 | ||||||
| Equity Contracts | – | 255,912 | 255,912 | |||||||||
| Total | $ | 2,038,536 | $ | 255,912 | $ | 2,294,448 | ||||||
| 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 | |||||||||
Janus Global Technology Fund | ||||||||||||
| Currency Contracts | $ | (133,322 | ) | $ | – | $ | (133,322 | ) | ||||
| Equity Contracts | – | 54,238 | 54,238 | |||||||||
| Total | $ | (133,322 | ) | $ | 54,238 | $ | (79,084 | ) | ||||
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
Emerging Market Investing
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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
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Notes to Financial Statements (unaudited) (continued)
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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ | 21,876 | $ | (21,876) | $ | – | $ | – | ||||||||||
| Credit Suisse International | 202,279 | – | – | 202,279 | ||||||||||||||
| Deutsche Bank AG | 56,197,642 | – | (56,197,642) | – | ||||||||||||||
| HSBC Securities (USA), Inc. | 62,121 | (7,628) | – | 54,493 | ||||||||||||||
| JPMorgan Chase & Co. | 2,797 | (1,274) | – | 1,523 | ||||||||||||||
| Total | $ | 56,486,715 | $ | (30,778) | $ | (56,197,642) | $ | 258,295 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ | 32,028 | $ | (21,876) | $ | – | $ | 10,152 | ||||||||||
| Credit Suisse International | 175,927 | – | (175,927) | – | ||||||||||||||
| Goldman Sachs International | 7,076,343 | – | (7,076,343) | – | ||||||||||||||
| HSBC Securities (USA), Inc. | 7,628 | (7,628) | – | – | ||||||||||||||
| JPMorgan Chase & Co. | 1,274 | (1,274) | – | – | ||||||||||||||
| RBC Capital Markets Corp. | 31,673 | – | – | 31,673 | ||||||||||||||
| Total | $ | 7,324,873 | $ | (30,778) | $ | (7,252,270) | $ | 41,825 | ||||||||||
| (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. |
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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.
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.
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
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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.
Short Sales
The Fund may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Fund owns or selling short a security that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Fund does not deliver from its portfolio the securities sold short and does not immediately receive the proceeds of the short sale. The Fund borrows the securities sold short and receives proceeds from the short sale only when it delivers the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain.
The Fund may also engage in other short sales. The Fund may engage in short sales when the portfolio managers anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of the Fund’s net assets may be invested in short positions (through short sales of stocks, structured products, futures, swaps, and uncovered written calls). The Fund may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which the Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance the Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Fund are fully collateralized by restricted cash or other securities, which are denoted on the accompanying Schedule of Investments. The Fund is also required to pay the lender of the security any dividends or interest that accrue on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, the Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Fund pays stock loan fees, disclosed on the Statement of Operations, on assets borrowed from the security broker.
The Fund may also enter into short positions through derivative instruments, such as options contracts, futures contracts, and swap agreements, which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
| 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
28 | MARCH 31, 2015
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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 Technology Fund | All Asset Levels | 0.64 | ||||||||
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
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Notes to Financial Statements (unaudited) (continued)
“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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Global Technology Fund | $ | 4,508 | ||||
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 March 31, 2015.
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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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Global Technology Fund | $ | 1,022 | ||||
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Global Technology Fund | $ | 934,160,979 | $ | 273,292,574 | $ | (27,114,979) | $ | 246,177,595 | ||||||||||
Information on the tax components of securities sold short as of March 31, 2015 is as follows:
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | (Appreciation)/ | |||||||||||||||
| Fund | Cost | (Appreciation) | Depreciation | Depreciation | ||||||||||||||
| Janus Global Technology Fund | $ | (6,200,642) | $ | (1,170,322) | $ | 294,621 | $ | (875,701) | ||||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Global Technology Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 113,902 | 132,514 | ||||||||
| Reinvested dividends and distributions | 56,061 | 19,319 | ||||||||
| Shares repurchased | (48,430) | (51,929) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 121,533 | 99,904 | ||||||||
| Shares Outstanding, Beginning of Period | 355,975 | 256,071 | ||||||||
| Shares Outstanding, End of Period | 477,508 | 355,975 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 67,570 | 48,655 | ||||||||
| Reinvested dividends and distributions | 22,680 | 8,179 | ||||||||
| Shares repurchased | (20,761) | (23,637) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 69,489 | 33,197 | ||||||||
| Shares Outstanding, Beginning of Period | 130,318 | 97,121 | ||||||||
| Shares Outstanding, End of Period | 199,807 | 130,318 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| For the period ended March 31 (unaudited) | Janus Global Technology Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 747,218 | 1,181,566 | ||||||||
| Reinvested dividends and distributions | 5,050,327 | 2,189,159 | ||||||||
| Shares repurchased | (1,761,479) | (3,043,094) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,036,066 | 327,631 | ||||||||
| Shares Outstanding, Beginning of Period | 28,801,076 | 28,473,445 | ||||||||
| Shares Outstanding, End of Period | 32,837,142 | 28,801,076 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 156,942 | 418,726 | ||||||||
| Reinvested dividends and distributions | 116,167 | 31,417 | ||||||||
| Shares repurchased | (98,129) | (164,797) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 174,980 | 285,346 | ||||||||
| Shares Outstanding, Beginning of Period | 703,707 | 418,361 | ||||||||
| Shares Outstanding, End of Period | 878,687 | 703,707 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 32,823 | 59,649 | ||||||||
| Reinvested dividends and distributions | 20,171 | 6,099 | ||||||||
| Shares repurchased | (12,872) | (21,707) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 40,122 | 44,041 | ||||||||
| Shares Outstanding, Beginning of Period | 98,035 | 53,994 | ||||||||
| Shares Outstanding, End of Period | 138,157 | 98,035 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 1,407,006 | 2,245,812 | ||||||||
| Reinvested dividends and distributions | 2,315,812 | 966,607 | ||||||||
| Shares repurchased | (1,516,497) | (2,572,731) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,206,321 | 639,688 | ||||||||
| Shares Outstanding, Beginning of Period | 12,979,208 | 12,339,520 | ||||||||
| Shares Outstanding, End of Period | 15,185,529 | 12,979,208 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Technology Fund | $ | 191,050,008 | $ | 203,684,444 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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Useful Information About Your Fund Report (unaudited) (continued)
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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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).
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-0515-87736 | 125-24-93047 05-15 |
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semiannual report
March 31, 2015
Janus Growth and Income Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Growth and Income Fund
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Janus Growth and Income Fund (unaudited)
FUND SNAPSHOT We seek to generate capital appreciation and income through investing in a diversified portfolio of equities and income-generating assets. We primarily focus our analysis on larger, well-established companies with predictable and sustainable earnings growth. | Marc Pinto co-portfolio manager |  Jeremiah Buckley co-portfolio manager |
PERFORMANCE
Janus Growth and Income Fund’s Class T Shares returned 5.17% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the S&P 500 Index, returned 5.93%, and its secondary benchmark, the Russell 1000 Growth Index, returned 8.81% during the period.
MARKET ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
PERFORMANCE DISCUSSION
The Fund underperformed its primary benchmark, the S&P 500 Index, and its secondary benchmark, the Russell 1000 Growth Index, for the period. We seek to provide our clients with both growth of capital and quarterly income. As part of that investment mandate, we focus much of our research efforts on identifying large, well-established companies that should be in a position to grow free cash flow and continue growing their dividend over longer time horizons. Although the Fund lagged during this period, we think investing in companies that can grow their dividends and whose stocks are less volatile than the overall market will drive superior risk-adjusted performance longer term. During the period, we saw encouraging signs from a number of companies in our portfolio that further strengthened our conviction in the stability of their business models and their ability to continue growing free cash flow over time.
Our materials holdings weighed the most on relative performance. LyondellBasell Industries was a top detractor during the period within the sector. The stock was down because falling oil prices have temporarily shifted the competitive dynamics between LyondellBasell and other petrochemical companies. Lyondell produces ethylene, which is a primary input for making a number of plastics and other materials. Lyondell’s access to cheap natural gas had made the economics of using ethylene in plastic production much more favorable to other oil-based derivative alternatives, but now that oil prices have fallen, those other options are more competitive. We view this as a near-term headwind, but continue to have conviction in the long-term growth potential of the company. We believe the company is still a strong operator, with a history of selectively investing in projects that have had a high return on invested capital. The company has also made other favorable capital allocation decisions for shareholders including special dividends and stock buybacks.
Our stock selection in the consumer discretionary sector also detracted from relative results. Mattel was a large detractor within the consumer discretionary sector. Results for the company have admittedly been worse than expected, which is part of the reason the company changed its leadership. Launches of some of its new toy products have disappointed, and competition from other companies has been fierce. We have trimmed the position due to these concerns, but ultimately still own the stock because we think a new CEO could help refocus the company on improving innovation among its core brands.
Enterprise Products Partners was another large detractor during the period. The pipeline company’s stock has traded down in sympathy with lower oil prices, but we think the company’s earnings streams are actually more insulated from falling oil prices than other companies in the energy sector. The contracts Enterprise uses with exploration and production companies that use its
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Janus Growth and Income Fund (unaudited)
pipelines are not typically tied to the price of the underlying commodity. The only way Enterprise Products Partners’ business would be hurt by falling oil prices is if there is a substantial reduction in production at U.S. shale sites. While production growth at U.S. shale sites will certainly slow in the near term, we do not believe there will be a reduction substantial enough to materially impact the company. Further, we believe the high dividend yield paid by Enterprise Products Partners offers some downside protection for the stock.
Our stock selection in the financial sector was a large contributor to relative results during the period. Within the sector, Blackstone Group was a top contributor. The stock was up after reporting earnings that exceeded expectations, driven by a strong first quarter for Blackstone’s private equity business and also by strong inflows for some of its other asset management products. We continue to like the company, and Blackstone remains a relatively large position in the portfolio. We think the company is a best-in-class alternatives manager, and also like the company for its high dividend yield.
Our stock selection in the technology sector was also a large contributor to relative performance during the period. TE Connectivity was a top contributor within the sector. The stock was up after the company announced it would raise its dividend. TE Connectivity embodies many of the characteristics we seek for stocks in our portfolio. The company pays a high dividend yield, is a highly cash generative company, and has consistently improved margins through productivity gains. Going forward, we think the connector manufacturer is well positioned to benefit from increasing electronic content growth in automobiles.
Apple was another large contributor to performance. The company continues to see strong iPhone growth and seems to have a stronghold on the high-end smartphone market, which has been much more profitable than other market segments. We feel Apple’s ability to combine hardware, software and services is an important differentiator from most of its competitors, and that integration between each of Apple’s devices will continue to entrench Apple products with its customers. We also like management’s commitment to return more of its large cash holdings to shareholders.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion regarding the use of forward currency contracts by the Fund.
OUTLOOK
While equity valuations are approaching the higher end of historical averages, we do not find them unreasonable in the context of the current market and economic environment. A low interest rate environment is favorable for equities, and while the Fed will likely act to raise rates before the year is over, it has also indicated the move will be gradual and dependent on clear signs the economy is improving. A rising rate environment that is backed by a strengthening economy should provide a constructive backdrop for equity markets. And on the economic front, we continue to see positive signs that signal the economy is indeed strengthening. The housing market is improving and we are seeing better employment data and even some signs of wage growth. Those factors, coupled with lower energy prices, should encourage further consumer spending.
Thank you for your investment in Janus Growth and Income Fund.
2 | MARCH 31, 2015
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(unaudited)
Janus Growth and Income Fund At A Glance
5 Top Performers – Equity Holdings
| Contribution | ||||
| Blackstone Group LP | 0.79% | |||
| TE Connectivity, Ltd. (U.S. Shares) | 0.72% | |||
| Apple, Inc. | 0.71% | |||
| Aetna, Inc. | 0.53% | |||
| Boeing Co. | 0.52% | |||
5 Bottom Performers – Equity Holdings
| Contribution | ||||
| LyondellBasell Industries NV – Class A | –0.78% | |||
| Enterprise Products Partners LP | –0.53% | |||
| Mattel, Inc. | –0.41% | |||
| Chevron Corp. | –0.35% | |||
| Microsoft Corp. | –0.29% | |||
5 Top Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Financials | 1.13% | 16.75% | 16.33% | |||||||||
| Information Technology | 0.43% | 13.83% | 19.67% | |||||||||
| Energy | 0.41% | 6.75% | 8.54% | |||||||||
| Industrials | 0.29% | 11.69% | 10.36% | |||||||||
| Telecommunication Services | 0.10% | 1.76% | 2.35% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Materials | –0.93% | 6.32% | 3.25% | |||||||||
| Consumer Discretionary | –0.87% | 14.21% | 12.03% | |||||||||
| Health Care | –0.82% | 11.35% | 14.50% | |||||||||
| Consumer Staples | –0.15% | 13.63% | 9.81% | |||||||||
| Other** | –0.07% | 0.35% | 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. |
Janus Investment Fund | 3
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Janus Growth and Income Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 3.7% | |||
| Blackstone Group LP Capital Markets | 3.4% | |||
| Boeing Co. Aerospace & Defense | 3.1% | |||
| LyondellBasell Industries NV – Class A Chemicals | 3.0% | |||
| Johnson & Johnson Pharmaceuticals | 2.9% | |||
| 16.1% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (0.0)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Growth and Income Fund – Class A Shares | |||||||||||||
| NAV | 5.16% | 10.51% | 12.22% | 6.97% | 10.59% | 0.96% | |||||||
| MOP | –0.89% | 4.16% | 10.89% | 6.34% | 10.31% | ||||||||
| Janus Growth and Income Fund – Class C Shares | |||||||||||||
| NAV | 4.75% | 9.66% | 11.34% | 6.16% | 9.83% | 1.76% | |||||||
| CDSC | 3.75% | 8.66% | 11.34% | 6.16% | 9.83% | ||||||||
| Janus Growth and Income Fund – Class D Shares(1) | 5.25% | 10.70% | 12.40% | 7.11% | 10.67% | 0.79% | |||||||
| Janus Growth and Income Fund – Class I Shares | 5.27% | 10.77% | 12.49% | 7.06% | 10.65% | 0.73% | |||||||
| Janus Growth and Income Fund – Class R Shares | 4.92% | 10.05% | 11.73% | 6.51% | 10.17% | 1.38% | |||||||
| Janus Growth and Income Fund – Class S Shares | 5.06% | 10.30% | 12.02% | 6.77% | 10.41% | 1.13% | |||||||
| Janus Growth and Income Fund – Class T Shares | 5.17% | 10.58% | 12.29% | 7.06% | 10.65% | 0.88% | |||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 9.72% | ||||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 15.63% | 9.36% | 9.05% | ||||||||
| Morningstar Quartile – Class T Shares | – | 3rd | 3rd | 3rd | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Blend Funds | – | 880/1,609 | 923/1,353 | 730/1,122 | 61/348 | ||||||||
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 | 5
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Janus Growth and Income Fund (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.
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 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.
© 2015 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 15, 1991 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,051.60 | $ | 4.81 | $ | 1,000.00 | $ | 1,020.24 | $ | 4.73 | 0.94% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,047.50 | $ | 8.73 | $ | 1,000.00 | $ | 1,016.40 | $ | 8.60 | 1.71% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,052.50 | $ | 4.04 | $ | 1,000.00 | $ | 1,020.99 | $ | 3.98 | 0.79% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,052.70 | $ | 3.63 | $ | 1,000.00 | $ | 1,021.39 | $ | 3.58 | 0.71% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,049.20 | $ | 7.05 | $ | 1,000.00 | $ | 1,018.05 | $ | 6.94 | 1.38% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,050.60 | $ | 5.78 | $ | 1,000.00 | $ | 1,019.30 | $ | 5.69 | 1.13% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,051.70 | $ | 4.45 | $ | 1,000.00 | $ | 1,020.59 | $ | 4.38 | 0.87% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Growth and Income Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 97.6% | ||||||||||
| Aerospace & Defense – 5.0% | ||||||||||
| 893,035 | Boeing Co. | $ | 134,026,693 | |||||||
| 790,523 | Honeywell International, Inc. | 82,459,454 | ||||||||
| 216,486,147 | ||||||||||
| Automobiles – 1.9% | ||||||||||
| 2,212,189 | General Motors Co. | 82,957,088 | ||||||||
| Beverages – 2.2% | ||||||||||
| 1,797,450 | Diageo PLC | 49,554,618 | ||||||||
| 482,741 | PepsiCo, Inc. | 46,159,695 | ||||||||
| 95,714,313 | ||||||||||
| Biotechnology – 1.2% | ||||||||||
| 332,462 | Amgen, Inc. | 53,144,051 | ||||||||
| Capital Markets – 4.4% | ||||||||||
| 66,455 | BlackRock, Inc. | 24,311,897 | ||||||||
| 3,818,944 | Blackstone Group LP | 148,518,732 | ||||||||
| 567,034 | TD Ameritrade Holding Corp. | 21,127,687 | ||||||||
| 193,958,316 | ||||||||||
| Chemicals – 5.6% | ||||||||||
| 1,598,687 | EI du Pont de Nemours & Co. | 114,258,160 | ||||||||
| 1,474,344 | LyondellBasell Industries NV – Class A | 129,447,403 | ||||||||
| 243,705,563 | ||||||||||
| Commercial Banks – 5.4% | ||||||||||
| 1,206,272 | JPMorgan Chase & Co. | 73,075,958 | ||||||||
| 771,172 | PacWest Bancorp | 36,160,255 | ||||||||
| 2,913,086 | U.S. Bancorp | 127,214,465 | ||||||||
| 236,450,678 | ||||||||||
| Commercial Services & Supplies – 0.8% | ||||||||||
| 646,015 | Waste Management, Inc. | 35,033,393 | ||||||||
| Communications Equipment – 1.1% | ||||||||||
| 717,261 | QUALCOMM, Inc. | 49,734,878 | ||||||||
| Consumer Finance – 1.0% | ||||||||||
| 542,562 | American Express Co. | 42,384,943 | ||||||||
| Diversified Financial Services – 2.1% | ||||||||||
| 984,254 | CME Group, Inc. | 93,218,696 | ||||||||
| Diversified Telecommunication Services – 1.7% | ||||||||||
| 1,561,921 | Verizon Communications, Inc. | 75,956,218 | ||||||||
| Electric Utilities – 2.2% | ||||||||||
| 887,572 | Brookfield Infrastructure Partners LP | 40,420,029 | ||||||||
| 889,338 | Edison International | 55,556,945 | ||||||||
| 95,976,974 | ||||||||||
| Electronic Equipment, Instruments & Components – 2.9% | ||||||||||
| 1,746,181 | TE Connectivity, Ltd. (U.S. Shares) | 125,061,483 | ||||||||
| Food & Staples Retailing – 2.8% | ||||||||||
| 768,349 | Kroger Co. | 58,901,634 | ||||||||
| 1,626,527 | Sysco Corp. | 61,368,864 | ||||||||
| 120,270,498 | ||||||||||
| Food Products – 1.0% | ||||||||||
| 431,658 | Hershey Co. | 43,558,609 | ||||||||
| Health Care Equipment & Supplies – 0.9% | ||||||||||
| 813,660 | Abbott Laboratories | 37,696,868 | ||||||||
| Health Care Providers & Services – 1.4% | ||||||||||
| 582,511 | Aetna, Inc. | 62,054,897 | ||||||||
| Hotels, Restaurants & Leisure – 3.9% | ||||||||||
| 1,166,933 | Las Vegas Sands Corp. | 64,227,992 | ||||||||
| 1,266,574 | Six Flags Entertainment Corp. | 61,314,848 | ||||||||
| 552,298 | Starwood Hotels & Resorts Worldwide, Inc. | 46,116,883 | ||||||||
| 171,659,723 | ||||||||||
| Household Durables – 0.9% | ||||||||||
| 820,593 | Garmin, Ltd. | 38,994,579 | ||||||||
| Household Products – 3.2% | ||||||||||
| 1,071,251 | Colgate-Palmolive Co. | 74,280,544 | ||||||||
| 615,240 | Kimberly-Clark Corp. | 65,898,357 | ||||||||
| 140,178,901 | ||||||||||
| Industrial Conglomerates – 1.4% | ||||||||||
| 381,811 | 3M Co. | 62,979,724 | ||||||||
| Information Technology Services – 1.0% | ||||||||||
| 494,077 | Automatic Data Processing, Inc. | 42,312,754 | ||||||||
| Insurance – 2.3% | ||||||||||
| 2,440,533 | Prudential PLC | 60,419,773 | ||||||||
| 355,519 | Travelers Cos., Inc. | 38,442,270 | ||||||||
| 98,862,043 | ||||||||||
| Leisure Products – 1.0% | ||||||||||
| 1,940,875 | Mattel, Inc. | 44,348,994 | ||||||||
| Machinery – 1.7% | ||||||||||
| 457,526 | Deere & Co. | 40,120,455 | ||||||||
| 504,338 | Dover Corp. | 34,859,843 | ||||||||
| 74,980,298 | ||||||||||
| Media – 3.6% | ||||||||||
| 783,460 | CBS Corp. – Class B | 47,501,180 | ||||||||
| 1,124,890 | Comcast Corp. – Class A | 63,522,538 | ||||||||
| 613,784 | Omnicom Group, Inc. | 47,862,876 | ||||||||
| 158,886,594 | ||||||||||
| Multi-Utilities – 1.1% | ||||||||||
| 494,077 | Ameren Corp. | 20,850,050 | ||||||||
| 443,720 | National Grid PLC (ADR) | 28,668,749 | ||||||||
| 49,518,799 | ||||||||||
| Oil, Gas & Consumable Fuels – 5.7% | ||||||||||
| 1,074,003 | Chevron Corp. | 112,748,835 | ||||||||
| 3,350,878 | Enterprise Products Partners LP | 110,344,413 | ||||||||
| 354,932 | MarkWest Energy Partners LP | 23,461,005 | ||||||||
| 246,554,253 | ||||||||||
| Paper & Forest Products – 0.9% | ||||||||||
| 683,430 | International Paper Co. | 37,923,531 | ||||||||
| Pharmaceuticals – 7.6% | ||||||||||
| 1,562,054 | AbbVie, Inc. | 91,442,641 | ||||||||
| 541,951 | Bristol-Myers Squibb Co. | 34,955,840 | ||||||||
| 1,032,278 | Eli Lilly & Co. | 74,994,997 | ||||||||
| 1,278,157 | Johnson & Johnson | 128,582,594 | ||||||||
| 329,976,072 | ||||||||||
| Real Estate Investment Trusts (REITs) – 1.3% | ||||||||||
| 382,985 | Crown Castle International Corp. | 31,611,582 | ||||||||
| 831,082 | Outfront Media, Inc. | 24,865,973 | ||||||||
| 56,477,555 | ||||||||||
| Real Estate Management & Development – 0.6% | ||||||||||
| 24,027,576 | Colony American Homes Holdings III LP*,§ | 27,631,712 | ||||||||
| Road & Rail – 2.2% | ||||||||||
| 890,672 | Union Pacific Corp. | 96,468,684 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Semiconductor & Semiconductor Equipment – 2.6% | ||||||||||
| 1,201,423 | Texas Instruments, Inc. | $ | 68,703,374 | |||||||
| 1,036,217 | Xilinx, Inc. | 43,831,979 | ||||||||
| 112,535,353 | ||||||||||
| Software – 2.4% | ||||||||||
| 2,525,274 | Microsoft Corp. | 102,665,014 | ||||||||
| Specialty Retail – 1.2% | ||||||||||
| 452,332 | Home Depot, Inc. | 51,389,439 | ||||||||
| Technology Hardware, Storage & Peripherals – 4.4% | ||||||||||
| 1,305,828 | Apple, Inc.† | 162,483,911 | ||||||||
| 535,795 | Seagate Technology PLC | 27,877,414 | ||||||||
| 190,361,325 | ||||||||||
| Textiles, Apparel & Luxury Goods – 1.3% | ||||||||||
| 568,544 | NIKE, Inc. – Class B | 57,042,020 | ||||||||
| Tobacco – 3.7% | ||||||||||
| 2,471,217 | Altria Group, Inc. | 123,610,274 | ||||||||
| 502,124 | Philip Morris International, Inc. | 37,825,001 | ||||||||
| 161,435,275 | ||||||||||
| Total Common Stocks (cost $2,958,270,622) | 4,256,546,255 | |||||||||
| Preferred Stocks – 1.9% | ||||||||||
| Aerospace & Defense – 0.4% | ||||||||||
| 264,550 | United Technologies Corp., 7.5000% | 16,280,407 | ||||||||
| Capital Markets – 0.3% | ||||||||||
| 250,000 | Morgan Stanley, 6.8750% | 6,877,500 | ||||||||
| 235,000 | Morgan Stanley, 7.1250% | 6,690,450 | ||||||||
| 13,567,950 | ||||||||||
| Consumer Finance – 0.3% | ||||||||||
| 500,000 | Discover Financial Services, 6.5000% | 12,960,000 | ||||||||
| Pharmaceuticals – 0.9% | ||||||||||
| 41,901 | Actavis PLC, 5.5000% | 42,403,812 | ||||||||
| Total Preferred Stocks (cost $81,241,428) | 85,212,169 | |||||||||
| Investment Companies – 0.5% | ||||||||||
| Money Markets – 0.5% | ||||||||||
| 22,157,000 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $22,157,000) | 22,157,000 | ||||||||
| Total Investments (total cost $3,061,669,050) – 100.0% | 4,363,915,424 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0)% | (2,021,816) | |||||||||
| Net Assets – 100% | $ | 4,361,893,608 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 4,182,868,472 | 95 | .8% | ||||
| United Kingdom | 138,643,140 | 3 | .2 | |||||
| Canada | 42,403,812 | 1 | .0 | |||||
| Total | $ | 4,363,915,424 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: British Pound 4/16/15 | 11,250,000 | $ | 16,684,216 | $ | 123,312 | |||||||
| Credit Suisse International: British Pound 4/9/15 | 10,790,000 | 16,002,848 | 657,344 | |||||||||
| HSBC Securities (USA), Inc.: British Pound 4/9/15 | 8,090,000 | 11,998,428 | 337,285 | |||||||||
| JPMorgan Chase & Co.: British Pound 4/16/15 | 9,527,000 | 14,128,936 | (13,790) | |||||||||
| RBC Capital Markets Corp.: British Pound 4/16/15 | 9,100,000 | 13,495,677 | (22,217) | |||||||||
| Total | $ | 72,310,105 | $ | 1,081,934 | ||||||||
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)
| Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| 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. | |
| † | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Growth and Income Fund | $ | 62,215,000 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Growth and Income Fund | ||||||||||||||
| Colony American Homes Holdings III LP | 1/30/13 | $ | 24,057,693 | $ | 27,631,712 | 0.6 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Growth and Income Fund | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | 34,425,000 | 190,715,618 | (202,983,618) | 22,157,000 | $ | – | $ | 6,762 | $ | 22,157,000 | |||||||||||
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Growth and Income Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Beverages | $ | 46,159,695 | $ | 49,554,618 | $ | – | |||||
| Insurance | 38,442,270 | 60,419,773 | – | ||||||||
| Real Estate Management & Development | – | – | 27,631,712 | ||||||||
| All Other | 4,034,338,187 | – | – | ||||||||
Preferred Stocks | – | 85,212,169 | – | ||||||||
Investment Companies | – | 22,157,000 | – | ||||||||
| Total Investments in Securities | $ | 4,118,940,152 | $ | 217,343,560 | $ | 27,631,712 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,117,941 | $ | – | |||||
Total Assets | $ | 4,118,940,152 | $ | 218,461,501 | $ | 27,631,712 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 36,007 | $ | – | |||||
| (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 | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Growth and Income Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 3,061,669,050 | ||
| Unaffiliated investments, at value | $ | 4,341,758,424 | ||
| Affiliated investments, at value | 22,157,000 | |||
| Cash | 469,095 | |||
| Forward currency contracts | 1,117,941 | |||
| Closed foreign currency contracts | 56,547 | |||
| Non-interested Trustees’ deferred compensation | 85,727 | |||
| Receivables: | ||||
| Fund shares sold | 854,055 | |||
| Dividends | 7,170,368 | |||
| Dividends from affiliates | 126 | |||
| Foreign dividend tax reclaim | 87,947 | |||
| Other assets | 35,641 | |||
| Total Assets | 4,373,792,871 | |||
| Liabilities: | ||||
| Forward currency contracts | 36,007 | |||
| Payables: | ||||
| Investments purchased | 5,617,866 | |||
| Fund shares repurchased | 2,187,356 | |||
| Dividends | 431,293 | |||
| Advisory fees | 2,252,348 | |||
| Fund administration fees | 37,539 | |||
| Transfer agent fees and expenses | 886,063 | |||
| 12b-1 Distribution and shareholder servicing fees | 31,127 | |||
| Non-interested Trustees’ fees and expenses | 27,142 | |||
| Non-interested Trustees’ deferred compensation fees | 85,727 | |||
| Accrued expenses and other payables | 306,795 | |||
| Total Liabilities | 11,899,263 | |||
| Net Assets | $ | 4,361,893,608 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Growth and Income Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,871,625,158 | ||
| Undistributed net investment income/(loss) | (798,646) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 187,805,647 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,303,261,449 | |||
| Total Net Assets | $ | 4,361,893,608 | ||
| Net Assets - Class A Shares | $ | 27,392,817 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 564,802 | |||
Net Asset Value Per Share(1) | $ | 48.50 | ||
Maximum Offering Price Per Share(2) | $ | 51.46 | ||
| Net Assets - Class C Shares | $ | 20,246,376 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 420,622 | |||
Net Asset Value Per Share(1) | $ | 48.13 | ||
| Net Assets - Class D Shares | $ | 2,726,254,662 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 56,181,721 | |||
| Net Asset Value Per Share | $ | 48.53 | ||
| Net Assets - Class I Shares | $ | 55,126,704 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,135,754 | |||
| Net Asset Value Per Share | $ | 48.54 | ||
| Net Assets - Class R Shares | $ | 3,090,305 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 63,930 | |||
| Net Asset Value Per Share | $ | 48.34 | ||
| Net Assets - Class S Shares | $ | 28,802,383 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 593,972 | |||
| Net Asset Value Per Share | $ | 48.49 | ||
| Net Assets - Class T Shares | $ | 1,500,980,361 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 30,945,768 | |||
| Net Asset Value Per Share | $ | 48.50 | ||
| (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 March 31, 2015 (unaudited) | Janus Growth and Income Fund | |||
| Investment Income: | ||||
| Interest | $ | 265,850 | ||
| Dividends | 63,950,470 | |||
| Dividends from affiliates | 6,762 | |||
| Other income | 13 | |||
| Foreign tax withheld | (14,205) | |||
| Total Investment Income | 64,208,890 | |||
| Expenses: | ||||
| Advisory fees | 13,102,276 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 33,979 | |||
| Class C Shares | 93,154 | |||
| Class R Shares | 8,359 | |||
| Class S Shares | 39,164 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 1,621,292 | |||
| Class R Shares | 4,179 | |||
| Class S Shares | 39,164 | |||
| Class T Shares | 1,911,949 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 7,035 | |||
| Class C Shares | 6,288 | |||
| Class I Shares | 23,487 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,603 | |||
| Class C Shares | �� | 1,398 | ||
| Class D Shares | 308,660 | |||
| Class I Shares | 1,064 | |||
| Class R Shares | 46 | |||
| Class S Shares | 413 | |||
| Class T Shares | 11,264 | |||
| Shareholder reports expense | 322,631 | |||
| Registration fees | 72,831 | |||
| Custodian fees | 14,043 | |||
| Professional fees | 46,889 | |||
| Non-interested Trustees’ fees and expenses | 50,542 | |||
| Fund administration fees | 180,432 | |||
| Other expenses | 113,405 | |||
| Total Expenses | 18,015,547 | |||
| Net Expenses | 18,015,547 | |||
| Net Investment Income/(Loss) | 46,193,343 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 268,979,325 | |||
| Total Net Realized Gain/(Loss) on Investments | 268,979,325 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (92,620,072) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (92,620,072) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 222,552,596 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Growth and | ||||||||
| Income Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 46,193,343 | $ | 88,188,829 | ||||
| Net realized gain/(loss) on investments | 268,979,325 | 194,416,720 | ||||||
| Change in unrealized net appreciation/depreciation | (92,620,072) | 367,046,598 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 222,552,596 | 649,652,147 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (355,466) | (454,067) | ||||||
| Class C Shares | (167,521) | (146,669) | ||||||
| Class D Shares | (37,177,408) | (46,552,060) | ||||||
| Class I Shares | (787,853) | (888,710) | ||||||
| Class R Shares | (34,220) | (38,958) | ||||||
| Class S Shares | (359,057) | (558,599) | ||||||
| Class T Shares | (20,355,677) | (25,868,230) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (174,363) | – | ||||||
| Class C Shares | (118,913) | – | ||||||
| Class D Shares | (17,078,208) | – | ||||||
| Class I Shares | (353,395) | – | ||||||
| Class R Shares | (21,283) | – | ||||||
| Class S Shares | (197,570) | – | ||||||
| Class T Shares | (9,801,010) | – | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (86,981,944) | (74,507,293) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 2,461,084 | 4,755,508 | ||||||
| Class C Shares | 5,154,754 | 2,127,955 | ||||||
| Class D Shares | 46,192,392 | 80,905,688 | ||||||
| Class I Shares | 4,537,824 | 27,389,044 | ||||||
| Class R Shares | 216,218 | 861,956 | ||||||
| Class S Shares | 2,082,506 | 4,313,084 | ||||||
| Class T Shares | 44,219,753 | 173,999,616 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 509,674 | 440,574 | ||||||
| Class C Shares | 257,322 | 130,017 | ||||||
| Class D Shares | 52,984,763 | 45,452,587 | ||||||
| Class I Shares | 983,332 | 778,248 | ||||||
| Class R Shares | 55,503 | 38,805 | ||||||
| Class S Shares | 554,649 | 556,882 | ||||||
| Class T Shares | 29,237,871 | 25,101,134 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (2,830,119) | (8,396,886) | ||||||
| Class C Shares | (2,156,502) | (1,813,256) | ||||||
| Class D Shares | (119,758,980) | (230,126,416) | ||||||
| Class I Shares | (6,849,679) | (10,104,944) | ||||||
| Class R Shares | (517,550) | (739,266) | ||||||
| Class S Shares | (8,209,834) | (15,273,822) | ||||||
| Class T Shares | (158,637,275) | (264,072,315) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (109,512,294) | (163,675,807) | ||||||
| Net Increase/(Decrease) in Net Assets | 26,058,358 | 411,469,047 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 4,335,835,250 | 3,924,366,203 | ||||||
| End of period | $ | 4,361,893,608 | $ | 4,335,835,250 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (798,646) | $ | 12,245,213 | ||||
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 March 31, | Janus Growth and | |||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Income Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $47.03 | $40.97 | $34.28 | $26.25 | $28.50 | $26.47 | $23.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.48(3) | 0.88(3) | 0.70 | 0.34 | 0.27 | 0.25 | 0.03 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.92 | 5.92 | 6.62 | 8.04 | (2.25) | 2.03 | 3.23 | |||||||||||||||||||||||
| Total from Investment Operations | 2.40 | 6.80 | 7.32 | 8.38 | (1.98) | 2.28 | 3.26 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.62) | (0.74) | (0.63) | (0.35) | (0.27) | (0.25) | (0.03) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.93) | (0.74) | (0.63) | (0.35) | (0.27) | (0.25) | (0.03) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.50 | $47.03 | $40.97 | $34.28 | $26.25 | $28.50 | $26.47 | |||||||||||||||||||||||
| Total Return* | 5.16% | 16.69% | 21.56% | 32.02% | (7.08)% | 8.68% | 14.02% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $27,393 | $26,418 | $25,749 | $25,678 | $20,936 | $18,894 | $19,157 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $27,258 | $28,164 | $22,648 | $22,087 | $22,536 | $18,803 | $19,612 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.94% | 0.96% | 0.97% | 1.00% | 0.96% | 1.04% | 1.16% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.94% | 0.96% | 0.96% | 0.97% | 0.94% | 1.00% | 0.98% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.00% | 1.96% | 2.08% | 1.24% | 0.92% | 0.99% | 0.31% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | Janus Growth and | |||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Income Fund | |||||||||||||||||||||||||||||
| and the period ended October 31. 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.67 | $40.70 | $34.13 | $26.16 | $28.43 | $26.42 | $23.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.29(3) | 0.52(3) | 0.36 | 0.11 | 0.07 | 0.06 | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.91 | 5.88 | 6.60 | 8.00 | (2.28) | 2.05 | 3.21 | |||||||||||||||||||||||
| Total from Investment Operations | 2.20 | 6.40 | 6.96 | 8.11 | (2.21) | 2.11 | 3.18 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.43) | (0.43) | (0.39) | (0.14) | (0.06) | (0.10) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.74) | (0.43) | (0.39) | (0.14) | (0.06) | (0.10) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.13 | $46.67 | $40.70 | $34.13 | $26.16 | $28.43 | $26.42 | |||||||||||||||||||||||
| Total Return* | 4.75% | 15.77% | 20.53% | 31.03% | (7.80)% | 8.00% | 13.68% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $20,246 | $16,454 | $13,964 | $11,850 | $10,060 | $4,824 | $4,760 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $18,682 | $15,369 | $12,399 | $11,477 | $9,952 | $4,999 | $4,673 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.71% | 1.76% | 1.82% | 1.85% | 1.70% | 1.82% | 2.08% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.71% | 1.76% | 1.80% | 1.72% | 1.70% | 1.74% | 1.73% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.21% | 1.16% | 1.23% | 0.50% | 0.17% | 0.28% | (0.43)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
16 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended | Janus Growth and | |||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Income Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $47.06 | $40.99 | $34.29 | $26.25 | $28.50 | $27.37 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.52(2) | 0.96(2) | 0.75 | 0.41 | 0.31 | 0.27 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.92 | 5.92 | 6.63 | 8.02 | (2.24) | 1.11 | ||||||||||||||||||||
| Total from Investment Operations | 2.44 | 6.88 | 7.38 | 8.43 | (1.93) | 1.38 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.66) | (0.81) | (0.68) | (0.39) | (0.32) | (0.25) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (0.97) | (0.81) | (0.68) | (0.39) | (0.32) | (0.25) | ||||||||||||||||||||
| Net Asset Value, End of Period | $48.53 | $47.06 | $40.99 | $34.29 | $26.25 | $28.50 | ||||||||||||||||||||
| Total Return* | 5.25% | 16.89% | 21.76% | 32.23% | (6.93)% | 5.09% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,726,255 | $2,663,380 | $2,414,285 | $2,125,471 | $1,757,879 | $1,783,138 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,709,576 | $2,594,398 | $2,248,201 | $2,046,072 | $2,045,514 | $1,787,046 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.79% | 0.79% | 0.80% | 0.80% | 0.80% | 0.83% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.79% | 0.79% | 0.80% | 0.80% | 0.80% | 0.83% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.15% | 2.12% | 2.23% | 1.42% | 1.06% | 1.56% | ||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | Janus Growth and | |||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Income Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $47.08 | $41.00 | $34.29 | $26.25 | $28.50 | $26.48 | $23.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.53(2) | 0.99(2) | 0.77 | 0.46 | 0.35 | 0.36 | 0.04 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.92 | 5.92 | 6.65 | 7.99 | (2.26) | 2.01 | 3.24 | |||||||||||||||||||||||
| Total from Investment Operations | 2.45 | 6.91 | 7.42 | 8.45 | (1.91) | 2.37 | 3.28 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.68) | (0.83) | (0.71) | (0.41) | (0.34) | (0.35) | (0.04) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.99) | (0.83) | (0.71) | (0.41) | (0.34) | (0.35) | (0.04) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.54 | $47.08 | $41.00 | $34.29 | $26.25 | $28.50 | $26.48 | |||||||||||||||||||||||
| Total Return* | 5.27% | 16.96% | 21.88% | 32.31% | (6.85)% | 9.00% | 14.12% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $55,127 | $54,748 | $31,066 | $23,999 | $23,016 | $65,031 | $6,761 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $55,377 | $45,976 | $25,489 | $25,945 | $57,356 | $44,786 | $2,059 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.71% | 0.73% | 0.73% | 0.76% | 0.71% | 0.72% | 0.73% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.71% | 0.73% | 0.71% | 0.72% | 0.70% | 0.72% | 0.67% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.22% | 2.19% | 2.33% | 1.48% | 1.18% | 1.49% | 0.42% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class R Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Growth and | |||||||||||||||||||||||||||||
| (unaudited), each year or period ended September 30 and the | Income Fund | |||||||||||||||||||||||||||||
| period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.86 | $40.85 | $34.22 | $26.22 | $28.48 | $26.45 | $23.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.38(3) | 0.68(3) | 0.52 | 0.22 | 0.12 | 0.15 | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.91 | 5.92 | 6.61 | 8.00 | (2.23) | 2.03 | 3.23 | |||||||||||||||||||||||
| Total from Investment Operations | 2.29 | 6.60 | 7.13 | 8.22 | (2.11) | 2.18 | 3.22 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.50) | (0.59) | (0.50) | (0.22) | (0.15) | (0.15) | (0.01) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.81) | (0.59) | (0.50) | (0.22) | (0.15) | (0.15) | (0.01) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.34 | $46.86 | $40.85 | $34.22 | $26.22 | $28.48 | $26.45 | |||||||||||||||||||||||
| Total Return* | 4.92% | 16.22% | 21.02% | 31.42% | (7.49)% | 8.27% | 13.83% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,090 | $3,225 | $2,685 | $2,382 | $1,931 | $2,000 | $1,789 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,353 | $2,932 | $2,518 | $2,355 | $2,691 | $2,026 | $1,853 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.38% | 1.38% | 1.39% | 1.40% | 1.39% | 1.44% | 1.45% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.38% | 1.38% | 1.39% | 1.40% | 1.39% | 1.43% | 1.44% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.58% | 1.52% | 1.64% | 0.82% | 0.46% | 0.58% | (0.14)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, | Janus Growth and | |||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Income Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $47.01 | $40.96 | $34.29 | $26.26 | $28.51 | $26.46 | $23.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.44(3) | 0.79(3) | 0.63 | 0.32 | 0.21 | 0.22 | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.92 | 5.94 | 6.62 | 8.00 | (2.25) | 2.03 | 3.23 | |||||||||||||||||||||||
| Total from Investment Operations | 2.36 | 6.73 | 7.25 | 8.32 | (2.04) | 2.25 | 3.24 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.57) | (0.68) | (0.58) | (0.29) | (0.21) | (0.20) | (0.02) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.88) | (0.68) | (0.58) | (0.29) | (0.21) | (0.20) | (0.02) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.49 | $47.01 | $40.96 | $34.29 | $26.26 | $28.51 | $26.46 | |||||||||||||||||||||||
| Total Return* | 5.06% | 16.50% | 21.33% | 31.76% | (7.26)% | 8.52% | 13.94% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $28,802 | $33,405 | $38,526 | $37,945 | $46,970 | $58,402 | $66,211 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $31,417 | $37,191 | $38,196 | $46,185 | $62,132 | $63,457 | $66,895 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.13% | 1.13% | 1.14% | 1.13% | 1.15% | 1.18% | 1.20% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.13% | 1.12% | 1.14% | 1.13% | 1.15% | 1.18% | 1.19% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.82% | 1.77% | 1.89% | 1.06% | 0.71% | 0.81% | 0.10% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
18 | MARCH 31, 2015
Table of Contents
Class T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | Janus Growth and | |||||||||||||||||||||||||||||
| or period ended September 30 and the year | Income Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $47.04 | $40.97 | $34.28 | $26.25 | $28.50 | $26.47 | $21.90 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.50(2) | 0.92(2) | 0.72 | 0.38 | 0.28 | 0.28 | 0.28 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.91 | 5.93 | 6.63 | 8.01 | (2.25) | 2.03 | 4.56 | |||||||||||||||||||||||
| Total from Investment Operations | 2.41 | 6.85 | 7.35 | 8.39 | (1.97) | 2.31 | 4.84 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.64) | (0.78) | (0.66) | (0.36) | (0.28) | (0.28) | (0.27) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.31) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.95) | (0.78) | (0.66) | (0.36) | (0.28) | (0.28) | (0.27) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $48.50 | $47.04 | $40.97 | $34.28 | $26.25 | �� | $28.50 | $26.47 | ||||||||||||||||||||||
| Total Return* | 5.17% | 16.81% | 21.66% | 32.07% | (7.03)% | 8.79% | 22.32% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,500,980 | $1,538,205 | $1,398,091 | $1,330,261 | $1,253,824 | $1,615,457 | $3,622,998 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,533,761 | $1,503,853 | $1,347,857 | $1,352,274 | $1,639,387 | $2,383,198 | $3,231,514 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.87% | 0.88% | 0.89% | 0.90% | 0.90% | 0.90% | 0.90% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.87% | 0.87% | 0.88% | 0.90% | 0.90% | 0.90% | 0.89% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 2.07% | 2.04% | 2.15% | 1.31% | 0.96% | 0.90% | 1.22% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 16% | 23% | 33% | 45% | 65% | 43% | 40% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 19
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Growth and 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 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market
20 | MARCH 31, 2015
Table of Contents
quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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
Janus Investment Fund | 21
Table of Contents
Notes to Financial Statements (unaudited) (continued)
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed quarterly, 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 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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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.
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The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for
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Notes to Financial Statements (unaudited) (continued)
nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Growth and Income Fund | $ | 71,238,165 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Growth and Income Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 1,117,941 | Forward currency contracts | $ | 36,007 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Janus Growth and Income Fund | ||||
| Currency Contracts | $ | 5,446,553 | ||
| 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 | |||
Janus Growth and Income Fund | ||||
| Currency Contracts | $ | 461,170 | ||
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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Notes to Financial Statements (unaudited) (continued)
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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ | 123,312 | $ | – | $ | – | $ | 123,312 | ||||||||||
| Credit Suisse International | 657,344 | – | – | 657,344 | ||||||||||||||
| HSBC Securities (USA), Inc. | 337,285 | – | – | 337,285 | ||||||||||||||
| Total | 1,117,941 | – | – | 1,117,941 | ||||||||||||||
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. | $ | 13,790 | $ | – | $ | – | $ | 13,790 | ||||||||||
| RBC Capital Markets Corp. | 22,217 | – | – | 22,217 | ||||||||||||||
| Total | 36,007 | – | – | 36,007 | ||||||||||||||
| (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.
| 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 Growth and Income Fund | All Asset Levels | 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, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes,
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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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Growth and Income 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 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
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Growth and Income Fund | $ | 3,557 | ||||
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
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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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Growth and Income Fund | $ | 144 | ||||
| 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 March 31, 2015 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 Growth and Income Fund | $3,044,519,045 | $1,330,731,673 | $(11,335,294) | $1,319,396,379 | ||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
| Accumulated | ||||||||||||||||||||||||||||||
| September 30, | September 30, | September 30, | September 30, | No Expiration | Capital | |||||||||||||||||||||||||
| Fund | 2015 | 2016 | 2017 | 2018 | Short-Term | Long-Term | Losses | |||||||||||||||||||||||
Janus Growth and Income Fund(1) | $(1,281,001) | $(7,963,315) | $(57,148,505) | $(462,850) | $– | $– | $(66,855,671) | |||||||||||||||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(62,874,013) should be available in the next fiscal year. |
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Notes to Financial Statements (unaudited) (continued)
| 6. | Capital Share Transactions |
| Janus Growth | ||||||||||
| For the period ended March 31 (unaudited) | and Income Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 51,482 | 107,492 | ||||||||
| Reinvested dividends and distributions | 10,797 | 9,793 | ||||||||
| Shares repurchased | (59,157) | (184,110) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 3,122 | (66,825) | ||||||||
| Shares Outstanding, Beginning of Period | 561,680 | 628,505 | ||||||||
| Shares Outstanding, End of Period | 564,802 | 561,680 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 108,134 | 47,912 | ||||||||
| Reinvested dividends and distributions | 5,511 | 2,914 | ||||||||
| Shares repurchased | (45,563) | (41,376) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 68,082 | 9,450 | ||||||||
| Shares Outstanding, Beginning of Period | 352,540 | 343,090 | ||||||||
| Shares Outstanding, End of Period | 420,622 | 352,540 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 960,771 | 1,811,609 | ||||||||
| Reinvested dividends and distributions | 1,121,146 | 1,009,156 | ||||||||
| Shares repurchased | (2,493,157) | (5,132,620) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (411,240) | (2,311,855) | ||||||||
| Shares Outstanding, Beginning of Period | 56,592,961 | 58,904,816 | ||||||||
| Shares Outstanding, End of Period | 56,181,721 | 56,592,961 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 94,672 | 614,463 | ||||||||
| Reinvested dividends and distributions | 20,800 | 17,247 | ||||||||
| Shares repurchased | (142,670) | (226,554) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (27,198) | 405,156 | ||||||||
| Shares Outstanding, Beginning of Period | 1,162,952 | 757,796 | ||||||||
| Shares Outstanding, End of Period | 1,135,754 | 1,162,952 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 4,532 | 18,862 | ||||||||
| Reinvested dividends and distributions | 1,182 | 864 | ||||||||
| Shares repurchased | (10,615) | (16,618) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (4,901) | 3,108 | ||||||||
| Shares Outstanding, Beginning of Period | 68,831 | 65,723 | ||||||||
| Shares Outstanding, End of Period | 63,930 | 68,831 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 43,678 | 96,624 | ||||||||
| Reinvested dividends and distributions | 11,765 | 12,422 | ||||||||
| Shares repurchased | (172,041) | (339,037) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (116,598) | (229,991) | ||||||||
| Shares Outstanding, Beginning of Period | 710,570 | 940,561 | ||||||||
| Shares Outstanding, End of Period | 593,972 | 710,570 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 923,658 | 3,910,299 | ||||||||
| Reinvested dividends and distributions | 619,221 | 557,593 | ||||||||
| Shares repurchased | (3,298,369) | (5,890,213) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (1,755,490) | (1,422,321) | ||||||||
| Shares Outstanding, Beginning of Period | 32,701,258 | 34,123,579 | ||||||||
| Shares Outstanding, End of Period | 30,945,768 | 32,701,258 | ||||||||
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| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Growth and Income Fund | $ | 717,102,105 | $ | 851,348,485 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87821 | 125-24-93048 05-15 |
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semiannual report
March 31, 2015
Janus Research Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Research Fund
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Janus Research Fund (unaudited)
FUND SNAPSHOT We seek to create a high-conviction portfolio reflecting the best ideas of the Janus research team. | Team Based Approach Led by Carmel Wellso Director of Research |
PERFORMANCE OVERVIEW
Janus Research Fund’s Class T Shares returned 11.99% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell 1000 Growth Index, returned 8.81%, and its secondary benchmark, the S&P 500 Index, returned 5.93% during the period.
MARKET ENVIRONMENT
Volatility marked the early part of the period as investors considered the possibility that the autumn’s precipitous slide in crude prices was a consequence of declining global growth expectations. Indeed, growth data outside of the United States remained muted. Conditions in Europe contributed to investor angst as prices within the eurozone entered deflationary territory. While European Central Bank (ECB) President Mario Draghi threw European investors a lifeline in the form of a 1 trillion euro quantitative easing program, he did the prospects of the U.S. dollar no favors, as it continued to surge against the euro and most other major currencies. This caused investors to worry that global earnings of U.S. companies would suffer. Major U.S. indices reached record levels in early March, only to pull back on concerns that yet another strong jobs report would entice the Federal Reserve (Fed) to raise interest rates as early as June. Those concerns were later assuaged as the Fed’s late-month statement, while jettisoning the term “patience” when alluding to its time frame for initiating rate hikes, revised growth expectations downward to such a degree that investors interpreted the overall message as dovish.
PERFORMANCE DISCUSSION
Our Fund, which represents the best ideas of our seven sector teams, focuses on companies that we believe can generate multiyear growth. Investing in companies with characteristics such as brand power and competitive position, we believe, can drive superior long-term performance. The diversified nature of the portfolio is also designed to minimize macroeconomic risks, such as we saw during the period. Six of our seven research sectors contributed to relative performance, with only our industrial holdings lagging those within the primary benchmark.
On an individual company basis, Apple was the period’s largest contributor. The electronic-device company benefited from positive sentiment in the aftermath of its astounding fourth quarter earnings results, the first full reporting period to include its highly popular iPhone 6, launched in September. In February, the company’s stock reached a new record, pushing its market capitalization above $700 billion. We think Apple still has strong opportunities as its ecosystem continues to attract new and potentially long-term subscribers onto its platform and increase its addressable market as lower price points draw new customers.
Pharmacyclics is among the many health care companies that aided outperformance. The company’s stock surged in January on consensus-beating earnings from the prior quarter as well as upbeat guidance for its blood-cancer drug, Imbruvica. It was then announced that AbbVie would acquire Pharmacyclics for $21 billion.
Home improvement retailer Lowe’s was a positive contributor. The company reported solid results early in the period and more importantly raised full-year guidance. It stated plans to use expected increases in free cash flow on a share repurchase program. Additionally, several operational initiatives over the past few years have begun to bear fruit and the company also has benefited from a continued recovery in the U.S. housing sector.
Internet giant Google endured a tough 2014, and despite seeing shares recover in early 2015, the company remained a leading detractor to Fund performance. The company endured a bout of headline risk, mainly emanating from Europe as regulators complained about its purported market power. We continue to favorably view Google’s strong position in the mobile search market, which is augmented by its Android mobile device software.
Several exploration and production companies were negatively impacted by weak energy prices. Among them was Noble Energy. While we like that Noble has a diversified, global production base, we no longer hold the company in the portfolio, as we view the prospects of other energy companies and other sectors as more promising at this time.
Chemical producer LyondellBasell was also impacted by the negative mood toward the energy complex. Investors feared prices for key products such as ethylene would face downward pressure as they are priced off crude, which in turn would squeeze the company’s margins. We continue to like the firm for its reliance upon natural gas,
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Janus Research Fund (unaudited)
which remains well supplied given high North American production levels. We also believe in management’s commitment to returning capital to shareholders.
OUTLOOK
The Fed left some uncertainty about when it would lift rates, leading to some concern about the economic recovery. The corporate outlook has become less sanguine in some sectors. Energy clearly is under pressure. Industrial firms face the double barrel pressure of a slowdown in their sales to oil companies and a loss of global competitiveness with a stronger dollar. Similarly, China is no longer the growth engine it once was for U.S. firms.
We cannot argue valuations are cheap, save for a few areas such as financials and deeply cyclical, commodity-exposed companies. But valuations are not extreme either, especially compared to the alternative asset classes.
Biotech merger and acquisition activity is continuing but we expect to see deals elsewhere and that should drive valuation. The Kraft-Heinz deal announced in March valued a slow-growing but quality brand-name business at more than 20 times earnings. Multiples remain close together: Find the companies that have a path to growth or that can help another company grow and you have the potential to make money in equities.
Thank you for your investment in Janus Research Fund.
2 | MARCH 31, 2015
Table of Contents
(unaudited)
Janus Research Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Apple, Inc. | 1.52% | |||
| Pharmacyclics, Inc. | 0.93% | |||
| Lowe’s Cos., Inc. | 0.62% | |||
| Biogen, Inc. | 0.56% | |||
| Kroger Co. | 0.48% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Google, Inc. – Class A | –0.26% | |||
| Noble Energy, Inc. | –0.22% | |||
| LyondellBasell Industries NV – Class A | –0.18% | |||
| Core Laboratories NV | –0.17% | |||
| Enterprise Products Partners LP | –0.15% | |||
4 Top Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Health Care | 1.43% | 15.23% | 15.15% | |||||||||
| Technology | 1.28% | 19.16% | 19.29% | |||||||||
| Consumer | 0.78% | 19.18% | 19.58% | |||||||||
| Energy | 0.38% | 4.78% | 4.77% | |||||||||
3 Bottom Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Industrials | –0.23% | 16.53% | 16.79% | |||||||||
| Communications | 0.07% | 16.12% | 16.38% | |||||||||
| Financials | 0.17% | 7.84% | 7.98% | |||||||||
| 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. | ||
| * | The sectors listed above reflect those covered by the seven analyst teams who comprise the Janus Research Team. |
Janus Investment Fund | 3
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Janus Research Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 6.2% | |||
| Google, Inc. – Class C Internet Software & Services | 3.3% | |||
| Biogen, Inc. Biotechnology | 2.3% | |||
| Amgen, Inc. Biotechnology | 2.0% | |||
| Facebook, Inc. – Class A Internet Software & Services | 2.0% | |||
| 15.8% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (0.8)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
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(unaudited)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Research Fund – Class A Shares | |||||||||||||
| NAV | 11.94% | 18.38% | 15.55% | 9.96% | 11.24% | 0.93% | |||||||
| MOP | 5.49% | 11.58% | 14.19% | 9.31% | 10.94% | ||||||||
| Janus Research Fund – Class C Shares | |||||||||||||
| NAV | 11.53% | 17.51% | 14.69% | 9.17% | 10.46% | 1.67% | |||||||
| CDSC | 10.56% | 16.51% | 14.69% | 9.17% | 10.46% | ||||||||
| Janus Research Fund – Class D Shares(1) | 12.05% | 18.63% | 15.80% | 10.19% | 11.48% | 0.72% | |||||||
| Janus Research Fund – Class I Shares | 12.10% | 18.72% | 15.89% | 10.15% | 11.45% | 0.65% | |||||||
| Janus Research Fund – Class N Shares | 12.15% | 18.82% | 15.69% | 10.15% | 11.45% | 0.55% | |||||||
| Janus Research Fund – Class S Shares | 11.86% | 18.24% | 15.39% | 9.80% | 11.09% | 1.06% | |||||||
| Janus Research Fund – Class T Shares | 11.99% | 18.49% | 15.69% | 10.15% | 11.45% | 0.80% | |||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 15.63% | 9.36% | 8.88% | ||||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 9.43% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Growth Funds | – | 155/1,759 | 246/1,538 | 188/1,334 | 33/568 | ||||||||
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 | 5
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Janus Research Fund (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.
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 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.
© 2015 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.
Effective December 15, 2014, Carmel Wellso leads the Janus Research Team for the Fund.
See “Useful Information About Your Fund Report.”
| * | The Fund’s inception date – May 3, 1993 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,119.40 | $ | 5.60 | $ | 1,000.00 | $ | 1,019.65 | $ | 5.34 | 1.06% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,115.30 | $ | 9.76 | $ | 1,000.00 | $ | 1,015.71 | $ | 9.30 | 1.85% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,120.50 | $ | 4.65 | $ | 1,000.00 | $ | 1,020.54 | $ | 4.43 | 0.88% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,121.00 | $ | 4.12 | $ | 1,000.00 | $ | 1,021.04 | $ | 3.93 | 0.78% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,121.50 | $ | 3.76 | $ | 1,000.00 | $ | 1,021.39 | $ | 3.58 | 0.71% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,118.60 | $ | 6.34 | $ | 1,000.00 | $ | 1,018.95 | $ | 6.04 | 1.20% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,119.90 | $ | 5.07 | $ | 1,000.00 | $ | 1,020.14 | $ | 4.84 | 0.96% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Research Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 99.3% | ||||||||||
| Aerospace & Defense – 1.8% | ||||||||||
| 244,969 | Precision Castparts Corp. | $ | 51,443,490 | |||||||
| 278,585 | United Technologies Corp. | 32,650,162 | ||||||||
| 84,093,652 | ||||||||||
| Airlines – 1.1% | ||||||||||
| 761,573 | United Continental Holdings, Inc.* | 51,215,784 | ||||||||
| Auto Components – 0.5% | ||||||||||
| 309,597 | Delphi Automotive PLC | 24,687,265 | ||||||||
| Beverages – 1.5% | ||||||||||
| 189,583 | Brown-Forman Corp. – Class B | 17,128,824 | ||||||||
| 558,717 | PepsiCo, Inc. | 53,424,520 | ||||||||
| 70,553,344 | ||||||||||
| Biotechnology – 7.5% | ||||||||||
| 609,874 | Amgen, Inc. | 97,488,359 | ||||||||
| 259,007 | Biogen, Inc.* | 109,363,116 | ||||||||
| 723,261 | Celgene Corp.* | 83,377,528 | ||||||||
| 1,738,495 | Ironwood Pharmaceuticals, Inc.* | 27,815,920 | ||||||||
| 88,450 | Regeneron Pharmaceuticals, Inc.* | 39,933,406 | ||||||||
| 357,978,329 | ||||||||||
| Building Products – 0.5% | ||||||||||
| 397,394 | AO Smith Corp | 26,092,890 | ||||||||
| Capital Markets – 2.2% | ||||||||||
| 65,828 | BlackRock, Inc. | 24,082,516 | ||||||||
| 1,013,023 | Blackstone Group LP | 39,396,464 | ||||||||
| 885,204 | E*TRADE Financial Corp.* | 25,277,000 | ||||||||
| 360,394 | LPL Financial Holdings, Inc. | 15,806,881 | ||||||||
| 104,562,861 | ||||||||||
| Chemicals – 3.6% | ||||||||||
| 418,360 | Air Products & Chemicals, Inc. | 63,289,501 | ||||||||
| 376,022 | LyondellBasell Industries NV – Class A | 33,014,731 | ||||||||
| 287,716 | Monsanto Co. | 32,379,559 | ||||||||
| 187,337 | PPG Industries, Inc. | 42,251,987 | ||||||||
| 170,935,778 | ||||||||||
| Commercial Banks – 0.4% | ||||||||||
| 366,039 | PacWest Bancorp | 17,163,569 | ||||||||
| Communications Equipment – 2.5% | ||||||||||
| 903,403 | CommScope Holding Co., Inc.* | 25,783,122 | ||||||||
| 513,393 | Motorola Solutions, Inc. | 34,227,911 | ||||||||
| 835,130 | QUALCOMM, Inc. | 57,907,914 | ||||||||
| 117,918,947 | ||||||||||
| Consumer Finance – 0.4% | ||||||||||
| 273,077 | American Express Co. | 21,332,775 | ||||||||
| Containers & Packaging – 1.0% | ||||||||||
| 895,808 | Crown Holdings, Inc.* | 48,391,548 | ||||||||
| Diversified Financial Services – 0.4% | ||||||||||
| 87,600 | Intercontinental Exchange, Inc. | 20,434,452 | ||||||||
| Electric Utilities – 0.4% | ||||||||||
| 465,960 | Brookfield Infrastructure Partners LP | 21,219,818 | ||||||||
| Electrical Equipment – 1.3% | ||||||||||
| 1,091,761 | Sensata Technologies Holding NV* | 62,721,669 | ||||||||
| Electronic Equipment, Instruments & Components – 3.0% | ||||||||||
| 988,730 | Amphenol Corp. – Class A | 58,265,859 | ||||||||
| 791,244 | National Instruments Corp. | 25,351,458 | ||||||||
| 840,298 | TE Connectivity, Ltd. (U.S. Shares) | 60,182,142 | ||||||||
| 143,799,459 | ||||||||||
| Energy Equipment & Services – 0.6% | ||||||||||
| 451,013 | Baker Hughes, Inc. | 28,675,407 | ||||||||
| Food & Staples Retailing – 2.6% | ||||||||||
| 830,295 | Kroger Co. | 63,650,415 | ||||||||
| 1,031,893 | Sysco Corp. | 38,933,323 | ||||||||
| 395,163 | Whole Foods Market, Inc. | 20,580,089 | ||||||||
| 123,163,827 | ||||||||||
| Food Products – 1.1% | ||||||||||
| 544,488 | Hershey Co. | 54,944,284 | ||||||||
| Health Care Equipment & Supplies – 0.9% | ||||||||||
| 2,466,712 | Boston Scientific Corp.* | 43,784,138 | ||||||||
| Health Care Providers & Services – 0.7% | ||||||||||
| 361,929 | Express Scripts Holding Co.* | 31,404,579 | ||||||||
| Health Care Technology – 0.6% | ||||||||||
| 231,412 | athenahealth, Inc.* | 27,628,279 | ||||||||
| Hotels, Restaurants & Leisure – 2.9% | ||||||||||
| 499,195 | Dunkin’ Brands Group, Inc. | 23,741,714 | ||||||||
| 398,553 | Las Vegas Sands Corp. | 21,936,357 | ||||||||
| 700,461 | Starbucks Corp. | 66,333,657 | ||||||||
| 346,517 | Starwood Hotels & Resorts Worldwide, Inc. | 28,934,169 | ||||||||
| 140,945,897 | ||||||||||
| Household Products – 1.5% | ||||||||||
| 1,021,965 | Colgate-Palmolive Co. | 70,863,053 | ||||||||
| Industrial Conglomerates – 1.2% | ||||||||||
| 347,994 | Danaher Corp. | 29,544,691 | ||||||||
| 152,536 | Roper Industries, Inc. | 26,236,192 | ||||||||
| 55,780,883 | ||||||||||
| Information Technology Services – 3.9% | ||||||||||
| 900,941 | Amdocs, Ltd. (U.S. Shares) | 49,011,191 | ||||||||
| 772,718 | MasterCard, Inc. – Class A | 66,755,108 | ||||||||
| 1,049,332 | Visa, Inc. – Class A | 68,636,806 | ||||||||
| 184,403,105 | ||||||||||
| Insurance – 0.7% | ||||||||||
| 330,633 | Aon PLC | 31,780,444 | ||||||||
| Internet & Catalog Retail – 2.5% | ||||||||||
| 183,998 | Amazon.com, Inc.* | 68,465,656 | ||||||||
| 42,302 | Priceline Group, Inc.* | 49,245,873 | ||||||||
| 117,711,529 | ||||||||||
| Internet Software & Services – 5.3% | ||||||||||
| 1,156,393 | Facebook, Inc. – Class A* | 95,072,850 | ||||||||
| 291,337 | Google, Inc. – Class C* | 159,652,676 | ||||||||
| 254,725,526 | ||||||||||
| Leisure Products – 0.3% | ||||||||||
| 670,784 | Mattel, Inc. | 15,327,414 | ||||||||
| Machinery – 2.3% | ||||||||||
| 870,022 | Colfax Corp.* | 41,526,150 | ||||||||
| 455,955 | Dover Corp. | 31,515,610 | ||||||||
| 1,415,461 | Rexnord Corp.* | 37,778,654 | ||||||||
| 110,820,414 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Media – 5.9% | ||||||||||
| 490,125 | CBS Corp. – Class B | $ | 29,716,279 | |||||||
| 1,592,131 | Comcast Corp. – Class A | 89,907,637 | ||||||||
| 166,569 | Time Warner Cable, Inc. | 24,965,362 | ||||||||
| 2,058,939 | Twenty-First Century Fox, Inc. – Class A | 69,674,496 | ||||||||
| 647,197 | Walt Disney Co. | 67,884,493 | ||||||||
| 282,148,267 | ||||||||||
| Oil, Gas & Consumable Fuels – 3.0% | ||||||||||
| 394,712 | Anadarko Petroleum Corp. | 32,686,101 | ||||||||
| 877,968 | Enterprise Products Partners LP | 28,911,486 | ||||||||
| 519,890 | MarkWest Energy Partners LP | 34,364,729 | ||||||||
| 341,536 | Phillips 66 | 26,844,730 | ||||||||
| 366,115 | Valero Energy Corp. | 23,292,236 | ||||||||
| 146,099,282 | ||||||||||
| Personal Products – 0.7% | ||||||||||
| 421,842 | Estee Lauder Cos., Inc. – Class A | 35,080,381 | ||||||||
| Pharmaceuticals – 5.8% | ||||||||||
| 897,944 | Bristol-Myers Squibb Co. | 57,917,388 | ||||||||
| 536,544 | Eli Lilly & Co. | 38,979,922 | ||||||||
| 672,882 | Endo International PLC* | 60,357,515 | ||||||||
| 167,779 | Jazz Pharmaceuticals PLC* | 28,990,534 | ||||||||
| 259,927 | Johnson & Johnson | 26,148,656 | ||||||||
| 510,808 | Mallinckrodt PLC* | 64,693,833 | ||||||||
| 277,087,848 | ||||||||||
| Professional Services – 0.5% | ||||||||||
| 223,003 | IHS, Inc. – Class A* | 25,368,821 | ||||||||
| Real Estate Investment Trusts (REITs) – 2.2% | ||||||||||
| 803,744 | American Tower Corp. | 75,672,498 | ||||||||
| 794,634 | Lexington Realty Trust | 7,811,252 | ||||||||
| 101,970 | Simon Property Group, Inc. | 19,949,411 | ||||||||
| 103,433,161 | ||||||||||
| Real Estate Management & Development – 0.4% | ||||||||||
| 126,959 | Jones Lang LaSalle, Inc. | 21,633,814 | ||||||||
| Road & Rail – 1.8% | ||||||||||
| 282,154 | Kansas City Southern | 28,802,281 | ||||||||
| 544,920 | Union Pacific Corp. | 59,020,285 | ||||||||
| 87,822,566 | ||||||||||
| Semiconductor & Semiconductor Equipment – 2.4% | ||||||||||
| 2,963,005 | Atmel Corp. | 24,385,531 | ||||||||
| 176,246 | Avago Technologies, Ltd. | 22,379,717 | ||||||||
| 622,235 | Freescale Semiconductor, Ltd.* | 25,362,299 | ||||||||
| 249,356 | KLA-Tencor Corp. | 14,534,961 | ||||||||
| 629,095 | Xilinx, Inc. | 26,610,719 | ||||||||
| 113,273,227 | ||||||||||
| Software – 4.1% | ||||||||||
| 338,549 | ANSYS, Inc.* | 29,856,636 | ||||||||
| 1,674,938 | Cadence Design Systems, Inc.* | 30,885,857 | ||||||||
| 104,967 | NetSuite, Inc.* | 9,736,739 | ||||||||
| 1,455,536 | Oracle Corp. | 62,806,378 | ||||||||
| 318,071 | Salesforce.com, Inc.* | 21,250,323 | ||||||||
| 547,060 | Solera Holdings, Inc. | 28,261,120 | ||||||||
| 98,447 | Tyler Technologies, Inc.* | 11,865,817 | ||||||||
| 194,662,870 | ||||||||||
| Specialty Retail – 6.4% | ||||||||||
| 68,205 | AutoZone, Inc.* | 46,526,723 | ||||||||
| 1,232,290 | Lowe’s Cos., Inc. | 91,670,053 | ||||||||
| 230,557 | Tiffany & Co. | 20,291,322 | ||||||||
| 733,183 | TJX Cos., Inc. | 51,359,469 | ||||||||
| 464,377 | Tractor Supply Co. | 39,499,908 | ||||||||
| 180,091 | Ulta Salon Cosmetics & Fragrance, Inc.* | 27,166,727 | ||||||||
| 347,419 | Williams-Sonoma, Inc. | 27,692,768 | ||||||||
| 304,206,970 | ||||||||||
| Technology Hardware, Storage & Peripherals – 6.5% | ||||||||||
| 2,377,525 | Apple, Inc. | 295,835,436 | ||||||||
| 587,926 | EMC Corp. | 15,027,388 | ||||||||
| 310,862,824 | ||||||||||
| Textiles, Apparel & Luxury Goods – 1.6% | ||||||||||
| 300,832 | Carter’s, Inc. | 27,817,935 | ||||||||
| 490,017 | NIKE, Inc. – Class B | 49,163,406 | ||||||||
| 76,981,341 | ||||||||||
| Tobacco – 0.9% | ||||||||||
| 866,217 | Altria Group, Inc. | 43,328,174 | ||||||||
| Trading Companies & Distributors – 0.9% | ||||||||||
| 390,942 | MSC Industrial Direct Co., Inc. – Class A | 28,226,012 | ||||||||
| 673,256 | NOW, Inc.*,# | 14,569,260 | ||||||||
| 42,795,272 | ||||||||||
| Wireless Telecommunication Services – 1.0% | ||||||||||
| 1,519,981 | T-Mobile U.S., Inc.* | 48,168,198 | ||||||||
| Total Common Stocks (cost $3,351,256,745) | 4,748,013,935 | |||||||||
| Investment Companies – 1.5% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 0.2% | ||||||||||
| 11,360,250 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 11,360,250 | ||||||||
| Money Markets – 1.3% | ||||||||||
| 59,724,975 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 59,724,975 | ||||||||
| Total Investment Companies (cost $71,085,225) | 71,085,225 | |||||||||
| Total Investments (total cost $3,422,341,970) – 100.8% | 4,819,099,160 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0.8)% | (39,790,422) | |||||||||
| Net Assets – 100% | $ | 4,779,308,738 | ||||||||
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)
| Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| 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. |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||||||||
Janus Research Fund | ||||||||||||||||||||||
| Janus Cash Collateral Fund LLC | – | 11,990,250 | (630,000) | 11,360,250 | $ | – | $ | – | $ | 11,360,250 | ||||||||||||
| Janus Cash Liquidity Fund LLC | 51,003,813 | 364,016,162 | (355,295,000) | 59,724,975 | – | 26,296 | 59,724,975 | |||||||||||||||
| Total | $ | – | $ | 26,296 | $ | 71,085,225 | ||||||||||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | |||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
| Janus Research Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | $4,748,013,935 | $ – | $ – | |||||
Investment Companies | – | 71,085,225 | – | |||||
Total Assets | $4,748,013,935 | $71,085,225 | $ – | |||||
10 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Research Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 3,422,341,970 | ||
Unaffiliated investments, at value(1) | $ | 4,748,013,935 | ||
| Affiliated investments, at value | 71,085,225 | |||
| Cash | 343,105 | |||
| Non-interested Trustees’ deferred compensation | 93,921 | |||
| Receivables: | ||||
| Fund shares sold | 3,158,160 | |||
| Dividends | 3,366,288 | |||
| Dividends from affiliates | 7,086 | |||
| Other assets | 34,957 | |||
| Total Assets | 4,826,102,677 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 2) | 11,360,250 | |||
| Payables: | ||||
| Investments purchased | 24,185,691 | |||
| Fund shares repurchased | 6,923,276 | |||
| Advisory fees | 2,947,459 | |||
| Fund administration fees | 40,867 | |||
| Transfer agent fees and expenses | 967,511 | |||
| 12b-1 Distribution and shareholder servicing fees | 11,975 | |||
| Non-interested Trustees’ fees and expenses | 27,130 | |||
| Non-interested Trustees’ deferred compensation fees | 93,921 | |||
| Accrued expenses and other payables | 235,859 | |||
| Total Liabilities | 46,793,939 | |||
| Net Assets | $ | 4,779,308,738 | ||
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 March 31, 2015 (unaudited) | Janus Research Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 3,171,218,177 | ||
| Undistributed net investment income/(loss) | 13,285,127 | |||
| Undistributed net realized gain/(loss) from investments | 198,032,647 | |||
| Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 1,396,772,787 | |||
| Total Net Assets | $ | 4,779,308,738 | ||
| Net Assets - Class A Shares | $ | 23,008,298 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 507,211 | |||
Net Asset Value Per Share(2) | $ | 45.36 | ||
Maximum Offering Price Per Share(3) | $ | 48.13 | ||
| Net Assets - Class C Shares | $ | 9,089,035 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 206,538 | |||
Net Asset Value Per Share(2) | $ | 44.01 | ||
| Net Assets - Class D Shares | $ | 2,717,946,140 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 59,564,715 | |||
| Net Asset Value Per Share | $ | 45.63 | ||
| Net Assets - Class I Shares | $ | 246,813,604 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,416,588 | |||
| Net Asset Value Per Share | $ | 45.57 | ||
| Net Assets - Class N Shares | $ | 76,669,540 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,682,431 | |||
| Net Asset Value Per Share | $ | 45.57 | ||
| Net Assets - Class S Shares | $ | 1,224,541 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 27,198 | |||
| Net Asset Value Per Share | $ | 45.02 | ||
| Net Assets - Class T Shares | $ | 1,704,557,580 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,352,789 | |||
| Net Asset Value Per Share | $ | 45.63 | ||
| (1) | Includes $11,021,967 of securities on loan. 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.
12 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Research Fund | |||
| Investment Income: | ||||
| Dividends | $ | 33,285,173 | ||
| Dividends from affiliates | 26,296 | |||
| Other income | 13 | |||
| Foreign tax withheld | (15,911) | |||
| Total Investment Income | 33,295,571 | |||
| Expenses: | ||||
| Advisory fees | 15,462,483 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 22,870 | |||
| Class C Shares | 28,015 | |||
| Class S Shares | 3,623 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 1,552,309 | |||
| Class S Shares | 3,623 | |||
| Class T Shares | 1,987,122 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 7,416 | |||
| Class C Shares | 2,913 | |||
| Class I Shares | 65,117 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,061 | |||
| Class C Shares | 393 | |||
| Class D Shares | 358,905 | |||
| Class I Shares | 4,547 | |||
| Class N Shares | 283 | |||
| Class S Shares | 17 | |||
| Class T Shares | 12,103 | |||
| Shareholder reports expense | 385,306 | |||
| Registration fees | 81,156 | |||
| Custodian fees | 11,114 | |||
| Professional fees | 37,329 | |||
| Non-interested Trustees’ fees and expenses | 51,770 | |||
| Fund administration fees | 186,794 | |||
| Other expenses | 109,296 | |||
| Total Expenses | 20,375,565 | |||
| Net Expenses | 20,375,565 | |||
| Net Investment Income/(Loss) | 12,920,006 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments | 277,060,257 | |||
| Total Net Realized Gain/(Loss) on Investments | 277,060,257 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments and non-interested Trustees’ deferred compensation | 220,107,731 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 220,107,731 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 510,087,994 | ||
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
| Janus Research | ||||||||
| Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 12,920,006 | $ | 18,029,335 | ||||
| Net realized gain/(loss) on investments | 277,060,257 | 525,310,072 | ||||||
| Change in unrealized net appreciation/depreciation | 220,107,731 | 179,970,407 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 510,087,994 | 723,309,814 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (6,239) | (58,429) | ||||||
| Class D Shares | (8,553,378) | (10,495,368) | ||||||
| Class I Shares | (949,789) | (781,633) | ||||||
| Class N Shares | (373,716) | (280,488) | ||||||
| Class S Shares | (67) | (15,266) | ||||||
| Class T Shares | (3,798,702) | (5,771,137) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (2,174,732) | (53,963) | ||||||
| Class C Shares | (616,271) | (8,830) | ||||||
| Class D Shares | (323,137,590) | (7,026,338) | ||||||
| Class I Shares | (26,628,511) | (456,215) | ||||||
| Class N Shares | (8,871,533) | (149,008) | ||||||
| Class S Shares | (402,511) | (9,466) | ||||||
| Class T Shares | (198,277,896) | (4,339,320) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (573,790,935) | (29,445,461) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 7,798,060 | 6,129,084 | ||||||
| Class C Shares | 5,876,893 | 1,069,754 | ||||||
| Class D Shares | 64,630,837 | 79,624,238 | ||||||
| Class I Shares | 56,827,769 | 79,836,942 | ||||||
| Class N Shares | 7,083,140 | 19,379,191 | ||||||
| Class S Shares | 390,468 | 2,438,281 | ||||||
| Class T Shares | 161,834,046 | 163,714,344 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 2,109,782 | 111,465 | ||||||
| Class C Shares | 579,039 | 8,663 | ||||||
| Class D Shares | 325,672,693 | 17,208,136 | ||||||
| Class I Shares | 23,711,026 | 1,048,401 | ||||||
| Class N Shares | 9,245,249 | 429,496 | ||||||
| Class S Shares | 402,578 | 24,732 | ||||||
| Class T Shares | 198,946,621 | 9,952,876 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (2,578,785) | (9,658,008) | ||||||
| Class C Shares | (832,895) | (557,693) | ||||||
| Class D Shares | (105,057,219) | (192,308,302) | ||||||
| Class I Shares | (28,047,693) | (49,255,036) | ||||||
| Class N Shares | (4,520,716) | (6,862,325) | ||||||
| Class S Shares | (2,635,118) | (610,899) | ||||||
| Class T Shares | (138,629,422) | (254,417,616) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 582,806,353 | (132,694,276) | ||||||
| Net Increase/(Decrease) in Net Assets | 519,103,412 | 561,170,077 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 4,260,205,326 | 3,699,035,249 | ||||||
| End of period | $ | 4,779,308,738 | $ | 4,260,205,326 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 13,285,127 | $ | 14,047,012 | ||||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Research Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.48 | $39.09 | $31.97 | $25.85 | $26.30 | $22.49 | $19.41 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.09(3) | 0.11(3) | 0.19 | 0.10 | 0.19 | 0.09 | 0.02 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.97 | 7.55 | 7.09 | 6.22 | (0.47) | 3.80 | 3.06 | |||||||||||||||||||||||
| Total from Investment Operations | 5.06 | 7.66 | 7.28 | 6.32 | (0.28) | 3.89 | 3.08 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.02) | (0.14) | (0.16) | (0.20) | (0.17) | (0.08) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (6.18) | (0.27) | (0.16) | (0.20) | (0.17) | (0.08) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $45.36 | $46.48 | $39.09 | $31.97 | $25.85 | $26.30 | $22.49 | |||||||||||||||||||||||
| Total Return* | 11.94% | 19.68% | 22.86% | 24.59% | (1.14)% | 17.31% | 15.87% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $23,008 | $15,851 | $16,229 | $13,144 | $10,941 | $1,805 | $88 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $18,346 | $18,486 | $13,861 | $12,582 | $6,469 | $700 | $24 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.06% | 0.93% | 0.96% | 1.09% | 0.90% | 1.06% | 1.24% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.06% | 0.93% | 0.96% | 1.09% | 0.90% | 1.06% | 1.17% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.40% | 0.25% | 0.62% | 0.35% | 0.49% | 0.35% | 0.02% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | 83% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Research Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $45.41 | $38.35 | $31.45 | $25.49 | $26.08 | $22.44 | $19.41 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.10)(3) | (0.21)(3) | (0.07) | (0.06) | 0.09 | (0.03) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.86 | 7.40 | 6.97 | 6.08 | (0.57) | 3.73 | 3.02 | |||||||||||||||||||||||
| Total from Investment Operations | 4.76 | 7.19 | 6.90 | 6.02 | (0.48) | 3.70 | 3.03 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | (0.06) | (0.11) | (0.06) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (6.16) | (0.13) | – | (0.06) | (0.11) | (0.06) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $44.01 | $45.41 | $38.35 | $31.45 | $25.49 | $26.08 | $22.44 | |||||||||||||||||||||||
| Total Return* | 11.53% | 18.78% | 21.94% | 23.64% | (1.89)% | 16.50% | 15.61% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $9,089 | $3,509 | $2,498 | $2,028 | $1,127 | $176 | $69 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,618 | $3,091 | $2,130 | $1,635 | $820 | $133 | $25 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.85% | 1.67% | 1.72% | 1.82% | 1.67% | 1.81% | 1.94% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.85% | 1.67% | 1.72% | 1.82% | 1.67% | 1.81% | 1.89% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.46)% | (0.48)% | (0.14)% | (0.38)% | (0.28)% | (0.26)% | (0.47)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | 83% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Research Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.82 | $39.34 | $32.19 | $25.97 | $26.35 | $23.74 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.14(2) | 0.21(2) | 0.27 | 0.17 | 0.18 | 0.13 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.99 | 7.59 | 7.13 | 6.25 | (0.41) | 2.48 | ||||||||||||||||||||
| Total from Investment Operations | 5.13 | 7.80 | 7.40 | 6.42 | (0.23) | 2.61 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.16) | (0.19) | (0.25) | (0.20) | (0.15) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (6.32) | (0.32) | (0.25) | (0.20) | (0.15) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $45.63 | $46.82 | $39.34 | $32.19 | $25.97 | $26.35 | ||||||||||||||||||||
| Total Return* | 12.05% | 19.93% | 23.16% | 24.83% | (0.95)% | 10.99% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,717,946 | $2,469,614 | $2,159,347 | $1,878,272 | $1,616,618 | $1,753,887 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,594,290 | $2,383,927 | $1,995,191 | $1,825,046 | $1,896,215 | $1,700,352 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.88% | 0.72% | 0.74% | 0.86% | 0.77% | 0.90% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.88% | 0.72% | 0.74% | 0.86% | 0.76% | 0.89% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.60% | 0.47% | 0.85% | 0.58% | 0.58% | 0.83% | ||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Research Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.80 | $39.33 | $32.18 | $25.97 | $26.38 | $22.50 | $19.41 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.16(2) | 0.24(2) | 0.30 | 0.21 | 0.19 | 0.18 | –(5) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.99 | 7.58 | 7.13 | 6.23 | (0.41) | 3.78 | 3.09 | |||||||||||||||||||||||
| Total from Investment Operations | 5.15 | 7.82 | 7.43 | 6.44 | (0.22) | 3.96 | 3.09 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.22) | (0.22) | (0.28) | (0.23) | (0.19) | (0.08) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (6.38) | (0.35) | (0.28) | (0.23) | (0.19) | (0.08) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $45.57 | $46.80 | $39.33 | $32.18 | $25.97 | $26.38 | $22.50 | |||||||||||||||||||||||
| Total Return* | 12.10% | 19.99% | 23.28% | 24.95% | (0.92)% | 17.63% | 15.92% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $246,814 | $196,908 | $139,452 | $101,806 | $91,170 | $72,225 | $6,821 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $220,138 | $149,173 | $128,180 | $109,409 | $88,419 | $42,421 | $794 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.78% | 0.65% | 0.64% | 0.78% | 0.67% | 0.79% | 1.02% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.78% | 0.65% | 0.64% | 0.78% | 0.67% | 0.78% | 0.85% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.69% | 0.54% | 0.91% | 0.67% | 0.69% | 0.86% | (0.57)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | 83% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
| (5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Research Fund | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $46.82 | $39.32 | $32.19 | $29.83 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.17(2) | 0.28(2) | 0.34 | 0.06 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.00 | 7.59 | 7.12 | 2.30 | ||||||||||||||
| Total from Investment Operations | 5.17 | 7.87 | 7.46 | 2.36 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.26) | (0.24) | (0.33) | – | ||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | ||||||||||||||
| Total Distributions | (6.42) | (0.37) | (0.33) | – | ||||||||||||||
| Net Asset Value, End of Period | $45.57 | $46.82 | $39.32 | $32.19 | ||||||||||||||
| Total Return* | 12.15% | 20.14% | 23.37% | 7.91% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $76,670 | $66,011 | $44,056 | $43,412 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $71,000 | $57,271 | $47,040 | $33,804 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.71% | 0.55% | 0.56% | 0.56% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.71% | 0.55% | 0.56% | 0.56% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.77% | 0.63% | 1.03% | 0.81% | ||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | ||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, 2015 | ||||||||||||||||||||||||||||||
| (unaudited), each year or period ended September 30 and the | Janus Research Fund | |||||||||||||||||||||||||||||
| period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.19 | $38.96 | $31.88 | $25.82 | $26.21 | $22.46 | $19.41 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.09(2) | 0.05(2) | 0.18 | 0.06 | 0.02 | 0.13 | –(5) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.90 | 7.52 | 7.05 | 6.21 | (0.36) | 3.70 | 3.05 | |||||||||||||||||||||||
| Total from Investment Operations | 4.99 | 7.57 | 7.23 | 6.27 | (0.34) | 3.83 | 3.05 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | –(5) | (0.21) | (0.15) | (0.21) | (0.05) | (0.08) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (6.16) | (0.34) | (0.15) | (0.21) | (0.05) | (0.08) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $45.02 | $46.19 | $38.96 | $31.88 | $25.82 | $26.21 | $22.46 | |||||||||||||||||||||||
| Total Return* | 11.86% | 19.53% | 22.77% | 24.41% | (1.32)% | 17.06% | 15.71% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,225 | $3,059 | $839 | $538 | $416 | $13 | $11 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,906 | $2,593 | $724 | $511 | $145 | $17 | $1 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.20% | 1.06% | 1.06% | 1.20% | 1.10% | 1.25% | 1.66% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.20% | 1.06% | 1.06% | 1.20% | 1.10% | 1.25% | 1.47% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.38% | 0.12% | 0.49% | 0.24% | 0.31% | 0.38% | (0.24)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | 83% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
| (5) | 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 T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the year | Janus Research Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $46.80 | $39.33 | $32.17 | $25.94 | $26.33 | $22.49 | $18.25 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.12(2) | 0.17(2) | 0.28 | 0.16 | 0.16 | 0.15 | 0.17 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.99 | 7.60 | 7.10 | 6.23 | (0.42) | 3.75 | 4.23 | |||||||||||||||||||||||
| Total from Investment Operations | 5.11 | 7.77 | 7.38 | 6.39 | (0.26) | 3.90 | 4.40 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.12) | (0.17) | (0.22) | (0.16) | (0.13) | (0.06) | (0.16) | |||||||||||||||||||||||
| Distributions (from capital gains) | (6.16) | (0.13) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (6.28) | (0.30) | (0.22) | (0.16) | (0.13) | (0.06) | (0.16) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $45.63 | $46.80 | $39.33 | $32.17 | $25.94 | $26.33 | $22.49 | |||||||||||||||||||||||
| Total Return* | 11.99% | 19.85% | 23.06% | 24.74% | (1.04)% | 17.36% | 24.29% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,704,558 | $1,505,253 | $1,336,614 | $1,349,917 | $1,213,477 | $1,354,695 | $2,890,078 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,594,065 | $1,466,282 | $1,323,849 | $1,339,538 | $1,465,454 | $1,881,088 | $2,505,457 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.96% | 0.80% | 0.81% | 0.95% | 0.87% | 1.02% | 1.02% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.96% | 0.80% | 0.80% | 0.95% | 0.87% | 1.02% | 1.01% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.52% | 0.39% | 0.80% | 0.49% | 0.48% | 0.44% | 0.59% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 20% | 44% | 45% | 64% | 88% | 69% | 83% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Research 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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. 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
Janus Investment Fund | 19
Table of Contents
Notes to Financial Statements (unaudited) (continued)
may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and
20 | MARCH 31, 2015
Table of Contents
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.
Dividends and 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.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
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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 | $11,021,967 | $ – | $(11,021,967) | $ – | ||||||||||||||
| (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
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.
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 vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Base Fee | ||||||
| Fund | Rate (%) | |||||
| Janus Research Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Research Fund | Russell 1000® Growth 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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Research Fund | 0.69 | |||||
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
24 | MARCH 31, 2015
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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/
Janus Investment Fund | 25
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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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Research Fund | $ | 12,477 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Research Fund | $ | 298 | ||||
| 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 March 31, 2015 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 Research Fund | $3,420,501,677 | $1,430,625,566 | $(32,028,083) | $1,398,597,483 | ||||||||||||||
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| 5. | Capital Share Transactions |
| Janus Research | ||||||||||
| For the period ended March 31 (unaudited) | Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 173,696 | 139,489 | ||||||||
| Reinvested dividends and distributions | 50,209 | 2,680 | ||||||||
| Shares repurchased | (57,725) | (216,269) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 166,180 | (74,100) | ||||||||
| Shares Outstanding, Beginning of Period | 341,031 | 415,131 | ||||||||
| Shares Outstanding, End of Period | 507,211 | 341,031 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 134,610 | 24,786 | ||||||||
| Reinvested dividends and distributions | 14,171 | 212 | ||||||||
| Shares repurchased | (19,508) | (12,862) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 129,273 | 12,136 | ||||||||
| Shares Outstanding, Beginning of Period | 77,265 | 65,129 | ||||||||
| Shares Outstanding, End of Period | 206,538 | 77,265 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 1,414,233 | 1,812,572 | ||||||||
| Reinvested dividends and distributions | 7,708,230 | 411,480 | ||||||||
| Shares repurchased | (2,305,992) | (4,360,784) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 6,816,471 | (2,136,732) | ||||||||
| Shares Outstanding, Beginning of Period | 52,748,244 | 54,884,976 | ||||||||
| Shares Outstanding, End of Period | 59,564,715 | 52,748,244 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 1,268,435 | 1,753,887 | ||||||||
| Reinvested dividends and distributions | 562,006 | 25,087 | ||||||||
| Shares repurchased | (620,942) | (1,117,575) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,209,499 | 661,399 | ||||||||
| Shares Outstanding, Beginning of Period | 4,207,089 | 3,545,690 | ||||||||
| Shares Outstanding, End of Period | 5,416,588 | 4,207,089 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 154,520 | 435,033 | ||||||||
| Reinvested dividends and distributions | 219,238 | 10,282 | ||||||||
| Shares repurchased | (101,275) | (155,686) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 272,483 | 289,629 | ||||||||
| Shares Outstanding, Beginning of Period | 1,409,948 | 1,120,319 | ||||||||
| Shares Outstanding, End of Period | 1,682,431 | 1,409,948 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 8,722 | 58,043 | ||||||||
| Reinvested dividends and distributions | 9,649 | 598 | ||||||||
| Shares repurchased | (57,399) | (13,962) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (39,028) | 44,679 | ||||||||
| Shares Outstanding, Beginning of Period | 66,226 | 21,547 | ||||||||
| Shares Outstanding, End of Period | 27,198 | 66,226 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 3,544,149 | 3,686,831 | ||||||||
| Reinvested dividends and distributions | 4,707,682 | 237,936 | ||||||||
| Shares repurchased | (3,064,953) | (5,739,830) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 5,186,878 | (1,815,063) | ||||||||
| Shares Outstanding, Beginning of Period | 32,165,911 | 33,980,974 | ||||||||
| Shares Outstanding, End of Period | 37,352,789 | 32,165,911 | ||||||||
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 March 31, 2015, 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 Research Fund | $ | 950,086,494 | $ | 912,202,353 | $ | – | $ | – | |||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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. |
Janus Investment Fund | 37
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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 | 39
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Useful Information About Your Fund Report (unaudited)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
Janus Investment Fund | 41
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Useful Information About Your Fund Report (unaudited) (continued)
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
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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).
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-0515-87822 | 125-24-93053 05-15 |
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semiannual report
March 31, 2015
Janus Global Select Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Global Select Fund
| 1 | ||
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Janus Global Select Fund (unaudited)
FUND SNAPSHOT We believe investing in companies where the market underestimates free-cash-flow growth and using risk efficiently drives excess returns. |  George Maris portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended March 31, 2015, Janus Global Select Fund’s Class T Shares returned 6.40% versus a return of 2.73% for the Fund’s benchmark, the MSCI All Country World Index.
INVESTMENT ENVIRONMENT
The stock market volatility marking the latter part of 2014 carried over into 2015. Two drivers were the collapse of crude oil prices and the strengthening of the U.S. dollar. Underlying the widely varying returns across global stock markets and major moves in currency markets were the divergent paths taken by global central banks. The Bank of Japan and People’s Bank of China took steps to catalyze their economy, and later the European Central Bank committed to a quantitative easing program totaling upward of 1 trillion euros. We appreciate the benefits a weaker euro will provide to export-oriented segments of the European economy, yet we continue to monitor the region’s geopolitical developments, namely with regard to Greece’s ongoing debt crisis, the UK’s upcoming elections and an uneasy truce in Ukraine.
In the U.S., corporate growth that had benefited from a weaker dollar until a year ago now must overcome the currency’s strength, which continued into the quarter. A weaker yen gives Japanese corporations the welcome choice of either winning back market share in key export markets or increasing profits. In Latin America, the prospects for Brazil dim as the country faces stagflation and a loss of confidence in President Dilma Rousseff only months after her re-election. Despite the challenging environment, we continue to monitor Brazil’s market for quality companies trading at deeply discounted valuations.
PERFORMANCE DISCUSSION
Our outperformance for the period, relative to the benchmark, was driven largely by stock selection in the health care and information technology sectors. Both sectors have experienced a robust amount of merger and acquisition activity of late, in addition to significant progress in groundbreaking innovation that has caught the eye of investors. The period’s leading contributor was biotech company Pharmacyclics following its acquisition by AbbVie. The company’s desirability centered on its cancer fighting drug Imbruvica, which is well tolerated, has fewer side effects than traditional treatments and can be administered for longer periods.
Silicon wafer maker Sumco also aided performance. The company should stand to benefit from a dramatically rationalized marketplace for silicon wafers. Sumco and one other industry participant are the major players in the industry. With the silicon wafer industry keeping capacity under control, recovering demand is pushing up prices and driving profit growth. As Sumco and the industry maintain capacity discipline, the outlook for continued growth in earnings remains positive, in our view.
Several factors contributed to United Continental Holdings contributing to performance. Low oil prices helped, given the airline industry’s reliance upon energy products. Just as important, the company continues to benefit from synergies after its merger with Continental. The strength of the U.S. economy also contributed to improved passenger demand. These benefits coupled with a commitment to capital discipline are resulting in improved cash flows, benefiting profitability and balance sheet strength. Management has instituted a share buyback to highlight the confidence in its prospects, a step usually met with favor by investors.
Detracting from relative performance were our consumer discretionary and industrial holdings.
Given the strong drop in crude prices, several individual detractors were within the energy sector. Chief among these was MEG Energy. The Canadian exploration and production company was caught in the broad energy sector sell-off. The company remains cash flow positive at current prices, is exercising strict capital discipline to preserve its balance sheet, and does not have any near-term debt maturities.
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Janus Global Select Fund (unaudited)
While Petroleo Brasileiro (Petrobras) was caught in energy sector weakness, there were also company-specific issues causing its poor performance. As the corruption scandal involving Petrobras grows, it burdens not just the company, but many Brazilian industries and political parties. With the uncertainties caused by the scandal, the company’s auditors delayed the authorization of formal audited results. The uncertainty created by this delay further divorces the valuation of the company from its fundamentals. Given the potential for asset write-downs and equity issuance, we exited our position in the company during the period.
Another detractor, National Bank of Greece, was negatively impacted by the political situation in its home country. After failing three times to elect a president in parliament, Greece will hold new elections in early 2015. The elections could empower a radical, anti-austerity party, whose positions could result in Greece’s exit from the European Union. While such an extreme outcome is unlikely, the ramifications are negative for the Greek market and National Bank of Greece in particular. We considered the risks surrounding the new government’s approach toward debt negotiations and policy prescriptions as violations of our investment thesis, and, as in the case with Petrobras, we no longer hold the stock in the portfolio.
OUTLOOK
Looking deeper into 2015, we consider the environment for equities to remain attractive. Our view on the U.S. is constructive. It seems likely the Federal Reserve will raise rates in 2015. Worrying about the impact misses the point that a Fed move signals confidence in the economic outlook. This is a welcome development for stocks. The country is already quite likely near the natural level of employment. With an uptick in wages, the economy should be supported as workers are likely to feel better about spending, which should help propel the economic recovery. Lower energy prices are providing additional support to the U.S. consumer. With many Americans living paycheck to paycheck, the savings on this expense can be allocated toward other spending. While industries tied to the energy sector are hit in the current low-price environment, the effects on the broad U.S. economy are positive for growth.
In Europe, years of crisis and anemic growth finally encouraged leaders in many countries to address structural inefficiencies, especially within the labor market. The corporate sector seems well ahead of governments in improving efficiencies and competitiveness. A weak euro should continue to provide a tailwind for exports. In China, economic growth is slowing, but at 7% in real terms, it still outpaces other major markets. And the country’s stocks remain among the world’s cheapest on static multiples.
Many market strategists highlight equity valuations as no longer at the deeply discounted levels we saw in the past few years. While we agree, we also do not think equities, broadly speaking, are expensive. Stocks currently trade roughly in line with long term averages. More importantly, compared to other asset classes such as fixed income and real estate, valuations remain inexpensive. Negative yields on mid-term bonds throughout Europe prove that.
Thank you for your continued investment in Janus Global Select Fund.
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(unaudited)
Janus Global Select Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pharmacyclics, Inc. | 1.30% | |||
| Sumco Corp. | 0.84% | |||
| United Continental Holdings, Inc. | 0.81% | |||
| Kroger Co. | 0.70% | |||
| ON Semiconductor Corp. | 0.69% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| MEG Energy Corp. | –0.73% | |||
| National Bank of Greece SA | –0.68% | |||
| Petroleo Brasileiro SA (ADR) | –0.63% | |||
| Kroton Educacional SA | –0.42% | |||
| Kansas City Southern | –0.42% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI All Country | |||||||||||
| Fund Contribution | (Average % of Equity) | World IndexSMWeighting | ||||||||||
| Health Care | 2.39% | 13.52% | 11.76% | |||||||||
| Information Technology | 1.08% | 15.67% | 13.77% | |||||||||
| Financials | 0.54% | 20.87% | 21.54% | |||||||||
| Materials | 0.48% | 5.92% | 5.47% | |||||||||
| Telecommunication Services | 0.42% | 3.04% | 3.82% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI All Country | |||||||||||
| Fund Contribution | (Average % of Equity) | World IndexSMWeighting | ||||||||||
| Consumer Discretionary | –1.38% | 12.91% | 11.98% | |||||||||
| Industrials | –0.07% | 10.72% | 10.46% | |||||||||
| Utilities | –0.02% | 3.21% | 3.32% | |||||||||
| Other** | 0.05% | 0.87% | 0.00% | |||||||||
| Consumer Staples | 0.18% | 7.44% | 9.76% | |||||||||
| 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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Janus Global Select Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Air Products & Chemicals, Inc. Chemicals | 3.2% | |||
| AIA Group, Ltd. Insurance | 3.1% | |||
| Citigroup, Inc. Commercial Banks | 2.9% | |||
| Kansas City Southern Road & Rail | 2.4% | |||
| PPG Industries, Inc. Chemicals | 2.3% | |||
| 13.9% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 8.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Global Select Fund – Class A Shares | |||||||||||||
| NAV | 6.39% | 9.44% | 6.13% | 7.78% | 2.67% | 1.05% | |||||||
| MOP | 0.27% | 3.13% | 4.88% | 7.15% | 2.26% | ||||||||
| Janus Global Select Fund – Class C Shares | |||||||||||||
| NAV | 5.97% | 8.49% | 5.28% | 6.95% | 1.88% | 1.88% | |||||||
| CDSC | 4.97% | 7.49% | 5.28% | 6.95% | 1.88% | ||||||||
| Janus Global Select Fund – Class D Shares(1) | 6.46% | 9.53% | 6.35% | 7.92% | 2.76% | 0.86% | |||||||
| Janus Global Select Fund – Class I Shares | 6.55% | 9.70% | 6.43% | 7.88% | 2.73% | 0.73% | |||||||
| Janus Global Select Fund – Class R Shares | 6.11% | 8.86% | 5.73% | 7.34% | 2.23% | 1.44% | |||||||
| Janus Global Select Fund – Class S Shares | 6.29% | 9.16% | 6.09% | 7.66% | 2.52% | 1.19% | |||||||
| Janus Global Select Fund – Class T Shares | 6.40% | 9.38% | 6.26% | 7.88% | 2.73% | 0.93% | |||||||
| MSCI All Country World IndexSM | 2.73% | 5.42% | 8.99% | 6.44% | 3.67% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 4th | 2nd | 4th | ||||||||
| Morningstar Ranking – based on total return for World Stock Funds | – | 120/1,213 | 730/808 | 131/508 | 292/360 | ||||||||
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 | 5
Table of Contents
Janus Global Select Fund (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.
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 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 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.
© 2015 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 – June 30, 2000 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,063.90 | $ | 4.84 | $ | 1,000.00 | $ | 1,020.24 | $ | 4.73 | 0.94% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,059.70 | $ | 9.19 | $ | 1,000.00 | $ | 1,016.01 | $ | 9.00 | 1.79% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,064.60 | $ | 4.48 | $ | 1,000.00 | $ | 1,020.59 | $ | 4.38 | 0.87% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,065.50 | $ | 3.71 | $ | 1,000.00 | $ | 1,021.34 | $ | 3.63 | 0.72% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,061.10 | $ | 7.35 | $ | 1,000.00 | $ | 1,017.80 | $ | 7.19 | 1.43% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,062.90 | $ | 6.12 | $ | 1,000.00 | $ | 1,019.00 | $ | 5.99 | 1.19% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,064.00 | $ | 4.79 | $ | 1,000.00 | $ | 1,020.29 | $ | 4.68 | 0.93% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Global Select Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 98.4% | ||||||||||
| Aerospace & Defense – 1.3% | ||||||||||
| 247,603 | United Technologies Corp. | $ | 29,019,072 | |||||||
| Airlines – 2.2% | ||||||||||
| 744,992 | United Continental Holdings, Inc.* | 50,100,712 | ||||||||
| Auto Components – 1.1% | ||||||||||
| 891,700 | NGK Spark Plug Co., Ltd. | 23,992,241 | ||||||||
| Automobiles – 1.5% | ||||||||||
| 122,506 | Hyundai Motor Co. | 18,598,208 | ||||||||
| 3,977,867 | SAIC Motor Corp., Ltd. – Class Aß | 16,017,780 | ||||||||
| 34,615,988 | ||||||||||
| Beverages – 3.0% | ||||||||||
| 1,134,675 | Diageo PLC | 31,282,309 | ||||||||
| 686,303 | SABMiller PLC | 35,908,407 | ||||||||
| 67,190,716 | ||||||||||
| Biotechnology – 1.1% | ||||||||||
| 149,887 | Amgen, Inc. | 23,959,437 | ||||||||
| Capital Markets – 3.6% | ||||||||||
| 704,511 | Blackstone Group LP | 27,398,433 | ||||||||
| 33 | GF Securities Co., Ltd. | 8,196,188 | ||||||||
| 1,275,146 | Morgan Stanley | 45,509,960 | ||||||||
| 81,104,581 | ||||||||||
| Chemicals – 5.5% | ||||||||||
| 470,549 | Air Products & Chemicals, Inc. | 71,184,653 | ||||||||
| 231,374 | PPG Industries, Inc. | 52,184,092 | ||||||||
| 123,368,745 | ||||||||||
| Commercial Banks – 6.3% | ||||||||||
| 21,644,350 | Banca Popolare di Milano Scarl* | 21,832,745 | ||||||||
| 533,443 | BNP Paribas SA | 32,438,181 | ||||||||
| 1,282,811 | Citigroup, Inc. | 66,090,423 | ||||||||
| 387,302 | Intesa Sanpaolo SpA | 1,314,102 | ||||||||
| 4,736,880 | State Bank of India | 20,202,445 | ||||||||
| 141,877,896 | ||||||||||
| Commercial Services & Supplies – 1.0% | ||||||||||
| 533,680 | Tyco International PLC | 22,980,261 | ||||||||
| Communications Equipment – 1.9% | ||||||||||
| 3,423,495 | Telefonaktiebolaget LM Ericsson – Class B | 42,986,562 | ||||||||
| Diversified Consumer Services – 0.3% | ||||||||||
| 2,322,192 | Kroton Educacional SA | 7,489,064 | ||||||||
| Electric Utilities – 1.3% | ||||||||||
| 664,850 | Brookfield Infrastructure Partners LP | 30,277,269 | ||||||||
| Electrical Equipment – 3.1% | ||||||||||
| 355,876 | EnerSys | 22,861,474 | ||||||||
| 307,660 | Schneider Electric SE | 23,927,486 | ||||||||
| 418,444 | Sensata Technologies Holding NV* | 24,039,608 | ||||||||
| 70,828,568 | ||||||||||
| Electronic Equipment, Instruments & Components – 0.9% | ||||||||||
| 608,312 | National Instruments Corp. | 19,490,316 | ||||||||
| Energy Equipment & Services – 0.6% | ||||||||||
| 229,877 | Baker Hughes, Inc. | 14,615,580 | ||||||||
| Food & Staples Retailing – 1.9% | ||||||||||
| 565,779 | Kroger Co. | 43,372,618 | ||||||||
| Food Products – 1.4% | ||||||||||
| 324,086 | Mead Johnson Nutrition Co. | 32,580,366 | ||||||||
| Health Care Equipment & Supplies – 1.5% | ||||||||||
| 1,970,664 | Boston Scientific Corp.* | 34,979,286 | ||||||||
| Health Care Providers & Services – 1.3% | ||||||||||
| 331,163 | Express Scripts Holding Co.* | 28,735,013 | ||||||||
| Hotels, Restaurants & Leisure – 1.3% | ||||||||||
| 25,477,238 | Bwin.Party Digital Entertainment PLC | 30,285,316 | ||||||||
| Household Durables – 1.2% | ||||||||||
| 2,027,000 | Sekisui Chemical Co., Ltd. | 26,327,248 | ||||||||
| Household Products – 1.2% | ||||||||||
| 253,803 | Kimberly-Clark Corp. | 27,184,839 | ||||||||
| Independent Power and Renewable Electricity Producers – 1.8% | ||||||||||
| 1,623,368 | NRG Energy, Inc. | 40,892,640 | ||||||||
| Insurance – 8.1% | ||||||||||
| 11,088,400 | AIA Group, Ltd. | 69,498,839 | ||||||||
| 445,870 | Aon PLC | 42,857,024 | ||||||||
| 1,384,107 | CNO Financial Group, Inc. | 23,834,323 | ||||||||
| 1,236,400 | Tokio Marine Holdings, Inc. | 46,735,646 | ||||||||
| 182,925,832 | ||||||||||
| Internet Software & Services – 2.5% | ||||||||||
| 344,107 | Alibaba Group Holding, Ltd. (ADR)* | 28,643,467 | ||||||||
| 2,650,133 | Auto Trader Group PLC* | 9,895,449 | ||||||||
| 1,445,654 | Youku Tudou, Inc. (ADR)* | 18,070,675 | ||||||||
| 56,609,591 | ||||||||||
| Media – 1.3% | ||||||||||
| 189,886 | Time Warner Cable, Inc. | 28,460,114 | ||||||||
| Metals & Mining – 1.0% | ||||||||||
| 880,451 | ArcelorMittal | 8,281,929 | ||||||||
| 903,000 | Sumitomo Metal Mining Co., Ltd. | 13,220,142 | ||||||||
| 21,502,071 | ||||||||||
| Multiline Retail – 1.6% | ||||||||||
| 570,175 | Macy’s, Inc. | 37,010,059 | ||||||||
| Oil, Gas & Consumable Fuels – 4.9% | ||||||||||
| 2,736,800 | Inpex Corp. | 30,198,766 | ||||||||
| 1,150,622 | MEG Energy Corp.* | 18,589,487 | ||||||||
| 871,511 | Royal Dutch Shell PLC – Class A | 25,896,730 | ||||||||
| 586,171 | Valero Energy Corp. | 37,292,199 | ||||||||
| 111,977,182 | ||||||||||
| Pharmaceuticals – 9.6% | ||||||||||
| 707,641 | AbbVie, Inc. | 41,425,304 | ||||||||
| 667,343 | Bristol-Myers Squibb Co. | 43,043,624 | ||||||||
| 421,100 | Eisai Co., Ltd. | 29,948,989 | ||||||||
| 406,376 | Endo International PLC* | 36,451,927 | ||||||||
| 4,105,982 | Indivior PLC* | 11,551,175 | ||||||||
| 156,386 | Jazz Pharmaceuticals PLC* | 27,021,937 | ||||||||
| 276,148 | Johnson & Johnson | 27,780,489 | ||||||||
| 217,223,445 | ||||||||||
| Real Estate Management & Development – 0.8% | ||||||||||
| 2,520,600 | Countrywide PLC | 19,181,480 | ||||||||
| Road & Rail – 2.4% | ||||||||||
| 529,782 | Kansas City Southern | 54,080,147 | ||||||||
| Semiconductor & Semiconductor Equipment – 6.9% | ||||||||||
| 2,475,541 | ARM Holdings PLC | 40,525,383 | ||||||||
| 5,362,018 | Atmel Corp. | 44,129,408 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Semiconductor & Semiconductor Equipment – (continued) | ||||||||||
| 3,944,150 | ON Semiconductor Corp.* | $ | 47,763,657 | |||||||
| 1,422,678 | Sumco Corp. | 23,929,244 | ||||||||
| 156,347,692 | ||||||||||
| Software – 1.0% | ||||||||||
| 146,200 | Nintendo Co., Ltd. | 21,518,498 | ||||||||
| Specialty Retail – 1.2% | ||||||||||
| 9,797,250 | L’Occitane International SA | 27,942,749 | ||||||||
| Technology Hardware, Storage & Peripherals – 3.0% | ||||||||||
| 275,061 | Apple, Inc. | 34,225,840 | ||||||||
| 26,264 | Samsung Electronics Co., Ltd. | 34,053,764 | ||||||||
| 68,279,604 | ||||||||||
| Textiles, Apparel & Luxury Goods – 2.4% | ||||||||||
| 3,380,900 | Prada SpA | 20,476,186 | ||||||||
| 9,732,900 | Samsonite International SA | 33,738,467 | ||||||||
| 54,214,653 | ||||||||||
| Thrifts & Mortgage Finance – 2.3% | ||||||||||
| 5,294,513 | MGIC Investment Corp.* | 50,986,160 | ||||||||
| Wireless Telecommunication Services – 3.1% | ||||||||||
| 1,304,296 | T-Mobile U.S., Inc.* | 41,333,140 | ||||||||
| 39,860,700 | Tower Bersama Infrastructure Tbk PT | 28,891,577 | ||||||||
| 70,224,717 | ||||||||||
| Total Common Stocks (cost $1,878,614,880) | 2,226,738,328 | |||||||||
| Preferred Stocks – 1.1% | ||||||||||
| Automobiles – 1.1% | ||||||||||
| 91,451 | Volkswagen AG (cost $17,109,282) | 24,332,748 | ||||||||
| Investment Companies – 0.1% | ||||||||||
| Money Markets – 0.1% | ||||||||||
| 2,751,052 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $2,751,052) | 2,751,052 | ||||||||
| Total Investments (total cost $1,898,475,214) – 99.6% | 2,253,822,128 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 0.4% | 8,107,727 | |||||||||
| Net Assets – 100% | $ | 2,261,929,855 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 1,327,902,456 | 58 | .9% | ||||
| Japan | 215,870,774 | 9 | .6 | |||||
| United Kingdom | 204,526,249 | 9 | .1 | |||||
| Hong Kong | 103,237,306 | 4 | .6 | |||||
| France | 92,590,345 | 4 | .1 | |||||
| China | 70,928,110 | 3 | .2 | |||||
| South Korea | 52,651,972 | 2 | .3 | |||||
| Italy | 43,623,033 | 1 | .9 | |||||
| Sweden | 42,986,562 | 1 | .9 | |||||
| Indonesia | 28,891,577 | 1 | .3 | |||||
| Germany | 24,332,748 | 1 | .1 | |||||
| India | 20,202,445 | 0 | .9 | |||||
| Canada | 18,589,487 | 0 | .8 | |||||
| Brazil | 7,489,064 | 0 | .3 | |||||
| Total | $ | 2,253,822,128 | 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 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. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| LP | Limited Partnership | |
| PLC | Public Limited Company |
| * | Non-income producing security. |
| ß | Security is illiquid. | |
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Global Select Fund | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | 6,260,000 | 158,979,045 | (162,487,993) | 2,751,052 | $ | – | $ | 3,104 | $ | 2,751,052 | |||||||||||
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Global Select Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Auto Components | $ | – | $ | 23,992,241 | $ | – | |||||
| Automobiles | – | 34,615,988 | – | ||||||||
| Beverages | – | 67,190,716 | – | ||||||||
| Commercial Banks | 66,090,423 | 75,787,473 | – | ||||||||
| Communications Equipment | – | 42,986,562 | – | ||||||||
| Electrical Equipment | 46,901,082 | 23,927,486 | – | ||||||||
| Hotels, Restaurants & Leisure | – | 30,285,316 | – | ||||||||
| Household Durables | – | 26,327,248 | – | ||||||||
| Insurance | 66,691,347 | 116,234,485 | – | ||||||||
| Metals & Mining | – | 21,502,071 | – | ||||||||
| Oil, Gas & Consumable Fuels | 55,881,686 | 56,095,496 | – | ||||||||
| Pharmaceuticals | 175,723,281 | 41,500,164 | – | ||||||||
| Real Estate Management & Development | – | 19,181,480 | – | ||||||||
| Semiconductor & Semiconductor Equipment | 91,893,065 | 64,454,627 | – | ||||||||
| Software | – | 21,518,498 | – | ||||||||
| Specialty Retail | – | 27,942,749 | – | ||||||||
| Technology Hardware, Storage & Peripherals | 34,225,840 | 34,053,764 | – | ||||||||
| Textiles, Apparel & Luxury Goods | – | 54,214,653 | – | ||||||||
| Wireless Telecommunication Services | 41,333,140 | 28,891,577 | – | ||||||||
| All Other | 837,295,870 | – | – | ||||||||
Preferred Stocks | – | 24,332,748 | – | ||||||||
Investment Companies | – | 2,751,052 | – | ||||||||
Total Assets | $ | 1,416,035,734 | $ | 837,786,394 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Global Select Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 1,898,475,214 | ||
| Unaffiliated investments, at value | $ | 2,251,071,076 | ||
| Affiliated investments, at value | 2,751,052 | |||
| Restricted cash (Note 1) | 7,607,853 | |||
| Non-interested Trustees’ deferred compensation | 44,451 | |||
| Receivables: | ||||
| Investments sold | 7,631,294 | |||
| Fund shares sold | 360,794 | |||
| Dividends | 3,781,045 | |||
| Dividends from affiliates | 1,415 | |||
| Foreign dividend tax reclaim | 1,483,201 | |||
| Other assets | 18,919 | |||
| Total Assets | 2,274,751,100 | |||
| Liabilities: | ||||
| Due to custodian | 10,155 | |||
| Payables: | ||||
| Investments purchased | 9,521,792 | |||
| Fund shares repurchased | 849,521 | |||
| Advisory fees | 1,240,822 | |||
| Fund administration fees | 19,387 | |||
| Transfer agent fees and expenses | 502,745 | |||
| 12b-1 Distribution and shareholder servicing fees | 4,752 | |||
| Non-interested Trustees’ fees and expenses | 13,850 | |||
| Non-interested Trustees’ deferred compensation fees | 44,451 | |||
| Accrued expenses and other payables | 613,770 | |||
| Total Liabilities | 12,821,245 | |||
| Net Assets | $ | 2,261,929,855 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Global Select Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,375,981,076 | ||
| Undistributed net investment income/(loss) | (501,623) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (468,533,044) | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 354,983,446 | |||
| Total Net Assets | $ | 2,261,929,855 | ||
| Net Assets - Class A Shares | $ | 5,801,457 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 413,166 | |||
Net Asset Value Per Share(1) | $ | 14.04 | ||
Maximum Offering Price Per Share(2) | $ | 14.90 | ||
| Net Assets - Class C Shares | $ | 3,849,301 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 281,675 | |||
Net Asset Value Per Share(1) | $ | 13.67 | ||
| Net Assets - Class D Shares | $ | 1,642,863,071 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 117,807,056 | |||
| Net Asset Value Per Share | $ | 13.95 | ||
| Net Assets - Class I Shares | $ | 37,715,086 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,696,037 | |||
| Net Asset Value Per Share | $ | 13.99 | ||
| Net Assets - Class R Shares | $ | 332,045 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 23,920 | |||
| Net Asset Value Per Share | $ | 13.88 | ||
| Net Assets - Class S Shares | $ | 461,910 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 32,792 | |||
| Net Asset Value Per Share | $ | 14.09 | ||
| Net Assets - Class T Shares | $ | 570,906,985 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 40,883,350 | |||
| Net Asset Value Per Share | $ | 13.96 | ||
| (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 March 31, 2015 (unaudited) | Janus Global Select Fund | |||
| Investment Income: | ||||
| Dividends | $ | 13,055,058 | ||
| Dividends from affiliates | 3,104 | |||
| Other income | 7,245 | |||
| Foreign tax withheld | (288,910) | |||
| Total Investment Income | 12,776,497 | |||
| Expenses: | ||||
| Advisory fees | 7,123,763 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 7,162 | |||
| Class C Shares | 19,176 | |||
| Class R Shares | 1,169 | |||
| Class S Shares | 552 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 969,539 | |||
| Class R Shares | 584 | |||
| Class S Shares | 552 | |||
| Class T Shares | 704,944 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 15 | |||
| Class C Shares | 1,903 | |||
| Class I Shares | 7,164 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 380 | |||
| Class C Shares | 319 | |||
| Class D Shares | 338,932 | |||
| Class I Shares | 764 | |||
| Class R Shares | 27 | |||
| Class S Shares | 28 | |||
| Class T Shares | 8,534 | |||
| Shareholder reports expense | 344,680 | |||
| Registration fees | 42,141 | |||
| Custodian fees | 84,081 | |||
| Professional fees | 36,782 | |||
| Non-interested Trustees’ fees and expenses | 25,077 | |||
| Fund administration fees | 91,962 | |||
| Other expenses | 62,428 | |||
| Total Expenses | 9,872,658 | |||
| Net Expenses | 9,872,658 | |||
| Net Investment Income/(Loss) | 2,903,839 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 160,049,505 | |||
| Total Net Realized Gain/(Loss) on Investments | 160,049,505 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (23,485,665) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (23,485,665) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 139,467,679 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Global | ||||||||
| Select Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 2,903,839 | $ | 16,315,433 | ||||
| Net realized gain/(loss) on investments | 160,049,505 | 318,518,854 | ||||||
| Change in unrealized net appreciation/depreciation | (23,485,665) | (47,740,820) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 139,467,679 | 287,093,467 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (31,705) | – | ||||||
| Class D Shares | (11,660,980) | (7,411,935) | ||||||
| Class I Shares | (292,555) | (224,131) | ||||||
| Class R Shares | (398) | – | ||||||
| Class S Shares | (2,105) | – | ||||||
| Class T Shares | (3,748,304) | (2,384,538) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (15,736,047) | (10,020,604) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 501,709 | 512,742 | ||||||
| Class C Shares | 181,737 | 121,822 | ||||||
| Class D Shares | 16,070,756 | 36,574,655 | ||||||
| Class I Shares | 2,678,373 | 4,729,476 | ||||||
| Class R Shares | 29,241 | 105,318 | ||||||
| Class S Shares | 28,345 | 86,782 | ||||||
| Class T Shares | 15,488,261 | 33,124,454 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 31,270 | – | ||||||
| Class D Shares | 11,422,558 | 7,270,574 | ||||||
| Class I Shares | 274,317 | 209,832 | ||||||
| Class R Shares | 398 | – | ||||||
| Class S Shares | 2,105 | – | ||||||
| Class T Shares | 3,654,546 | 2,319,882 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (660,298) | (3,222,801) | ||||||
| Class C Shares | (468,641) | (1,040,328) | ||||||
| Class D Shares | (89,815,463) | (174,126,131) | ||||||
| Class I Shares | (2,714,841) | (6,596,653) | ||||||
| Class R Shares | (279,303) | (570,332) | ||||||
| Class S Shares | (16,969) | (471,378) | ||||||
| Class T Shares | (47,648,959) | (137,289,672) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (91,240,858) | (238,261,758) | ||||||
| Net Increase/(Decrease) in Net Assets | 32,490,774 | 38,811,105 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 2,229,439,081 | 2,190,627,976 | ||||||
| End of period | $ | 2,261,929,855 | $ | 2,229,439,081 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (501,623) | $ | 12,330,585 | ||||
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 March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Global Select Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.27 | $11.69 | $9.35 | $9.14 | $10.99 | $9.03 | $7.59 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.01(3) | 0.07(3) | 0.07 | 0.06 | 0.19 | (0.01) | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.51 | 2.27 | 0.22 | (1.93) | 1.97 | 1.45 | |||||||||||||||||||||||
| Total from Investment Operations | 0.84 | 1.58 | 2.34 | 0.28 | (1.74) | 1.96 | 1.44 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.07) | – | – | (0.07) | (0.11) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.07) | – | – | (0.07) | (0.11) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $14.04 | $13.27 | $11.69 | $9.35 | $9.14 | $10.99 | $9.03 | |||||||||||||||||||||||
| Total Return* | 6.39% | 13.52% | 25.03% | 3.11% | (16.04)% | 21.71% | 18.97% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $5,801 | $5,606 | $7,427 | $11,777 | $21,288 | $33,737 | $23,859 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,746 | $6,593 | $9,256 | $17,151 | $34,871 | $29,501 | $24,760 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.94% | 1.05% | 1.18% | 1.20% | 1.08% | 1.11% | 1.19% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.94% | 1.05% | 1.17% | 1.18% | 1.08% | 1.10% | 1.16% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.21% | 0.51% | 0.23% | 0.13% | 0.48% | 0.19% | (0.36)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Select Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $12.90 | $11.48 | $9.25 | $9.04 | $10.89 | $9.01 | $7.59 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(3) | (0.04)(3) | (0.17) | (0.09) | 0.10 | (0.07) | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.81 | 1.46 | 2.40 | 0.30 | (1.91) | 1.95 | 1.45 | |||||||||||||||||||||||
| Total from Investment Operations | 0.77 | 1.42 | 2.23 | 0.21 | (1.81) | 1.88 | 1.42 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | (0.04) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | – | – | – | – | (0.04) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.67 | $12.90 | $11.48 | $9.25 | $9.04 | $10.89 | $9.01 | |||||||||||||||||||||||
| Total Return* | 5.97% | 12.37% | 24.11% | 2.32% | (16.68)% | 20.87% | 18.71% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,849 | $3,920 | $4,333 | $5,985 | $10,384 | $14,285 | $9,611 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,846 | $4,224 | $4,976 | $9,087 | $16,160 | $12,066 | $9,297 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.79% | 1.88% | 1.94% | 1.96% | 1.81% | 1.88% | 2.13% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.79% | 1.88% | 1.93% | 1.93% | 1.81% | 1.88% | 1.93% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.64)% | (0.29)% | (0.54)% | (0.61)% | (0.23)% | (0.57)% | (1.14)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
16 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Global Select Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.20 | $11.68 | $9.37 | $9.17 | $11.01 | $9.82 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.02(2) | 0.09(2) | 0.06 | 0.07 | 0.22 | 0.01 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.49 | 2.31 | 0.24 | (1.93) | 1.18 | ||||||||||||||||||||
| Total from Investment Operations | 0.85 | 1.58 | 2.37 | 0.31 | (1.71) | 1.19 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.10) | (0.06) | (0.06) | (0.11) | (0.13) | – | ||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | – | ||||||||||||||||||||
| Total Distributions | (0.10) | (0.06) | (0.06) | (0.11) | (0.13) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $13.95 | $13.20 | $11.68 | $9.37 | $9.17 | $11.01 | ||||||||||||||||||||
| Total Return* | 6.46% | 13.55% | 25.38% | 3.42% | (15.80)% | 12.12% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,642,863 | $1,615,507 | $1,548,438 | $1,455,243 | $1,611,690 | $2,121,813 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,620,338 | $1,627,022 | $1,508,289 | $1,672,075 | $2,155,890 | $2,043,615 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.87% | 0.86% | 0.91% | 0.90% | 0.85% | 0.90% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.87% | 0.86% | 0.91% | 0.89% | 0.85% | 0.90% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.27% | 0.74% | 0.54% | 0.48% | 0.73% | 0.57% | ||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Select Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.24 | $11.72 | $9.37 | $9.17 | $11.03 | $9.04 | $7.59 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(2) | 0.11(2) | 0.07 | 0.08 | 0.21 | 0.03 | –(6) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.49 | 2.32 | 0.22 | (1.92) | 1.97 | 1.45 | |||||||||||||||||||||||
| Total from Investment Operations | 0.86 | 1.60 | 2.39 | 0.30 | (1.71) | 2.00 | 1.45 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.11) | (0.08) | (0.04) | (0.10) | (0.15) | (0.01) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.11) | (0.08) | (0.04) | (0.10) | (0.15) | (0.01) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.99 | $13.24 | $11.72 | $9.37 | $9.17 | $11.03 | $9.04 | |||||||||||||||||||||||
| Total Return* | 6.55% | 13.73% | 25.63% | 3.30% | (15.83)% | 22.17% | 19.10% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $37,715 | $35,503 | $33,056 | $16,902 | $26,051 | $52,107 | $9,121 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $35,947 | $34,589 | $24,652 | $24,543 | $47,794 | $28,520 | $2,354 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.72% | 0.73% | 0.76% | 0.95% | 0.84% | 0.79% | 0.74% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.72% | 0.73% | 0.76% | 0.93% | 0.84% | 0.79% | 0.66% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.44% | 0.87% | 0.89% | 0.41% | 0.69% | 0.57% | (0.31)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class R Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Select Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.09 | $11.59 | $9.30 | $9.09 | $10.94 | $9.02 | $7.59 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(3) | 0.02(3) | (0.09) | –(4) | 0.13 | (0.03) | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.48 | 2.38 | 0.26 | (1.90) | 1.95 | 1.44 | |||||||||||||||||||||||
| Total from Investment Operations | 0.80 | 1.50 | 2.29 | 0.26 | (1.77) | 1.92 | 1.43 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.01) | – | – | (0.05) | (0.08) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.01) | – | – | (0.05) | (0.08) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.88 | $13.09 | $11.59 | $9.30 | $9.09 | $10.94 | $9.02 | |||||||||||||||||||||||
| Total Return* | 6.11% | 12.94% | 24.62% | 2.85% | (16.35)% | 21.29% | 18.84% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $332 | $560 | $919 | $1,915 | $2,159 | $3,426 | $1,597 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $469 | $792 | $1,696 | $2,253 | $3,171 | $2,334 | $1,374 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.43% | 1.44% | 1.46% | 1.47% | 1.46% | 1.50% | 1.49% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.43% | 1.44% | 1.46% | 1.47% | 1.46% | 1.50% | 1.47% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.39)% | 0.13% | (0.09)% | (0.14)% | 0.13% | (0.21)% | (0.71)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Select Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.32 | $11.76 | $9.48 | $9.17 | $10.98 | $9.03 | $7.59 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | –(3)(4) | 0.04(3) | 0.16 | 0.04 | 0.29 | (0.03) | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.52 | 2.20 | 0.27 | (2.05) | 1.98 | 1.45 | |||||||||||||||||||||||
| Total from Investment Operations | 0.83 | 1.56 | 2.36 | 0.31 | (1.76) | 1.95 | 1.44 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.06) | – | (0.08) | – | (0.05) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.06) | – | (0.08) | – | (0.05) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $14.09 | $13.32 | $11.76 | $9.48 | $9.17 | $10.98 | $9.03 | |||||||||||||||||||||||
| Total Return* | 6.29% | 13.27% | 25.00% | 3.38% | (16.12)% | 21.59% | 18.97% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $462 | $424 | $733 | $1,120 | $802 | $12,076 | $13,346 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $442 | $542 | $1,071 | $1,238 | $7,522 | $13,398 | $10,379 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.19% | 1.19% | 1.21% | 0.74%(6) | 1.21% | 1.24% | 1.24% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.19% | 1.16% | 1.18% | 0.73%(6) | 1.21% | 1.24% | 1.21% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.03)% | 0.34% | 0.22% | 0.68% | 0.14% | 0.04% | (0.46)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | A non-recurring expense adjustment impacted the Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets and Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets. The ratio would be 1.22% and 1.21%, respectively, without the inclusion of the non-recurring expense adjustment. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
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Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | Janus Global Select Fund | |||||||||||||||||||||||||||||
| ended September 30 and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.21 | $11.69 | $9.37 | $9.16 | $11.01 | $9.03 | $7.14 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.01(2) | 0.09(2) | 0.05 | 0.06 | 0.20 | (0.01) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.83 | 1.48 | 2.32 | 0.25 | (1.93) | 1.99 | 1.95 | |||||||||||||||||||||||
| Total from Investment Operations | 0.84 | 1.57 | 2.37 | 0.31 | (1.73) | 1.98 | 1.96 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.09) | (0.05) | (0.05) | (0.10) | (0.12) | –(3) | (0.06) | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | (0.01) | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.09) | (0.05) | (0.05) | (0.10) | (0.12) | – | (0.07) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.96 | $13.21 | $11.69 | $9.37 | $9.16 | $11.01 | $9.03 | |||||||||||||||||||||||
| Total Return* | 6.40% | 13.46% | 25.33% | 3.38% | (15.97)% | 21.96% | 27.96% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $570,907 | $567,919 | $595,722 | $653,810 | $831,865 | $1,381,716 | $3,133,551 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $565,504 | $596,800 | $616,392 | $811,160 | $1,277,525 | $2,008,730 | $2,600,372 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.93% | 0.93% | 0.96% | 0.97% | 0.96% | 0.95% | 0.97% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.93% | 0.92% | 0.95% | 0.97% | 0.96% | 0.95% | 0.96% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.22% | 0.67% | 0.49% | 0.39% | 0.59% | 0.22% | 0.14% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 33% | 55% | 53% | 182% | 138% | 116% | 125% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | 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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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Global Select 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. 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
20 | MARCH 31, 2015
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that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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 March 31, 2015, the Fund had restricted cash in the amount of $7,607,853. The restricted cash represents collateral pledged in relation to investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets,
22 | MARCH 31, 2015
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2015, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2015, the Fund has available investment quota of $7,607,853. The Fund is subject to certain restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
Emerging Market Investing
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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.
| 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 Global Select Fund | All Asset Levels | 0.64 | ||||||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Global Select Fund | 1.02 | |||||
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
24 | MARCH 31, 2015
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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 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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Global Select Fund | $ | 235 | ||||
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 March 31, 2015.
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 March 31, 2015.
As of March 31, 2015, 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 Select Fund - Class A Shares | – | % | – | % | ||||||
| Janus Global Select Fund - Class C Shares | – | – | ||||||||
| Janus Global Select Fund - Class D Shares | – | – | ||||||||
| Janus Global Select Fund - Class I Shares | 64 | 1 | ||||||||
| Janus Global Select Fund - Class R Shares | – | – | ||||||||
| Janus Global Select Fund - Class S Shares | – | – | ||||||||
| Janus Global Select Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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
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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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | �� | |||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||||
| Janus Global Select Fund | $ | 1,903,008,217 | $ | 475,071,686 | $ | (124,257,775) | $ | 350,813,911 | ||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
| Accumulated | ||||||||||||||||||||||
| September 30, | September 30, | No Expiration | Capital | |||||||||||||||||||
| Fund | 2016 | 2017 | Short-Term | Long-Term | Losses | |||||||||||||||||
Janus Global Select Fund(1) | $ | (3,575,412) | $ | (616,553,423) | $ | – | $ | – | $ | (620,128,835) | ||||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(618,341,129) should be available in the next fiscal year. |
| 5. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Global Select Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 36,628 | 38,875 | ||||||||
| Reinvested dividends and distributions | 2,369 | – | ||||||||
| Shares repurchased | (48,304) | (251,667) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (9,307) | (212,792) | ||||||||
| Shares Outstanding, Beginning of Period | 422,473 | 635,265 | ||||||||
| Shares Outstanding, End of Period | 413,166 | 422,473 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 13,482 | 9,713 | ||||||||
| Reinvested dividends and distributions | – | – | ||||||||
| Shares repurchased | (35,693) | (83,419) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (22,211) | (73,706) | ||||||||
| Shares Outstanding, Beginning of Period | 303,886 | 377,592 | ||||||||
| Shares Outstanding, End of Period | 281,675 | 303,886 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| For the period ended March 31 (unaudited) | Janus Global Select Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 1,197,814 | 2,877,318 | ||||||||
| Reinvested dividends and distributions | 871,951 | 604,370 | ||||||||
| Shares repurchased | (6,670,787) | (13,666,898) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (4,601,022) | (10,185,210) | ||||||||
| Shares Outstanding, Beginning of Period | 122,408,078 | 132,593,288 | ||||||||
| Shares Outstanding, End of Period | 117,807,056 | 122,408,078 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 195,189 | 367,566 | ||||||||
| Reinvested dividends and distributions | 20,876 | 17,399 | ||||||||
| Shares repurchased | (201,166) | (523,291) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 14,899 | (138,326) | ||||||||
| Shares Outstanding, Beginning of Period | 2,681,138 | 2,819,464 | ||||||||
| Shares Outstanding, End of Period | 2,696,037 | 2,681,138 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 2,188 | 8,322 | ||||||||
| Reinvested dividends and distributions | 30 | – | ||||||||
| Shares repurchased | (21,087) | (44,805) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (18,869) | (36,483) | ||||||||
| Shares Outstanding, Beginning of Period | 42,789 | 79,272 | ||||||||
| Shares Outstanding, End of Period | 23,920 | 42,789 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 2,086 | 6,612 | ||||||||
| Reinvested dividends and distributions | 159 | – | ||||||||
| Shares repurchased | (1,275) | (37,081) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 970 | (30,469) | ||||||||
| Shares Outstanding, Beginning of Period | 31,822 | 62,291 | ||||||||
| Shares Outstanding, End of Period | 32,792 | 31,822 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 1,147,767 | 2,598,099 | ||||||||
| Reinvested dividends and distributions | 278,548 | 192,521 | ||||||||
| Shares repurchased | (3,529,952) | (10,769,936) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (2,103,637) | (7,979,316) | ||||||||
| Shares Outstanding, Beginning of Period | 42,986,987 | 50,966,303 | ||||||||
| Shares Outstanding, End of Period | 40,883,350 | 42,986,987 | ||||||||
| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Select Fund | $ | 728,759,374 | $ | 838,559,380 | $ | – | $ | – | ||||||
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| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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
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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).
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-0515-87735 | 125-24-93046 05-15 |
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semiannual report
March 31, 2015
Janus Contrarian Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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FUND SNAPSHOT We believe a bottom-up process focused on nonconsensus, contrarian investment ideas will drive strong risk adjusted returns over time. Through our deep fundamental analysis, we seek to identify high-quality businesses, regardless of geography, and capitalize on asymmetrical risk/reward opportunities. |  Dan Kozlowski portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ending March 31, 2015, the Fund’s Class T Shares generated a return of 7.06% versus a 5.93% return for the S&P 500 Index, the Fund’s benchmark.
INVESTMENT ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
PERFORMANCE DISCUSSION
The Fund outperformed its benchmark, the S&P 500 Index, during the period. As part of our contrarian investment mandate, we seek companies that are undergoing a structural change in their business or industry that has gone unrecognized by the market, but we believe should positively reshape the company’s destiny, and stock performance, over time. These stocks are generally out of favor with investors, but if we correctly identify the changing dynamics at work within these companies or industries, the stocks in our portfolio have the potential to move from being out of favor to in favor as the company executes its turnaround. Our long-term performance ultimately should be driven by our ability to correctly identify companies that are early in the process of undergoing dramatic changes. During the period we were pleased to see many holdings in our portfolio continued to drive positive performance as the market received more indications of long-term improvements for the companies.
Some of our specialty pharmaceutical holdings were top contributors to performance during the period. We believe this is an industry undergoing significant, positive changes. After floundering for a decade due to expensive and often unproductive research and development (R&D) projects, new, financially minded CEOs have been brought in to lead a number of specialty pharmaceutical companies. These CEOs are accessing cheap financing and making shrewd acquisitions to boost product pipelines and achieve efficiencies in manufacturing, research and development and selling expenses. By acquiring companies with innovative therapies already in the pipeline, these new CEOs are making R&D spending more profitable and much less risky for their companies. Many of these companies have also redomiciled overseas where tax rates are lower, and that advantaged tax status allows them to pay a premium for future acquisition targets in deals that are still accretive because they can move the acquired company into a lower tax structure.
Two of the bigger acquirers within the industry, Mallinckrodt Pharmaceuticals and Endo International, were top contributors this during the period. Since its spin-off from Covidien, Mallinckrodt’s management team has made a number of operational improvements. The stock was up the first quarter of 2015 after the company gave better than expected earnings guidance for 2015. An announcement that Mallinckrodt would acquire Ikaria, a company developing innovative therapies and delivery systems that cater to critically ill infants in hospitals’ neonatal intensive care units, also helped drive the stock.
Endo International, meanwhile, was up after the company gave an outlook for organic growth that was better than expected. We continue to like the direction Endo’s CEO is taking the company. The CEO came from one of the most successful specialty pharmaceutical companies of the last five years. That company had an impressive strategy of driving down its operating expenses and making shrewd
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acquisitions to help grow the business, and we expect Endo’s CEO to continue to improve the company as he executes a similar strategy.
We were also pleased by the results of many of our holdings outside the specialty pharmaceutical industry. For example, United Continental was a top contributor to performance. Airline companies have comprised large positions in our portfolio over the last three years due to improving competitive dynamics taking place in the industry. Consolidation from several large mergers has led to a reduction of airline capacity, giving large airlines like United Continental pricing power for the first time in decades. As major airlines gain pricing power, and also operational efficiencies, through consolidation, these companies are creating tremendous shareholder value, in our opinion. This was evident for United Continental during the period.
While generally pleased with performance during the period, we still had some stocks that fell and were large detractors from performance. Rayonier Advanced Materials was a large detractor. This specialty chemicals business was spun off from Rayonier Inc. last summer. We originally bought the stock because we thought the company would have more control over its own destiny after the spin-off. With a strong balance sheet intact when it was spun off, we thought the management team would be aggressive in making acquisitions to consolidate the industry and create a more favorable pricing environment. However, excess supply within the specialty chemicals industry has been a larger headwind to the pricing environment than we expected and we are currently reviewing the long-term impact on the company.
Knowles Corporation was also a detractor from our performance. The company was spun out of Dover, and manufactures microphones, and microspeakers for mobile phones and other devices. There has been a lot of negative sentiment around the stock after some of Knowles’ microphones used in the iPhone 6 were defective, causing speculation the microphones would not be used in future Apple products. The company has since reached a new deal with Apple, but not until the second quarter. We continue to like the company’s prospects, especially now that the spun off company has control over its own destiny. We think the stock’s current valuation doesn’t reflect the company’s potential even if it was left out of the Apple vendor lineup. With Apple as a partner again, we believe there could be a significant change in sentiment around the company.
NOW Inc., also called DistributionNOW, was another detractor. The company was spun out of National Oilwell Varco, and is a distributor serving the energy sector. Like many stocks serving the oil industry, the stock was weak due to fears that lower oil prices would ultimately translate into less demand for the company’s services. However, we like the long-term outlook for the company. NOW Inc. was spun out with a clean balance sheet, and we believe the company will eventually be active in consolidating the consumable and replacement parts industry serving the energy sector. We also have a high degree of confidence in the company’s management team.
DERIVATIVES USE
Derivatives, including options, futures and forward exchange contracts, are used in the portfolio to generate income (through selling calls and selling puts), to have exposure to a position without owning it (generally selling a put to buy a call – often referred to as stock replacement), and periodically to hedge market risk (generally, by buying puts in market indices, such as the S&P 500). The purpose of the option strategy is an attempt to generate income and reduce the risk in the portfolio. The purpose of the futures strategy is to reduce the overall volatility of the Fund. The purpose of our forward exchange contracts strategy is to hedge currency exposure in the portfolio. During the period, our use of derivatives contributed to relative results. Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
We believe equity valuations are more fully valued on a broad basis, which makes us more cautious about equity markets in general. However, broad equity market valuations have less of an impact on our investment process. The new ideas we find for the portfolio typically have a lot of negative sentiment surrounding the company, and thus trade at lower valuations than the rest of the market. In terms of generating new ideas, we remain encouraged by the fact that our analysts continue to identify plenty of new potential investments for the portfolio.
We have mentioned this in previous outlooks, but it remains true that without a fast-growing economy at their backs for the last five years, corporate boards and management teams have been forced to take a harder look at their businesses and make the types of sweeping changes required to reshape a company’s long-term destiny. We’ve seen an increase in the number of companies divesting noncore assets, changing management teams or making acquisitions to consolidate the industry in which the company operates. If we are
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(unaudited)
correct in identifying those companies and industries that are early in implementing these types of material, positive changes should drive relative outperformance over time.
Thank you for your continued investment in Janus Contrarian Fund.
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Janus Contrarian Fund (unaudited)
Janus Contrarian Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| United Continental Holdings, Inc. | 2.55% | |||
| Mallinckrodt PLC | 2.21% | |||
| Endo International PLC | 2.13% | |||
| United Continental Holdings, Inc. – Call expired March 2015 exercise price $55.00 | 1.22% | |||
| Wolverine World Wide, Inc. | 0.59% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Rayonier Advanced Materials, Inc. | –1.24% | |||
| Knowles Corp. | –1.17% | |||
| NOW, Inc. | –0.71% | |||
| United Continental Holdings, Inc. – Call expires June 2015 exercise price $75.00 | –0.42% | |||
| Microsoft Corp. | –0.40% | |||
5 Top Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Health Care | 2.32% | 15.60% | 14.50% | |||||||||
| Industrials | 2.05% | 22.17% | 10.36% | |||||||||
| Energy | 0.47% | 7.00% | 8.54% | |||||||||
| Telecommunication Services | 0.19% | –0.11% | 2.35% | |||||||||
| Financials | 0.10% | 11.94% | 16.33% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | S&P 500® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Information Technology | –1.99% | 15.53% | 19.67% | |||||||||
| Materials | –0.57% | 9.10% | 3.25% | |||||||||
| Consumer Staples | –0.46% | 4.67% | 9.81% | |||||||||
| Consumer Discretionary | –0.33% | 13.29% | 12.03% | |||||||||
| Other** | –0.19% | 0.95% | 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 March 31, 2015
| Endo International PLC Pharmaceuticals | 8.8% | |||
| United Continental Holdings, Inc. Airlines | 8.5% | |||
| Mallinckrodt PLC Pharmaceuticals | 6.9% | |||
| Air Products & Chemicals, Inc. Chemicals | 4.9% | |||
| Motorola Solutions, Inc. Communications Equipment | 4.9% | |||
| 34.0% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
* Other of (9.4)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Contrarian Fund – Class A Shares | |||||||||||||
| NAV | 7.03% | 12.63% | 11.78% | 9.17% | 7.94% | 1.02% | |||||||
| MOP | 0.87% | 6.15% | 10.46% | 8.53% | 7.52% | ||||||||
| Janus Contrarian Fund – Class C Shares | |||||||||||||
| NAV | 6.59% | 11.74% | 10.90% | 8.34% | 7.12% | 1.80% | |||||||
| CDSC | 5.63% | 10.74% | 10.90% | 8.34% | 7.12% | ||||||||
| Janus Contrarian Fund – Class D Shares(1) | 7.11% | 12.85% | 12.00% | 9.37% | 8.12% | 0.80% | |||||||
| Janus Contrarian Fund – Class I Shares | 7.09% | 12.88% | 12.08% | 9.32% | 8.09% | 0.74% | |||||||
| Janus Contrarian Fund – Class R Shares | 6.82% | 12.18% | 11.33% | 8.72% | 7.48% | 1.39% | |||||||
| Janus Contrarian Fund – Class S Shares | 6.94% | 12.44% | 11.62% | 8.99% | 7.75% | 1.16% | |||||||
| Janus Contrarian Fund – Class T Shares | 7.06% | 12.71% | 11.90% | 9.32% | 8.09% | 0.89% | |||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 4.77% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 3rd | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Blend Funds | – | 321/1,609 | 1,011/1,353 | 63/1,122 | 58/837 | ||||||||
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)
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 derivatives can be highly volatile and involve additional risks than if the underlying securities were held directly. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities.
There are special risks associated with selling securities short. Stocks sold short have the potential risk of unlimited losses.
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 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.
© 2015 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 – February 29, 2000 | |
| (1) | Closed to new investors. |
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Janus Contrarian 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,070.30 | $ | 5.78 | $ | 1,000.00 | $ | 1,019.35 | $ | 5.64 | 1.12% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,065.90 | $ | 9.68 | $ | 1,000.00 | $ | 1,015.56 | $ | 9.45 | 1.88% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,071.10 | $ | 4.85 | $ | 1,000.00 | $ | 1,020.24 | $ | 4.73 | 0.94% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,070.90 | $ | 4.34 | $ | 1,000.00 | $ | 1,020.74 | $ | 4.23 | 0.84% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,068.20 | $ | 7.89 | $ | 1,000.00 | $ | 1,017.30 | $ | 7.70 | 1.53% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,069.40 | $ | 6.60 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.44 | 1.28% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,070.60 | $ | 5.32 | $ | 1,000.00 | $ | 1,019.80 | $ | 5.19 | 1.03% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 97.8% | ||||||||||
| Airlines – 8.5% | ||||||||||
| 5,740,429 | United Continental Holdings, Inc.*,† | $ | 386,043,850 | |||||||
| Capital Markets – 3.3% | ||||||||||
| 300,504 | Blackstone Group LP | 11,686,601 | ||||||||
| 4,907,146 | E*TRADE Financial Corp.* | 140,123,554 | ||||||||
| 151,810,155 | ||||||||||
| Chemicals – 6.3% | ||||||||||
| 1,482,783 | Air Products & Chemicals, Inc. | 224,315,412 | ||||||||
| 935,239 | Platform Specialty Products Corp.*,# | 23,998,233 | ||||||||
| 2,786,145 | Rayonier Advanced Materials, Inc.#,£ | 41,513,561 | ||||||||
| 289,827,206 | ||||||||||
| Commercial Banks – 3.1% | ||||||||||
| 2,783,058 | Citigroup, Inc. | 143,383,148 | ||||||||
| Communications Equipment – 4.9% | ||||||||||
| 3,350,323 | Motorola Solutions, Inc.† | 223,366,034 | ||||||||
| Consumer Finance – 1.0% | ||||||||||
| 1,497,208 | Synchrony Financial*,# | 45,440,263 | ||||||||
| Containers & Packaging – 4.0% | ||||||||||
| 1,195,958 | Ball Corp.† | 84,482,473 | ||||||||
| 1,770,876 | Crown Holdings, Inc.* | 95,662,722 | ||||||||
| 180,145,195 | ||||||||||
| Diversified Financial Services – 3.1% | ||||||||||
| 74,657 | Berkshire Hathaway, Inc. – Class B* | 10,774,498 | ||||||||
| 1,093,076 | CME Group, Inc. | 103,525,228 | ||||||||
| 246,307 | Moody’s Corp. | 25,566,667 | ||||||||
| 139,866,393 | ||||||||||
| Electronic Equipment, Instruments & Components – 3.3% | ||||||||||
| 7,872,648 | Knowles Corp.*,#,£ | 151,705,927 | ||||||||
| Energy Equipment & Services – 0.5% | ||||||||||
| 377,746 | Baker Hughes, Inc. | 24,017,091 | ||||||||
| Food & Staples Retailing – 1.3% | ||||||||||
| 1,599,443 | Sysco Corp. | 60,346,984 | ||||||||
| Food Products – 1.0% | ||||||||||
| 929,289 | Post Holdings, Inc.*,# | 43,527,897 | ||||||||
| Hotels, Restaurants & Leisure – 2.0% | ||||||||||
| 8,370,056 | Wendy’s Co. | 91,233,610 | ||||||||
| Information Technology Services – 3.6% | ||||||||||
| 1,506,703 | Amdocs, Ltd. (U.S. Shares) | 81,964,643 | ||||||||
| 2,322,839 | Blackhawk Network Holdings, Inc. – Class B*,£ | 82,576,927 | ||||||||
| 164,541,570 | ||||||||||
| Internet & Catalog Retail – 2.4% | ||||||||||
| 3,098,621 | Lands’ End, Inc.*,#,£ | 111,178,521 | ||||||||
| Internet Software & Services – 0.9% | ||||||||||
| 492,885 | Alibaba Group Holding, Ltd. (ADR)*,# | 41,027,747 | ||||||||
| Leisure Products – 0.5% | ||||||||||
| 1,005,551 | Mattel, Inc. | 22,976,840 | ||||||||
| Machinery – 2.6% | ||||||||||
| 2,002,306 | Colfax Corp.*,# | 95,570,066 | ||||||||
| 576,279 | Joy Global, Inc. | 22,578,611 | ||||||||
| 118,148,677 | ||||||||||
| Media – 3.7% | ||||||||||
| 1,618,634 | Comcast Corp. – Class A | 91,404,262 | ||||||||
| 1,958,737 | News Corp. – Class A* | 31,359,379 | ||||||||
| 773,813 | Tribune Media Co. – Class A# | 47,055,569 | ||||||||
| 169,819,210 | ||||||||||
| Multiline Retail – 3.3% | ||||||||||
| 1,830,776 | Dollar Tree, Inc.* | 148,558,319 | ||||||||
| Oil, Gas & Consumable Fuels – 5.6% | ||||||||||
| 675,608 | Anadarko Petroleum Corp. | 55,947,099 | ||||||||
| 122,294 | Exxon Mobil Corp. | 10,394,990 | ||||||||
| 1,762,672 | MarkWest Energy Partners LP | 116,512,619 | ||||||||
| 935,304 | Phillips 66 | 73,514,894 | ||||||||
| 256,369,602 | ||||||||||
| Personal Products – 2.2% | ||||||||||
| 2,381,736 | Herbalife, Ltd.*,# | 101,843,031 | ||||||||
| Pharmaceuticals – 18.8% | ||||||||||
| 4,465,465 | Endo International PLC* | 400,552,210 | ||||||||
| 17,637,650 | Indivior PLC* | 49,619,210 | ||||||||
| 2,505,227 | Mallinckrodt PLC* | 317,287,000 | ||||||||
| 1,962,969 | Zoetis, Inc. | 90,865,835 | ||||||||
| 858,324,255 | ||||||||||
| Real Estate Management & Development – 4.6% | ||||||||||
| 13,771,577 | Colony American Homes Holdings III LP*,§ | 15,837,314 | ||||||||
| 10,451,593 | St Joe Co.*,†,#,£ | 193,981,566 | ||||||||
| 209,818,880 | ||||||||||
| Software – 2.4% | ||||||||||
| 2,719,192 | Microsoft Corp. | 110,548,751 | ||||||||
| Specialty Retail – 1.0% | ||||||||||
| 206,194 | Home Depot, Inc. | 23,425,700 | ||||||||
| 319,694 | Murphy USA, Inc.* | 23,136,255 | ||||||||
| 46,561,955 | ||||||||||
| Textiles, Apparel & Luxury Goods – 2.1% | ||||||||||
| 2,882,821 | Wolverine World Wide, Inc.# | 96,430,362 | ||||||||
| Tobacco – 0.8% | ||||||||||
| 6,989,851 | ITC, Ltd. | 36,360,976 | ||||||||
| Trading Companies & Distributors – 1.0% | ||||||||||
| 2,174,827 | NOW, Inc.*,# | 47,063,256 | ||||||||
| Total Common Stocks (cost $3,673,162,686) | 4,470,285,705 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Counterparty/Reference Asset | ||||||||||
| OTC Purchased Options – Calls – 0.8% | ||||||||||
| Credit Suisse International: | ||||||||||
| United Continental Holdings, Inc.* expires June 2015 8,400 contracts exercise price $72.50 | $ | 2,656,653 | ||||||||
| United Continental Holdings, Inc.* expires June 2015 9,365 contracts exercise price $70.00 | 3,838,523 | |||||||||
| United Continental Holdings, Inc.* expires June 2015 28,101 contracts exercise price $75.00 | 6,855,163 | |||||||||
| Goldman Sachs & Co.: | ||||||||||
| United Continental Holdings, Inc.* expires June 2015 7,847 contracts exercise price $70.00 | 3,216,326 | |||||||||
| United Continental Holdings, Inc.* expires June 2015 30,138 contracts exercise price $72.50 | 9,531,691 | |||||||||
| United Continental Holdings, Inc.* expires June 2015 32,043 contracts exercise price $75.00 | 7,816,803 | |||||||||
| UBS AG: United Continental Holdings, Inc.* expires June 2015 12,210 contracts exercise price $75.00 | 2,978,597 | |||||||||
| Total OTC Purchased Options – Calls (premiums paid $81,731,916) | 36,893,756 | |||||||||
| Investment Companies – 10.8% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 8.8% | ||||||||||
| 400,958,653 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 400,958,653 | ||||||||
| Money Markets – 2.0% | ||||||||||
| 94,349,404 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 94,349,404 | ||||||||
| Total Investment Companies (cost $495,308,057) | 495,308,057 | |||||||||
| Total Investments (total cost $4,250,202,659) – 109.4% | 5,002,487,518 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (9.4)% | (431,673,807) | |||||||||
| Net Assets – 100% | $ | 4,570,813,711 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 4,875,479,585 | 97 | .5% | ||||
| United Kingdom | 49,619,210 | 1 | .0 | |||||
| China | 41,027,747 | 0 | .8 | |||||
| India | 36,360,976 | 0 | .7 | |||||
| Total | $ | 5,002,487,518 | 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 4/9/15 | 2,493,000 | $ | 3,697,414 | $ | 104,346 | |||||||
| HSBC Securities (USA), Inc.: British Pound 4/9/15 | 7,350,000 | 10,900,921 | (6,652) | |||||||||
| JPMorgan Chase & Co.: British Pound 4/16/15 | 512,000 | 759,317 | (741) | |||||||||
| Total | $ | 15,357,652 | $ | 96,953 | ||||||||
Schedule of Futures – Short
| Unrealized | ||||
| Appreciation/ | ||||
| Description | (Depreciation) | |||
S&P 500® E-mini expires June 2015 3,588 contracts principal amount $366,459,214 value $369,707,520 | $ | (3,248,306) | ||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| S&P 500® Index | Measures broad U.S. equity performance. | |
| 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. |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Contrarian Fund | $ | 414,705,875 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Contrarian Fund | ||||||||||||||
| Colony American Homes Holdings III LP | 1/30/13 | $ | 13,788,838 | $ | 15,837,314 | 0.3 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Contrarian Fund | |||||||||||||||||||||
| Blackhawk Network Holdings, Inc. | 167,970 | – | (167,970) | – | $ | 1,468,577 | $ | – | $ | – | |||||||||||
| Blackhawk Network Holdings, Inc. – Class B | 2,015,852 | 422,264 | (115,277) | 2,322,839 | (546,079) | – | 82,576,927 | ||||||||||||||
| Janus Cash Collateral Fund LLC | 335,527,059 | 850,929,844 | (785,498,250) | 400,958,653 | – | 3,338,087(1) | 400,958,653 | ||||||||||||||
| Janus Cash Liquidity Fund LLC | 54,149,470 | 965,593,645 | (925,393,711) | 94,349,404 | – | 47,484 | 94,349,404 | ||||||||||||||
| Knowles Corp. | 4,595,571 | 3,277,077 | – | 7,872,648 | – | – | 151,705,927 | ||||||||||||||
| Lands’ End, Inc. | 3,012,307 | 86,314 | – | 3,098,621 | – | – | 111,178,521 | ||||||||||||||
| Rayonier Advanced Materials, Inc. | 2,513,326 | 906,832 | (634,013) | 2,786,145 | (17,071,658) | 445,243 | 41,513,561 | ||||||||||||||
| St Joe Co. | 10,027,714 | 423,879 | – | 10,451,593 | – | – | 193,981,566 | ||||||||||||||
| Total | $ | (16,149,160) | $ | 3,830,814 | $ | 1,076,264,559 | |||||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Contrarian Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Pharmaceuticals | $ | 808,705,045 | $ | 49,619,210 | $ | – | |||||
| Real Estate Management & Development | 193,981,566 | – | 15,837,314 | ||||||||
| Tobacco | – | 36,360,976 | – | ||||||||
| All Other | 3,365,781,594 | – | – | ||||||||
OTC Purchased Options – Calls | – | 36,893,756 | – | ||||||||
Investment Companies | – | 495,308,057 | – | ||||||||
| Total Investments in Securities | $ | 4,368,468,205 | $ | 618,181,999 | $ | 15,837,314 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 104,346 | $ | – | |||||
Variation Margin Receivable | 2,655,120 | – | – | ||||||||
Total Assets | $ | 4,371,123,325 | $ | 618,286,345 | $ | 15,837,314 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 7,393 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Contrarian Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 4,250,202,659 | ||
Unaffiliated investments, at value(1) | $ | 3,926,222,959 | ||
Affiliated investments, at value(2) | 1,076,264,559 | |||
| Cash | 228,971 | |||
| Forward currency contracts | 104,346 | |||
| Closed foreign currency contracts | 7,031 | |||
| Variation margin receivable | 2,655,120 | |||
| Non-interested Trustees’ deferred compensation | 89,825 | |||
| Receivables: | ||||
| Investments sold | 3,713,034 | |||
| Fund shares sold | 3,147,540 | |||
| Dividends | 8,696,974 | |||
| Dividends from affiliates | 5,630 | |||
| Foreign dividend tax reclaim | 547,925 | |||
| Other assets | 32,901 | |||
| Total Assets | 5,021,716,815 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 3) | 400,958,653 | |||
| Forward currency contracts | 7,393 | |||
| Payables: | ||||
| Investments purchased | 42,077,283 | |||
| Fund shares repurchased | 3,658,734 | |||
| Advisory fees | 2,905,220 | |||
| Fund administration fees | 38,963 | |||
| Transfer agent fees and expenses | 850,743 | |||
| 12b-1 Distribution and shareholder servicing fees | 115,652 | |||
| Non-interested Trustees’ fees and expenses | 26,764 | |||
| Non-interested Trustees’ deferred compensation fees | 89,825 | |||
| Accrued expenses and other payables | 173,874 | |||
| Total Liabilities | 450,903,104 | |||
| Net Assets | $ | 4,570,813,711 | ||
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 March 31, 2015 (unaudited) | Janus Contrarian Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 3,689,339,347 | ||
| Undistributed net investment income/(loss) | (3,105,961) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 135,431,578 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 749,148,747 | |||
| Total Net Assets | $ | 4,570,813,711 | ||
| Net Assets - Class A Shares | $ | 134,843,449 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,057,237 | |||
Net Asset Value Per Share(3) | $ | 22.26 | ||
Maximum Offering Price Per Share(4) | $ | 23.62 | ||
| Net Assets - Class C Shares | $ | 101,859,061 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,756,630 | |||
Net Asset Value Per Share(3) | $ | 21.41 | ||
| Net Assets - Class D Shares | $ | 2,497,175,477 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 111,765,063 | |||
| Net Asset Value Per Share | $ | 22.34 | ||
| Net Assets - Class I Shares | $ | 450,760,321 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 20,184,835 | |||
| Net Asset Value Per Share | $ | 22.33 | ||
| Net Assets - Class R Shares | $ | 2,090,939 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 95,218 | |||
| Net Asset Value Per Share | $ | 21.96 | ||
| Net Assets - Class S Shares | $ | 6,981,721 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 313,502 | |||
| Net Asset Value Per Share | $ | 22.27 | ||
| Net Assets - Class T Shares | $ | 1,377,102,743 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 61,690,704 | |||
| Net Asset Value Per Share | $ | 22.32 | ||
| (1) | Includes $218,562,297 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes $172,096,027 of securities on loan. See Note 3 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 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Contrarian Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 3,338,087 | ||
| Dividends | 24,603,071 | |||
| Dividends from affiliates | 492,727 | |||
| Other income | 198 | |||
| Total Investment Income | 28,434,083 | |||
| Expenses: | ||||
| Advisory fees | 16,422,372 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 133,507 | |||
| Class C Shares | 391,623 | |||
| Class R Shares | 5,157 | |||
| Class S Shares | 9,355 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 1,458,928 | |||
| Class R Shares | 2,578 | |||
| Class S Shares | 9,355 | |||
| Class T Shares | 1,702,122 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 41,434 | |||
| Class C Shares | 34,078 | |||
| Class I Shares | 124,688 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 5,959 | |||
| Class C Shares | 5,614 | |||
| Class D Shares | 290,586 | |||
| Class I Shares | 8,426 | |||
| Class R Shares | 49 | |||
| Class S Shares | 55 | |||
| Class T Shares | 10,738 | |||
| Shareholder reports expense | 307,922 | |||
| Registration fees | 105,613 | |||
| Custodian fees | 21,314 | |||
| Professional fees | 51,590 | |||
| Non-interested Trustees’ fees and expenses | 52,133 | |||
| Stock loan fees | 6,670 | |||
| Fund administration fees | 182,356 | |||
| Other expenses | 108,212 | |||
| Total Expenses | 21,492,434 | |||
| Net Expenses | 21,492,434 | |||
| Net Investment Income/(Loss) | 6,941,649 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 268,150,819 | |||
| Investments in affiliates | (16,149,160) | |||
| Futures contracts | (7,223,667) | |||
| Short sales | (1,476,869) | |||
| Total Net Realized Gain/(Loss) on Investments | 243,301,123 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 65,632,342 | |||
| Futures contracts | (6,951,810) | |||
| Short sales | (1,956,441) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 56,724,091 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 306,966,863 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus | ||||||||
| Contrarian Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 6,941,649 | $ | 7,906,050 | ||||
| Net realized gain/(loss) on investments | 243,301,123 | 643,091,680 | ||||||
| Change in unrealized net appreciation/depreciation | 56,724,091 | 145,615,137 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 306,966,863 | 796,612,867 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (278,953) | (4,939) | ||||||
| Class D Shares | (7,604,911) | (4,076,137) | ||||||
| Class I Shares | (1,718,839) | (312,235) | ||||||
| Class S Shares | (4,684) | – | ||||||
| Class T Shares | (3,095,172) | (1,515,990) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (10,141,869) | �� | – | |||||
| Class C Shares | (7,191,085) | – | ||||||
| Class D Shares | (232,877,664) | – | ||||||
| Class I Shares | (38,595,332) | – | ||||||
| Class R Shares | (189,010) | – | ||||||
| Class S Shares | (757,586) | – | ||||||
| Class T Shares | (130,435,409) | – | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (432,890,514) | (5,909,301) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 64,687,494 | 57,257,857 | ||||||
| Class C Shares | 50,639,301 | 33,365,683 | ||||||
| Class D Shares | 72,845,425 | 116,394,836 | ||||||
| Class I Shares | 193,698,633 | 265,244,632 | ||||||
| Class R Shares | 506,590 | 955,570 | ||||||
| Class S Shares | 1,714,160 | 4,268,514 | ||||||
| Class T Shares | 217,296,971 | 403,549,761 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 9,572,764 | 4,784 | ||||||
| Class C Shares | 5,181,008 | – | ||||||
| Class D Shares | 235,738,914 | 4,000,437 | ||||||
| Class I Shares | 26,015,077 | 291,293 | ||||||
| Class R Shares | 189,010 | – | ||||||
| Class S Shares | 762,270 | – | ||||||
| Class T Shares | 131,226,809 | 1,487,245 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (12,250,400) | (14,819,124) | ||||||
| Class C Shares | (8,105,802) | (4,487,427) | ||||||
| Class D Shares | (122,456,729) | (203,304,825) | ||||||
| Class I Shares | (86,983,258) | (52,213,653) | ||||||
| Class R Shares | (550,528) | (1,000,626) | ||||||
| Class S Shares | (1,599,961) | (911,966) | ||||||
| Class T Shares | (241,421,628) | (339,376,709) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 536,706,120 | 270,706,282 | ||||||
| Net Increase/(Decrease) in Net Assets | 410,782,469 | 1,061,409,848 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 4,160,031,242 | 3,098,621,394 | ||||||
| End of period | $ | 4,570,813,711 | $ | 4,160,031,242 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (3,105,961) | $ | 2,654,949 | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.11 | $18.48 | $13.91 | $11.29 | $13.97 | $11.68 | $10.42 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(3) | 0.02(3) | 0.01 | 0.04 | (0.06) | 0.01 | (0.02) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.46 | 4.61 | 4.65 | 2.58 | (2.60) | 2.28 | 1.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.49 | 4.63 | 4.66 | 2.62 | (2.66) | 2.29 | 1.26 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.06) | –(4) | (0.09) | – | (0.02) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (2.34) | – | (0.09) | – | (0.02) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.26 | $23.11 | $18.48 | $13.91 | $11.29 | $13.97 | $11.68 | |||||||||||||||||||||||
| Total Return* | 7.03% | 25.08% | 33.67% | 23.21% | (19.09)% | 19.61% | 12.09% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $134,843 | $75,649 | $25,397 | $23,930 | $33,491 | $73,013 | $68,166 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $107,099 | $46,300 | $24,023 | $28,841 | $64,181 | $72,658 | $76,549 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.12% | 1.02% | 0.85% | 0.91% | 0.90% | 1.06% | 1.43% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.12% | 1.02% | 0.85% | 0.91% | 0.90% | 1.06% | 1.34% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.27% | 0.10% | 0.22% | 0.50% | 0.30% | 0.11% | (0.36)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $22.34 | $18.01 | $13.59 | $11.12 | $13.84 | $11.65 | $10.42 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(3) | (0.15)(3) | (0.28) | (0.36) | (0.34) | (0.10) | (0.05) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.40 | 4.48 | 4.70 | 2.83 | (2.38) | 2.29 | 1.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.35 | 4.33 | 4.42 | 2.47 | (2.72) | 2.19 | 1.23 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $21.41 | $22.34 | $18.01 | $13.59 | $11.12 | $13.84 | $11.65 | |||||||||||||||||||||||
| Total Return* | 6.59% | 24.04% | 32.52% | 22.21% | (19.65)% | 18.80% | 11.80% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $101,859 | $56,098 | $21,162 | $19,148 | $26,153 | $63,203 | $64,036 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $78,540 | $34,189 | $20,204 | $22,509 | $52,601 | $65,635 | $67,507 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.88% | 1.80% | 1.70% | 1.75% | 1.62% | 1.85% | 2.37% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.88% | 1.80% | 1.70% | 1.70% | 1.62% | 1.85% | 2.09% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.48)% | (0.69)% | (0.62)% | (0.29)% | (0.43)% | (0.69)% | (1.12)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Contrarian Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.18 | $18.53 | $13.98 | $11.32 | $14.01 | $12.96 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.04(2) | 0.05(2) | 0.07 | 0.12 | 0.01 | 0.05 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.47 | 4.64 | 4.63 | 2.54 | (2.66) | 1.00 | ||||||||||||||||||||
| Total from Investment Operations | 1.51 | 4.69 | 4.70 | 2.66 | (2.65) | 1.05 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.07) | (0.04) | (0.15) | –(3) | (0.04) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (2.35) | (0.04) | (0.15) | – | (0.04) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $22.34 | $23.18 | $18.53 | $13.98 | $11.32 | $14.01 | ||||||||||||||||||||
| Total Return* | 7.11% | 25.33% | 33.88% | 23.51% | (18.96)% | 8.10% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,497,175 | $2,382,592 | $1,977,490 | $1,599,671 | $1,476,010 | $2,134,011 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,438,226 | $2,258,453 | $1,813,911 | $1,613,932 | $2,012,506 | $2,113,716 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.94% | 0.80% | 0.68% | 0.66% | 0.69% | 0.80% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.94% | 0.80% | 0.68% | 0.66% | 0.69% | 0.80% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.35% | 0.24% | 0.41% | 0.75% | 0.55% | 0.52% | ||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.20 | $18.55 | $13.98 | $11.33 | $14.01 | $11.70 | $10.42 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.06(2) | 0.09(2) | 0.11 | 0.12 | (0.01) | 0.05 | –(3) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.45 | 4.63 | 4.62 | 2.53 | (2.61) | 2.28 | 1.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.51 | 4.72 | 4.73 | 2.65 | (2.62) | 2.33 | 1.28 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.10) | (0.07) | (0.16) | –(3) | (0.06) | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (2.38) | (0.07) | (0.16) | – | (0.06) | (0.02) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.33 | $23.20 | $18.55 | $13.98 | $11.33 | $14.01 | $11.70 | |||||||||||||||||||||||
| Total Return* | 7.09% | 25.47% | 34.09% | 23.39% | (18.80)% | 19.90% | 12.28% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $450,760 | $329,245 | $85,000 | $44,907 | $58,036 | $126,187 | $57,734 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $402,987 | $184,931 | $69,116 | $51,304 | $115,103 | $94,317 | $27,329 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.84% | 0.74% | 0.52% | 0.62% | 0.65% | 0.74% | 0.94% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.84% | 0.74% | 0.52% | 0.62% | 0.65% | 0.74% | 0.90% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.49% | 0.40% | 0.59% | 0.80% | 0.54% | 0.42% | (0.13)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class R Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $22.81 | $18.31 | $13.76 | $11.21 | $13.91 | $11.67 | $10.42 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(3) | (0.07)(3) | (0.16) | (0.07) | (0.11) | (0.02) | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.45 | 4.57 | 4.72 | 2.62 | (2.59) | 2.26 | 1.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.43 | 4.50 | 4.56 | 2.55 | (2.70) | 2.24 | 1.25 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | (0.01) | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (2.28) | – | (0.01) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $21.96 | $22.81 | $18.31 | $13.76 | $11.21 | $13.91 | $11.67 | |||||||||||||||||||||||
| Total Return* | 6.82% | 24.58% | 33.12% | 22.75% | (19.41)% | 19.19% | 12.00% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,091 | $1,994 | $1,634 | $1,877 | $2,506 | $3,905 | $2,549 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,068 | $1,910 | $1,715 | $2,053 | $3,679 | $3,256 | $2,682 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.53% | 1.38% | 1.25% | 1.24% | 1.30% | 1.43% | 1.67% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.53% | 1.38% | 1.25% | 1.24% | 1.30% | 1.43% | 1.65% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.21)% | (0.35)% | (0.18)% | 0.15% | (0.07)% | (0.30)% | (0.68)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.09 | $18.48 | $13.87 | $11.27 | $13.96 | $11.68 | $10.42 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | –(3)(4) | (0.01)(3) | (0.05) | 0.04 | (0.11) | 0.01 | (0.02) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.47 | 4.62 | 4.69 | 2.56 | (2.58) | 2.27 | 1.28 | |||||||||||||||||||||||
| Total from Investment Operations | 1.47 | 4.61 | 4.64 | 2.60 | (2.69) | 2.28 | 1.26 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.01) | – | (0.03) | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (2.29) | – | (0.03) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.27 | $23.09 | $18.48 | $13.87 | $11.27 | $13.96 | $11.68 | |||||||||||||||||||||||
| Total Return* | 6.94% | 24.95% | 33.50% | 23.07% | (19.27)% | 19.52% | 12.09% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $6,982 | $6,346 | $2,022 | $2,598 | $2,662 | $7,021 | $4,493 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $7,505 | $5,130 | $1,850 | $2,688 | $5,556 | $7,644 | $4,551 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.28% | 1.16% | 1.00% | 1.00% | 1.06% | 1.18% | 1.42% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.28% | 1.15% | 0.99% | 0.99% | 1.06% | 1.18% | 1.40% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.01)% | (0.05)% | 0.07% | 0.42% | 0.11% | (0.02)% | (0.46)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 19
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Financial Highlights (continued)
Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | Janus Contrarian Fund | |||||||||||||||||||||||||||||
| ended September 30 and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.15 | $18.51 | $13.96 | $11.31 | $14.00 | $11.69 | $10.90 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(2) | 0.03(2) | 0.05 | 0.09 | (0.04) | –(3) | –(3) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.47 | 4.64 | 4.63 | 2.56 | (2.62) | 2.32 | 1.22 | |||||||||||||||||||||||
| Total from Investment Operations | 1.50 | 4.67 | 4.68 | 2.65 | (2.66) | 2.32 | 1.22 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.05) | (0.03) | (0.13) | – | (0.03) | (0.01) | (0.05) | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.28) | – | – | – | – | – | (0.37) | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | (0.01) | |||||||||||||||||||||||
| Total Distributions | (2.33) | (0.03) | (0.13) | – | (0.03) | (0.01) | (0.43) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $22.32 | $23.15 | $18.51 | $13.96 | $11.31 | $14.00 | $11.69 | |||||||||||||||||||||||
| Total Return* | 7.06% | 25.24% | 33.76% | 23.43% | (19.04)% | 19.81% | 12.35% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,377,103 | $1,308,109 | $985,916 | $769,713 | $849,035 | $1,701,378 | $3,655,102 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,365,439 | $1,238,665 | $894,444 | $838,592 | $1,474,114 | $2,454,799 | $3,398,196 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.03% | 0.89% | 0.76% | 0.75% | 0.81% | 0.91% | 1.01% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.03% | 0.89% | 0.75% | 0.74% | 0.81% | 0.91% | 1.00% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.26% | 0.16% | 0.34% | 0.67% | 0.40% | 0.16% | 0.02% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 31% | 61% | 66% | 53% | 130% | 95% | 80% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
20 | MARCH 31, 2015
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Contrarian 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 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.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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
22 | MARCH 31, 2015
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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.
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for
24 | MARCH 31, 2015
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nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Contrarian Fund | $ | 12,581,521 | ||||
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/(depreciation) is reported on the Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
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 sold futures contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Contrarian Fund | $ | 154,296,014 | ||||
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by such Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on various equity securities for the purpose of increasing exposure to individual equity risk.
During the period, the Fund purchased put options on various equity securities for the purpose of decreasing exposure to individual equity risk.
The following table provides average ending monthly market value amounts on purchased call and put options during the period ended March 31, 2015.
| Purchased | Purchased | |||||||||
| Fund | Call Options | Put Options | ||||||||
| Janus Contrarian Fund | $ | 71,503,963 | $ | 5,422,465 | ||||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Contrarian Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 104,346 | Forward currency contracts | $ | 7,393 | ||||||
| Equity Contracts | Unaffiliated investments at value | 36,893,756* | ||||||||||
| Equity Contracts | Variation margin receivable | 2,655,120 | ||||||||||
| Total | $ | 39,653,222 | $ | 7,393 | ||||||||
| * | Amounts relate to purchased options. |
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
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The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||
| Investments and foreign | ||||||||||||
| Derivatives not accounted for as hedging instruments | currency transactions | Futures contracts | Total | |||||||||
Janus Contrarian Fund | ||||||||||||
| Currency Contracts | $ | 766,839 | $ | – | $ | 766,839 | ||||||
| Equity Contracts | 106,864,332* | (7,223,667 | ) | 99,640,665 | ||||||||
| Total | $ | 107,631,171 | $ | (7,223,667 | ) | $ | 100,407,504 | |||||
| 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 | Futures contracts | Total | |||||||||
Janus Contrarian Fund | ||||||||||||
| Currency Contracts | $ | 11,763 | $ | – | $ | 11,763 | ||||||
| Equity Contracts | (59,327,142 | )* | (6,951,810 | ) | (66,278,952 | ) | ||||||
| Total | $ | (59,315,379 | ) | $ | (6,951,810 | ) | $ | (66,267,189 | ) | |||
| * | Amounts relate to purchased options. |
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
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 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 March 31, 2015” 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 | ||||||||||||||
| Credit Suisse International | $ | 13,454,685 | $ | – | $ | (13,454,685) | $ | – | ||||||||||
| Deutsche Bank AG | $ | 390,658,325 | – | $ | (390,658,325) | – | ||||||||||||
| Goldman Sachs & Co. | 20,564,820 | – | (20,564,820) | – | ||||||||||||||
| UBS AG | 2,978,597 | – | (2,519,792) | 458,805 | ||||||||||||||
| Total | $ | 427,656,427 | $ | – | $ | (427,197,622) | $ | 458,805 | ||||||||||
28 | MARCH 31, 2015
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Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| HSBC Securities (USA), Inc. | $ | 6,652 | $ | – | $ | – | $ | 6,652 | ||||||||||
| JPMorgan Chase & Co. | 741 | – | – | 741 | ||||||||||||||
| Total | $ | 7,393 | $ | – | $ | – | $ | 7,393 | ||||||||||
| (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.
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.
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
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
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 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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Janus Contrarian Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Contrarian 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
30 | MARCH 31, 2015
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fee rate before any waivers and/or reimbursements of expenses for the period ended March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Contrarian Fund | 0.75 | |||||
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 February 1, 2016.
| Fund | Expense Limit (%) | |||||
| Janus Contrarian 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 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
Janus Investment Fund | 31
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Notes to Financial Statements (unaudited) (continued)
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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 can be found in a table
32 | MARCH 31, 2015
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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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Contrarian Fund | $ | 90,806 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Contrarian Fund | $ | 5,810 | ||||
| 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 March 31, 2015 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 Contrarian Fund | $ | 4,265,237,770 | $ | 1,080,397,849 | $ | (343,148,101) | $ | 737,249,748 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
| Accumulated | |||||||||||||||||||||||||||||||
| September 30, | September 30, | September 30, | September 30, | No Expiration | Capital | ||||||||||||||||||||||||||
| Fund | 2016 | 2017 | 2018 | 2019 | Short-Term | Long-Term | Losses | ||||||||||||||||||||||||
Janus Contrarian Fund(1) | $ | (14,397,922) | $ | (8,936,372) | $ | (2,708,558) | $ | (922,145) | $ | – | $ | – | $ | (26,964,997) | |||||||||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(7,198,961) should be available in the next fiscal year. |
Janus Investment Fund | 33
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Notes to Financial Statements (unaudited) (continued)
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Contrarian Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 2,881,099 | 2,566,477 | ||||||||
| Reinvested dividends and distributions | 454,763 | 238 | ||||||||
| Shares repurchased | (552,049) | (667,313) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,783,813 | 1,899,402 | ||||||||
| Shares Outstanding, Beginning of Period | 3,273,424 | 1,374,022 | ||||||||
| Shares Outstanding, End of Period | 6,057,237 | 3,273,424 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 2,373,142 | 1,549,523 | ||||||||
| Reinvested dividends and distributions | 255,222 | – | ||||||||
| Shares repurchased | (382,350) | (214,002) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,246,014 | 1,335,521 | ||||||||
| Shares Outstanding, Beginning of Period | 2,510,616 | 1,175,095 | ||||||||
| Shares Outstanding, End of Period | 4,756,630 | 2,510,616 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 3,261,475 | 5,363,281 | ||||||||
| Reinvested dividends and distributions | 11,167,167 | 198,431 | ||||||||
| Shares repurchased | (5,463,942) | (9,466,560) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 8,964,700 | (3,904,848) | ||||||||
| Shares Outstanding, Beginning of Period | 102,800,363 | 106,705,211 | ||||||||
| Shares Outstanding, End of Period | 111,765,063 | 102,800,363 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 8,663,994 | 11,926,608 | ||||||||
| Reinvested dividends and distributions | 1,232,358 | 14,442 | ||||||||
| Shares repurchased | (3,905,099) | (2,328,628) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 5,991,253 | 9,612,422 | ||||||||
| Shares Outstanding, Beginning of Period | 14,193,582 | 4,581,160 | ||||||||
| Shares Outstanding, End of Period | 20,184,835 | 14,193,582 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 23,205 | 44,408 | ||||||||
| Reinvested dividends and distributions | 9,096 | – | ||||||||
| Shares repurchased | (24,489) | (46,243) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 7,812 | (1,835) | ||||||||
| Shares Outstanding, Beginning of Period | 87,406 | 89,241 | ||||||||
| Shares Outstanding, End of Period | 95,218 | 87,406 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 75,046 | 206,407 | ||||||||
| Reinvested dividends and distributions | 36,195 | – | ||||||||
| Shares repurchased | (72,606) | (40,944) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 38,635 | 165,463 | ||||||||
| Shares Outstanding, Beginning of Period | 274,867 | 109,404 | ||||||||
| Shares Outstanding, End of Period | 313,502 | 274,867 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 9,688,210 | 18,599,427 | ||||||||
| Reinvested dividends and distributions | 6,219,280 | 73,809 | ||||||||
| Shares repurchased | (10,730,081) | (15,413,393) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 5,177,409 | 3,259,843 | ||||||||
| Shares Outstanding, Beginning of Period | 56,513,295 | 53,253,452 | ||||||||
| Shares Outstanding, End of Period | 61,690,704 | 56,513,295 | ||||||||
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| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Contrarian Fund | $ | 1,523,197,598 | $ | 1,305,239,674 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87364 | 125-24-93038 05-15 |
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semiannual report
March 31, 2015
Janus Overseas Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Overseas Fund
| 1 | ||
| 10 | ||
| 13 | ||
| 15 | ||
| 16 | ||
| 17 | ||
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Janus Overseas Fund (unaudited)
FUND SNAPSHOT I invest opportunistically. I believe our fundamental research uncovers stocks in which the market price does not reflect a company’s long-term fundamentals. |  Brent Lynn portfolio manager |
PERFORMANCE OVERVIEW
Janus Overseas Fund’s Class T Shares returned -10.96% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the MSCI All Country World ex-U.S. Index, returned -0.51%, and its secondary benchmark, the MSCI EAFE Index, returned 1.13% during the period.
MARKET ENVIRONMENT
Global stock market volatility during the period was especially felt outside the United States. Emerging markets struggled as a result of reduced growth expectations. The fall in crude punished energy exporters such as Russia and Middle Eastern countries, but low prices benefited import-intensive countries such as India, China and Japan. Disappointing growth data from China stoked fears of a slowdown, but they were partially allayed by monetary easing measures by the country’s government. Actions by central banks in Europe and Japan gave credence to the viewpoint that authorities were still taking aggressive steps to support growth. Meanwhile, the Federal Reserve remained on track to raise rates in 2015. This expectation boosted the U.S. dollar at the expense of emerging market currencies.
Equities continued to be momentum driven during the period, with investors preferring visible short-term earnings and visible growth in light of global macro uncertainty. Japan and much of Europe performed well as investors welcomed further increases in quantitative easing (QE) by the Bank of Japan (BOJ) and the initiation of QE by the European Central Bank (ECB). A number of emerging markets performed poorly, hurt in part by the knee-jerk investor reaction that a strong dollar must be negative for these regions. Despite the difficulty of a valuation-sensitive and contrarian-oriented investing style in a momentum market, the Fund remains underweight the most in-favor sectors and regions, preferring to adhere to the philosophy of identifying strong companies with durable long-term growth prospects that we believe have been extremely mispriced by the market.
PERFORMANCE DISCUSSION
Detracting most from quarterly performance relative to the benchmark were our energy and consumer discretionary holdings. Despite having reported solid operating results, exploration and production company Pacific Rubiales led detractors. Investors have been concerned by low oil prices, the company’s debt levels, and the loss of its leading oilfield in 2016. I believe the stock price incorporates excessive pessimism and gives no credit to the company’s proven capabilities in heavy oil production as well as to exciting long-term growth prospects from the liberalization of the Mexican energy sector.
Petroleo Brasileiro (Petrobras) was negatively impacted by a corruption scandal and balance sheet concerns at the same time the company is in the midst of a large capital expenditure program. Due to the investigations, there was a long delay in releasing audited numbers. While we see significant value in the company, we trimmed our position during the period to better manage overall portfolio risk.
Oil prices also were a headwind for another detractor, Africa Oil. Further putting pressure on the stock were disappointing exploration results and an equity issuance to reinforce the company’s balance sheet.
Contributing to quarterly performance was our selection of industrial and financial stocks.
Industrial holding United Continental Holdings was the period’s largest individual contributor. The U.S. airliner was a key beneficiary of rapidly falling crude prices, continued capacity discipline by the industry, and a general strengthening of the U.S. economy.
Within financials, Chinese real estate conglomerate Evergrande Group benefited from core real estate sales and solid pricing. Sentiment toward the company was also aided by expectations that the central government would take additional steps to spur residential development in order to support broader economic growth.
Adani Enterprises of India rose as a result of strong growth in the company’s key ports business, government
Janus Investment Fund | 1
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Janus Overseas Fund (unaudited)
moves to unravel problems in the country’s power and coal sectors, and company plan to separate its business lines.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
I am disappointed with the period’s performance, and more importantly, the longer-term underperformance of the Fund. However, I continue to be quite optimistic about future prospects. The Fund remains aggressively positioned in out-of-favor areas such as energy and emerging markets. I cannot predict the timing of a sentiment change toward our stocks, but I believe that the Fund is filled with strong companies trading at extremely attractive valuations. The potential scope for the rerating of many of our holdings is significant. I take the responsibility of managing your money very seriously, and I thank you for your continued investment in the Janus Overseas Fund.
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(unaudited)
Janus Overseas Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| United Continental Holdings, Inc. | 2.39% | |||
| Evergrande Real Estate Group, Ltd. | 0.97% | |||
| Adani Enterprises, Ltd. | 0.84% | |||
| Axis Bank, Ltd. | 0.47% | |||
| Nexon Co., Ltd. | 0.46% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Pacific Rubiales Energy Corp. | –2.96% | |||
| Petroleo Brasileiro SA (ADR) | –2.11% | |||
| Africa Oil Corp. | –1.83% | |||
| Athabasca Oil Corp. | –1.29% | |||
| Reliance Industries, Ltd. | –1.05% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI All Country World ex-U.S. | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Industrials | 2.48% | 14.11% | 10.95% | |||||||||
| Financials | 0.83% | 17.83% | 27.29% | |||||||||
| Materials | 0.62% | 3.48% | 7.78% | |||||||||
| Utilities | 0.30% | 0.47% | 3.54% | |||||||||
| Other** | 0.09% | 0.16% | 0.00% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI All Country World ex-U.S. | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Energy | –11.01% | 24.32% | 7.69% | |||||||||
| Consumer Discretionary | –3.35% | 18.89% | 11.20% | |||||||||
| Consumer Staples | –0.97% | 2.94% | 9.99% | |||||||||
| Information Technology | –0.44% | 12.72% | 7.40% | |||||||||
| Telecommunication Services | –0.01% | 0.00% | 5.38% | |||||||||
| 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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Janus Overseas Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Reliance Industries, Ltd. Oil, Gas & Consumable Fuels | 7.4% | |||
| ARM Holdings PLC Semiconductor & Semiconductor Equipment | 4.6% | |||
| United Continental Holdings, Inc. Airlines | 4.2% | |||
| Evergrande Real Estate Group, Ltd. Real Estate Management & Development | 4.0% | |||
| Li & Fung, Ltd. Textiles, Apparel & Luxury Goods | 3.6% | |||
| 23.8% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (8.9)%.
Emerging markets comprised 41.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Overseas Fund – Class A Shares | |||||||||||||
| NAV | –11.04% | –14.12% | –4.72% | 5.87% | 8.48% | 0.87% | |||||||
| MOP | –16.16% | –19.06% | –5.84% | 5.24% | 8.18% | ||||||||
| Janus Overseas Fund – Class C Shares | |||||||||||||
| NAV | –11.38% | –14.77% | –5.45% | 5.11% | 7.75% | 1.65% | |||||||
| CDSC | –12.27% | –15.62% | –5.45% | 5.11% | 7.75% | ||||||||
| Janus Overseas Fund – Class D Shares(1) | –10.94% | –13.90% | –4.47% | 6.07% | 8.63% | 0.58% | |||||||
| Janus Overseas Fund – Class I Shares | –10.89% | –13.82% | –4.41% | 6.02% | 8.60% | 0.54% | |||||||
| Janus Overseas Fund – Class N Shares | –10.84% | –13.75% | –4.55% | 6.02% | 8.60% | 0.43% | |||||||
| Janus Overseas Fund – Class R Shares | –11.20% | –14.41% | –5.03% | 5.49% | 8.09% | 1.18% | |||||||
| Janus Overseas Fund – Class S Shares | –11.06% | –14.17% | –4.79% | 5.74% | 8.34% | 0.93% | |||||||
| Janus Overseas Fund – Class T Shares | –10.96% | –13.97% | –4.55% | 6.02% | 8.60% | 0.68% | |||||||
| MSCI All Country World ex-U.S. IndexSM | –0.51% | –1.01% | 4.82% | 5.46% | N/A** | ||||||||
| MSCI EAFE® Index | 1.13% | –0.92% | 6.16% | 4.95% | 5.03% | ||||||||
| Morningstar Quartile – Class T Shares | – | 4th | 4th | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Foreign Large Blend Funds | – | 758/764 | 644/652 | 113/467 | 15/147 | ||||||||
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 | 5
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Janus Overseas Fund (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.
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 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, and therefore the ranking for the period.
© 2015 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 2, 1994 | |
| ** | Since inception index return is not available for indices created subsequent to fund inception. | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 889.60 | $ | 3.91 | $ | 1,000.00 | $ | 1,020.79 | $ | 4.18 | 0.83% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 886.20 | $ | 7.34 | $ | 1,000.00 | $ | 1,017.15 | $ | 7.85 | 1.56% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 890.60 | $ | 2.78 | $ | 1,000.00 | $ | 1,021.99 | $ | 2.97 | 0.59% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 891.10 | $ | 2.50 | $ | 1,000.00 | $ | 1,022.29 | $ | 2.67 | 0.53% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 891.60 | $ | 1.93 | $ | 1,000.00 | $ | 1,022.89 | $ | 2.07 | 0.41% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 888.00 | $ | 5.51 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.89 | 1.17% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 889.40 | $ | 4.33 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.63 | 0.92% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 890.40 | $ | 3.16 | $ | 1,000.00 | $ | 1,021.59 | $ | 3.38 | 0.67% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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
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Janus Overseas Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 99.2% | ||||||||||
| Air Freight & Logistics – 2.6% | ||||||||||
| 487,540 | Panalpina Welttransport Holding AG | $ | 71,144,229 | |||||||
| Airlines – 4.2% | ||||||||||
| 1,734,857 | United Continental Holdings, Inc.*,† | 116,669,133 | ||||||||
| Automobiles – 0.7% | ||||||||||
| 4,498,500 | SAIC Motor Corp., Ltd. – Class Aß | 18,114,226 | ||||||||
| Beverages – 1.1% | ||||||||||
| 396,055 | Remy Cointreau SA# | 29,164,522 | ||||||||
| Capital Markets – 4.4% | ||||||||||
| 5,128,584 | Atlas Mara, Ltd.*,£ | 35,900,088 | ||||||||
| 2,451,102 | Deutsche Bank AG | 85,266,549 | ||||||||
| 121,166,637 | ||||||||||
| Commercial Banks – 3.1% | ||||||||||
| 3,226,900 | Axis Bank, Ltd. | 28,852,460 | ||||||||
| 7,173,864 | State Bank of India | 30,596,002 | ||||||||
| 2,930,834 | TCS Group Holding PLC (GDR) | 7,039,383 | ||||||||
| 4,016,133 | Turkiye Halk Bankasi A/S | 19,805,743 | ||||||||
| 86,293,588 | ||||||||||
| Construction & Engineering – 1.5% | ||||||||||
| 76,724,800 | Louis XIII Holdings, Ltd.*,£ | 28,707,990 | ||||||||
| 2,988,439 | Voltas, Ltd. | 13,351,726 | ||||||||
| 42,059,716 | ||||||||||
| Food & Staples Retailing – 1.1% | ||||||||||
| 1,888,345 | X5 Retail Group NV (GDR)* | 28,970,443 | ||||||||
| Food Products – 0.4% | ||||||||||
| 184,405,502 | Chaoda Modern Agriculture Holdings, Ltd.*,#,£ | 10,466,233 | ||||||||
| Hotels, Restaurants & Leisure – 6.6% | ||||||||||
| 46,570,735 | Bwin.Party Digital Entertainment PLC£ | 55,359,589 | ||||||||
| 5,443,726 | Cox & Kings, Ltd. | 28,168,599 | ||||||||
| 13,681,535 | Melco International Development, Ltd.# | 23,094,506 | ||||||||
| 1,199,257 | Orascom Development Holding AG* | 20,233,758 | ||||||||
| 39,669,165 | Shangri-La Asia, Ltd. | 54,434,328 | ||||||||
| 181,290,780 | ||||||||||
| Household Durables – 1.7% | ||||||||||
| 17,393,600 | MRV Engenharia e Participacoes SA | 43,774,284 | ||||||||
| 20,696,760 | PDG Realty SA Empreendimentos e Participacoes* | 3,243,295 | ||||||||
| 47,017,579 | ||||||||||
| Independent Power and Renewable Electricity Producers – 0.5% | ||||||||||
| 18,336,327 | Adani Power, Ltd.* | 13,854,230 | ||||||||
| Industrial Conglomerates – 1.3% | ||||||||||
| 76,423,998 | Shun Tak Holdings, Ltd. | 36,880,699 | ||||||||
| Information Technology Services – 1.3% | ||||||||||
| 1,505,017 | QIWI PLC (ADR)# | 36,150,508 | ||||||||
| Internet & Catalog Retail – 3.3% | ||||||||||
| 1,128,645 | Ctrip.com International, Ltd. (ADR)* | 66,161,170 | ||||||||
| 1,138,745 | MakeMyTrip, Ltd.* | 25,006,840 | ||||||||
| 91,168,010 | ||||||||||
| Internet Software & Services – 3.0% | ||||||||||
| 666,242 | Rocket Internet SE*,# | 33,007,098 | ||||||||
| 3,894,931 | Youku Tudou, Inc. (ADR)*,# | 48,686,637 | ||||||||
| 81,693,735 | ||||||||||
| Machinery – 0.2% | ||||||||||
| 1,440,211 | Iochpe-Maxion SA | 4,536,347 | ||||||||
| Metals & Mining – 4.4% | ||||||||||
| 8,907,410 | Hindustan Zinc, Ltd. | 23,080,995 | ||||||||
| 7,720,538 | Outokumpu Oyj*,# | 61,375,017 | ||||||||
| 11,556,083 | Turquoise Hill Resources, Ltd.*,# | 36,044,321 | ||||||||
| 120,500,333 | ||||||||||
| Oil, Gas & Consumable Fuels – 24.5% | ||||||||||
| 1,550,652 | Africa Oil Corp.*,¤,£ | 2,263,388 | ||||||||
| 21,341,915 | Africa Oil Corp.*,¤,#,£ | 31,008,468 | ||||||||
| 2,921,946 | Africa Oil Corp. (PP)*,§,£ | 4,264,978 | ||||||||
| 16,190,132 | Athabasca Oil Corp.*,# | 26,847,187 | ||||||||
| 11,319,962 | Cairn Energy PLC* | 26,216,379 | ||||||||
| 9,009,657 | Cobalt International Energy, Inc.*,† | 84,780,872 | ||||||||
| 993,929 | Euronav NV*,¤ | 11,986,784 | ||||||||
| 2,189,682 | Euronav NV*,¤ | 25,889,798 | ||||||||
| 4,798,758 | Gran Tierra Energy, Inc.*,# | 13,110,947 | ||||||||
| 12,363,554 | Karoon Gas Australia, Ltd.*,#,£ | 20,313,377 | ||||||||
| 1,693,334 | Kosmos Energy, Ltd.* | 13,394,272 | ||||||||
| 21,877,765 | Ophir Energy PLC* | 43,609,110 | ||||||||
| 16,907,140 | Pacific Rubiales Energy Corp.#,£ | 40,318,669 | ||||||||
| 2,960,967 | Parex Resources, Inc.* | 18,868,449 | ||||||||
| 7,352,531 | Petroleo Brasileiro SA (ADR)†,# | 44,188,711 | ||||||||
| 15,481,444 | Reliance Industries, Ltd. | 204,206,939 | ||||||||
| 2,381,185 | Trilogy Energy Corp.# | 13,970,471 | ||||||||
| 4,504,939 | Tullow Oil PLC | 18,808,693 | ||||||||
| 908,288 | Whiting Petroleum Corp.* | 28,066,099 | ||||||||
| 672,113,591 | ||||||||||
| Pharmaceuticals – 4.1% | ||||||||||
| 363,904 | Endo International PLC* | 32,642,189 | ||||||||
| 4,600,331 | Indivior PLC* | 12,941,905 | ||||||||
| 391,788 | Jazz Pharmaceuticals PLC*,† | 67,697,048 | ||||||||
| 113,281,142 | ||||||||||
| Real Estate Investment Trusts (REITs) – 2.2% | ||||||||||
| 16,103,000 | Concentradora Fibra Hotelera Mexicana SA de CV | 21,613,277 | ||||||||
| 24,444,964 | Emlak Konut Gayrimenkul Yatirim Ortakligi A/S | 27,692,699 | ||||||||
| 6,090,100 | Prologis Property Mexico SA de CV* | 10,901,419 | ||||||||
| 60,207,395 | ||||||||||
| Real Estate Management & Development – 10.2% | ||||||||||
| 2,501,265 | Countrywide PLC | 19,034,343 | ||||||||
| 3,647,013 | Dalian Wanda Commercial Properties Co., Ltd. – Class H* | 22,571,181 | ||||||||
| 33,235,054 | DLF, Ltd. | 84,005,756 | ||||||||
| 215,909,268 | Evergrande Real Estate Group, Ltd.# | 108,974,717 | ||||||||
| 8,531,847 | Housing Development & Infrastructure, Ltd.* | 13,866,888 | ||||||||
| 335,671 | IRSA Inversiones y Representaciones SA (ADR) | 6,616,075 | ||||||||
| 1,445,980 | Kennedy Wilson Europe Real Estate PLC | 23,561,707 | ||||||||
| 278,630,667 | ||||||||||
| Road & Rail – 1.2% | ||||||||||
| 7,113,146 | ALL – America Latina Logistica SA | 8,850,469 | ||||||||
| 5,194,029 | Globaltrans Investment PLC (GDR) | 23,511,217 | ||||||||
| 32,361,686 | ||||||||||
| Semiconductor & Semiconductor Equipment – 4.6% | ||||||||||
| 7,690,976 | ARM Holdings PLC† | 125,903,692 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Software – 1.9% | ||||||||||
| 4,945,400 | Nexon Co., Ltd. | $ | 52,732,493 | |||||||
| Textiles, Apparel & Luxury Goods – 5.5% | ||||||||||
| 265,374,180 | Global Brands Group Holding, Ltd.* | 51,873,761 | ||||||||
| 102,190,429 | Li & Fung, Ltd. | 99,686,186 | ||||||||
| 151,559,947 | ||||||||||
| Thrifts & Mortgage Finance – 0.6% | ||||||||||
| 1,746,897 | Indiabulls Housing Finance, Ltd. | 15,557,587 | ||||||||
| Trading Companies & Distributors – 3.0% | ||||||||||
| 8,255,942 | Adani Enterprises, Ltd. | 81,103,906 | ||||||||
| Total Common Stocks (cost $3,433,087,123) | 2,720,593,054 | |||||||||
| Investment Companies – 9.7% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 9.6% | ||||||||||
| 262,402,818 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 262,402,818 | ||||||||
| Money Markets – 0.1% | ||||||||||
| 3,382,000 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 3,382,000 | ||||||||
| Total Investment Companies (cost $265,784,818) | 265,784,818 | |||||||||
| Total Investments (total cost $3,698,871,941) – 108.9% | 2,986,377,872 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (8.9)% | (244,492,020) | |||||||||
| Net Assets – 100% | $ | 2,741,885,852 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 622,145,378 | 20 | .8% | ||||
| India | 561,651,928 | 18 | .8 | |||||
| United Kingdom | 361,335,506 | 12 | .1 | |||||
| Hong Kong | 294,677,470 | 9 | .9 | |||||
| China | 274,974,164 | 9 | .2 | |||||
| Canada | 173,585,931 | 5 | .8 | |||||
| Germany | 118,273,647 | 4 | .0 | |||||
| Brazil | 104,593,106 | 3 | .5 | |||||
| Russia | 95,671,551 | 3 | .2 | |||||
| Switzerland | 91,377,987 | 3 | .0 | |||||
| Finland | 61,375,017 | 2 | .0 | |||||
| Japan | 52,732,493 | 1 | .8 | |||||
| Turkey | 47,498,442 | 1 | .6 | |||||
| Belgium | 37,876,582 | 1 | .3 | |||||
| Mexico | 32,514,696 | 1 | .1 | |||||
| France | 29,164,522 | 1 | .0 | |||||
| Australia | 20,313,377 | 0 | .7 | |||||
| Argentina | 6,616,075 | 0 | .2 | |||||
| Total | $ | 2,986,377,872 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: Japanese Yen 4/16/15 | 1,340,000,000 | $ | 11,176,838 | $ | (106,385) | |||||||
| Credit Suisse International: Japanese Yen 4/9/15 | 592,800,000 | 4,943,898 | 12,630 | |||||||||
| HSBC Securities (USA), Inc.: Japanese Yen 4/9/15 | 1,628,000,000 | 13,577,371 | (44,036) | |||||||||
| JPMorgan Chase & Co.: Japanese Yen 4/16/15 | 380,000,000 | 3,169,551 | 20,057 | |||||||||
| RBC Capital Markets Corp.: Japanese Yen 4/16/15 | 1,720,000,000 | 14,346,389 | (125,637) | |||||||||
| Total | $ | 47,214,047 | $ | (243,371) | ||||||||
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 All Country World ex-U.S. IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| 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. | |
| ADR | American Depositary Receipt | |
| GDR | Global Depositary Receipt | |
| LLC | Limited Liability Company | |
| PLC | Public Limited Company | |
| PP | Private Placement |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Overseas Fund | $ | 307,119,993 | |||
| ß | Security is illiquid. | |
| ¤ | Issued by the same entity and traded on separate exchanges. | |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||
Janus Overseas Fund | ||||||||||||
| Africa Oil Corp. | 10/17/13 | $23,586,134 | $4,264,978 | 0.2 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. The issuer incurs all registration costs.
10 | MARCH 31, 2015
Table of Contents
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Overseas Fund | |||||||||||||||||||||
| Africa Oil Corp. | – | 1,578,494 | (27,842) | 1,550,652 | $ | (5,520) | $ | – | $ | 2,263,388 | |||||||||||
| Africa Oil Corp. | 14,362,584 | 7,759,121 | (779,790) | 21,341,915 | (4,082,121) | – | 31,008,468 | ||||||||||||||
| Africa Oil Corp. | 2,921,946 | – | – | 2,921,946 | – | – | 4,264,978 | ||||||||||||||
Atlas Mara, Ltd.(1) | 2,857,769 | 2,320,571 | (49,756) | 5,128,584 | (122,037) | – | 35,900,088 | ||||||||||||||
| Bwin.Party Digital Entertainment PLC | 46,209,074 | 361,661 | – | 46,570,735 | – | – | 55,359,589 | ||||||||||||||
| Chaoda Modern Agriculture Holdings, Ltd. | 184,405,502 | – | – | 184,405,502 | – | – | 10,466,233 | ||||||||||||||
| Janus Cash Collateral Fund LLC | 306,383,352 | 547,437,441 | (591,417,975) | 262,402,818 | – | 3,323,511(2) | 262,402,818 | ||||||||||||||
| Janus Cash Liquidity Fund LLC | 67,472,000 | 362,458,609 | (426,548,609) | 3,382,000 | – | 6,866 | 3,382,000 | ||||||||||||||
| Karoon Gas Australia, Ltd. | 9,237,023 | 3,670,749 | (544,218) | 12,363,554 | (851,798) | – | 20,313,377 | ||||||||||||||
| Louis XIII Holdings, Ltd. | 34,453,800 | 42,271,000 | – | 76,724,800 | – | – | 28,707,990 | ||||||||||||||
| Pacific Rubiales Energy Corp. | 6,395,288 | 10,865,836 | (353,984) | 16,907,140 | (2,529,348) | 960,375 | 40,318,669 | ||||||||||||||
| Total | $ | (7,590,824) | $ | 4,290,752 | $ | 494,387,598 | |||||||||||||||
| (1) | Formerly named Atlas Mara Co-Nvest, Ltd. | |
| (2) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | |||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
| Janus Overseas Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | ||||||||
| Air Freight & Logistics | $ – | $ 71,144,229 | $– | |||||
| Automobiles | – | 18,114,226 | – | |||||
| Beverages | – | 29,164,522 | – | |||||
| Capital Markets | 35,900,088 | 85,266,549 | – | |||||
| Commercial Banks | – | 86,293,588 | – | |||||
| Construction & Engineering | – | 42,059,716 | – | |||||
| Food & Staples Retailing | – | 28,970,443 | – | |||||
| Hotels, Restaurants & Leisure | – | 181,290,780 | – | |||||
| Independent Power and Renewable Electricity Producers | – | 13,854,230 | – | |||||
| Industrial Conglomerates | – | 36,880,699 | – | |||||
| Internet Software & Services | 48,686,637 | 33,007,098 | – | |||||
| Metals & Mining | 36,044,321 | 84,456,012 | – | |||||
| Oil, Gas & Consumable Fuels | 326,540,929 | 345,572,662 | – | |||||
| Pharmaceuticals | 100,339,237 | 12,941,905 | – | |||||
| Real Estate Investment Trusts (REITs) | 32,514,696 | 27,692,699 | – | |||||
| Real Estate Management & Development | 6,616,075 | 272,014,592 | – | |||||
| Road & Rail | 8,850,469 | 23,511,217 | – | |||||
| Semiconductor & Semiconductor Equipment | – | 125,903,692 | – | |||||
| Software | – | 52,732,493 | – | |||||
| Textiles, Apparel & Luxury Goods | – | 151,559,947 | – | |||||
| Thrifts & Mortgage Finance | – | 15,557,587 | – | |||||
| Trading Companies & Distributors | – | 81,103,906 | – | |||||
| All Other | 306,007,810 | – | – | |||||
Investment Companies | – | 265,784,818 | – | |||||
| Total Investments in Securities | $901,500,262 | $2,084,877,610 | $– | |||||
Other Financial Instruments(a): | ||||||||
Forward Currency Contracts | $ – | $ 32,687 | $– | |||||
Total Assets | $901,500,262 | $2,084,910,297 | $– | |||||
Liabilities | ||||||||
Other Financial Instruments(a): | ||||||||
Forward Currency Contracts | $ – | $ 276,058 | $– | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Overseas Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 3,698,871,941 | ||
Unaffiliated investments, at value(1) | $ | 2,491,990,274 | ||
Affiliated investments, at value(2) | 494,387,598 | |||
| Cash | 1,247,260 | |||
| Restricted cash (Note 1) | 810,967 | |||
| Forward currency contracts | 32,687 | |||
| Closed foreign currency contracts | 8,983 | |||
| Non-interested Trustees’ deferred compensation | 53,943 | |||
| Receivables: | ||||
| Investments sold | 29,317,965 | |||
| Fund shares sold | 751,485 | |||
| Dividends | 544,000 | |||
| Dividends from affiliates | 772 | |||
| Foreign dividend tax reclaim | 962,717 | |||
| Other assets | 36,229 | |||
| Total Assets | 3,020,144,880 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 3) | 262,402,818 | |||
| Forward currency contracts | 276,058 | |||
| Closed foreign currency contracts | 164,779 | |||
| Payables: | ||||
| Investments purchased | 7,638,327 | |||
| Fund shares repurchased | 4,869,085 | |||
| Advisory fees | 855,132 | |||
| Fund administration fees | 23,675 | |||
| Transfer agent fees and expenses | 671,061 | |||
| 12b-1 Distribution and shareholder servicing fees | 154,707 | |||
| Non-interested Trustees’ fees and expenses | 20,860 | |||
| Non-interested Trustees’ deferred compensation fees | 53,943 | |||
| Foreign tax liability | 223,975 | |||
| Accrued expenses and other payables | 904,608 | |||
| Total Liabilities | 278,259,028 | |||
| Net Assets | $ | 2,741,885,852 | ||
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 March 31, 2015 (unaudited) | Janus Overseas Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 4,530,701,471 | ||
| Undistributed net investment income/(loss) | (4,670,744) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (1,070,647,020) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(3) | (713,497,855) | |||
| Total Net Assets | $ | 2,741,885,852 | ||
| Net Assets - Class A Shares | $ | 50,202,388 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,607,124 | |||
Net Asset Value Per Share(4) | $ | 31.24 | ||
Maximum Offering Price Per Share(5) | $ | 33.15 | ||
| Net Assets - Class C Shares | $ | 37,599,225 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,228,973 | |||
Net Asset Value Per Share(4) | $ | 30.59 | ||
| Net Assets - Class D Shares | $ | 913,294,244 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 29,428,860 | |||
| Net Asset Value Per Share | $ | 31.03 | ||
| Net Assets - Class I Shares | $ | 273,763,688 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,795,160 | |||
| Net Asset Value Per Share | $ | 31.13 | ||
| Net Assets - Class N Shares | $ | 126,907,386 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,090,118 | |||
| Net Asset Value Per Share | $ | 31.03 | ||
| Net Assets - Class R Shares | $ | 54,392,047 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,769,446 | |||
| Net Asset Value Per Share | $ | 30.74 | ||
| Net Assets - Class S Shares | $ | 285,519,559 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,220,156 | |||
| Net Asset Value Per Share | $ | 30.97 | ||
| Net Assets - Class T Shares | $ | 1,000,207,315 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 32,220,950 | |||
| Net Asset Value Per Share | $ | 31.04 | ||
| (1) | Includes $217,236,070 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes $37,418,718 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (3) | Includes $223,975 of foreign tax on investments. | |
| (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.
14 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Overseas Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 3,323,511 | ||
| Dividends | 3,868,226 | |||
| Dividends from affiliates | 967,241 | |||
| Other income | 1,979 | |||
| Foreign tax withheld | (244,150) | |||
| Total Investment Income | 7,916,807 | |||
| Expenses: | ||||
| Advisory fees | 5,694,368 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 79,396 | |||
| Class C Shares | 219,118 | |||
| Class R Shares | 147,333 | |||
| Class S Shares | 419,515 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 604,809 | |||
| Class R Shares | 73,667 | |||
| Class S Shares | 419,515 | |||
| Class T Shares | 1,441,340 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 48,424 | |||
| Class C Shares | 28,288 | |||
| Class I Shares | 177,112 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 4,503 | |||
| Class C Shares | 3,784 | |||
| Class D Shares | 139,035 | |||
| Class I Shares | 7,386 | |||
| Class N Shares | 439 | |||
| Class R Shares | 561 | |||
| Class S Shares | 2,417 | |||
| Class T Shares | 11,748 | |||
| Shareholder reports expense | 167,043 | |||
| Registration fees | 108,492 | |||
| Custodian fees | 272,928 | |||
| Professional fees | 64,928 | |||
| Non-interested Trustees’ fees and expenses | 31,168 | |||
| Fund administration fees | 126,414 | |||
| Other expenses | 103,948 | |||
| Total Expenses | 10,397,679 | |||
| Less: Excess Expense Reimbursement | (1,021) | |||
| Net Expenses | 10,396,658 | |||
| Net Investment Income/(Loss) | (2,479,851) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 105,100,558 | |||
| Investments in affiliates | (7,590,824) | |||
| Swap contracts | (5,169,623) | |||
| Total Net Realized Gain/(Loss) on Investments | 92,340,111 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation(1) | (472,303,080) | |||
| Swap contracts | 2,594,844 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (469,708,236) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (379,847,976) | ||
| (1) | Includes $188,128 of foreign tax on investments. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus | ||||||||
| Overseas Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (2,479,851) | $ | 76,448,548 | ||||
| Net realized gain/(loss) on investments | 92,340,111 | (117,365,358) | ||||||
Change in unrealized net appreciation/depreciation(1) | (469,708,236) | 230,079,559 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | (379,847,976) | 189,162,749 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (182,114) | (5,806,375) | ||||||
| Class C Shares | – | (1,820,668) | ||||||
| Class D Shares | (10,986,064) | (51,455,216) | ||||||
| Class I Shares | (3,285,643) | (19,000,102) | ||||||
| Class N Shares | (1,745,070) | (7,498,313) | ||||||
| Class R Shares | (148,032) | (2,876,430) | ||||||
| Class S Shares | (1,797,049) | (19,895,812) | ||||||
| Class T Shares | (10,733,014) | (68,409,986) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (28,876,986) | (176,762,902) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 5,444,264 | 22,768,533 | ||||||
| Class C Shares | 1,525,219 | 4,371,815 | ||||||
| Class D Shares | 14,093,904 | 27,446,017 | ||||||
| Class I Shares | 35,502,598 | 169,989,614 | ||||||
| Class N Shares | 20,728,264 | 151,620,006 | ||||||
| Class R Shares | 6,886,364 | 13,842,849 | ||||||
| Class S Shares | 27,959,308 | 67,575,426 | ||||||
| Class T Shares | 36,573,538 | 105,078,690 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 139,875 | 4,685,234 | ||||||
| Class C Shares | – | 1,350,827 | ||||||
| Class D Shares | 10,481,741 | 49,706,550 | ||||||
| Class I Shares | 3,158,008 | 18,162,448 | ||||||
| Class N Shares | 1,745,070 | 7,498,313 | ||||||
| Class R Shares | 135,981 | 2,598,425 | ||||||
| Class S Shares | 1,773,829 | 19,648,948 | ||||||
| Class T Shares | 10,516,424 | 67,217,467 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (27,581,862) | (136,346,580) | ||||||
| Class C Shares | (10,934,114) | (29,166,582) | ||||||
| Class D Shares | (122,216,460) | (209,274,485) | ||||||
| Class I Shares | (105,417,945) | (452,630,361) | ||||||
| Class N Shares | (26,198,395) | (55,048,359) | ||||||
| Class R Shares | (11,697,396) | (40,921,081) | ||||||
| Class S Shares | (98,596,602) | (315,952,531) | ||||||
| Class T Shares | (257,986,990) | (693,320,437) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (483,965,377) | (1,199,099,254) | ||||||
| Net Increase/(Decrease) in Net Assets | (892,690,339) | (1,186,699,407) | ||||||
| Net Assets: | ||||||||
| Beginning of period | 3,634,576,191 | 4,821,275,598 | ||||||
| End of period | $ | 2,741,885,852 | $ | 3,634,576,191 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (4,670,744) | $ | 26,686,093 | ||||
| (1) | Includes $188,128 of foreign tax on investments. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Overseas Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $35.21 | $35.47 | $32.28 | $33.87 | $47.51 | $38.63 | $33.51 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(3) | 0.56(3) | 1.81 | 1.18 | 0.08 | (0.01) | 0.22 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.83) | 0.43 | 2.33 | (0.10) | (13.67) | 9.03 | 4.90 | |||||||||||||||||||||||
| Total from Investment Operations | (3.88) | 0.99 | 4.14 | 1.08 | (13.59) | 9.02 | 5.12 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.09) | (1.25) | (0.95) | – | (0.05) | (0.14) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | – | |||||||||||||||||||||||
| Total Distributions | (0.09) | (1.25) | (0.95) | (2.67) | (0.05) | (0.14) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $31.24 | $35.21 | $35.47 | $32.28 | $33.87 | $47.51 | $38.63 | |||||||||||||||||||||||
| Total Return* | (11.04)% | 2.77% | 12.99% | 3.27% | (28.64)% | 23.39% | 15.28% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $50,202 | $80,632 | $184,757 | $337,951 | $569,936 | $781,965 | $462,533 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $63,691 | $148,264 | $257,869 | $507,350 | $892,190 | $614,405 | $452,405 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.83% | 0.87% | 0.94% | 1.00% | 1.03% | 1.07% | 1.00% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.83% | 0.87% | 0.87% | 0.98% | 1.03% | 1.07% | 1.00% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.32)% | 1.51% | 0.36% | 0.62% | 0.31% | 0.13% | 0.39% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended | Janus Overseas Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $34.52 | $34.73 | $31.56 | $33.42 | $47.17 | $38.52 | $33.51 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.17)(3) | 0.28(3) | 0.34 | 0.41 | (0.34) | (0.24) | 0.10 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.76) | 0.43 | 3.43 | 0.40 | (13.41) | 8.93 | 4.91 | |||||||||||||||||||||||
| Total from Investment Operations | (3.93) | 0.71 | 3.77 | 0.81 | (13.75) | 8.69 | 5.01 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.92) | (0.60) | – | – | (0.04) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | – | |||||||||||||||||||||||
| Total Distributions | – | (0.92) | (0.60) | (2.67) | – | (0.04) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.59 | $34.52 | $34.73 | $31.56 | $33.42 | $47.17 | $38.52 | |||||||||||||||||||||||
| Total Return* | (11.38)% | 2.00% | 12.04% | 2.46% | (29.15)% | 22.57% | 14.95% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $37,599 | $52,599 | $75,376 | $113,481 | $184,001 | $281,217 | $185,858 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $43,944 | $66,242 | $92,575 | $158,005 | $303,311 | $239,154 | $170,640 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.56% | 1.65% | 1.75% | 1.78% | 1.77% | 1.76% | 2.01% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.56% | 1.65% | 1.71% | 1.73% | 1.77% | 1.76% | 1.92% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.05)% | 0.77% | (0.47)% | (0.12)% | (0.44)% | (0.56)% | (0.56)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Overseas Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $35.23 | $35.61 | $32.52 | $33.98 | $47.60 | $41.51 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(2) | 0.69(2) | 1.11 | 1.03 | 0.19 | 0.16 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.84) | 0.40 | 3.15 | 0.18 | (13.73) | 5.92 | ||||||||||||||||||||
| Total from Investment Operations | (3.85) | 1.09 | 4.26 | 1.21 | (13.54) | 6.08 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.35) | (1.47) | (1.17) | – | (0.08) | – | ||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | 0.01 | ||||||||||||||||||||
| Total Distributions | (0.35) | (1.47) | (1.17) | (2.67) | (0.08) | 0.01 | ||||||||||||||||||||
| Net Asset Value, End of Period | $31.03 | $35.23 | $35.61 | $32.52 | $33.98 | $47.60 | ||||||||||||||||||||
| Total Return* | (10.94)% | 3.04% | 13.31% | 3.67% | (28.50)% | 14.67% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $913,294 | $1,143,816 | $1,281,830 | $1,402,452 | $1,573,265 | $2,440,197 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,010,784 | $1,271,212 | $1,362,059 | $1,593,240 | $2,375,411 | $2,308,567 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.59% | 0.58% | 0.60% | 0.63% | 0.82% | 0.87% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.59% | 0.58% | 0.60% | 0.63% | 0.82% | 0.87% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.08)% | 1.86% | 0.68% | 1.05% | 0.49% | 0.66% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | ||||||||||||||||||||||||||||||
| ended September 30 and the period ended | Janus Overseas Fund | |||||||||||||||||||||||||||||
| October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $35.33 | $35.68 | $32.56 | $34.03 | $47.67 | $38.67 | $33.51 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | –(2)(6) | 0.67(2) | 1.50 | 1.27 | 0.22 | 0.08 | 0.21 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.84) | 0.45 | 2.79 | (0.07) | (13.73) | 9.08 | 4.95 | |||||||||||||||||||||||
| Total from Investment Operations | (3.84) | 1.12 | 4.29 | 1.20 | (13.51) | 9.16 | 5.16 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.36) | (1.47) | (1.17) | – | (0.13) | (0.17) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | 0.01 | –(3) | |||||||||||||||||||||||
| Total Distributions | (0.36) | (1.47) | (1.17) | (2.67) | (0.13) | (0.16) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $31.13 | $35.33 | $35.68 | $32.56 | $34.03 | $47.67 | $38.67 | |||||||||||||||||||||||
| Total Return* | (10.89)% | 3.11% | 13.38% | 3.63% | (28.42)% | 23.78% | 15.40% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $273,764 | $382,220 | $638,610 | $882,908 | $1,275,662 | $1,534,256 | $542,392 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $314,806 | $459,134 | $786,165 | $1,175,310 | $1,878,306 | $913,570 | $447,943 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.53% | 0.54% | 0.54% | 0.62% | 0.75% | 0.80% | 0.70% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.53% | 0.54% | 0.54% | 0.62% | 0.75% | 0.77% | 0.69% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.03)% | 1.80% | 0.71% | 1.06% | 0.61% | 0.48% | 0.64% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
18 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and | Janus Overseas Fund | |||||||||||||||||
| each year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $35.27 | $35.65 | $32.56 | $30.64 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.02(2) | 0.77(2) | 0.94 | 0.36 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.85) | 0.39 | 3.38 | 1.56 | ||||||||||||||
| Total from Investment Operations | (3.83) | 1.16 | 4.32 | 1.92 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.41) | (1.54) | (1.23) | – | ||||||||||||||
| Distributions (from capital gains) | – | – | – | – | ||||||||||||||
| Total Distributions | (0.41) | (1.54) | (1.23) | – | ||||||||||||||
| Net Asset Value, End of Period | $31.03 | $35.27 | $35.65 | $32.56 | ||||||||||||||
| Total Return* | (10.84)% | 3.24% | 13.50% | 6.27% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $126,907 | $148,599 | $54,195 | $58,250 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $135,428 | $159,178 | $55,053 | $32,375 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.41% | 0.43% | 0.43% | 0.44% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.41% | 0.43% | 0.43% | 0.44% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.10% | 2.08% | 0.84% | 0.82% | ||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Overseas Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $34.70 | $35.03 | $31.96 | $33.64 | $47.32 | $38.58 | $33.51 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.11)(2) | 0.46(2) | 0.90 | 0.74 | (0.09) | (0.13) | 0.16 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.77) | 0.41 | 3.09 | 0.25 | (13.59) | 8.95 | 4.91 | |||||||||||||||||||||||
| Total from Investment Operations | (3.88) | 0.87 | 3.99 | 0.99 | (13.68) | 8.82 | 5.07 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.08) | (1.20) | (0.92) | – | – | (0.09) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | 0.01 | – | |||||||||||||||||||||||
| Total Distributions | (0.08) | (1.20) | (0.92) | (2.67) | – | (0.08) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.74 | $34.70 | $35.03 | $31.96 | $33.64 | $47.32 | $38.58 | |||||||||||||||||||||||
| Total Return* | (11.20)% | 2.45% | 12.65% | 3.01% | (28.91)% | 22.91% | 15.13% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $54,392 | $66,292 | $90,140 | $129,777 | $132,118 | $158,469 | $99,338 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $59,095 | $82,309 | $106,930 | $139,180 | $177,799 | $128,643 | $95,361 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.18% | 1.24% | 1.43% | 1.48% | 1.44% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.18% | 1.24% | 1.43% | 1.48% | 1.43% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.66)% | 1.25% | 0.07% | 0.44% | (0.08)% | (0.27)% | (0.07)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 19
Table of Contents
Financial Highlights (continued)
Class S Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | ||||||||||||||||||||||||||||||
| ended September 30 and the period ended | Janus Overseas Fund | |||||||||||||||||||||||||||||
| October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $35.01 | $35.32 | $32.23 | $33.82 | $47.44 | $38.61 | $33.51 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.07)(3) | 0.55(3) | 1.18 | 0.90 | (0.01) | (0.04) | 0.20 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.80) | 0.42 | 2.93 | 0.18 | (13.62) | 8.97 | 4.89 | |||||||||||||||||||||||
| Total from Investment Operations | (3.87) | 0.97 | 4.11 | 1.08 | (13.63) | 8.93 | 5.09 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.17) | (1.28) | (1.02) | – | – | (0.11) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | 0.01 | 0.01 | 0.01 | |||||||||||||||||||||||
| Total Distributions | (0.17) | (1.28) | (1.02) | (2.67) | 0.01 | (0.10) | 0.01 | |||||||||||||||||||||||
| Net Asset Value, End of Period | $30.97 | $35.01 | $35.32 | $32.23 | $33.82 | $47.44 | $38.61 | |||||||||||||||||||||||
| Total Return* | (11.06)% | 2.71% | 12.91% | 3.28% | (28.71)% | 23.20% | 15.22% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $285,520 | $397,834 | $620,750 | $924,703 | $1,132,967 | $1,728,739 | $1,371,807 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $336,534 | $528,419 | $793,882 | $1,087,271 | $1,731,141 | $1,601,017 | $1,344,815 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.92% | 0.93% | 0.93% | 0.99% | 1.18% | 1.22% | 1.19% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.92% | 0.93% | 0.93% | 0.99% | 1.18% | 1.22% | 1.18% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.41)% | 1.49% | 0.31% | 0.67% | 0.13% | (0.04)% | 0.18% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the year | Janus Overseas Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $35.20 | $35.55 | $32.44 | $33.95 | $47.56 | $38.65 | $27.12 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(3) | 0.65(3) | 1.28 | 1.06 | 0.11 | 0.01 | 0.41 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (3.83) | 0.42 | 2.94 | 0.10 | (13.68) | 9.04 | 12.66 | |||||||||||||||||||||||
| Total from Investment Operations | (3.86) | 1.07 | 4.22 | 1.16 | (13.57) | 9.05 | 13.07 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.30) | (1.42) | (1.11) | – | (0.05) | (0.15) | (0.22) | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | (2.67) | – | – | (1.33) | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | 0.01 | 0.01 | 0.01 | |||||||||||||||||||||||
| Total Distributions | (0.30) | (1.42) | (1.11) | (2.67) | (0.04) | (0.14) | (1.54) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $31.04 | $35.20 | $35.55 | $32.44 | $33.95 | $47.56 | $38.65 | |||||||||||||||||||||||
| Total Return* | (10.96)% | 2.98% | 13.22% | 3.52% | (28.54)% | 23.48% | 51.63% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,000,207 | $1,362,584 | $1,875,618 | $2,712,057 | $3,719,191 | $6,113,812 | $7,112,657 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,156,240 | $1,691,922 | $2,301,346 | $3,426,766 | $6,059,513 | $6,528,596 | $5,182,633 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.68% | 0.75% | 0.93% | 0.95% | 0.91% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.67% | 0.67% | 0.68% | 0.74% | 0.93% | 0.95% | 0.91% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.16)% | 1.75% | 0.56% | 0.90% | 0.37% | 0.14% | 0.90% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 30% | 21% | 26% | 43% | 30% | 45% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | 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.
20 | MARCH 31, 2015
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Overseas 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market
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Notes to Financial Statements (unaudited) (continued)
quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The 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 3 | ||||||
| Fund | to Level 1 | |||||
| Janus Overseas Fund | $ | 3,562,428 | ||||
Financial assets were transferred out of Level 3 to Level 1 as the current market for the securities with quoted prices are considered active.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from
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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.
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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 March 31, 2015, the Fund had restricted cash in the amount of $810,967. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates, as well as investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
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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, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative
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contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Overseas Fund | $ | 83,918,308 | ||||
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 centrally clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps.
Index swaps, interest rate swaps, and credit default swaps are valued using an approved vendor supplied price.
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Notes to Financial Statements (unaudited) (continued)
Basket swaps are valued using a broker supplied price. Equity swaps that consist of a single underlying equity are valued either at the closing price, the latest bid price, or the last sale price of the underlying equity. The market value of swap contracts are aggregated by positive and negative values that are disclosed separately as an asset or liability on the Fund’s Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period.
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.
The following table provides average ending monthly market value amounts on total return swaps which are long the reference asset during the period ended March 31, 2015.
| Fund | Long | |||||
| Janus Overseas Fund | $ | (425,369) | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Overseas Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 32,687 | Forward currency contracts | $ | 276,058 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||
| Investments and foreign | ||||||||||||
| Derivatives not accounted for as hedging instruments | currency transactions | Swap contracts | Total | |||||||||
Janus Overseas Fund | ||||||||||||
| Currency Contracts | $15,145,290 | $ – | $15,145,290 | |||||||||
| Equity Contracts | – | (5,169,623 | ) | (5,169,623 | ) | |||||||
| Total | $15,145,290 | $(5,169,623 | ) | $9,975,667 | ||||||||
| 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 | Swap contracts | Total | |||||||||
Janus Overseas Fund | ||||||||||||
| Currency Contracts | $(5,984,424 | ) | $ – | $(5,984,424 | ) | |||||||
| Equity Contracts | – | 2,594,844 | 2,594,844 | |||||||||
| Total | $(5,984,424 | ) | $2,594,844 | $(3,389,580 | ) | |||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
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| 3. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2015, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2015, the Fund has available investment quota of $810,967. The Fund is subject to certain
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Notes to Financial Statements (unaudited) (continued)
restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
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
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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
28 | MARCH 31, 2015
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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 March 31, 2015” 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 | ||||||||||||||
| Credit Suisse International | $ 12,630 | $– | $ – | $12,630 | ||||||||||||||
| Deutsche Bank AG | 254,654,788 | – | (254,654,788) | – | ||||||||||||||
| JPMorgan Chase & Co. | 20,057 | – | – | 20,057 | ||||||||||||||
| Total | $254,687,475 | $– | $(254,654,788) | $32,687 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $106,385 | $– | $– | $106,385 | ||||||||||||||
| HSBC Securities (USA), Inc. | 44,036 | – | – | 44,036 | ||||||||||||||
| RBC Capital Markets Corp. | 125,637 | – | – | 125,637 | ||||||||||||||
| Total | $276,058 | $– | $– | $276,058 | ||||||||||||||
| (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.
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
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Securities Lending
Under procedures adopted by the Trustees, the 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 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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Base Fee | ||||||
| Fund | Rate (%) | |||||
| Janus Overseas Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Overseas Fund | MSCI All Country World ex-U.S. IndexSM | |||||
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
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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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Overseas Fund | 0.37 | |||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Overseas Fund | 0.95 | |||||
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash
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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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Overseas Fund | $ | 2,372 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Overseas Fund | $ | 2,475 | ||||
As of March 31, 2015, 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 Overseas Fund - Class A Shares | – | % | – | % | ||||||
| Janus Overseas Fund - Class C Shares | – | – | ||||||||
| Janus Overseas Fund - Class D Shares | – | – | ||||||||
| Janus Overseas Fund - Class I Shares | – | – | ||||||||
| Janus Overseas Fund - Class N Shares | 21 | 1 | ||||||||
| Janus Overseas Fund - Class R Shares | – | – | ||||||||
| Janus Overseas Fund - Class S Shares | – | – | ||||||||
| Janus Overseas Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Overseas Fund | $ | 3,750,070,101 | $ | 525,297,426 | $ | (1,288,989,655) | $ | (763,692,229) | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 30, 2014, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under
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Notes to Financial Statements (unaudited) (continued)
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 September 30, 2014
| Accumulated | |||||||||||||||||||
| No Expiration | Capital | ||||||||||||||||||
| Fund | September 30, 2016 | Short-Term | Long-Term | Losses | |||||||||||||||
Janus Overseas Fund (1) | $ | (330,727,597) | $ | – | $ | (653,490,953) | $ | (984,218,550) | |||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(984,218,550) should be available in the next fiscal year. |
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Overseas Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 168,991 | 621,182 | ||||||||
| Reinvested dividends and distributions | 4,531 | 132,239 | ||||||||
| Shares repurchased | (856,176) | (3,672,221) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (682,654) | (2,918,800) | ||||||||
| Shares Outstanding, Beginning of Period | 2,289,778 | 5,208,578 | ||||||||
| Shares Outstanding, End of Period | 1,607,124 | 2,289,778 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 48,371 | 120,868 | ||||||||
| Reinvested dividends and distributions | – | 38,661 | ||||||||
| Shares repurchased | (343,177) | (806,341) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (294,806) | (646,812) | ||||||||
| Shares Outstanding, Beginning of Period | 1,523,779 | 2,170,591 | ||||||||
| Shares Outstanding, End of Period | 1,228,973 | 1,523,779 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 431,878 | 745,903 | ||||||||
| Reinvested dividends and distributions | 341,982 | 1,405,331 | ||||||||
| Shares repurchased | (3,809,054) | (5,688,549) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (3,035,194) | (3,537,315) | ||||||||
| Shares Outstanding, Beginning of Period | 32,464,054 | 36,001,369 | ||||||||
| Shares Outstanding, End of Period | 29,428,860 | 32,464,054 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 1,105,249 | 4,573,004 | ||||||||
| Reinvested dividends and distributions | 102,766 | 512,195 | ||||||||
| Shares repurchased | (3,230,147) | (12,166,683) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (2,022,132) | (7,081,484) | ||||||||
| Shares Outstanding, Beginning of Period | 10,817,292 | 17,898,776 | ||||||||
| Shares Outstanding, End of Period | 8,795,160 | 10,817,292 | ||||||||
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| For the period ended March 31 (unaudited) | Janus Overseas Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 640,240 | 3,968,125 | ||||||||
| Reinvested dividends and distributions | 56,991 | 212,056 | ||||||||
| Shares repurchased | (820,746) | (1,486,614) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (123,515) | 2,693,567 | ||||||||
| Shares Outstanding, Beginning of Period | 4,213,633 | 1,520,066 | ||||||||
| Shares Outstanding, End of Period | 4,090,118 | 4,213,633 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 219,071 | 381,074 | ||||||||
| Reinvested dividends and distributions | 4,472 | 74,220 | ||||||||
| Shares repurchased | (364,346) | (1,118,249) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (140,803) | (662,955) | ||||||||
| Shares Outstanding, Beginning of Period | 1,910,249 | 2,573,204 | ||||||||
| Shares Outstanding, End of Period | 1,769,446 | 1,910,249 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 876,643 | 1,848,288 | ||||||||
| Reinvested dividends and distributions | 57,949 | 557,417 | ||||||||
| Shares repurchased | (3,076,927) | (8,617,851) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (2,142,335) | (6,212,146) | ||||||||
| Shares Outstanding, Beginning of Period | 11,362,491 | 17,574,637 | ||||||||
| Shares Outstanding, End of Period | 9,220,156 | 11,362,491 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 1,132,611 | 2,841,938 | ||||||||
| Reinvested dividends and distributions | 343,001 | 1,900,946 | ||||||||
| Shares repurchased | (7,965,806) | (18,794,720) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (6,490,194) | (14,051,836) | ||||||||
| Shares Outstanding, Beginning of Period | 38,711,144 | 52,762,980 | ||||||||
| Shares Outstanding, End of Period | 32,220,950 | 38,711,144 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Overseas Fund | $ | 729,320,179 | $ | 1,096,142,021 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87737 | 125-24-93050 05-15 |
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semiannual report
March 31, 2015
Janus Triton Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Triton Fund
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Janus Triton Fund (unaudited)
FUND SNAPSHOT We believe a fundamentally driven investment process focused on identifying smaller-cap companies with differentiated business models and sustainable competitive advantages will drive outperformance versus our benchmark and peers over time. Identifying small-cap companies with the ability to hold our positions as they potentially grow into the mid-cap space allows us the flexibility to capture a longer growth period in a company’s lifecycle. |  Jonathan Coleman portfolio manager |
PERFORMANCE
Janus Triton Fund’s Class T Shares returned 17.81% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell 2500 Growth Index, returned 15.48% during the period. The Fund’s secondary benchmark, the Russell 2000 Growth Index, returned 17.36%.
INVESTMENT ENVIRONMENT
Small-cap indices had substantial gains during the period, but the march forward was not without volatility. Small-cap stocks sold off early in the period as several data points showed the economy outside the U.S. was weakening. Markets then rose but were volatile again in December as investors considered whether the sharp slide in oil prices was a consequence of declining expectations of global growth. Small-cap stocks continued their climb in the first quarter, driven in part by signs of U.S. consumer strength, and the perception the Federal Reserve would likely be slower to raise interest rates than many expected heading into the year.
PERFORMANCE DISCUSSION
The Fund outperformed both its primary benchmark, the Russell 2500 Growth Index, and also its secondary benchmark, the Russell 2000 Growth Index, during the period. As part of our investment process, we focus on identifying companies we believe have long-duration growth potential, but that also have higher-quality business models with more predictable, growing revenue streams. These companies often have a small share of large or growing addressable markets, with sustainable competitive advantages such as high barriers to entry in their respective industry, and a differentiated product or service that gives them pricing power, which should help the company grow in a variety of market and economic environments. These companies also typically generate a high return on invested capital, or demonstrate a proven ability to expand profit margins. We believe this high-quality investment approach to small-cap equities should help our Fund produce positive results during market rallies, and outperform the benchmark in weak or uncertain economic environments, creating a better opportunity to generate higher compounded returns over full market cycles. The past six months served as a microcosm of how we would expect our Fund to perform over longer periods, as much of our relative outperformance during the period came when markets slipped in early October and mid-December.
Our stock selection in the technology sector was a large contributor to relative performance. Many of our technology companies have predictable or recurring revenue streams from diverse end markets outside the technology sector, and these companies were among our top-performing technology stocks during the period. SS&C Technologies, for example, provides a number of investment and financial software-enabled services to companies in the financial services industry. Most of its revenue comes from subscription services or software maintenance, which helps create a steadier and recurring revenue source for the company. Strategic acquisitions made by the company in recent years have broadened its array of service offerings to financial firms and should create better cross-selling opportunities to its clients. The stock was up at the end of 2014 after the company announced another acquisition that should help further broaden its offering to customers.
Broadridge Financial Solutions was also a top contributor. A new CFO has done a better job of laying out the company’s long-term growth potential and capital allocation plan to shareholders, and the stock has been up as the market has gained a better appreciation of Broadridge’s business. The company provides investor communications and technology-driven solutions to banks, broker-dealers, mutual funds and corporations globally. Among a number of services, Broadridge is responsible for distributing proxy information on behalf of corporations to a wide network of broker-dealers, financial advisors and mutual funds. We believe the wide network Broadridge has set up among these investor bases is a competitive
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Janus Triton Fund (unaudited)
advantage for the company. We also see further growth potential ahead as Broadridge creates new business lines around the data they have about proxy voters.
While we outperformed within the technology sector, we had stocks outside the sector that were large contributors as well. For example, Wolverine World Wide was another large contributor. The company owns a number of shoe brands, and in our view it has a proven track record of acquiring and improving management of those brands, then increasing sales as Wolverine pushes those brands through its global distribution network. The stock was up this period after revenue growth for some of its brands demonstrated the company’s ability to expand into more footwear categories.
While generally pleased with our performance during the period, we did have stocks that fell and detracted from our results. A couple of our energy holdings were among our leading detractors on an absolute basis, but it is worth noting that our stock selection within the sector was actually a bright spot for the Fund, and a large reason why we outperformed the benchmark. Sinking oil prices caused energy stocks to sell off broadly this period, and while our energy holdings were not immune to the cycle, as a group they held up much better than those in the benchmark. We would expect that in an environment where falling oil prices are a concern due to our focus on finding energy companies with less commodity sensitivity and more stable revenue streams. We have avoided many of the highly levered exploration and production companies whose business models face considerable risk if prices don’t pick up. Instead we tend to own a lot midstream companies whose contracts are less tied to the price of the underlying commodity, which makes their revenues less susceptible to a drop in oil prices. Targa Resources and DCP Midstream are examples of such companies. While their stocks fell and both were large detractors from absolute performance, we think the market has failed to give these companies credit for the durability of their earnings.
We also had industrial holdings with exposure to the energy sector that underperformed during the six-month period. Kennametal was one of these detractors. The company makes cutting tools used in end markets serving the energy sector. We are reviewing the stock as we wait to see the plans of a new CEO who arrived in late 2014 and has indicated a desire to cut costs in the business.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
We would expect a lower return environment for small-caps for the rest of the year. We previously pointed out that the small-cap market was entering 2015 with valuations on the high end of historical averages. After another sharp climb to kick off the year, valuations are more stretched. The prospect of the Federal Reserve raising rates at some point later this year could be the impetus that triggers some P/E multiple contraction.
While returns may not be as robust as the prior two years, we like how our Fund is positioned against this investment backdrop. We have taken a careful approach to navigating a few pockets of the market where valuations are particularly rich, and could be due for greater multiple contraction. We see high valuations on a broad basis for stocks tied to biotechnology, cloud computing and social media. We hold a few cloud and social media companies, but avoid areas within those industries where momentum is a major factor of stock performance, and hold only a select few companies we believe will prove disruptive to the large end markets they serve. We have also been selective with our holdings in the biotech industry. We own a few biotech companies that have innovative therapies with promising potential, but take smaller positions with companies whose performance is tied to the success or failure of a clinical trial for a single drug, and have larger positions with biotech companies that have already had innovative therapies approved by the FDA, or have multiple products in their pipelines.
Given where multiples sit today, we would also expect earnings growth to be needed to drive further stock price appreciation from stocks. We believe this should benefit those small-cap stocks we tend to focus on, which have demonstrated a more steady earnings growth trajectory over time.
Thank you for your investment in Janus Triton Fund.
2 | MARCH 31, 2015
Table of Contents
(unaudited)
Janus Triton Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| SS&C Technologies Holdings, Inc. | 1.14% | |||
| Broadridge Financial Solutions, Inc. | 0.61% | |||
| Belden, Inc. | 0.60% | |||
| Sensient Technologies Corp. | 0.59% | |||
| Wolverine World Wide, Inc. | 0.53% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Kennametal, Inc. | –0.27% | |||
| Targa Resources Corp. | –0.25% | |||
| DCP Midstream Partners LP | –0.23% | |||
| Dril-Quip, Inc. | –0.19% | |||
| FEI Co. | –0.16% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 2500tm | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Information Technology | 1.82% | 29.08% | 21.79% | |||||||||
| Consumer Discretionary | 1.12% | 15.10% | 18.37% | |||||||||
| Energy | 0.95% | 2.27% | 3.45% | |||||||||
| Materials | 0.85% | 3.32% | 7.05% | |||||||||
| Financials | 0.54% | 7.84% | 8.78% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 2500tm | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Health Care | –1.41% | 16.38% | 19.34% | |||||||||
| Industrials | –1.00% | 20.31% | 16.77% | |||||||||
| Other** | –0.60% | 3.96% | 0.00% | |||||||||
| Utilities | 0.03% | 0.05% | 0.41% | |||||||||
| Consumer Staples | 0.04% | 1.68% | 3.39% | |||||||||
| Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
| * | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
| ** | Not a GICS classified sector. |
Janus Investment Fund | 3
Table of Contents
Janus Triton Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| SS&C Technologies Holdings, Inc. Software | 2.5% | |||
| Carter’s, Inc. Textiles, Apparel & Luxury Goods | 2.0% | |||
| Broadridge Financial Solutions, Inc. Information Technology Services | 1.9% | |||
| Sensient Technologies Corp. Chemicals | 1.9% | |||
| Blackbaud, Inc. Software | 1.9% | |||
| 10.2% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (7.9)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
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(unaudited)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Triton Fund – Class A Shares | |||||||||||||
| NAV | 17.64% | 18.87% | 18.43% | 13.96% | 13.63% | 1.15% | |||||||
| MOP | 10.90% | 12.03% | 17.03% | 13.29% | 12.97% | ||||||||
| Janus Triton Fund – Class C Shares | |||||||||||||
| NAV | 17.27% | 18.11% | 17.56% | 13.14% | 12.81% | 1.85% | |||||||
| CDSC | 16.27% | 17.11% | 17.56% | 13.14% | 12.81% | ||||||||
| Janus Triton Fund – Class D Shares(1) | 17.93% | 19.30% | 18.76% | 14.21% | 13.88% | 0.84% | |||||||
| Janus Triton Fund – Class I Shares | 17.92% | 19.38% | 18.84% | 14.15% | 13.82% | 0.79% | |||||||
| Janus Triton Fund – Class N Shares | 17.98% | 19.49% | 18.63% | 14.15% | 13.82% | 0.68% | |||||||
| Janus Triton Fund – Class R Shares | 17.52% | 18.55% | 18.05% | 13.58% | 13.24% | 1.43% | |||||||
| Janus Triton Fund – Class S Shares | 17.66% | 18.89% | 18.34% | 13.82% | 13.48% | 1.18% | |||||||
| Janus Triton Fund – Class T Shares | 17.81% | 19.18% | 18.63% | 14.15% | 13.82% | 0.93% | |||||||
| Russell 2500tm Growth Index | 15.48% | 13.83% | 16.97% | 10.64% | 10.17% | ||||||||
| Russell 2000® Growth Index | 17.36% | 12.06% | 16.58% | 10.02% | 9.44% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Small Growth Funds | – | 4/746 | 51/679 | 7/582 | 5/582 | ||||||||
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 | 5
Table of Contents
Janus Triton Fund (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.
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 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, and therefore the ranking for the period.
© 2015 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 – February 25, 2005 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,176.40 | $ | 6.02 | $ | 1,000.00 | $ | 1,019.40 | $ | 5.59 | 1.11% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,172.70 | $ | 9.80 | $ | 1,000.00 | $ | 1,015.91 | $ | 9.10 | 1.81% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,179.30 | $ | 4.46 | $ | 1,000.00 | $ | 1,020.84 | $ | 4.13 | 0.82% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,179.20 | $ | 4.13 | $ | 1,000.00 | $ | 1,021.14 | $ | 3.83 | 0.76% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,179.80 | $ | 3.64 | $ | 1,000.00 | $ | 1,021.59 | $ | 3.38 | 0.67% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,175.20 | $ | 7.70 | $ | 1,000.00 | $ | 1,017.85 | $ | 7.14 | 1.42% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,176.60 | $ | 6.35 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.89 | 1.17% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,178.10 | $ | 5.00 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.63 | 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 182/365 (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 Triton Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 92.6% | ||||||||||
| Aerospace & Defense – 2.2% | ||||||||||
| 1,144,075 | Aerovironment, Inc.* | $ | 30,329,428 | |||||||
| 2,400,090 | HEICO Corp. – Class A£ | 118,900,459 | ||||||||
| 149,229,887 | ||||||||||
| Automobiles – 0.5% | ||||||||||
| 541,122 | Thor Industries, Inc. | 34,204,322 | ||||||||
| Biotechnology – 3.1% | ||||||||||
| 1,010,393 | ACADIA Pharmaceuticals, Inc.*,# | 32,928,708 | ||||||||
| 3,030,292 | Dyax Corp.* | 50,772,542 | ||||||||
| 2,909,565 | Ironwood Pharmaceuticals, Inc.* | 46,553,040 | ||||||||
| 399,946 | OvaScience, Inc.*,# | 13,890,125 | ||||||||
| 284,089 | ProQR Therapeutics NV* | 6,215,867 | ||||||||
| 107,150 | Puma Biotechnology, Inc.*,# | 25,299,187 | ||||||||
| 348,645 | Synageva BioPharma Corp.*,# | 34,003,347 | ||||||||
| 209,662,816 | ||||||||||
| Building Products – 0.8% | ||||||||||
| 804,566 | AO Smith Corp | 52,827,804 | ||||||||
| Capital Markets – 2.4% | ||||||||||
| 1,290,022 | Eaton Vance Corp. | 53,716,516 | ||||||||
| 1,020,285 | Financial Engines, Inc.# | 42,678,521 | ||||||||
| 1,574,496 | LPL Financial Holdings, Inc. | 69,057,395 | ||||||||
| 165,452,432 | ||||||||||
| Chemicals – 1.9% | ||||||||||
| 1,886,499 | Sensient Technologies Corp. | 129,942,051 | ||||||||
| Commercial Banks – 1.7% | ||||||||||
| 1,069,527 | PacWest Bancorp | 50,150,121 | ||||||||
| 538,768 | SVB Financial Group* | 68,445,087 | ||||||||
| 118,595,208 | ||||||||||
| Commercial Services & Supplies – 1.9% | ||||||||||
| 846,774 | Clean Harbors, Inc.*,# | 48,079,828 | ||||||||
| 1,425,966 | Healthcare Services Group, Inc.# | 45,816,288 | ||||||||
| 1,387,824 | Rollins, Inc. | 34,320,887 | ||||||||
| 128,217,003 | ||||||||||
| Construction Materials – 0.4% | ||||||||||
| 1,305,211 | Summit Materials, Inc.*,£ | 28,910,424 | ||||||||
| Containers & Packaging – 0.8% | ||||||||||
| 980,536 | Crown Holdings, Inc.* | 52,968,555 | ||||||||
| Diversified Consumer Services – 1.1% | ||||||||||
| 2,298,905 | ServiceMaster Global Holdings, Inc.* | 77,588,044 | ||||||||
| Diversified Financial Services – 2.1% | ||||||||||
| 782,934 | MarketAxess Holdings, Inc. | 64,905,229 | ||||||||
| 1,253,120 | MSCI, Inc. | 76,828,787 | ||||||||
| 141,734,016 | ||||||||||
| Electrical Equipment – 3.2% | ||||||||||
| 1,503,832 | EnerSys | 96,606,168 | ||||||||
| 1,560,213 | Enphase Energy, Inc.*,# | 20,579,209 | ||||||||
| 6,254,828 | GrafTech International, Ltd.* | 24,331,281 | ||||||||
| 548,738 | Polypore International, Inc.* | 32,320,668 | ||||||||
| 803,425 | Sensata Technologies Holding NV* | 46,156,766 | ||||||||
| 219,994,092 | ||||||||||
| Electronic Equipment, Instruments & Components – 4.2% | ||||||||||
| 1,173,119 | Belden, Inc. | 109,757,013 | ||||||||
| 981,601 | FEI Co.† | 74,935,420 | ||||||||
| 954,392 | National Instruments Corp. | 30,578,720 | ||||||||
| 988,588 | OSI Systems, Inc.* | 73,412,545 | ||||||||
| 288,683,698 | ||||||||||
| Energy Equipment & Services – 0.7% | ||||||||||
| 673,434 | Dril-Quip, Inc.* | 46,056,151 | ||||||||
| Food & Staples Retailing – 1.4% | ||||||||||
| 473,627 | Casey’s General Stores, Inc. | 42,673,793 | ||||||||
| 1,709,835 | Diplomat Pharmacy, Inc.*,§ | 56,169,789 | ||||||||
| 98,843,582 | ||||||||||
| Health Care Equipment & Supplies – 4.1% | ||||||||||
| 3,570,445 | Endologix, Inc.*,#,£ | 60,947,496 | ||||||||
| 1,751,550 | Masimo Corp.* | 57,766,119 | ||||||||
| 2,673,309 | Novadaq Technologies, Inc.*,# | 43,414,538 | ||||||||
| 1,649,345 | Quidel Corp.*,# | 44,499,328 | ||||||||
| 1,024,981 | STERIS Corp.# | 72,025,415 | ||||||||
| 278,652,896 | ||||||||||
| Health Care Providers & Services – 0.9% | ||||||||||
| 885,947 | HealthEquity, Inc.* | 22,139,816 | ||||||||
| 1,072,118 | Premier, Inc. – Class A* | 40,290,194 | ||||||||
| 62,430,010 | ||||||||||
| Health Care Technology – 0.8% | ||||||||||
| 392,220 | athenahealth, Inc.*,# | 46,827,146 | ||||||||
| 305,775 | Inovalon Holdings, Inc.* | 9,237,462 | ||||||||
| 56,064,608 | ||||||||||
| Hotels, Restaurants & Leisure – 3.0% | ||||||||||
| 651,577 | Dunkin’ Brands Group, Inc. | 30,989,002 | ||||||||
| 332,512 | Popeyes Louisiana Kitchen, Inc.* | 19,890,868 | ||||||||
| 1,076,689 | Six Flags Entertainment Corp. | 52,122,514 | ||||||||
| 9,542,784 | Wendy’s Co. | 104,016,346 | ||||||||
| 207,018,730 | ||||||||||
| Household Durables – 0.4% | ||||||||||
| 364,659 | Tupperware Brands Corp.# | 25,168,764 | ||||||||
| Information Technology Services – 6.9% | ||||||||||
| 2,411,377 | Broadridge Financial Solutions, Inc. | 132,649,849 | ||||||||
| 2,072,096 | Euronet Worldwide, Inc.* | 121,735,640 | ||||||||
| 699,515 | Gartner, Inc.* | 58,654,333 | ||||||||
| 1,545,252 | Jack Henry & Associates, Inc. | 107,997,662 | ||||||||
| 751,095 | MAXIMUS, Inc. | 50,143,102 | ||||||||
| 471,180,586 | ||||||||||
| Internet & Catalog Retail – 0.4% | ||||||||||
| 819,906 | Wayfair, Inc. – Class A*,#,£ | 26,335,381 | ||||||||
| Internet Software & Services – 2.6% | ||||||||||
| 990,294 | ChannelAdvisor Corp.*,# | 9,595,949 | ||||||||
| 683,328 | Cimpress NV*,# | 57,659,217 | ||||||||
| 221,317 | CoStar Group, Inc.* | 43,783,142 | ||||||||
| 682,999 | Envestnet, Inc.* | 38,302,584 | ||||||||
| 858,573 | HomeAway, Inc.* | 25,903,147 | ||||||||
| 175,244,039 | ||||||||||
| Life Sciences Tools & Services – 2.5% | ||||||||||
| 569,266 | Bio-Techne Corp. | 57,091,687 | ||||||||
| 118,462 | Mettler-Toledo International, Inc.* | 38,932,536 | ||||||||
| 1,487,785 | PerkinElmer, Inc. | 76,085,325 | ||||||||
| 172,109,548 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Machinery – 6.3% | ||||||||||
| 971,278 | CLARCOR, Inc. | $ | 64,162,625 | |||||||
| 2,246,743 | Kennametal, Inc. | 75,692,772 | ||||||||
| 886,263 | Nordson Corp. | 69,429,843 | ||||||||
| 703,751 | Photo Labs, Inc.*,# | 49,262,570 | ||||||||
| 3,555,793 | Rexnord Corp.* | 94,904,115 | ||||||||
| 396,613 | Tennant Co. | 25,926,592 | ||||||||
| 541,517 | Wabtec Corp. | 51,449,530 | ||||||||
| 430,828,047 | ||||||||||
| Media – 2.2% | ||||||||||
| 1,691,856 | AMC Entertainment Holdings, Inc. – Class A£ | 60,043,969 | ||||||||
| 1,343,864 | Markit, Ltd.* | 36,149,942 | ||||||||
| 3,597,437 | National CineMedia, Inc.£ | 54,321,299 | ||||||||
| 150,515,210 | ||||||||||
| Metals & Mining – 0.4% | ||||||||||
| 401,524 | Reliance Steel & Aluminum Co. | 24,525,086 | ||||||||
| Oil, Gas & Consumable Fuels – 1.2% | ||||||||||
| 1,242,857 | DCP Midstream Partners LP# | 45,923,566 | ||||||||
| 349,773 | Targa Resources Corp.# | 33,504,756 | ||||||||
| 79,428,322 | ||||||||||
| Personal Products – 0.9% | ||||||||||
| 1,976,545 | Ontex Group NV* | 59,925,461 | ||||||||
| Pharmaceuticals – 4.2% | ||||||||||
| 495,717 | Akorn, Inc.*,# | 23,551,515 | ||||||||
| 2,651,478 | Catalent, Inc.* | 82,593,540 | ||||||||
| 1,687,492 | Depomed, Inc.* | 37,816,696 | ||||||||
| 2,665,784 | IGI Laboratories, Inc.*,#,£ | 21,752,797 | ||||||||
| 287,704 | Mallinckrodt PLC* | 36,437,711 | ||||||||
| 588,137 | Pacira Pharmaceuticals, Inc.*,# | 52,255,972 | ||||||||
| 952,097 | Relypsa, Inc.* | 34,342,139 | ||||||||
| 288,750,370 | ||||||||||
| Professional Services – 0.9% | ||||||||||
| 743,160 | Corporate Executive Board Co. | 59,348,758 | ||||||||
| Real Estate Investment Trusts (REITs) – 0.6% | ||||||||||
| 668,957 | Lamar Advertising Co. – Class A | 39,649,081 | ||||||||
| Real Estate Management & Development – 0.8% | ||||||||||
| 307,809 | Jones Lang LaSalle, Inc. | 52,450,653 | ||||||||
| Road & Rail – 2.0% | ||||||||||
| 431,370 | Genesee & Wyoming, Inc. – Class A* | 41,601,323 | ||||||||
| 643,686 | Landstar System, Inc. | 42,676,382 | ||||||||
| 662,751 | Old Dominion Freight Line, Inc.* | 51,230,652 | ||||||||
| 135,508,357 | ||||||||||
| Semiconductor & Semiconductor Equipment – 2.4% | ||||||||||
| 9,694,476 | Atmel Corp. | 79,785,537 | ||||||||
| 6,672,842 | ON Semiconductor Corp.* | 80,808,117 | ||||||||
| 160,593,654 | ||||||||||
| Software – 12.0% | ||||||||||
| 3,709,685 | ACI Worldwide, Inc.* | 80,351,777 | ||||||||
| 1,416,262 | Advent Software, Inc. | 62,471,317 | ||||||||
| 2,711,067 | Blackbaud, Inc.£ | 128,450,354 | ||||||||
| 5,721,666 | Cadence Design Systems, Inc.*,# | 105,507,521 | ||||||||
| 299,438 | FactSet Research Systems, Inc.# | 47,670,530 | ||||||||
| 938,558 | Guidewire Software, Inc.* | 49,377,536 | ||||||||
| 1,007,935 | Informatica Corp.* | 44,202,989 | ||||||||
| 2,540,762 | RealPage, Inc.* | 51,170,947 | ||||||||
| 1,406,878 | Solera Holdings, Inc. | 72,679,318 | ||||||||
| 2,783,549 | SS&C Technologies Holdings, Inc.† | 173,415,103 | ||||||||
| 815,297,392 | ||||||||||
| Specialty Retail – 2.5% | ||||||||||
| 1,159,201 | Hibbett Sports, Inc.*,#,£ | 56,870,401 | ||||||||
| 3,306,477 | Sally Beauty Holdings, Inc.* | 113,643,614 | ||||||||
| 170,514,015 | ||||||||||
| Textiles, Apparel & Luxury Goods – 4.4% | ||||||||||
| 1,478,171 | Carter’s, Inc. | 136,686,472 | ||||||||
| 1,869,965 | Tumi Holdings, Inc.*,# | 45,739,344 | ||||||||
| 3,581,822 | Wolverine World Wide, Inc.# | 119,811,946 | ||||||||
| 302,237,762 | ||||||||||
| Trading Companies & Distributors – 1.8% | ||||||||||
| 663,701 | MSC Industrial Direct Co., Inc. – Class A | 47,919,212 | ||||||||
| 1,026,813 | WESCO International, Inc.*,# | 71,763,961 | ||||||||
| 119,683,173 | ||||||||||
| Total Common Stocks (cost $4,492,218,500) | 6,306,369,988 | |||||||||
| Investment Companies – 15.3% | ||||||||||
| Exchange-Traded Funds (ETFs) – 1.1% | ||||||||||
| 631,706 | iShares Russell 2000® Index Fund# | 78,552,641 | ||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 7.7% | ||||||||||
| 522,461,730 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 522,461,730 | ||||||||
| Money Markets – 6.5% | ||||||||||
| 444,046,403 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 444,046,403 | ||||||||
| Total Investment Companies (cost $1,036,189,526) | 1,045,060,774 | |||||||||
| Total Investments (total cost $5,528,408,026) – 107.9% | 7,351,430,762 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (7.9)% | (535,090,817) | |||||||||
| Net Assets – 100% | $ | 6,816,339,945 | ||||||||
Summary of Investments by Country��– (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 7,205,724,954 | 98 | .0% | ||||
| Belgium | 59,925,461 | 0 | .8 | |||||
| Canada | 43,414,538 | 0 | .6 | |||||
| United Kingdom | 36,149,942 | 0 | .5 | |||||
| Netherlands | 6,215,867 | 0 | .1 | |||||
| Total | $ | 7,351,430,762 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Triton Fund
Schedule of Investments (unaudited)
As of March 31, 2015
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 10,972,000 | $ | 16,271,930 | $ | 115,819 | |||||||
| Canadian Dollar 4/16/15 | 16,000,000 | 12,632,045 | (11,548) | |||||||||
| Euro 4/16/15 | 16,004,500 | 17,209,881 | (24,828) | |||||||||
| 46,113,856 | 79,443 | |||||||||||
| Credit Suisse International: | ||||||||||||
| Canadian Dollar 4/9/15 | 15,300,000 | 12,080,442 | 61,849 | |||||||||
| Euro 4/9/15 | 18,000,000 | 19,353,695 | 463,906 | |||||||||
| 31,434,137 | 525,755 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| British Pound 4/9/15 | 11,980,000 | 17,767,758 | 281,265 | |||||||||
| Canadian Dollar 4/9/15 | 19,360,000 | 15,286,101 | 28,676 | |||||||||
| Euro 4/9/15 | 25,050,000 | 26,933,892 | 459,923 | |||||||||
| 59,987,751 | 769,864 | |||||||||||
| Total | $ | 137,535,744 | $ | 1,375,062 | ||||||||
Total Return Swaps outstanding at March 31, 2015
| Unrealized | |||||||||||||
| Return Paid | Return Received | Notional | Appreciation/ | ||||||||||
| Counterparty | by the Fund | by the Fund | Termination Date | Amount | (Depreciation) | ||||||||
| Goldman Sachs International | 1 month USD LIBOR minus 2 basis points | Russell 2500® Total Return Growth Index | 5/5/15 | $ | 93,590,905 | $ | 701,173 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| Russell 2000® Growth Index | Measures the performance of those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| Russell 2500TMGrowth Index | Measures the performance of those Russell 2500TM Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| LIBOR | London Interbank Offered Rate | |
| LLC | Limited Liability Company | |
| LP | Limited Partnership | |
| PLC | Public Limited Company |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Triton Fund | $ | 79,783,500 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Triton Fund | ||||||||||||||
| Diplomat Pharmacy, Inc. | 3/31/14 | $ | 28,628,678 | $ | 56,169,789 | 0.8 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Triton Fund | |||||||||||||||||||||
| AMC Entertainment Holdings, Inc. – Class A | 1,465,608 | 226,248 | – | 1,691,856 | $ | – | $ | 676,743 | $ | 60,043,969 | |||||||||||
| Blackbaud, Inc. | 2,711,067 | – | – | 2,711,067 | – | 650,656 | 128,450,354 | ||||||||||||||
| Endologix, Inc. | 3,570,445 | – | – | 3,570,445 | – | – | 60,947,496 | ||||||||||||||
| HEICO Corp. – Class A | 2,400,090 | – | – | 2,400,090 | – | 168,006 | 118,900,459 | ||||||||||||||
Hibbett Sports, Inc.(1) | 1,325,312 | – | (166,111) | 1,159,201 | (956,223) | – | N/A | ||||||||||||||
| IGI Laboratories, Inc. | 2,665,784 | – | – | 2,665,784 | – | – | 21,752,797 | ||||||||||||||
| Janus Cash Collateral Fund LLC | 427,977,561 | 982,300,868 | (887,816,699) | 522,461,730 | – | 471,007(2) | 522,461,730 | ||||||||||||||
| Janus Cash Liquidity Fund LLC | 230,115,675 | 730,913,728 | (516,983,000) | 444,046,403 | – | 126,337 | 444,046,403 | ||||||||||||||
| National CineMedia, Inc. | 3,597,437 | – | – | 3,597,437 | – | 1,582,872 | 54,321,299 | ||||||||||||||
| Summit Materials, Inc. | – | 1,305,211 | – | 1,305,211 | – | – | 28,910,424 | ||||||||||||||
Wayfair, Inc. – Class A(1) | – | 819,906 | – | 819,906 | – | – | N/A | ||||||||||||||
| Total | $ | (956,223) | $ | 3,675,621 | $ | 1,439,834,931 | |||||||||||||||
| (1) | Company was no longer an affiliate as of March 31, 2015. | |
| (2) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Triton Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Food & Staples Retailing | $ | 42,673,793 | $ | 56,169,789 | $ | – | |||||
| Personal Products | – | 59,925,461 | – | ||||||||
| All Other | 6,147,600,945 | – | – | ||||||||
Investment Companies | 78,552,641 | 966,508,133 | – | ||||||||
| Total Investments in Securities | $ | 6,268,827,379 | $ | 1,082,603,383 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,411,438 | $ | – | |||||
Outstanding Swap Contracts, at Value | – | 701,173 | – | ||||||||
Total Assets | $ | 6,268,827,379 | $ | 1,084,715,994 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 36,376 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Triton Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 5,528,408,026 | ||
Unaffiliated investments, at value(1) | $ | 5,911,595,831 | ||
Affiliated investments, at value(2) | 1,439,834,931 | |||
| Restricted cash (Note 1) | 1,010,000 | |||
| Forward currency contracts | 1,411,438 | |||
| Closed foreign currency contracts | 33,310 | |||
| Outstanding swap contracts, at value | 701,173 | |||
| Non-interested Trustees’ deferred compensation | 133,816 | |||
| Receivables: | ||||
| Investments sold | 2,274,642 | |||
| Fund shares sold | 12,962,320 | |||
| Dividends | 1,244,025 | |||
| Dividends from affiliates | 41,353 | |||
| Other assets | 151,101 | |||
| Total Assets | 7,371,393,940 | |||
| Liabilities: | ||||
| Due to custodian | 7,357 | |||
| Collateral for securities loaned (Note 3) | 522,461,730 | |||
| Forward currency contracts | 36,376 | |||
| Closed foreign currency contracts | 308,856 | |||
| Payables: | ||||
| Investments purchased | 19,082,936 | |||
| Fund shares repurchased | 7,111,294 | |||
| Dividends and interest on swap contracts | 11,279 | |||
| Advisory fees | 3,616,784 | |||
| Fund administration fees | 56,512 | |||
| Transfer agent fees and expenses | 1,222,447 | |||
| 12b-1 Distribution and shareholder servicing fees | 555,612 | |||
| Non-interested Trustees’ fees and expenses | 35,782 | |||
| Non-interested Trustees’ deferred compensation fees | 133,816 | |||
| Accrued expenses and other payables | 413,214 | |||
| Total Liabilities | 555,053,995 | |||
| Net Assets | $ | 6,816,339,945 | ||
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 March 31, 2015 (unaudited) | Janus Triton Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 4,638,074,809 | ||
| Undistributed net investment income/(loss) | (17,126,983) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 370,168,982 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,825,223,137 | |||
| Total Net Assets | $ | 6,816,339,945 | ||
| Net Assets - Class A Shares | $ | 606,970,978 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 24,401,173 | |||
Net Asset Value Per Share(3) | $ | 24.87 | ||
Maximum Offering Price Per Share(4) | $ | 26.39 | ||
| Net Assets - Class C Shares | $ | 254,626,840 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,703,730 | |||
Net Asset Value Per Share(3) | $ | 23.79 | ||
| Net Assets - Class D Shares | $ | 947,463,077 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,617,323 | |||
| Net Asset Value Per Share | $ | 25.19 | ||
| Net Assets - Class I Shares | $ | 1,415,338,147 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 55,930,843 | |||
| Net Asset Value Per Share | $ | 25.31 | ||
| Net Assets - Class N Shares | $ | 325,057,419 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 12,826,062 | |||
| Net Asset Value Per Share | $ | 25.34 | ||
| Net Assets - Class R Shares | $ | 178,613,063 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,292,883 | |||
| Net Asset Value Per Share | $ | 24.49 | ||
| Net Assets - Class S Shares | $ | 393,992,991 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,937,247 | |||
| Net Asset Value Per Share | $ | 24.72 | ||
| Net Assets - Class T Shares | $ | 2,694,277,430 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 107,456,792 | |||
| Net Asset Value Per Share | $ | 25.07 | ||
| (1) | Includes $462,689,316 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes $47,224,091 of securities on loan. See Note 3 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 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Triton Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 471,007 | ||
| Dividends | 11,296,055 | |||
| Dividends from affiliates | 3,204,614 | |||
| Total Investment Income | 14,971,676 | |||
| Expenses: | ||||
| Advisory fees | 19,199,733 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 665,591 | |||
| Class C Shares | 1,139,178 | |||
| Class R Shares | 395,071 | |||
| Class S Shares | 450,921 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 524,020 | |||
| Class R Shares | 197,535 | |||
| Class S Shares | 450,921 | |||
| Class T Shares | 2,934,948 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 492,772 | |||
| Class C Shares | 146,891 | |||
| Class I Shares | 575,790 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 32,531 | |||
| Class C Shares | 18,583 | |||
| Class D Shares | 92,000 | |||
| Class I Shares | 31,664 | |||
| Class N Shares | 1,094 | |||
| Class R Shares | 2,787 | |||
| Class S Shares | 2,568 | |||
| Class T Shares | 11,772 | |||
| Shareholder reports expense | 143,638 | |||
| Registration fees | 141,894 | |||
| Custodian fees | 17,153 | |||
| Professional fees | 44,746 | |||
| Non-interested Trustees’ fees and expenses | 65,546 | |||
| Fund administration fees | 250,192 | |||
| Other expenses | 135,870 | |||
| Total Expenses | 28,165,409 | |||
| Net Expenses | 28,165,409 | |||
| Net Investment Income/(Loss) | (13,193,733) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 425,167,525 | |||
| Investments in affiliates | (956,223) | |||
| Swap contracts | (1,248,862) | |||
| Total Net Realized Gain/(Loss) on Investments | 422,962,440 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 576,083,345 | |||
| Swap contracts | 701,173 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 576,784,518 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 986,553,225 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Triton | ||||||||
| Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (13,193,733) | $ | (13,474,475) | ||||
| Net realized gain/(loss) on investments | 422,962,440 | 545,115,261 | ||||||
| Change in unrealized net appreciation/depreciation | 576,784,518 | (70,669,461) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 986,553,225 | 460,971,325 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class D Shares | (796,379) | – | ||||||
| Class I Shares | (1,428,387) | – | ||||||
| Class N Shares | (477,244) | – | ||||||
| Class T Shares | (1,117,516) | – | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (49,440,324) | (23,023,900) | ||||||
| Class C Shares | (22,062,985) | (8,454,935) | ||||||
| Class D Shares | (80,480,528) | (32,997,488) | ||||||
| Class I Shares | (111,845,077) | (49,639,274) | ||||||
| Class N Shares | (23,927,171) | (4,806,746) | ||||||
| Class R Shares | (14,837,621) | (5,279,922) | ||||||
| Class S Shares | (34,216,867) | (12,053,837) | ||||||
| Class T Shares | (216,037,050) | (84,421,860) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (556,667,149) | (220,677,962) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 115,581,007 | 155,390,489 | ||||||
| Class C Shares | 38,876,912 | 49,929,035 | ||||||
| Class D Shares | 62,542,362 | 120,176,729 | ||||||
| Class I Shares | 263,438,805 | 399,048,228 | ||||||
| Class N Shares | 80,888,528 | 116,153,071 | ||||||
| Class R Shares | 37,061,796 | 57,284,565 | ||||||
| Class S Shares | 66,874,810 | 120,837,446 | ||||||
| Class T Shares | 418,380,779 | 509,504,846 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 40,890,788 | 19,507,920 | ||||||
| Class C Shares | 17,784,934 | 6,718,282 | ||||||
| Class D Shares | 80,085,718 | 32,616,963 | ||||||
| Class I Shares | 98,737,715 | 43,358,892 | ||||||
| Class N Shares | 24,257,619 | 4,748,319 | ||||||
| Class R Shares | 12,779,954 | 4,498,747 | ||||||
| Class S Shares | 33,754,182 | 11,838,549 | ||||||
| Class T Shares | 215,199,675 | 83,819,214 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (74,413,763) | (293,298,517) | ||||||
| Class C Shares | (25,323,446) | (56,781,025) | ||||||
| Class D Shares | (88,175,968) | (186,476,796) | ||||||
| Class I Shares | (167,513,074) | (680,766,283) | ||||||
| Class N Shares | (18,397,923) | (30,988,627) | ||||||
| Class R Shares | (25,955,168) | (48,497,683) | ||||||
| Class S Shares | (67,994,762) | (103,030,506) | ||||||
| Class T Shares | (244,341,804) | (687,252,941) | ||||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
| Janus Triton | ||||||||
| Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 895,019,676 | (351,661,083) | ||||||
| Net Increase/(Decrease) in Net Assets | 1,324,905,752 | (111,367,720) | ||||||
| Net Assets: | ||||||||
| Beginning of period | 5,491,434,193 | 5,602,801,913 | ||||||
| End of period | $ | 6,816,339,945 | $ | 5,491,434,193 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (17,126,983) | $ | (113,724) | ||||
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 | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.32 | $22.43 | $18.03 | $14.84 | $14.67 | $11.60 | $10.26 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.07)(3) | (0.10)(3) | 0.02 | (0.06) | (0.01) | (0.01) | 0.03 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.98 | 1.88 | 5.24 | 3.85 | 0.49 | 3.10 | 1.31 | |||||||||||||||||||||||
| Total from Investment Operations | 3.91 | 1.78 | 5.26 | 3.79 | 0.48 | 3.09 | 1.34 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | (0.01) | – | – | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.36) | (0.89) | (0.86) | (0.60) | (0.31) | (0.02) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $24.87 | $23.32 | $22.43 | $18.03 | $14.84 | $14.67 | $11.60 | |||||||||||||||||||||||
| Total Return* | 17.64% | 8.07% | 30.43% | 26.04% | 3.05% | 26.64% | 13.06% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $606,971 | $487,358 | $581,387 | $334,176 | $151,623 | $40,333 | $13,610 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $533,936 | $578,998 | $478,210 | $254,283 | $123,437 | $23,711 | $11,470 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.11% | 1.15% | 1.11% | 1.13% | 1.01% | 1.07% | 1.43% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.11% | 1.15% | 1.11% | 1.13% | 1.01% | 1.07% | 1.33% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.61)% | (0.42)% | 0.09% | (0.31)% | (0.26)% | (0.32)% | 0.99% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $22.47 | $21.79 | $17.65 | $14.64 | $14.60 | $11.60 | $10.26 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.15)(3) | (0.25)(3) | (0.06) | (0.13) | (0.06) | (0.06) | –(4) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.83 | 1.82 | 5.05 | 3.74 | 0.41 | 3.06 | 1.34 | |||||||||||||||||||||||
| Total from Investment Operations | 3.68 | 1.57 | 4.99 | 3.61 | 0.35 | 3.00 | 1.34 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $23.79 | $22.47 | $21.79 | $17.65 | $14.64 | $14.60 | $11.60 | |||||||||||||||||||||||
| Total Return* | 17.27% | 7.32% | 29.48% | 25.14% | 2.16% | 25.86% | 13.06% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $254,627 | $208,869 | $202,466 | $117,035 | $61,322 | $15,778 | $6,018 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $228,461 | $215,905 | $160,080 | $88,869 | $49,099 | $9,957 | $4,585 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.81% | 1.83% | 1.85% | 1.94% | 1.80% | 1.79% | 2.19% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.81% | 1.83% | 1.85% | 1.94% | 1.80% | 1.79% | 2.07% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.30)% | (1.11)% | (0.64)% | (1.12)% | (1.05)% | (1.03)% | (0.02)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
18 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||
| 2015 (unaudited) and each year or period ended | Janus Triton Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.57 | $22.59 | $18.14 | $14.88 | $14.69 | $12.38 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(2) | (0.03)(2) | 0.06 | (0.03) | 0.01 | 0.01 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.04 | 1.90 | 5.29 | 3.89 | 0.49 | 2.30 | ||||||||||||||||||||
| Total from Investment Operations | 4.00 | 1.87 | 5.35 | 3.86 | 0.50 | 2.31 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.02) | – | (0.05) | – | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | ||||||||||||||||||||
| Total Distributions | (2.38) | (0.89) | (0.90) | (0.60) | (0.31) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $25.19 | $23.57 | $22.59 | $18.14 | $14.88 | $14.69 | ||||||||||||||||||||
| Total Return* | 17.93% | 8.42% | 30.79% | 26.45% | 3.19% | 18.66% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $947,463 | $830,607 | $827,017 | $608,824 | $454,229 | $226,862 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $875,765 | $874,533 | $705,383 | $572,683 | $429,320 | $192,780 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.82% | 0.84% | 0.83% | 0.84% | 0.82% | 0.83% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.82% | 0.84% | 0.83% | 0.84% | 0.82% | 0.83% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.30)% | (0.11)% | 0.42% | (0.01)% | (0.06)% | (0.19)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | ||||||||||||||||||||||||||||||
| ended September 30 and the period ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.68 | $22.68 | $18.21 | $14.93 | $14.72 | $11.63 | $10.26 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | (0.02)(2) | 0.07 | (0.03) | 0.01 | 0.04 | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.05 | 1.91 | 5.32 | 3.91 | 0.51 | 3.09 | 1.36 | |||||||||||||||||||||||
| Total from Investment Operations | 4.02 | 1.89 | 5.39 | 3.88 | 0.52 | 3.13 | 1.37 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.03) | – | (0.07) | – | – | (0.04) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.39) | (0.89) | (0.92) | (0.60) | (0.31) | (0.04) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $25.31 | $23.68 | $22.68 | $18.21 | $14.93 | $14.72 | $11.63 | |||||||||||||||||||||||
| Total Return* | 17.92% | 8.48% | 30.91% | 26.50% | 3.32% | 26.96% | 13.35% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,415,338 | $1,130,109 | $1,312,895 | $807,407 | $299,600 | $74,640 | $4,377 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,234,352 | $1,239,318 | $1,123,056 | $590,777 | $221,851 | $23,645 | $1,277 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.76% | 0.79% | 0.76% | 0.79% | 0.75% | 0.71% | 1.01% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.76% | 0.79% | 0.76% | 0.79% | 0.75% | 0.71% | 0.97% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.27)% | (0.07)% | 0.45% | 0.04% | 0.01% | 0.01% | 0.73% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | 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 N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and | Janus Triton Fund | |||||||||||||||||
| each year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $23.71 | $22.68 | $18.22 | $17.42 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.02)(2) | 0.01(2) | 0.10 | (0.02) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.06 | 1.91 | 5.29 | 0.82 | ||||||||||||||
| Total from Investment Operations | 4.04 | 1.92 | 5.39 | 0.80 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.05) | – | (0.08) | – | ||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | – | ||||||||||||||
| Total Distributions | (2.41) | (0.89) | (0.93) | – | ||||||||||||||
| Net Asset Value, End of Period | $25.34 | $23.71 | $22.68 | $18.22 | ||||||||||||||
| Total Return* | 17.98% | 8.61% | 30.95% | 4.59% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $325,057 | $217,789 | $120,673 | $54,877 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $269,285 | $164,744 | $91,626 | $23,040 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.68% | 0.72% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.68% | 0.72% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.19)% | 0.06% | 0.47% | (0.09)% | ||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.03 | $22.22 | $17.91 | $14.78 | $14.68 | $11.64 | $10.26 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | �� | |||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.11)(2) | (0.16)(2) | 0.01 | (0.05) | (0.04) | (0.04) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.93 | 1.86 | 5.15 | 3.78 | 0.45 | 3.08 | 1.37 | |||||||||||||||||||||||
| Total from Investment Operations | 3.82 | 1.70 | 5.16 | 3.73 | 0.41 | 3.04 | 1.38 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $24.49 | $23.03 | $22.22 | $17.91 | $14.78 | $14.68 | $11.64 | |||||||||||||||||||||||
| Total Return* | 17.52% | 7.78% | 30.02% | 25.73% | 2.57% | 26.12% | 13.45% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $178,613 | $144,014 | $125,829 | $43,169 | $16,032 | $4,373 | $1,167 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $158,462 | $143,875 | $78,346 | $27,890 | $13,079 | $2,304 | $983 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.42% | 1.43% | 1.43% | 1.45% | 1.43% | 1.46% | 1.81% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.42% | 1.43% | 1.43% | 1.45% | 1.43% | 1.45% | 1.80% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.92)% | (0.70)% | (0.27)% | (0.62)% | (0.69)% | (0.72)% | 0.21% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
20 | MARCH 31, 2015
Table of Contents
Class S Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.19 | $22.32 | $17.96 | $14.79 | $14.65 | $11.60 | $10.26 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.08)(3) | (0.10)(3) | 0.03 | (0.04) | –(4) | (0.03) | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.97 | 1.86 | 5.20 | 3.81 | 0.45 | 3.10 | 1.33 | |||||||||||||||||||||||
| Total from Investment Operations | 3.89 | 1.76 | 5.23 | 3.77 | 0.45 | 3.07 | 1.34 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | (0.02) | – | – | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.36) | (0.89) | (0.87) | (0.60) | (0.31) | (0.02) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $24.72 | $23.19 | $22.32 | $17.96 | $14.79 | $14.65 | $11.60 | |||||||||||||||||||||||
| Total Return* | 17.66% | 8.02% | 30.37% | 25.99% | 2.85% | 26.45% | 13.06% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $393,993 | $336,292 | $294,312 | $115,486 | $30,983 | $6,444 | $3,845 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $361,728 | $327,838 | $211,261 | $76,974 | $20,684 | $5,740 | $2,245 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.18% | 1.20% | 1.18% | 1.23% | 1.61% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.18% | 1.20% | 1.18% | 1.23% | 1.57% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.65)% | (0.45)% | 0.01% | (0.37)% | (0.43)% | (0.48)% | 0.70% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | ||||||||||||||||||||||||||||||
| ended September 30 and the year ended | Janus Triton Fund | |||||||||||||||||||||||||||||
| October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $23.47 | $22.52 | $18.09 | $14.85 | $14.68 | $11.60 | $8.89 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(3) | (0.05)(3) | 0.05 | (0.04) | –(4) | 0.01 | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.02 | 1.89 | 5.27 | 3.88 | 0.48 | 3.09 | 2.70 | |||||||||||||||||||||||
| Total from Investment Operations | 3.97 | 1.84 | 5.32 | 3.84 | 0.48 | 3.10 | 2.71 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.01) | – | (0.04) | – | – | (0.02) | –(4) | |||||||||||||||||||||||
| Distributions (from capital gains) | (2.36) | (0.89) | (0.85) | (0.60) | (0.31) | – | – | |||||||||||||||||||||||
| Total Distributions | (2.37) | (0.89) | (0.89) | (0.60) | (0.31) | (0.02) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $25.07 | $23.47 | $22.52 | $18.09 | $14.85 | $14.68 | $11.60 | |||||||||||||||||||||||
| Total Return* | 17.81% | 8.31% | 30.66% | 26.37% | 3.05% | 26.74% | 30.55% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,694,277 | $2,136,397 | $2,138,223 | $1,389,123 | $830,444 | $431,352 | $315,350 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,354,409 | $2,240,693 | $1,744,940 | $1,179,102 | $846,328 | $313,740 | $193,298 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.92% | 0.93% | 0.93% | 0.94% | 0.93% | 0.96% | 1.18% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.92% | 0.92% | 0.92% | 0.94% | 0.93% | 0.96% | 1.17% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.42)% | (0.20)% | 0.31% | (0.11)% | (0.17)% | (0.14)% | 0.06% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 18% | 30% | 39% | 35% | 42% | 32% | 50% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 21
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Triton 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance
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with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The 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 3 | ||||||
| Fund | to Level 2 | |||||
| Janus Triton Fund | $ | 28,628,678 | ||||
Financial assets were transferred out of Level 3 to Level 2 since certain security’s prices were determined using
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
other significant observable inputs at the end of the current period and significant unobservable inputs at the end of the prior fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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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Restricted Cash
As of March 31, 2015, the Fund had restricted cash in the amount of $1,010,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Triton Fund | $ | 28,402,226 | ||||
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 centrally clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred
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from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps.
Index swaps, interest rate swaps, and credit default swaps are valued using an approved vendor supplied price. Basket swaps are valued using a broker supplied price. Equity swaps that consist of a single underlying equity are valued either at the closing price, the latest bid price, or the last sale price of the underlying equity. The market value of swap contracts are aggregated by positive and negative values that are disclosed separately as an asset or liability on the Fund’s Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period.
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.
The following table provides average ending monthly market value amounts on total return swaps which are long the reference asset during the period ended March 31, 2015.
| Fund | Long | |||||
| Janus Triton Fund | $ | 100,168 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Triton Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 1,411,438 | Forward currency contracts | $ | 36,376 | ||||||
| Equity Contracts | Outstanding swap contracts, at value | 701,173 | ||||||||||
| Total | 2,112,611 | $ | 36,376 | |||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||
| Investments and foreign | ||||||||||||
| Derivatives not accounted for as hedging instruments | currency transactions | Swap contracts | Total | |||||||||
Janus Triton Fund | ||||||||||||
| Currency Contracts | $ | 1,053,667 | $ | – | $ | 1,053,667 | ||||||
| Equity Contracts | – | (1,248,862 | ) | (1,248,862 | ) | |||||||
| Total | $ | 1,053,667 | $ | (1,248,862 | ) | $ | (195,195 | ) | ||||
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Notes to Financial Statements (unaudited) (continued)
| 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 | Swap contracts | Total | |||||||||
Janus Triton Fund | ||||||||||||
| Currency Contracts | $ | 1,375,062 | $ | – | $ | 1,375,062 | ||||||
| Equity Contracts | – | 701,173 | 701,173 | |||||||||
| Total | $ | 1,375,062 | $ | 701,173 | $ | 2,076,235 | ||||||
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) to gain exposure to a particular portion of the market. ETFs are typically open-end investment companies, which may be managed or unmanaged, that generally seek to track the performance of a specific index. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses.
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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ 115,819 | $(36,376) | $ – | $ 79,443 | ||||||||||||||
| Credit Suisse International | 525,755 | – | – | 525,755 | ||||||||||||||
| Deutsche Bank AG | 509,913,407 | – | (509,913,407) | – | ||||||||||||||
| Goldman Sachs International | 701,173 | – | – | 701,173 | ||||||||||||||
| HSBC Securities (USA), Inc. | 769,864 | – | – | 769,864 | ||||||||||||||
| Total | $512,026,018 | $(36,376) | $(509,913,407) | $2,076,235 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $36,376 | $(36,376) | $– | $– | ||||||||||||||
| (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
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Notes to Financial Statements (unaudited) (continued)
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.
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.
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
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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.
| 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 Triton Fund | All Asset Levels | 0.64 | ||||||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Triton Fund | 0.92 | |||||
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 on the Statement of Assets and Liabilities in the asset, “Non-
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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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Triton Fund | $ | 46,856 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Triton Fund | $ | 8,547 | ||||
| 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 March 31, 2015 are noted below.
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Notes to Financial Statements (unaudited) (continued)
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 Triton Fund | $ | 5,533,778,963 | $ | 1,884,717,801 | $ | (67,066,002) | $ | 1,817,651,799 | ||||||||||
| 6. | Capital Share Transactions |
| Janus | ||||||||||
| For the period ended March 31 (unaudited) | Triton Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 4,838,266 | 6,715,936 | ||||||||
| Reinvested dividends and distributions | 1,794,243 | 865,096 | ||||||||
| Shares repurchased | (3,127,478) | (12,603,702) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 3,505,031 | (5,022,670) | ||||||||
| Shares Outstanding, Beginning of Period | 20,896,142 | 25,918,812 | ||||||||
| Shares Outstanding, End of Period | 24,401,173 | 20,896,142 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 1,703,465 | 2,225,244 | ||||||||
| Reinvested dividends and distributions | 814,702 | 307,473 | ||||||||
| Shares repurchased | (1,108,355) | (2,530,428) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,409,812 | 2,289 | ||||||||
| Shares Outstanding, Beginning of Period | 9,293,918 | 9,291,629 | ||||||||
| Shares Outstanding, End of Period | 10,703,730 | 9,293,918 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 2,592,005 | 5,159,604 | ||||||||
| Reinvested dividends and distributions | 3,474,435 | 1,434,343 | ||||||||
| Shares repurchased | (3,689,097) | (7,960,388) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,377,343 | (1,366,441) | ||||||||
| Shares Outstanding, Beginning of Period | 35,239,980 | 36,606,421 | ||||||||
| Shares Outstanding, End of Period | 37,617,323 | 35,239,980 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 10,877,596 | 16,927,185 | ||||||||
| Reinvested dividends and distributions | 4,263,286 | 1,898,375 | ||||||||
| Shares repurchased | (6,943,443) | (28,983,936) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 8,197,439 | (10,158,376) | ||||||||
| Shares Outstanding, Beginning of Period | 47,733,404 | 57,891,780 | ||||||||
| Shares Outstanding, End of Period | 55,930,843 | 47,733,404 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 3,356,045 | 4,973,789 | ||||||||
| Reinvested dividends and distributions | 1,046,489 | 207,804 | ||||||||
| Shares repurchased | (763,263) | (1,314,839) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 3,639,271 | 3,866,754 | ||||||||
| Shares Outstanding, Beginning of Period | 9,186,791 | 5,320,037 | ||||||||
| Shares Outstanding, End of Period | 12,826,062 | 9,186,791 | ||||||||
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| Janus | ||||||||||
| For the period ended March 31 (unaudited) | Triton Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 1,581,947 | 2,498,701 | ||||||||
| Reinvested dividends and distributions | 569,263 | 201,466 | ||||||||
| Shares repurchased | (1,112,023) | (2,109,504) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,039,187 | 590,663 | ||||||||
| Shares Outstanding, Beginning of Period | 6,253,696 | 5,663,033 | ||||||||
| Shares Outstanding, End of Period | 7,292,883 | 6,253,696 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 2,821,908 | 5,243,452 | ||||||||
| Reinvested dividends and distributions | 1,490,909 | 527,565 | ||||||||
| Shares repurchased | (2,876,290) | (4,458,895) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,436,527 | 1,312,122 | ||||||||
| Shares Outstanding, Beginning of Period | 14,500,720 | 13,188,598 | ||||||||
| Shares Outstanding, End of Period | 15,937,247 | 14,500,720 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 17,298,470 | 21,850,427 | ||||||||
| Reinvested dividends and distributions | 9,376,892 | 3,697,363 | ||||||||
| Shares repurchased | (10,232,249) | (29,477,076) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 16,443,113 | (3,929,286) | ||||||||
| Shares Outstanding, Beginning of Period | 91,013,679 | 94,942,965 | ||||||||
| Shares Outstanding, End of Period | 107,456,792 | 91,013,679 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Triton Fund | $ | 1,079,169,035 | $ | 1,027,765,599 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87823 | 125-24-93054 05-15 |
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semiannual report
March 31, 2015
Janus Twenty Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Twenty Fund
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Janus Twenty Fund (unaudited)(closed to new investors)
FUND SNAPSHOT We believe that investing with conviction in our most compelling large-cap growth ideas will allow us to outperform our index and peer group over time. We use in-depth fundamental research to identify dominant growth companies that not only have strong global growth opportunities, but have the potential to grow over a multiyear period. We believe investing with conviction allows us to capitalize on our best ideas, making them big enough to matter and to focus on long-term value drivers, while avoiding short-term noise. | Marc Pinto portfolio manager |
PERFORMANCE
Janus Twenty Fund’s Class T Shares returned 6.18% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell 1000 Growth Index, returned 8.81%, and its secondary benchmark, the S&P 500 Index, returned 5.93% during the period.
MARKET ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
PERFORMANCE DISCUSSION
Our Fund is a concentrated, opportunistic portfolio drawing from our analysts’ highest-conviction ideas among U.S. large-cap stocks. We hold companies that we believe are dominant global franchises with long-duration growth opportunities both in the U.S. and overseas. We believe a highly concentrated portfolio of such companies can create a meaningful opportunity to add risk-adjusted outperformance over the long term, but over shorter time horizons it can trail as it did this period.
Microsoft was a large detractor during the period. The company reported softer-than-expected earnings results due in part to weak demand for personal computers. We continue to think the company is undervalued relative to its long-term growth potential. We have been encouraged by moves the new CEO is making to de-emphasize the company’s focus on hardware and increase its focus on productivity tools and also its public and private cloud offerings. Microsoft’s cloud-based revenues are growing at a much higher percentage than its total revenue, and we believe investors should eventually value the stock higher based on the potential of that cloud business.
LyondellBasell was also a top detractor during the period. The stock was down because falling oil prices have temporarily shifted the competitive dynamics between LyondellBasell and other petrochemical companies. Lyondell produces ethylene, which is a primary input for making a number of plastics and other materials. Lyondell’s access to cheap natural gas had made the economics of using ethylene in plastic production much more favorable to other oil-based derivative alternatives, but now that oil prices have fallen, those other options are more competitive. We view this as a near-term headwind, but continue to have conviction in the long-term growth potential of the company. We believe the company is still a strong operator, with a history of selectively investing in projects that have had a high return on invested capital. The company has also made other favorable capital allocation decisions for shareholders including special dividends and stock buybacks.
Precision Castparts also fell during the period. The stock has admittedly been a disappointment and after failing to meet earnings expectations in recent quarters, we have trimmed the position. However, we continue to hold the stock because its current valuation is near historic lows and doesn’t reflect the company’s growth potential as it grows content on a number of new airplanes that are being built to meet a record-level backlog of orders from airline carriers.
While disappointed with the performance of some of our holdings, we continued to be impressed with the results of
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Janus Twenty Fund (unaudited)(closed to new investors)
many other companies in our portfolio. United Continental was our largest contributor to performance. We believe several favorable dynamics are playing out for the company. The stock was up significantly during the period as the market reflected what cheaper oil prices mean for the bottom lines of airline companies. United is a large beneficiary of cheaper oil, since the company only hedges 20% of its oil costs. While cheaper fuel is a near-term boost for the company, we see other favorable long-term tailwinds that give us high conviction in the company’s earnings growth potential over the long term. An industry-wide reduction in capacity has given major airlines such as United more pricing power for the first time in decades. We also see the potential for further margin expansion at United, as it works through the operational kinks of its merger with Continental and gains operational efficiencies. We saw similar operational improvements at Delta Airlines after its merger with Northwest Airlines, and believe those same operational improvements and corresponding synergies will take place with United.
Celgene was also a top contributor during the period. The stock was up after the company announced encouraging results about the effectiveness of a treatment it is developing for Crohn’s disease. In addition to the new treatment for Crohn’s disease, we continue to be encouraged about a number of other products being developed by Celgene. We believe there are continued growth opportunities for the company’s multiple myeloma treatment, Revlimid, and are also encouraged by the potential for several other drugs including Abraxane for pancreatic cancer, Pomalyst for refractory multiple myeloma, and Otezla, an oral drug to treat psoriatic arthritis and psoriasis.
Finally, Blackstone Group was another contributor to performance. The stock was up after reporting earnings that exceeded expectations, driven by a strong first quarter for Blackstone’s private equity business and also by strong inflows for some of its other asset management products. We continue to like the company, and Blackstone remains a relatively large position size in the portfolio. We think the company is a best-in-class alternatives manager, and also like the company for its high dividend yield.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
While equity valuations are approaching the higher end of historical averages, we do not find them unreasonable in the context of the current market and economic environment. A low interest rate environment is favorable for equities, and while the Fed will likely act to raise rates before the year is over, it has also indicated the move will be gradual and dependent on clear signs the economy is improving. A rising rate environment that is backed by a strengthening economy should provide a constructive backdrop for equity markets. And on the economic front, we continue to see positive signs that signal the economy is indeed strengthening. The housing market is improving and we are seeing better employment data and even some signs of wage growth. Those factors, coupled with lower energy prices, should encourage further consumer spending.
Thank you for your investment in Janus Twenty Fund.
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(unaudited)(closed to new investors)
Janus Twenty Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| United Continental Holdings, Inc. | 1.08% | |||
| Celgene Corp. | 1.07% | |||
| Blackstone Group LP | 1.04% | |||
| Pharmacyclics, Inc. | 0.72% | |||
| Biogen, Inc. | 0.71% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Microsoft Corp. | –0.70% | |||
| LyondellBasell Industries NV – Class A | –0.53% | |||
| QUALCOMM, Inc. | –0.37% | |||
| Precision Castparts Corp. | –0.35% | |||
| American Express Co. | –0.33% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Health Care | 1.01% | 14.78% | 14.28% | |||||||||
| Energy | 0.87% | 2.73% | 4.68% | |||||||||
| Telecommunication Services | 0.20% | 0.00% | 2.22% | |||||||||
| Financials | 0.11% | 6.92% | 5.28% | |||||||||
| Industrials | 0.07% | 8.04% | 11.99% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Information Technology | –1.58% | 29.87% | 28.36% | |||||||||
| Consumer Discretionary | –0.96% | 25.89% | 18.47% | |||||||||
| Materials | –0.75% | 5.22% | 4.03% | |||||||||
| Consumer Staples | –0.64% | 5.23% | 10.60% | |||||||||
| Other** | –0.33% | 1.32% | 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. |
Janus Investment Fund | 3
Table of Contents
Janus Twenty Fund (unaudited)(closed to new investors)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 5.9% | |||
| MasterCard, Inc. – Class A Information Technology Services | 5.2% | |||
| Google, Inc. – Class C Internet Software & Services | 4.6% | |||
| Home Depot, Inc. Specialty Retail | 4.1% | |||
| Blackstone Group LP Capital Markets | 4.1% | |||
| 23.9% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (0.1)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
Table of Contents
(unaudited)(closed to new investors)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Twenty Fund – Class D Shares(1) | 6.22% | 11.02% | 11.09% | 10.15% | 12.09% | 0.70% | |||||||
| Janus Twenty Fund – Class T Shares(1) | 6.18% | 10.92% | 10.97% | 10.09% | 12.07% | 0.81% | |||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 15.63% | 9.36% | 10.65% | ||||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 11.09% | ||||||||
| Morningstar Quartile – Class T Shares | – | 4th | 4th | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Growth Funds | – | 1,345/1,759 | 1,441/1,538 | 196/1,334 | 38/344 | ||||||||
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).
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.
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 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, 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.
See important disclosures on the next page.
Janus Investment Fund | 5
Table of Contents
Janus Twenty Fund (unaudited)(closed to new investors)
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 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.
© 2015 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 – April 30, 1985 | |
| (1) | Closed to new investors. |
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 -3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,062.20 | $ | 3.91 | $ | 1,000.00 | $ | 1,021.14 | $ | 3.83 | 0.76% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,061.80 | $ | 4.47 | $ | 1,000.00 | $ | 1,020.59 | $ | 4.38 | 0.87% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Janus Twenty Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 100.1% | ||||||||||
| Aerospace & Defense – 2.0% | ||||||||||
| 900,888 | Precision Castparts Corp. | $ | 189,186,480 | |||||||
| Airlines – 1.3% | ||||||||||
| 1,816,323 | United Continental Holdings, Inc.* | 122,147,722 | ||||||||
| Automobiles – 2.0% | ||||||||||
| 5,045,806 | General Motors Co. | 189,217,725 | ||||||||
| Beverages – 2.5% | ||||||||||
| 8,519,394 | Diageo PLC | 234,874,582 | ||||||||
| Biotechnology – 6.0% | ||||||||||
| 454,212 | Biogen, Inc.* | 191,786,475 | ||||||||
| 1,908,844 | Celgene Corp.* | 220,051,536 | ||||||||
| 314,257 | Regeneron Pharmaceuticals, Inc.* | 141,880,751 | ||||||||
| 553,718,762 | ||||||||||
| Capital Markets – 4.1% | ||||||||||
| 9,668,856 | Blackstone Group LP | 376,021,810 | ||||||||
| Chemicals – 4.6% | ||||||||||
| 3,470,511 | EI du Pont de Nemours & Co. | 248,037,421 | ||||||||
| 2,053,142 | LyondellBasell Industries NV – Class A | 180,265,868 | ||||||||
| 428,303,289 | ||||||||||
| Communications Equipment – 2.1% | ||||||||||
| 2,855,475 | QUALCOMM, Inc. | 197,998,636 | ||||||||
| Consumer Finance – 2.8% | ||||||||||
| 3,344,753 | American Express Co. | 261,292,104 | ||||||||
| Hotels, Restaurants & Leisure – 7.6% | ||||||||||
| 3,856,540 | Las Vegas Sands Corp. | 212,263,962 | ||||||||
| 3,465,655 | Starbucks Corp. | 328,197,528 | ||||||||
| 2,006,100 | Starwood Hotels & Resorts Worldwide, Inc. | 167,509,350 | ||||||||
| 707,970,840 | ||||||||||
| Household Products – 3.8% | ||||||||||
| 5,081,178 | Colgate-Palmolive Co. | 352,328,883 | ||||||||
| Information Technology Services – 5.2% | ||||||||||
| 5,560,941 | MasterCard, Inc. – Class A | 480,409,693 | ||||||||
| Internet & Catalog Retail – 2.3% | ||||||||||
| 179,223 | Priceline Group, Inc.* | 208,642,455 | ||||||||
| Internet Software & Services – 10.4% | ||||||||||
| 3,338,832 | Facebook, Inc. – Class A* | 274,502,073 | ||||||||
| 778,032 | Google, Inc. – Class C* | 426,361,536 | ||||||||
| 5,929,553 | Yahoo!, Inc.* | 263,479,687 | ||||||||
| 964,343,296 | ||||||||||
| Media – 5.9% | ||||||||||
| 5,865,950 | Comcast Corp. – Class A | 331,250,196 | ||||||||
| 6,482,482 | Twenty-First Century Fox, Inc. – Class A | 219,367,191 | ||||||||
| 550,617,387 | ||||||||||
| Oil, Gas & Consumable Fuels – 2.3% | ||||||||||
| 2,048,081 | Chevron Corp. | 215,007,543 | ||||||||
| Pharmaceuticals – 9.4% | ||||||||||
| 5,523,934 | AbbVie, Inc. | 323,371,096 | ||||||||
| 1,133,765 | Actavis PLC* | 337,431,139 | ||||||||
| 3,312,095 | Bristol-Myers Squibb Co. | 213,630,128 | ||||||||
| 874,432,363 | ||||||||||
| Road & Rail – 3.0% | ||||||||||
| 2,603,987 | Union Pacific Corp. | 282,037,832 | ||||||||
| Semiconductor & Semiconductor Equipment – 3.0% | ||||||||||
| 4,892,918 | Texas Instruments, Inc. | 279,801,516 | ||||||||
| Software – 6.1% | ||||||||||
| 9,199,323 | Microsoft Corp. | 373,998,477 | ||||||||
| 4,373,136 | Oracle Corp. | 188,700,818 | ||||||||
| 562,699,295 | ||||||||||
| Specialty Retail – 4.1% | ||||||||||
| 3,322,634 | Home Depot, Inc. | 377,484,449 | ||||||||
| Technology Hardware, Storage & Peripherals – 5.9% | ||||||||||
| 4,430,344 | Apple, Inc. | 551,267,704 | ||||||||
| Textiles, Apparel & Luxury Goods – 3.7% | ||||||||||
| 3,463,142 | NIKE, Inc. – Class B | 347,457,037 | ||||||||
| Total Investments (total cost $7,737,458,137) – 100.1% | 9,307,261,403 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (6,520,542) | |||||||||
| Net Assets – 100% | $ | 9,300,740,861 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 9,072,386,821 | 97 | .5% | ||||
| United Kingdom | 234,874,582 | 2 | .5 | |||||
| Total | $ | 9,307,261,403 | 100 | .0% | ||||
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)
| Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| LLC | Limited Liability Company | |
| LP | Limited Partnership | |
| PLC | Public Limited Company |
| * | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015.
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Twenty Fund | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | – | 1,312,818,232 | (1,312,818,232) | – | $ | – | $ | 62,358 | $ | – | |||||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Twenty Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Beverages | $ | – | $ | 234,874,582 | $ | – | |||||
| All Other | 9,072,386,821 | – | – | ||||||||
Total Assets | $ | 9,072,386,821 | $ | 234,874,582 | $ | – | |||||
8 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Twenty Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 7,737,458,137 | ||
| Investments, at value | $ | 9,307,261,403 | ||
| Non-interested Trustees’ deferred compensation | 182,776 | |||
| Receivables: | ||||
| Fund shares sold | 1,052,025 | |||
| Dividends | 7,122,958 | |||
| Dividends from affiliates | 1,323 | |||
| Foreign dividend tax reclaim | 372,248 | |||
| Other assets | 77,565 | |||
| Total Assets | 9,316,070,298 | |||
| Liabilities: | ||||
| Due to custodian | 5,254,309 | |||
| Payables: | ||||
| Fund shares repurchased | 3,424,146 | |||
| Advisory fees | 4,028,577 | |||
| Fund administration fees | 80,416 | |||
| Transfer agent fees and expenses | 1,897,118 | |||
| Non-interested Trustees’ fees and expenses | 57,777 | |||
| Non-interested Trustees’ deferred compensation fees | 182,776 | |||
| Accrued expenses and other payables | 404,318 | |||
| Total Liabilities | 15,329,437 | |||
| Net Assets | $ | 9,300,740,861 | ||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 6,968,774,797 | ||
| Undistributed net investment income/(loss) | 14,867,586 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 747,399,962 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,569,698,516 | |||
| Total Net Assets | $ | 9,300,740,861 | ||
| Net Assets - Class D Shares | $ | 6,097,769,444 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 103,961,632 | |||
| Net Asset Value Per Share | $ | 58.65 | ||
| Net Assets - Class T Shares | $ | 3,202,971,417 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 54,606,665 | |||
| Net Asset Value Per Share | $ | 58.66 | ||
See Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Twenty Fund | |||
| Investment Income: | ||||
| Dividends | $ | 76,778,798 | ||
| Dividends from affiliates | 62,358 | |||
| Total Investment Income | 76,841,156 | |||
| Expenses: | ||||
| Advisory fees | 27,646,781 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 3,644,978 | |||
| Class T Shares | 4,021,729 | |||
| Other transfer agent fees and expenses: | ||||
| Class D Shares | 461,128 | |||
| Class T Shares | 11,973 | |||
| Shareholder reports expense | 485,577 | |||
| Registration fees | 64,882 | |||
| Custodian fees | 32,982 | |||
| Professional fees | 59,657 | |||
| Non-interested Trustees’ fees and expenses | 105,288 | |||
| Fund administration fees | 383,992 | |||
| Other expenses | 218,318 | |||
| Total Expenses | 37,137,285 | |||
| Net Expenses | 37,137,285 | |||
| Net Investment Income/(Loss) | 39,703,871 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 1,010,954,249 | |||
| Written options contracts | 10,361,608 | |||
| Total Net Realized Gain/(Loss) on Investments | 1,021,315,857 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (498,874,863) | |||
| Written options contracts | (2,211,290) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (501,086,153) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 559,933,575 | ||
See Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Twenty | ||||||||
| Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 39,703,871 | $ | 75,706,165 | ||||
| Net realized gain/(loss) on investments | 1,021,315,857 | 1,353,376,092 | ||||||
| Change in unrealized net appreciation/depreciation | (501,086,153) | (133,366,814) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 559,933,575 | 1,295,715,443 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class D Shares | (41,949,046) | (35,971,282) | ||||||
| Class T Shares | (18,490,391) | (19,549,723) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class D Shares | (898,775,726) | (1,335,477,342) | ||||||
| Class T Shares | (478,388,677) | (847,822,924) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (1,437,603,840) | (2,238,821,271) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class D Shares | 46,605,613 | 98,659,130 | ||||||
| Class T Shares | 104,872,865 | 228,774,147 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class D Shares | 914,769,274 | 1,335,331,453 | ||||||
| Class T Shares | 486,808,617 | 853,100,342 | ||||||
| Shares Repurchased | ||||||||
| Class D Shares | (259,776,241) | (500,086,439) | ||||||
| Class T Shares | (293,017,608) | (1,089,275,564) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 1,000,262,520 | 926,503,069 | ||||||
| Net Increase/(Decrease) in Net Assets | 122,592,255 | (16,602,759) | ||||||
| Net Assets: | ||||||||
| Beginning of period | 9,178,148,606 | 9,194,751,365 | ||||||
| End of period | $ | 9,300,740,861 | $ | 9,178,148,606 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 14,867,586 | $ | 35,603,152 | ||||
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Financial Highlights
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Twenty Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $65.38 | $74.21 | $62.64 | $55.85 | $60.37 | $59.05 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.27(2) | 0.55(2) | 0.53 | 0.29 | 0.27 | 0.12 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.45 | 9.05 | 11.56 | 15.77 | (4.56) | 1.20 | ||||||||||||||||||||
| Total from Investment Operations | 3.72 | 9.60 | 12.09 | 16.06 | (4.29) | 1.32 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.47) | (0.48) | (0.52) | (0.11) | (0.23) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (9.98) | (17.95) | – | (9.16) | – | – | ||||||||||||||||||||
| Total Distributions | (10.45) | (18.43) | (0.52) | (9.27) | (0.23) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $58.65 | $65.38 | $74.21 | $62.64 | $55.85 | $60.37 | ||||||||||||||||||||
| Total Return* | 6.22% | 14.74% | 19.46% | 32.63% | (7.16)%(3) | 2.24% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $6,097,769 | $5,969,948 | $5,600,776 | $5,080,754 | $4,132,242 | $4,904,660 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $6,091,653 | $5,945,940 | $5,167,194 | $4,792,688 | $5,018,914 | $4,970,013 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.76% | 0.70% | 0.67% | 0.70% | 0.81% | 0.87% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.76% | 0.70% | 0.67% | 0.70% | 0.81% | 0.86% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.89% | 0.83% | 0.79% | 0.50% | 0.45% | 0.31% | ||||||||||||||||||||
| Portfolio Turnover Rate | 40% | 36% | 71% | 12% | 56% | 35% | ||||||||||||||||||||
Class T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the year | Janus Twenty Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $65.33 | $74.16 | $62.57 | $55.81 | $60.33 | $57.00 | $46.29 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.24(2) | 0.48(2) | 0.45 | 0.24 | 0.16 | (0.12) | 0.06 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 3.46 | 9.05 | 11.57 | 15.72 | (4.53) | 3.45 | 10.66 | |||||||||||||||||||||||
| Total from Investment Operations | 3.70 | 9.53 | 12.02 | 15.96 | (4.37) | 3.33 | 10.72 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.39) | (0.41) | (0.43) | (0.04) | (0.15) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.98) | (17.95) | – | (9.16) | – | – | – | |||||||||||||||||||||||
| Return of capital | – | – | – | – | – | – | (0.01) | |||||||||||||||||||||||
| Total Distributions | (10.37) | (18.36) | (0.43) | (9.20) | (0.15) | – | (0.01) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $58.66 | $65.33 | $74.16 | $62.57 | $55.81 | $60.33 | $57.00 | |||||||||||||||||||||||
| Total Return* | 6.18% | 14.63% | 19.35% | 32.43% | (7.28)%(3) | 5.84% | 23.16% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,202,971 | $3,208,201 | $3,593,975 | $3,460,637 | $2,985,145 | $3,850,699 | $9,016,257 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,226,222 | $3,581,846 | $3,430,478 | $3,326,880 | $3,792,727 | $5,792,097 | $7,846,950 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.87% | 0.81% | 0.77% | 0.81% | 0.93% | 0.91% | 0.86% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.87% | 0.80% | 0.76% | 0.81% | 0.93% | 0.91% | 0.86% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.79% | 0.73% | 0.70% | 0.39% | 0.33% | (0.14)% | (0.10)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 40% | 36% | 71% | 12% | 56% | 35% | 32% | |||||||||||||||||||||||
| * | 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 September 30, 2010. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Total return reflects a non-recurring litigation settlement from Enron Corp. This resulted in an increase to the total return of 0.29% for Class D Shares and 0.28% for Class T Shares for the year ended September 30, 2011. | |
| (4) | Period from November 1, 2009 through September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. |
See Notes to Financial Statements.
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Twenty 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 nondiversified, as defined in the 1940 Act.
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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
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”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value
Janus Investment Fund | 13
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Notes to Financial Statements (unaudited) (continued)
Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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
14 | MARCH 31, 2015
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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.
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. |
Janus Investment Fund | 15
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Notes to Financial Statements (unaudited) (continued)
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
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Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by such Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on various equity securities for the purpose of increasing exposure to individual equity risk.
The following table provides average ending monthly market value amounts on purchased call options during the period ended March 31, 2015.
| Purchased | ||||||
| Fund | Call Options | |||||
| Janus Twenty Fund | $ | 8,422,663 | ||||
In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. When an option is written, the Fund receives a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written, at value” (if applicable). The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
During the period, the Fund wrote put options on various 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 put options during the period ended March 31, 2015.
| Fund | Written Put Options | |||||
| Janus Twenty Fund | $ | 1,123,810 | ||||
Written option activity for the period ended March 31, 2015 is indicated in the table below:
| Number of | Premiums | |||||||||
| Put Options | Contracts | Received | ||||||||
Janus Twenty Fund | ||||||||||
| Options outstanding at September 30, 2014 | 44,000 | $ | 5,535,200 | |||||||
| Options written | 88,000 | 9,680,000 | ||||||||
| Options closed | (132,000) | (15,215,200) | ||||||||
| Options expired | – | – | ||||||||
| Options exercised | – | – | ||||||||
| Options outstanding at March 31, 2015 | – | $ | – | |||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| 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 | |||||||||
Janus Twenty Fund | ||||||||||||
| Equity Contracts | $ | (4,300,788 | )* | $ | 10,361,608 | $ | 6,060,820 | |||||
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Notes to Financial Statements (unaudited) (continued)
| 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 | |||||||||
Janus Twenty Fund | ||||||||||||
| Equity Contracts | $ | 6,901,800* | $ | (2,211,290 | ) | $ | 4,690,510 | |||||
| * | Amounts relate to purchased options. |
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee (%) | |||||
| Janus Twenty Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. The performance adjustment either increases or decreases the base fee depending on how well the Fund
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has performed relative to its benchmark index, as shown below:
| Fund | Benchmark Index | |||||
| Janus Twenty Fund | Russell 1000® Growth 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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Twenty Fund | 0.60 | |||||
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.
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Notes to Financial Statements (unaudited) (continued)
Total compensation of $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
| 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 March 31, 2015 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 Twenty Fund | $ | 7,728,259,134 | $ | 1,656,234,225 | $ | (77,231,956) | $ | 1,579,002,269 | ||||||||||
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| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Twenty Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 763,937 | 1,497,254 | ||||||||
| Reinvested dividends and distributions | 16,113,604 | 21,905,044 | ||||||||
| Shares repurchased | (4,231,929) | (7,554,597) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 12,645,612 | 15,847,701 | ||||||||
| Shares Outstanding, Beginning of Period | 91,316,020 | 75,468,319 | ||||||||
| Shares Outstanding, End of Period | 103,961,632 | 91,316,020 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 1,714,676 | 3,438,094 | ||||||||
| Reinvested dividends and distributions | 8,572,083 | 13,994,428 | ||||||||
| Shares repurchased | (4,787,910) | (16,784,566) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 5,498,849 | 647,956 | ||||||||
| Shares Outstanding, Beginning of Period | 49,107,816 | 48,459,860 | ||||||||
| Shares Outstanding, End of Period | 54,606,665 | 49,107,816 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Twenty Fund | $ | 3,678,849,033 | $ | 4,023,048,658 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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
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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).
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-0515-87824 | 125-24-93055 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Venture Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Venture Fund
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Table of Contents
Janus Venture Fund (unaudited)
FUND SNAPSHOT We believe that a research-driven investment process focused on identifying quality small-cap companies with differentiated business models and sustainable competitive advantages will drive outperformance against our benchmark and peers over time. We take a moderate approach, seeking to identify companies with large addressable markets that are poised for growth over a multiyear period. | Jonathan Coleman portfolio manager |
PERFORMANCE
Janus Venture Fund’s Class T Shares returned 17.61% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell 2000 Growth Index, returned 17.36%, and its secondary benchmark, the Russell 2000 Index, returned 14.46% during the period.
INVESTMENT ENVIRONMENT
Small-cap indices had substantial gains during the period, but the march forward was not without volatility. Small-cap stocks sold off early in the period as several data points showed the economy outside the U.S. was weakening. Markets then rose but were volatile again in December as investors considered whether the sharp slide in oil prices was a consequence of declining expectations of global growth. Small-cap stocks continued their climb in the first quarter, driven in part by signs of U.S. consumer strength, and the perception the Federal Reserve would likely be slower to raise interest rates than many expected heading into the year.
PERFORMANCE DISCUSSION
The Fund outperformed both its primary benchmark, the Russell 2000 Growth Index, and also its secondary benchmark, the Russell 2000 Index, during the period. As part of our investment process, we focus on identifying companies we believe have long-duration growth potential, but that also have higher-quality business models with more predictable, growing revenue streams. These companies often have a small share of large or growing addressable markets, with sustainable competitive advantages such as high barriers to entry in their respective industry, and a differentiated product or service that gives them pricing power, which should help the company grow in a variety of market and economic environments. These companies also typically generate a high return on invested capital, or demonstrate a proven ability to expand profit margins. We believe this high-quality investment approach to small-cap equities should help our Fund produce positive results during market rallies, and outperform the benchmark in weak or uncertain economic environments, creating a better opportunity to generate higher compounded returns over full market cycles. The past six months served as a microcosm of how we would expect our Fund to perform over longer periods, as much of our relative outperformance during the period came when markets slipped in early October and mid-December.
Our stock selection in the technology sector was a large contributor to relative performance. Many of our technology companies have predictable or recurring revenue streams from diverse end markets outside the technology sector, and these companies were among our top-performing technology stocks during the period. SS&C Technologies, for example, provides a number of investment and financial software-enabled services to companies in the financial services industry. Most of its revenue comes from subscription services or software maintenance, which helps create a steadier and recurring revenue source for the company. Strategic acquisitions made by the company in recent years have broadened its array of service offerings to financial firms and should create better cross-selling opportunities to its clients. The stock was up at the end of 2014 after the company announced another acquisition that should help further broaden its offering to customers.
Broadridge Financial Solutions was also a top contributor. A new CFO has done a better job of laying out the company’s long-term growth potential and capital allocation plan to shareholders, and the stock has been up as the market has gained a better appreciation of Broadridge’s business. The company provides investor communications and technology-driven solutions to banks, broker-dealers, mutual funds and corporations globally. Among a number of services, Broadridge is responsible for distributing proxy information on behalf of corporations to a wide network of broker-dealers, financial advisors and mutual funds. We believe the wide network Broadridge has set up among these investor bases is a competitive advantage for the company. We also see further growth
Janus Investment Fund | 1
Table of Contents
Janus Venture Fund (unaudited)
potential ahead as Broadridge creates new business lines around the data they have about proxy voters.
While we outperformed within the technology sector, we had stocks outside the sector that were large contributors as well. Sensient Technologies was a top contributor. The company is a supplier of flavors, fragrances and colors used to make a diverse variety of foods and beverages, pharmaceuticals, cosmetics, home and personal care products. We like that the company sells into a number of non-economically sensitive end markets. The company’s new CEO was previously responsible for expanding margins for the Sensient’s division focusing on coloring of products, and we think he can also expand margins for the entire company. The stock was up this period after the company began to demonstrate margin improvement and higher returns on invested capital due to improving the company’s product mix and restructuring efforts.
While generally pleased with our performance during the period, we did have stocks that fell and detracted from our results. A couple of our energy holdings were among our leading detractors on an absolute basis, but it is worth noting that our stock selection within the sector was a bright spot for the Portfolio, and a large reason why we outperformed the benchmark. Sinking oil prices caused energy stocks to sell off broadly this period, and while our energy holdings were not immune to the cycle, as a group they held up much better than those in the benchmark. We would expect that in an environment where falling oil prices are a concern due to our focus on finding energy companies with less commodity sensitivity and more stable revenue streams. We have avoided many of the highly levered exploration and production companies whose business models face considerable risk if prices don’t pick up. Instead we tend to own a lot midstream companies whose contracts are less tied to the price of the underlying commodity, which makes their revenues less susceptible to a drop in oil prices. DCP Midstream is an example of such a company. While the stock fell and was a large detractor from absolute performance, we think the market has failed to give the company credit for the durability of its earnings.
Beyond our exposure to the energy sector, Forex Capital Markets (FXCM) was also a top detractor. The company offers an online foreign exchange trading platform. When the Swiss franc devalued, the currency move wiped out capital in many customer accounts, which translated into a big earnings hit for FXCM. We sold the position to pursue other companies that had a better risk/reward profile.
ChannelAdvisor was another large detractor. The company helps other businesses manage, monitor, and optimize their merchandise sales in various online channels. The stock was down after the company reported disappointing fourth quarter revenues. The fourth quarter saw a rapid shift in buying behavior, with consumers doing more of their holiday shopping on large e-commerce sites that offer a better mobile shopping experience. ChannelAdvisor makes less revenue from the shopping that takes place on these larger platforms. We are currently reviewing the position while assessing how ChannelAdvisor will respond.
Please see “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
We would expect a lower return environment for small caps for the rest of the year. We previously pointed out that the small-cap market was entering 2015 with valuations on the high end of historical averages. After another sharp climb to kick off the year, valuations are more stretched. The prospect of the Federal Reserve raising rates at some point later this year could be the impetus that triggers some P/E multiple contraction.
While returns may not be as robust as the prior two years, we like how our Fund is positioned against this investment backdrop. We have taken a careful approach to navigating a few pockets of the market where valuations are particularly rich, and could be due for greater multiple contraction. We see high valuations on a broad basis for stocks tied to biotechnology, cloud computing or social media. We hold a few cloud and social media companies, but avoid areas within those industries where momentum is a major factor of stock performance, and hold only a select few companies we believe will prove disruptive to the large end markets they serve. We have also been selective with our holdings in the biotech industry. We own a few biotech companies that have innovative therapies with promising potential, but take smaller positions with companies whose performance is tied to the success or failure of a clinical trial for a single drug, and have larger positions with biotech companies that have already had innovative therapies approved by the FDA, or have multiple products in their pipelines.
Given where multiples sit today, we would also expect earnings growth to be needed to drive further stock price appreciation from stocks. This should benefit those small-cap stocks we tend to focus on, which have demonstrated a more steady earnings growth trajectory over time.
Thank you for your investment in Janus Venture Fund.
2 | MARCH 31, 2015
Table of Contents
(unaudited)
Janus Venture Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| SS&C Technologies Holdings, Inc. | 0.88% | |||
| Belden, Inc. | 0.66% | |||
| Sensient Technologies Corp. | 0.60% | |||
| NICE Systems, Ltd. (ADR) | 0.59% | |||
| Broadridge Financial Solutions, Inc. | 0.55% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| FXCM, Inc. – Class A | –0.51% | |||
| DCP Midstream Partners LP | –0.45% | |||
| Stratasys, Ltd. | –0.38% | |||
| Kennametal, Inc. | –0.30% | |||
| ChannelAdvisor Corp. | –0.29% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 2000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Energy | 1.43% | 2.98% | 3.25% | |||||||||
| Materials | 1.07% | 2.34% | 4.72% | |||||||||
| Information Technology | 0.72% | 30.60% | 25.61% | |||||||||
| Consumer Discretionary | 0.61% | 13.73% | 15.59% | |||||||||
| Consumer Staples | 0.43% | 2.37% | 3.76% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 2000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Industrials | –1.83% | 19.26% | 14.42% | |||||||||
| Health Care | –1.19% | 17.89% | 23.94% | |||||||||
| Other** | –0.57% | 3.64% | 0.00% | |||||||||
| Financials | –0.40% | 7.11% | 7.70% | |||||||||
| Utilities | 0.01% | 0.03% | 0.25% | |||||||||
| Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
| * | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
| ** | Not a GICS classified sector. |
Janus Investment Fund | 3
Table of Contents
Janus Venture Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Rexnord Corp. Machinery | 2.0% | |||
| SS&C Technologies Holdings, Inc. Software | 2.0% | |||
| Sensient Technologies Corp. Chemicals | 1.9% | |||
| Solera Holdings, Inc. Software | 1.8% | |||
| Broadridge Financial Solutions, Inc. Information Technology Services | 1.8% | |||
| 9.5% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
* Includes Other of (10.2)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
Table of Contents
(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Venture Fund – Class A Shares | |||||||||||||
| NAV | 17.58% | 18.23% | 17.74% | 10.91% | 12.45% | 1.17% | |||||||
| MOP | 10.82% | 11.43% | 16.36% | 10.25% | 12.23% | ||||||||
| Janus Venture Fund – Class C Shares | |||||||||||||
| NAV | 17.12% | 17.39% | 16.40% | 10.12% | 11.70% | 1.82% | |||||||
| CDSC | 16.12% | 16.39% | 16.40% | 10.12% | 11.70% | ||||||||
| Janus Venture Fund – Class D Shares(1) | 17.67% | 18.51% | 18.19% | 11.19% | 12.65% | 0.82% | |||||||
| Janus Venture Fund – Class I Shares | 17.71% | 18.61% | 18.06% | 11.13% | 12.63% | 0.75% | |||||||
| Janus Venture Fund – Class N Shares | 17.78% | 18.71% | 18.06% | 11.13% | 12.63% | 0.68% | |||||||
| Janus Venture Fund – Class S Shares | 17.48% | 18.11% | 17.56% | 10.78% | 12.33% | 1.18% | |||||||
| Janus Venture Fund – Class T Shares | 17.61% | 18.41% | 18.06% | 11.13% | 12.63% | 0.93% | |||||||
| Russell 2000® Growth Index | 17.36% | 12.06% | 16.58% | 10.02% | 8.39% | ||||||||
| Russell 2000® Index | 14.46% | 8.21% | 14.57% | 8.82% | 10.02% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Small Growth Funds | – | 12/746 | 72/679 | 44/582 | 7/50 | ||||||||
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 | 5
Table of Contents
Janus Venture Fund (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.
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 May 6, 2011. Performance shown for each class for periods prior to May 6, 2011, 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 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 May 6, 2011. Performance shown for periods prior to May 6, 2011, 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 the Fund’s 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.
© 2015 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.
Effective February 27, 2015, Jonathan Coleman is sole Portfolio Manager of the Fund.
See “Useful Information About Your Fund Report.”
| * | The Fund’s inception date – April 30, 1985 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,175.80 | $ | 5.59 | $ | 1,000.00 | $ | 1,019.80 | $ | 5.19 | 1.03% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,171.20 | $ | 9.74 | $ | 1,000.00 | $ | 1,015.96 | $ | 9.05 | 1.80% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,176.70 | $ | 4.45 | $ | 1,000.00 | $ | 1,020.84 | $ | 4.13 | 0.82% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,177.10 | $ | 4.13 | $ | 1,000.00 | $ | 1,021.14 | $ | 3.83 | 0.76% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,177.80 | $ | 3.64 | $ | 1,000.00 | $ | 1,021.59 | $ | 3.38 | 0.67% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,174.80 | $ | 6.34 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.89 | 1.17% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,176.10 | $ | 4.99 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.63 | 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 182/365 (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 Venture Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 92.4% | ||||||||||
| Aerospace & Defense – 2.0% | ||||||||||
| 991,268 | HEICO Corp. – Class A | $ | 49,107,417 | |||||||
| 462,101 | Sparton Corp.* | 11,321,474 | ||||||||
| 60,428,891 | ||||||||||
| Air Freight & Logistics – 0.9% | ||||||||||
| 695,412 | Hub Group, Inc. – Class A* | 27,322,738 | ||||||||
| Biotechnology – 5.2% | ||||||||||
| 448,313 | ACADIA Pharmaceuticals, Inc.*,# | 14,610,521 | ||||||||
| 478,463 | Achillion Pharmaceuticals, Inc.*,# | 4,717,645 | ||||||||
| 334,847 | Chimerix, Inc.* | 12,620,383 | ||||||||
| 1,223,486 | Dyax Corp.* | 20,499,508 | ||||||||
| 299,909 | Eagle Pharmaceuticals, Inc.* | 12,563,188 | ||||||||
| 313,093 | Insys Therapeutics, Inc.*,# | 18,200,096 | ||||||||
| 1,198,140 | Ironwood Pharmaceuticals, Inc.* | 19,170,240 | ||||||||
| 62,772 | Ligand Pharmaceuticals, Inc.* | 4,840,349 | ||||||||
| 97,606 | Medivation, Inc.* | 12,598,006 | ||||||||
| 235,365 | OvaScience, Inc.*,# | 8,174,227 | ||||||||
| 65,692 | Puma Biotechnology, Inc.*,# | 15,510,538 | ||||||||
| 139,166 | Synageva BioPharma Corp.*,# | 13,572,860 | ||||||||
| 157,077,561 | ||||||||||
| Building Products – 1.3% | ||||||||||
| 592,467 | AO Smith Corp | 38,901,383 | ||||||||
| Capital Markets – 3.1% | ||||||||||
| 400,504 | Artisan Partners Asset Management, Inc. – Class A | 18,206,912 | ||||||||
| 317,147 | Financial Engines, Inc.# | 13,266,259 | ||||||||
| 899,410 | LPL Financial Holdings, Inc. | 39,448,123 | ||||||||
| 1,002,262 | WisdomTree Investments, Inc.# | 21,508,542 | ||||||||
| 92,429,836 | ||||||||||
| Chemicals – 1.9% | ||||||||||
| 817,360 | Sensient Technologies Corp. | 56,299,757 | ||||||||
| Commercial Banks – 0.6% | ||||||||||
| 483,251 | Bank of the Ozarks, Inc. | 17,846,459 | ||||||||
| Commercial Services & Supplies – 1.7% | ||||||||||
| 466,150 | ABM Industries, Inc. | 14,851,539 | ||||||||
| 1,121,886 | Heritage-Crystal Clean, Inc.*,#,£ | 13,126,066 | ||||||||
| 1,059,530 | SP Plus Corp.* | 23,150,731 | ||||||||
| 51,128,336 | ||||||||||
| Diversified Consumer Services – 0.7% | ||||||||||
| 657,763 | ServiceMaster Global Holdings, Inc.* | 22,199,501 | ||||||||
| Diversified Financial Services – 0.9% | ||||||||||
| 454,066 | MSCI, Inc. | 27,838,787 | ||||||||
| Electrical Equipment – 2.4% | ||||||||||
| 722,575 | EnerSys | 46,418,218 | ||||||||
| 3,025,348 | GrafTech International, Ltd.* | �� | 11,768,604 | |||||||
| 211,330 | Polypore International, Inc.* | 12,447,337 | ||||||||
| 70,634,159 | ||||||||||
| Electronic Equipment, Instruments & Components – 4.4% | ||||||||||
| 479,176 | Belden, Inc. | 44,831,707 | ||||||||
| 1,635,433 | CTS Corp. | 29,421,440 | ||||||||
| 273,665 | FEI Co. | 20,891,586 | ||||||||
| 536,735 | National Instruments Corp. | 17,196,989 | ||||||||
| 252,904 | OSI Systems, Inc.* | 18,780,651 | ||||||||
| 131,122,373 | ||||||||||
| Energy Equipment & Services – 0.5% | ||||||||||
| 229,807 | Dril-Quip, Inc.* | 15,716,501 | ||||||||
| Food & Staples Retailing – 1.4% | ||||||||||
| 223,281 | Casey’s General Stores, Inc. | 20,117,618 | ||||||||
| 688,565 | Diplomat Pharmacy, Inc.*,§ | 22,620,049 | ||||||||
| 42,737,667 | ||||||||||
| Health Care Equipment & Supplies – 5.2% | ||||||||||
| 1,719,180 | Endologix, Inc.* | 29,346,403 | ||||||||
| 112,146 | HeartWare International, Inc.*,# | 9,843,054 | ||||||||
| 134,701 | ICU Medical, Inc.* | 12,546,051 | ||||||||
| 449,925 | Insulet Corp.* | 15,004,999 | ||||||||
| 355,675 | LDR Holding Corp.* | 13,031,932 | ||||||||
| 949,592 | Masimo Corp.* | 31,317,544 | ||||||||
| 1,481,967 | Novadaq Technologies, Inc.*,# | 24,067,144 | ||||||||
| 706,447 | Quidel Corp.*,# | 19,059,940 | ||||||||
| 154,217,067 | ||||||||||
| Health Care Providers & Services – 1.0% | ||||||||||
| 704,134 | Aceto Corp. | 15,490,948 | ||||||||
| 549,448 | Capital Senior Living Corp.* | 14,252,681 | ||||||||
| 29,743,629 | ||||||||||
| Health Care Technology – 0.7% | ||||||||||
| 161,365 | athenahealth, Inc.*,# | 19,265,367 | ||||||||
| Hotels, Restaurants & Leisure – 2.7% | ||||||||||
| 88,046 | Biglari Holdings, Inc.* | 36,459,849 | ||||||||
| 882,314 | Diamond Resorts International, Inc.* | 29,495,757 | ||||||||
| 1,261,679 | Domino’s Pizza Group PLC | 14,504,890 | ||||||||
| 80,460,496 | ||||||||||
| Industrial Conglomerates – 0.5% | ||||||||||
| 794,130 | Raven Industries, Inc. | 16,247,900 | ||||||||
| Information Technology Services – 5.3% | ||||||||||
| 586,427 | Blackhawk Network Holdings, Inc. – Class B* | 20,847,480 | ||||||||
| 964,975 | Broadridge Financial Solutions, Inc. | 53,083,275 | ||||||||
| 780,752 | Euronet Worldwide, Inc.* | 45,869,180 | ||||||||
| 231,238 | MAXIMUS, Inc. | 15,437,449 | ||||||||
| 224,995 | WEX, Inc.* | 24,155,463 | ||||||||
| 159,392,847 | ||||||||||
| Internet Software & Services – 5.8% | ||||||||||
| 1,059,287 | ChannelAdvisor Corp.*,# | 10,264,491 | ||||||||
| 235,029 | Cimpress NV*,# | 19,831,747 | ||||||||
| 93,607 | CoStar Group, Inc.* | 18,518,273 | ||||||||
| 199,755 | Demandware, Inc.*,# | 12,165,079 | ||||||||
| 1,610,513 | Endurance International Group Holdings, Inc.*,# | 30,696,378 | ||||||||
| 298,320 | Envestnet, Inc.* | 16,729,786 | ||||||||
| 475,126 | HomeAway, Inc.* | 14,334,551 | ||||||||
| 480,792 | j2 Global, Inc. | 31,578,418 | ||||||||
| 319,692 | Textura Corp.*,# | 8,689,229 | ||||||||
| 119,843 | Zillow Group, Inc. – Class A*,# | 12,020,253 | ||||||||
| 174,828,205 | ||||||||||
| Life Sciences Tools & Services – 0.7% | ||||||||||
| 216,952 | Bio-Techne Corp. | 21,758,116 | ||||||||
| Machinery – 6.3% | ||||||||||
| 134,572 | CIRCOR International, Inc. | 7,361,088 | ||||||||
| 1,180,385 | Kennametal, Inc. | 39,767,171 | ||||||||
| 385,304 | Nordson Corp. | 30,184,715 | ||||||||
| 140,893 | Photo Labs, Inc.* | 9,862,510 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Machinery – (continued) | ||||||||||
| 2,281,238 | Rexnord Corp.* | $ | 60,886,242 | |||||||
| 429,860 | Wabtec Corp. | 40,840,999 | ||||||||
| 188,902,725 | ||||||||||
| Media – 1.9% | ||||||||||
| 996,623 | Manchester United PLC – Class A*,# | 15,856,272 | ||||||||
| 2,301,965 | National CineMedia, Inc. | 34,759,671 | ||||||||
| 1,424,840 | SFX Entertainment, Inc.*,# | 5,827,596 | ||||||||
| 56,443,539 | ||||||||||
| Oil, Gas & Consumable Fuels – 1.4% | ||||||||||
| 670,739 | DCP Midstream Partners LP# | 24,783,806 | ||||||||
| 441,839 | Dominion Midstream Partners LP# | 18,340,737 | ||||||||
| 43,124,543 | ||||||||||
| Personal Products – 1.2% | ||||||||||
| 1,134,913 | Ontex Group NV* | 34,408,619 | ||||||||
| Pharmaceuticals – 5.8% | ||||||||||
| 1,173,257 | Catalent, Inc.* | 36,546,956 | ||||||||
| 149,125 | Concordia Healthcare Corp.# | 10,025,665 | ||||||||
| 769,882 | Flamel Technologies SA (ADR)*,# | 13,842,478 | ||||||||
| 1,463,729 | IGI Laboratories, Inc.*,# | 11,944,029 | ||||||||
| 215,954 | Mallinckrodt PLC* | 27,350,574 | ||||||||
| 148,497 | Pacira Pharmaceuticals, Inc.* | 13,193,958 | ||||||||
| 1,949,595 | Pernix Therapeutics Holdings*,#,£ | 20,841,171 | ||||||||
| 543,505 | Prestige Brands Holdings, Inc.* | 23,310,929 | ||||||||
| 476,429 | Relypsa, Inc.* | 17,184,794 | ||||||||
| 174,240,554 | ||||||||||
| Professional Services – 1.1% | ||||||||||
| 262,006 | Corporate Executive Board Co. | 20,923,799 | ||||||||
| 411,506 | Paylocity Holding Corp.* | 11,785,532 | ||||||||
| 32,709,331 | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.5% | ||||||||||
| 864,506 | Easterly Government Properties, Inc.* | 13,875,321 | ||||||||
| Real Estate Management & Development – 1.5% | ||||||||||
| 127,917 | Jones Lang LaSalle, Inc. | 21,797,057 | ||||||||
| 253,471 | RE/MAX Holdings, Inc. – Class A | 8,417,772 | ||||||||
| 767,166 | St Joe Co.*,# | 14,238,601 | ||||||||
| 44,453,430 | ||||||||||
| Road & Rail – 1.1% | ||||||||||
| 267,677 | Old Dominion Freight Line, Inc.* | 20,691,432 | ||||||||
| 285,363 | Saia, Inc.* | 12,641,581 | ||||||||
| 33,333,013 | ||||||||||
| Semiconductor & Semiconductor Equipment – 2.6% | ||||||||||
| 3,665,746 | Atmel Corp. | 30,169,090 | ||||||||
| 3,495,545 | ON Semiconductor Corp.* | 42,331,050 | ||||||||
| 209,666 | SolarEdge Technologies, Inc.* | 4,597,975 | ||||||||
| 77,098,115 | ||||||||||
| Software – 11.6% | ||||||||||
| 797,151 | ACI Worldwide, Inc.* | 17,266,291 | ||||||||
| 316,490 | Advent Software, Inc. | 13,960,374 | ||||||||
| 708,937 | Blackbaud, Inc. | 33,589,435 | ||||||||
| 2,561,351 | Cadence Design Systems, Inc.* | 47,231,313 | ||||||||
| 469,411 | FleetMatics Group PLC*,# | 21,053,083 | ||||||||
| 262,876 | Guidewire Software, Inc.* | 13,829,906 | ||||||||
| 716,738 | NICE Systems, Ltd. (ADR) | 43,670,846 | ||||||||
| 1,610,396 | RealPage, Inc.* | 32,433,376 | ||||||||
| 1,031,397 | Solera Holdings, Inc. | 53,281,969 | ||||||||
| 974,437 | SS&C Technologies Holdings, Inc. | 60,707,425 | ||||||||
| 89,596 | Tyler Technologies, Inc.* | 10,799,006 | ||||||||
| 347,823,024 | ||||||||||
| Specialty Retail – 3.3% | ||||||||||
| 687,880 | Hibbett Sports, Inc.*,# | 33,747,393 | ||||||||
| 225,492 | Monro Muffler Brake, Inc.# | 14,668,254 | ||||||||
| 1,467,354 | Sally Beauty Holdings, Inc.* | 50,432,957 | ||||||||
| 98,848,604 | ||||||||||
| Technology Hardware, Storage & Peripherals – 0.4% | ||||||||||
| 203,068 | Stratasys, Ltd.*,# | 10,717,929 | ||||||||
| Textiles, Apparel & Luxury Goods – 3.2% | ||||||||||
| 403,787 | Carter’s, Inc. | 37,338,184 | ||||||||
| 427,377 | Tumi Holdings, Inc.* | 10,453,641 | ||||||||
| 1,432,118 | Wolverine World Wide, Inc. | 47,904,347 | ||||||||
| 95,696,172 | ||||||||||
| Trading Companies & Distributors – 1.6% | ||||||||||
| 685,715 | WESCO International, Inc.*,# | 47,924,621 | ||||||||
| Total Common Stocks (cost $2,112,483,934) | 2,767,197,116 | |||||||||
| Investment Companies – 17.8% | ||||||||||
| Exchange-Traded Funds (ETFs) – 2.6% | ||||||||||
| 239,163 | iShares Russell 2000® Growth†,# | 36,245,153 | ||||||||
| 335,992 | iShares Russell 2000® Index Fund# | 41,780,605 | ||||||||
| 78,025,758 | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 10.7% | ||||||||||
| 321,931,294 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 321,931,294 | ||||||||
| Money Markets – 4.5% | ||||||||||
| 134,578,128 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 134,578,128 | ||||||||
| Total Investment Companies (cost $527,941,264) | 534,535,180 | |||||||||
| Total Investments (total cost $2,640,425,198) – 110.2% | 3,301,732,296 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (10.2)% | (304,299,407) | |||||||||
| Net Assets – 100% | $ | 2,997,432,889 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 3,154,600,885 | 95 | .6% | ||||
| Israel | 48,268,821 | 1 | .5 | |||||
| Belgium | 34,408,619 | 1 | .0 | |||||
| Canada | 34,092,809 | 1 | .0 | |||||
| United Kingdom | 30,361,162 | 0 | .9 | |||||
| Total | $ | 3,301,732,296 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Venture Fund
Schedule of Investments (unaudited)
As of March 31, 2015
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 6,125,000 | $ | 9,083,629 | $ | 62,935 | |||||||
| Canadian Dollar 4/16/15 | 15,000,000 | 11,842,542 | (10,827) | |||||||||
| Euro 4/16/15 | 15,775,000 | 16,963,096 | (38,056) | |||||||||
| Israeli Shekel 4/16/15 | 50,000,000 | 12,574,377 | (136,799) | |||||||||
| 50,463,644 | (122,747) | |||||||||||
| Credit Suisse International: | ||||||||||||
| British Pound 4/9/15 | 5,500,000 | 8,157,151 | 221,738 | |||||||||
| Canadian Dollar 4/9/15 | 14,400,000 | 11,369,828 | 57,407 | |||||||||
| Euro 4/9/15 | 9,570,000 | 10,289,714 | 257,220 | |||||||||
| Israeli Shekel 4/9/15 | 43,800,000 | 11,015,072 | (93,890) | |||||||||
| 40,831,765 | 442,475 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| British Pound 4/9/15 | 8,110,000 | 12,028,090 | 198,811 | |||||||||
| Canadian Dollar 4/9/15 | 11,041,000 | 8,717,657 | 16,996 | |||||||||
| Euro 4/9/15 | 15,900,000 | 17,095,764 | 256,827 | |||||||||
| 37,841,511 | 472,634 | |||||||||||
| JPMorgan Chase & Co.: Israeli Shekel 4/16/15 | 42,000,000 | 10,562,477 | 58,770 | |||||||||
| RBC Capital Markets Corp.: Israeli Shekel 4/16/15 | 44,000,000 | 11,065,452 | (156,196) | |||||||||
| Total | $ | 150,764,849 | $ | 694,936 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| Russell 2000® Growth Index | Measures the performance of those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| Russell 2000® Index | Measures the performance of the 2,000 smallest companies in the Russell 3000® Index. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| LP | Limited Partnership | |
| PLC | Public Limited Company |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Venture Fund | $ | 34,098,750 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||
Janus Venture Fund | ||||||||||||
| Diplomat Pharmacy, Inc. | 3/31/14 | $11,529,002 | $22,620,049 | 0.8 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||
Janus Venture Fund | ||||||||||||||||
| Heritage-Crystal Clean, Inc. | 1,109,835 | 12,051 | – | 1,121,886 | $– | $ – | $ 13,126,066 | |||||||||
| Janus Cash Collateral Fund LLC | 217,514,548 | 619,602,836 | (515,186,090) | 321,931,294 | – | 991,578(1) | 321,931,294 | |||||||||
| Janus Cash Liquidity Fund LLC | 66,748,956 | 397,410,172 | (329,581,000) | 134,578,128 | – | 51,492 | 134,578,128 | |||||||||
| Pernix Therapeautics Holdings | 1,928,653 | 20,942 | – | 1,949,595 | – | – | 20,841,171 | |||||||||
| Total | $– | $1,043,070 | $490,476,659 | |||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | |||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
| Janus Venture Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | ||||||||
| Food & Staples Retailing | $ 20,117,618 | $ 22,620,049 | $– | |||||
| Hotels, Restaurants & Leisure | 65,955,606 | 14,504,890 | – | |||||
| Personal Products | – | 34,408,619 | – | |||||
| All Other | 2,609,590,334 | – | – | |||||
Investment Companies | 78,025,758 | 456,509,422 | – | |||||
| Total Investments in Securities | $2,773,689,316 | $528,042,980 | $– | |||||
Other Financial Instruments(a): | ||||||||
Forward Currency Contracts | $ – | $ 1,130,704 | $– | |||||
Total Assets | $2,773,689,316 | $529,173,684 | $– | |||||
Liabilities | ||||||||
Other Financial Instruments(a): | ||||||||
Forward Currency Contracts | $ – | $ 435,768 | $– | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Venture Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 2,640,425,198 | ||
Unaffiliated investments, at value(1) | $ | 2,811,255,637 | ||
Affiliated investments, at value(2) | 490,476,659 | |||
| Cash | 139 | |||
| Forward currency contracts | 1,130,704 | |||
| Closed foreign currency contracts | 32,927 | |||
| Non-interested Trustees’ deferred compensation | 58,868 | |||
| Receivables: | ||||
| Investments sold | 32,070,863 | |||
| Fund shares sold | 4,423,865 | |||
| Dividends | 1,131,096 | |||
| Dividends from affiliates | 11,744 | |||
| Other assets | 52,253 | |||
| Total Assets | 3,340,644,755 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 3) | 321,931,294 | |||
| Forward currency contracts | 435,768 | |||
| Closed foreign currency contracts | 218,635 | |||
| Payables: | ||||
| Investments purchased | 14,937,242 | |||
| Fund shares repurchased | 3,202,550 | |||
| Advisory fees | 1,597,288 | |||
| Fund administration fees | 24,957 | |||
| Transfer agent fees and expenses | 569,175 | |||
| 12b-1 Distribution and shareholder servicing fees | 28,664 | |||
| Non-interested Trustees’ fees and expenses | 15,382 | |||
| Non-interested Trustees’ deferred compensation fees | 58,868 | |||
| Accrued expenses and other payables | 192,043 | |||
| Total Liabilities | 343,211,866 | |||
| Net Assets | $ | 2,997,432,889 | ||
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 March 31, 2015 (unaudited) | Janus Venture Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,250,932,967 | ||
| Undistributed net investment income/(loss) | (3,152,592) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 87,608,829 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 662,043,685 | |||
| Total Net Assets | $ | 2,997,432,889 | ||
| Net Assets - Class A Shares | $ | 50,413,477 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 747,621 | |||
Net Asset Value Per Share(3) | $ | 67.43 | ||
Maximum Offering Price Per Share(4) | $ | 71.54 | ||
| Net Assets - Class C Shares | $ | 16,888,966 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 260,316 | |||
Net Asset Value Per Share(3) | $ | 64.88 | ||
| Net Assets - Class D Shares | $ | 1,527,048,795 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 22,284,735 | |||
| Net Asset Value Per Share | $ | 68.52 | ||
| Net Assets - Class I Shares | $ | 298,048,843 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,341,729 | |||
| Net Asset Value Per Share | $ | 68.65 | ||
| Net Assets - Class N Shares | $ | 10,504,371 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 152,643 | |||
| Net Asset Value Per Share | $ | 68.82 | ||
| Net Assets - Class S Shares | $ | 11,498,464 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 171,149 | |||
| Net Asset Value Per Share | $ | 67.18 | ||
| Net Assets - Class T Shares | $ | 1,083,029,973 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,929,895 | |||
| Net Asset Value Per Share | $ | 67.99 | ||
| (1) | Includes $313,578,514 of securites on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes $646,800 of securities on loan. See Note 3 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 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Venture Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 991,578 | ||
| Dividends | 7,035,113 | |||
| Dividends from affiliates | 51,492 | |||
| Foreign tax withheld | (47,636) | |||
| Total Investment Income | 8,030,547 | |||
| Expenses: | ||||
| Advisory fees | 8,357,012 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 35,745 | |||
| Class C Shares | 56,134 | |||
| Class S Shares | 10,905 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 862,176 | |||
| Class S Shares | 10,905 | |||
| Class T Shares | 1,096,699 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 13,868 | |||
| Class C Shares | 6,481 | |||
| Class I Shares | 99,152 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,572 | |||
| Class C Shares | 829 | |||
| Class D Shares | 111,056 | |||
| Class I Shares | 5,650 | |||
| Class N Shares | 54 | |||
| Class S Shares | 46 | |||
| Class T Shares | 4,929 | |||
| Shareholder reports expense | 122,970 | |||
| Registration fees | 93,995 | |||
| Custodian fees | 10,920 | |||
| Professional fees | 33,191 | |||
| Non-interested Trustees’ fees and expenses | 29,009 | |||
| Fund administration fees | 109,224 | |||
| Other expenses | 62,771 | |||
| Total Expenses | 11,135,293 | |||
| Less: Excess Expense Reimbursement | (46) | |||
| Net Expenses | 11,135,247 | |||
| Net Investment Income/(Loss) | (3,104,700) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 136,190,677 | |||
| Total Net Realized Gain/(Loss) on Investments | 136,190,677 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 286,699,319 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 286,699,319 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 419,785,296 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Venture | ||||||||
| Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (3,104,700) | $ | (4,325,799) | ||||
| Net realized gain/(loss) on investments | 136,190,677 | 248,356,225 | ||||||
| Change in unrealized net appreciation/depreciation | 286,699,319 | (106,994,436) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 419,785,296 | 137,035,990 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (1,973,328) | (7,243,110) | ||||||
| Class C Shares | (1,073,412) | (862,562) | ||||||
| Class D Shares | (143,461,693) | (203,840,778) | ||||||
| Class I Shares | (22,650,603) | (20,128,824) | ||||||
| Class N Shares | (681,803) | (1,039,789) | ||||||
| Class S Shares | (860,870) | (919,357) | ||||||
| Class T Shares | (84,366,121) | (103,805,136) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (255,067,830) | (337,839,556) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 34,248,969 | 17,515,218 | ||||||
| Class C Shares | 8,147,265 | 4,888,512 | ||||||
| Class D Shares | 32,095,924 | 79,819,813 | ||||||
| Class I Shares | 85,971,839 | 121,173,390 | ||||||
| Class N Shares | 3,668,606 | 2,576,291 | ||||||
| Class S Shares | 4,679,555 | 3,802,604 | ||||||
| Class T Shares | 307,498,082 | 288,964,867 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 1,971,599 | 7,237,855 | ||||||
| Class C Shares | 1,071,501 | 858,572 | ||||||
| Class D Shares | 138,049,764 | 196,581,536 | ||||||
| Class I Shares | 21,979,796 | 19,123,185 | ||||||
| Class N Shares | 681,803 | 1,039,789 | ||||||
| Class S Shares | 858,052 | 919,357 | ||||||
| Class T Shares | 82,310,252 | 101,318,138 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (5,104,223) | (47,925,485) | ||||||
| Class C Shares | (893,896) | (1,653,918) | ||||||
| Class D Shares | (72,694,677) | (149,372,724) | ||||||
| Class I Shares | (32,043,596) | (50,539,751) | ||||||
| Class N Shares | (929,677) | (3,228,340) | ||||||
| Class S Shares | (1,329,768) | (3,405,974) | ||||||
| Class T Shares | (91,432,917) | (243,759,158) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 518,804,253 | 345,933,777 | ||||||
| Net Increase/(Decrease) in Net Assets | 683,521,719 | 145,130,211 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 2,313,911,170 | 2,168,780,959 | ||||||
| End of period | $ | 2,997,432,889 | $ | 2,313,911,170 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (3,152,592) | $ | (47,892) | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Venture Fund | |||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $63.79 | $70.71 | $60.33 | $50.20 | $60.66 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.16)(2) | (0.34)(2) | (0.42) | (0.11) | 0.04 | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.85 | 4.36 | 17.45 | 14.32 | (10.50) | |||||||||||||||||
| Total from Investment Operations | 10.69 | 4.02 | 17.03 | 14.21 | (10.46) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Net Asset Value, End of Period | $67.43 | $63.79 | $70.71 | $60.33 | $50.20 | |||||||||||||||||
| Total Return* | 17.58% | 6.05% | 31.76% | 29.59% | (17.24)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $50,413 | $16,621 | $44,205 | $209,254 | $349 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $28,674 | $45,860 | $243,045 | $31,344 | $217 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.03% | 1.17% | 1.14% | 1.08% | 1.03% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.03% | 1.17% | 1.14% | 1.08% | 1.03% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.48)% | (0.51)% | (0.04)% | (0.48)% | (0.23)% | |||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | |||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Venture Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $61.85 | $69.27 | $59.57 | $49.97 | $60.66 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.39)(2) | (0.72)(2) | 0.07 | (0.14) | (0.08) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.47 | 4.24 | 16.28 | 13.82 | (10.61) | |||||||||||||||||
| Total from Investment Operations | 10.08 | 3.52 | 16.35 | 13.68 | (10.69) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Net Asset Value, End of Period | $64.88 | $61.85 | $69.27 | $59.57 | $49.97 | |||||||||||||||||
| Total Return* | 17.12% | 5.37% | 30.95% | 28.62% | (17.62)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $16,889 | $7,926 | $4,469 | $413 | $36 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $11,258 | $6,549 | $1,655 | $108 | $15 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.80% | 1.82% | 1.80% | 1.75% | 3.04% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.80% | 1.82% | 1.80% | 1.75% | 2.11% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.23)% | (1.14)% | (0.51)% | (1.11)% | (1.47)% | |||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | |||||||||||||||||
| * | 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 6, 2011 (inception date) through September 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 | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or | Janus Venture Fund | |||||||||||||||||||||||||
| period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $64.67 | $71.33 | $60.63 | $50.30 | $47.12 | $41.61 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(2) | (0.10)(2) | 0.23 | (0.20) | (0.01) | 0.03 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.96 | 4.38 | 17.12 | 14.61 | 3.19 | 5.48 | ||||||||||||||||||||
| Total from Investment Operations | 10.90 | 4.28 | 17.35 | 14.41 | 3.18 | 5.51 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | – | ||||||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $68.52 | $64.67 | $71.33 | $60.63 | $50.30 | $47.12 | ||||||||||||||||||||
| Total Return* | 17.67% | 6.40% | 32.16% | 29.95% | 6.75% | 13.24% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,527,049 | $1,340,281 | $1,332,186 | $1,052,828 | $846,012 | $842,433 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,440,907 | $1,375,889 | $1,141,628 | $997,625 | $966,040 | $823,838 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.82% | 0.82% | 0.84% | 0.83% | 0.85% | 0.87% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.82% | 0.82% | 0.84% | 0.83% | 0.85% | 0.87% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.19)% | (0.15)% | 0.35% | (0.11)% | (0.20)% | (0.39)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | 58% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Venture Fund | |||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(3) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $64.76 | $71.37 | $60.61 | $50.25 | $60.66 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | (0.04)(2) | 0.24 | (0.14) | 0.02 | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.99 | 4.37 | 17.17 | 14.58 | (10.43) | |||||||||||||||||
| Total from Investment Operations | 10.94 | 4.33 | 17.41 | 14.44 | (10.41) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Net Asset Value, End of Period | $68.65 | $64.76 | $71.37 | $60.61 | $50.25 | |||||||||||||||||
| Total Return* | 17.71% | 6.48% | 32.28% | 30.04% | (17.16)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $298,049 | $206,130 | $128,788 | $29,810 | $1,557 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $241,712 | $147,267 | $77,403 | $21,852 | $388 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.76% | 0.75% | 0.75% | 0.72% | 0.81% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.76% | 0.75% | 0.75% | 0.72% | 0.81% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.15)% | (0.06)% | 0.35% | (0.03)% | (0.08)% | |||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | |||||||||||||||||
| * | 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 September 30, 2010. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Period from May 6, 2011 (inception date) through September 30, 2011. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Venture Fund | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $64.87 | $71.43 | $60.62 | $56.72 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | (0.01)(2) | 0.29 | (0.02) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 11.03 | 4.39 | 17.17 | 3.92 | ||||||||||||||
| Total from Investment Operations | 11.00 | 4.38 | 17.46 | 3.90 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | – | ||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | – | ||||||||||||||
| Net Asset Value, End of Period | $68.82 | $64.87 | $71.43 | $60.62 | ||||||||||||||
| Total Return* | 17.78% | 6.55% | 32.37% | 6.88% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $10,504 | $6,486 | $6,736 | $3,807 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $7,672 | $6,525 | $5,487 | $266 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.69% | 0.92% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.69% | 0.91% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.08)% | (0.01)% | 0.48% | (0.58)% | ||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | ||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Venture Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(3) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $63.63 | $70.57 | $60.26 | $50.16 | $60.66 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.19)(2) | (0.32)(2) | 0.09 | (0.08) | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.79 | 4.32 | 16.87 | 14.26 | (10.49) | |||||||||||||||||
| Total from Investment Operations | 10.60 | 4.00 | 16.96 | 14.18 | (10.50) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | |||||||||||||||||
| Net Asset Value, End of Period | $67.18 | $63.63 | $70.57 | $60.26 | $50.16 | |||||||||||||||||
| Total Return* | 17.48% | 6.03% | 31.67% | 29.55% | (17.31)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $11,498 | $6,792 | $6,069 | $189 | $8 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $8,748 | $6,387 | $2,060 | $37 | $9 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.21% | 1.20% | 1.18% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.17% | 1.18% | 1.21% | 1.18% | 1.18% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.58)% | (0.49)% | 0.01% | (0.53)% | (0.59)% | |||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | |||||||||||||||||
| * | 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 September 30, 2012. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Period from May 6, 2011 (inception date) through September 30, 2011. |
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 | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | Janus Venture Fund | |||||||||||||||||||||||||||||
| ended September 30 and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $64.25 | $70.99 | $60.43 | $50.21 | $47.08 | $38.68 | $29.82 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.10)(2) | (0.16)(2) | 0.15 | (0.11) | (0.06) | (0.13) | –(3) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 10.89 | 4.36 | 17.06 | 14.41 | 3.19 | 8.53 | 8.86 | |||||||||||||||||||||||
| Total from Investment Operations | 10.79 | 4.20 | 17.21 | 14.30 | 3.13 | �� | 8.40 | 8.86 | ||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (7.05) | (10.94) | (6.65) | (4.08) | – | – | – | |||||||||||||||||||||||
| Total Distributions | (7.05) | (10.94) | (6.65) | (4.08) | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $67.99 | $64.25 | $70.99 | $60.43 | $50.21 | $47.08 | $38.68 | |||||||||||||||||||||||
| Total Return* | 17.61% | 6.31% | 32.03% | 29.77% | 6.65% | 21.72% | 29.71% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,083,030 | $729,674 | $646,328 | $498,625 | $219,453 | $206,712 | $921,384 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $879,769 | $724,733 | $618,311 | $345,919 | $239,806 | $458,457 | $776,334 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.92% | 0.93% | 0.94% | 0.95% | 0.96% | 0.92% | 0.93% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.92% | 0.92% | 0.94% | 0.94% | 0.96% | 0.92% | 0.93% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.32)% | (0.25)% | 0.18% | (0.23)% | (0.31)% | (0.47)% | (0.48)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 47% | 92% | 51% | 54% | 58% | 40% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
20 | MARCH 31, 2015
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Venture 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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. 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
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Notes to Financial Statements (unaudited) (continued)
may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The 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 3 | ||||||
| Fund | to Level 2 | |||||
| Janus Venture Fund | $ | 11,529,002 | ||||
Financial assets were transferred out of Level 3 to Level 2 since certain security’s prices were determined using other significant observable inputs at the end of the current period and significant unobservable inputs at the end of the prior fiscal year.
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Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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
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Notes to Financial Statements (unaudited) (continued)
derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
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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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Venture Fund | $ | 30,671,174 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Venture Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 1,130,704 | Forward currency contracts | $ | 435,768 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Janus Venture Fund | ||||
| Currency Contracts | $ | 432,089 | ||
| 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 | |||
Janus Venture Fund | ||||
| Currency Contracts | $ | 694,936 | ||
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 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
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Notes to Financial Statements (unaudited) (continued)
the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) to gain exposure to a particular portion of the market. ETFs are typically open-end investment companies, which may be managed or unmanaged, that generally seek to track the performance of a specific index. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial
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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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ 62,935 | $ (62,935) | $ – | $ – | ||||||||||||||
| Credit Suisse International | 536,365 | (93,890) | – | 442,475 | ||||||||||||||
| Deutsche Bank AG | 314,225,314 | – | (314,225,314) | – | ||||||||||||||
| HSBC Securities (USA), Inc. | 472,634 | – | – | 472,634 | ||||||||||||||
| JPMorgan Chase & Co. | 58,770 | – | – | 58,770 | ||||||||||||||
| Total | $315,356,018 | $(156,825) | $(314,225,314) | $973,879 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $185,682 | $ (62,935) | $– | $122,747 | ||||||||||||||
| Credit Suisse International | 93,890 | (93,890) | – | – | ||||||||||||||
| RBC Capital Markets Corp. | 156,196 | – | – | 156,196 | ||||||||||||||
| Total | $435,768 | $(156,825) | $– | $278,943 | ||||||||||||||
| (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.
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 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.
| 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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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 Venture Fund | All Asset Levels | 0.64 | ||||||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Venture Fund | 0.92 | |||||
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’
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
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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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Venture Fund | $ | 13,627 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Venture Fund | $ | 1,457 | ||||
| 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 March 31, 2015 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 Venture Fund | $2,639,794,080 | $728,633,792 | $(66,695,576) | $661,938,216 | ||||||||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Venture Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 533,676 | 264,806 | ||||||||
| Reinvested dividends and distributions | 31,430 | 116,122 | ||||||||
| Shares repurchased | (78,064) | (745,484) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 487,042 | (364,556) | ||||||||
| Shares Outstanding, Beginning of Period | 260,579 | 625,135 | ||||||||
| Shares Outstanding, End of Period | 747,621 | 260,579 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 128,843 | 76,052 | ||||||||
| Reinvested dividends and distributions | 17,716 | 14,135 | ||||||||
| Shares repurchased | (14,398) | (26,551) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 132,161 | 63,636 | ||||||||
| Shares Outstanding, Beginning of Period | 128,155 | 64,519 | ||||||||
| Shares Outstanding, End of Period | 260,316 | 128,155 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| For the period ended March 31 (unaudited) | Janus Venture Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 483,212 | 1,197,745 | ||||||||
| Reinvested dividends and distributions | 2,166,846 | 3,119,846 | ||||||||
| Shares repurchased | (1,088,883) | (2,269,979) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,561,175 | 2,047,612 | ||||||||
| Shares Outstanding, Beginning of Period | 20,723,560 | 18,675,948 | ||||||||
| Shares Outstanding, End of Period | 22,284,735 | 20,723,560 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 1,302,130 | 1,845,456 | ||||||||
| Reinvested dividends and distributions | 344,457 | 303,254 | ||||||||
| Shares repurchased | (487,853) | (770,352) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,158,734 | 1,378,358 | ||||||||
| Shares Outstanding, Beginning of Period | 3,182,995 | 1,804,637 | ||||||||
| Shares Outstanding, End of Period | 4,341,729 | 3,182,995 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 56,133 | 39,094 | ||||||||
| Reinvested dividends and distributions | 10,661 | 16,468 | ||||||||
| Shares repurchased | (14,133) | (49,887) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 52,661 | 5,675 | ||||||||
| Shares Outstanding, Beginning of Period | 99,982 | 94,307 | ||||||||
| Shares Outstanding, End of Period | 152,643 | 99,982 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 71,138 | 58,655 | ||||||||
| Reinvested dividends and distributions | 13,724 | 14,788 | ||||||||
| Shares repurchased | (20,450) | (52,700) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 64,412 | 20,743 | ||||||||
| Shares Outstanding, Beginning of Period | 106,737 | 85,994 | ||||||||
| Shares Outstanding, End of Period | 171,149 | 106,737 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 4,665,623 | 4,373,658 | ||||||||
| Reinvested dividends and distributions | 1,301,759 | 1,617,467 | ||||||||
| Shares repurchased | (1,395,120) | (3,738,079) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,572,262 | 2,253,046 | ||||||||
| Shares Outstanding, Beginning of Period | 11,357,633 | 9,104,587 | ||||||||
| Shares Outstanding, End of Period | 15,929,895 | 11,357,633 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Venture Fund | $ | 793,004,581 | $ | 605,360,218 | $ | – | $ | – | ||||||
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| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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 | 33
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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
Janus Investment Fund | 45
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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
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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).
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-0515-87467 | 125-24-93056 05-15 |
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semiannual report
March 31, 2015
Janus Global Research Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Global Research Fund
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Janus Global Research Fund (unaudited)
FUND SNAPSHOT We seek to create a diversified, high-conviction portfolio reflecting the best ideas of the Janus research team. | Team-Based Approach Led by Carmel Wellso, Director of Research |
PERFORMANCE
Janus Global Research Fund’s Class T Shares returned 8.59% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the MSCI World Index, returned 3.35%, and its secondary benchmark, the MSCI All Country World Index, returned 2.73% during the period.
MARKET ENVIRONMENT
Global equity markets started the period with a surge in volatility, which soon subsided as investors were comforted by a series of accommodative measures by major central banks. The European Central Bank (ECB) announced that it would raise the level of its balance sheet by 1 trillion euros; the Bank of Japan enacted unprecedented easing; and the People’s Bank of China unexpectedly lowered a key interest rate. These initiatives diverged from the path taken by the U.S. Federal Reserve (Fed), which remained on track to initiate rate hikes in 2015. Volatility spiked again in January as investors feared that crude oil’s precipitous slide could be a consequence of slowing global growth, rather than solely of elevated North American production. Indeed, growth data outside of the U.S. remained muted. China’s fourth quarter GDP expanded by 7.3%, well below its 25-year average. Europe contributed to market angst as prices within the eurozone entered deflationary territory and Syriza, an anti-austerity party, emerged victorious in Greece’s parliamentary election. European stocks regained favor upon the ECB announcement that it would christen its own version of quantitative easing by purchasing 60 billion euros in bonds monthly. As yields on many short- and mid-term European bonds turned negative, the region’s stocks took off. The corresponding slide in the euro drove the U.S. dollar to levels that caused investors to worry that U.S. corporate earnings would suffer. Shrugging this off, U.S. indices reached record levels in early March. Despite yet another strong jobs report, which fueled speculation of a June rate increase, the Fed’s late-March statement included downwardly revised growth expectations, which investors interpreted as dovish.
PERFORMANCE DISCUSSION
Our outperformance for the period was driven by strong stock selection on the health care and financial sectors. In fact, five of the 10 largest contributors to performance were health care companies. The catalyst for the sector was robust merger and acquisition activity, as evidenced by our top contributor, Pharmacyclics. The biotechnology company’s stock surged in January on consensus-beating earnings from the prior quarter as well as upbeat guidance for its blood-cancer drug, Imbruvica. It was then announced that AbbVie would acquire Pharmacyclics for $21 billion. We sold our position following the announcement.
U.S. supermarket chain Kroger contributed to relative outperformance as well. The company’s gains were partly a consequence of investors’ rising confidence in management, which has translated into a rerating of its stock. The company has been able to expand margins and is doing well against mainline supermarket competitors in addition to down-market retailers. The continued strength of the U.S. consumer has been an additional tailwind.
Apple was also a strong performer. The electronic-device company benefited from positive sentiment in the aftermath of its astounding fourth quarter earnings results, the first full reporting period to include its highly popular iPhone 6, launched in September. In February, the company’s stock reached a new record, pushing its market capitalization above $700 billion. We think Apple still has strong opportunities as its ecosystem continues to attract new and potentially long-term subscribers onto its platform and increase its addressable market as lower price points draw new customers.
The lone sector to detract from relative performance was energy, which was weighed down by the collapse in crude prices that accelerated during the autumn. Integrated oil company Royal Dutch Shell detracted from results as the company reported weaker than expected earnings in early 2015. In March, the company signaled that it may be attempting to preserve cash should it be forced to compensate for earthquake damages purportedly caused by drilling activity in the Groningen oilfield in the northern part of the Netherlands.
Noble Energy also weighed on performance. While we like that Noble has a diversified, global production base, we exited the position during the period in favor of energy companies with more attractive risk/return profiles in the current oil price environment.
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Janus Global Research Fund (unaudited)
MEG Energy was caught up in the sell-off. Even in a tepid energy price environment, we like this company as it remains profitable with a price per barrel in the $50 range. Management has been disciplined in reining in capital expenditure during this period of low prices as the company sees the value of keeping assets in the ground until market conditions are more favorable. The company’s balance sheet is excellent with its first bonds not maturing until 2021.
OUTLOOK
Most equity markets were positive for the period, with Europe experiencing strong gains in the wake of the ECB’s monetary policy announcement. We had expected that a lower euro could drive export growth and highlight operating leverage in many companies that had improved cost structures. We think profit growth could surprise at many companies in Europe. With regard to Greece, we expect that the country’s and European politicians lower the stakes and do what they do so well: find an interim solution to kick the problem down the road.
The Japanese market has been strong while the yen falls but we are missing the structural reform the country needs. Japan needs to break its deflationary spiral and improve its economy. A weaker yen helps competitiveness but without reform to labor rules, to corporate taxation, to the pension and health care system, and to other core issues, the country risks a short-term boost without a long-term solution. There are some bright spots for equities. For one, there are a lot of buyers as companies, the government pension plans and central banks are buying shares.
In the U.S., the Fed left some uncertainty about when it would lift rates, leading to some concern about the economic recovery. The corporate outlook has become less sanguine in some sectors. Energy clearly is under pressure. Industrial firms face the double barrel pressure of a slowdown in their sales to oil companies and a loss of global competitiveness with a stronger dollar. Similarly, China is no longer the growth engine it once was for U.S. firms.
We cannot argue valuations are cheap, save for a few areas such as financials and deeply cyclical, commodity-exposed companies. But valuations are not extreme either, especially compared to the alternative asset classes.
Biotech merger and acquisition activity is continuing but we will see deals elsewhere and that will drive valuation. The Kraft-Heinz deal announced in March valued a slow-growing but quality brand-name business at more than 20 times earnings. Multiples remain close together: Find the companies that have a path to growth or that can help another company grow and you have the potential to make money in equities.
Thank you for your investment in Janus Global Research Fund.
2 | MARCH 31, 2015
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(unaudited)
Janus Global Research Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pharmacyclics, Inc. | 0.66% | |||
| Kroger Co. | 0.52% | |||
| Apple, Inc. | 0.52% | |||
| Valeant Pharmaceuticals International, Inc. (U.S. Shares) | 0.46% | |||
| AIA Group, Ltd. | 0.46% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Royal Dutch Shell PLC (ADR) | –0.30% | |||
| Noble Energy, Inc. | –0.29% | |||
| MEG Energy Corp. | –0.29% | |||
| Canadian Pacific Railway, Ltd. | –0.29% | |||
| Core Laboratories NV | –0.24% | |||
3 Top Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Health Care | 2.07% | 13.70% | 13.53% | |||||||||
| Financials | 1.85% | 21.52% | 21.60% | |||||||||
| Technology | 1.31% | 10.42% | 10.30% | |||||||||
4 Bottom Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Energy | –0.51% | 11.02% | 11.32% | |||||||||
| Communications | 0.10% | 9.21% | 9.34% | |||||||||
| Consumer | 0.32% | 14.25% | 14.61% | |||||||||
| Industrials | 0.38% | 19.13% | 19.28% | |||||||||
| 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. | ||
| * | The sectors listed above reflect those covered by the seven analyst teams who comprise the Janus Research Team. |
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Janus Global Research Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| AIA Group, Ltd. Insurance | 2.3% | |||
| Canadian Pacific Railway, Ltd. Road & Rail | 2.0% | |||
| Apple, Inc. Technology Hardware, Storage & Peripherals | 1.9% | |||
| Brenntag AG Trading Companies & Distributors | 1.7% | |||
| Biogen, Inc. Biotechnology | 1.5% | |||
| 9.4% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
* Includes Other of (0.7)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
| Janus Global Research Fund – Class A Shares | |||||||||||||||
| NAV | 8.54% | 12.39% | 11.71% | 10.07% | 9.77% | 0.97% | 0.91% | ||||||||
| MOP | 2.29% | 5.92% | 10.39% | 9.42% | 9.13% | ||||||||||
| Janus Global Research Fund – Class C Shares | |||||||||||||||
| NAV | 8.10% | 11.53% | 10.83% | 9.21% | 8.91% | 1.73% | 1.67% | ||||||||
| CDSC | 7.10% | 10.53% | 10.83% | 9.21% | 8.91% | ||||||||||
| Janus Global Research Fund – Class D Shares(1) | 8.63% | 12.61% | 11.90% | 10.17% | 9.87% | 0.77% | 0.71% | ||||||||
| Janus Global Research Fund – Class I Shares | 8.69% | 12.69% | 11.98% | 10.12% | 9.83% | 0.67% | 0.61% | ||||||||
| Janus Global Research Fund – Class R Shares | 8.31% | 11.93% | 11.29% | 9.66% | 9.37% | 1.35% | 1.29% | ||||||||
| Janus Global Research Fund – Class S Shares | 8.44% | 12.21% | 11.52% | 9.83% | 9.54% | 1.10% | 1.04% | ||||||||
| Janus Global Research Fund – Class T Shares | 8.59% | 12.51% | 11.80% | 10.12% | 9.83% | 0.85% | 0.79% | ||||||||
| MSCI World IndexSM | 3.35% | 6.03% | 10.01% | 6.39% | 6.12% | ||||||||||
| MSCI All Country World IndexSM | 2.73% | 5.42% | 8.99% | 6.44% | 6.14% | ||||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 1st | 1st | ||||||||||
| Morningstar Ranking – based on total return for World Stock Funds | – | 35/1,213 | 83/808 | 4/508 | 4/500 | ||||||||||
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 February 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 5
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Janus Global Research Fund (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.
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, 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 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 R Shares commenced operations on March 15, 2013, as there were no corresponding Class R Shares prior to the merger. Performance shown for periods prior to March 15, 2013 reflects the historical performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class R 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.
© 2015 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.
Effective December 15, 2014, Carmel Wellso leads the Janus Research Team for the Fund.
See “Useful Information About Your Fund Report.”
| * | The Fund’s inception date – February 25, 2005 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,085.40 | $ | 4.99 | $ | 1,000.00 | $ | 1,020.14 | $ | 4.84 | 0.96% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,081.00 | $ | 8.92 | $ | 1,000.00 | $ | 1,016.36 | $ | 8.65 | 1.72% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,086.30 | $ | 4.11 | $ | 1,000.00 | $ | 1,020.99 | $ | 3.98 | 0.79% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,086.90 | $ | 3.54 | $ | 1,000.00 | $ | 1,021.54 | $ | 3.43 | 0.68% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,083.10 | $ | 7.06 | $ | 1,000.00 | $ | 1,018.15 | $ | 6.84 | 1.36% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,084.40 | $ | 5.77 | $ | 1,000.00 | $ | 1,019.40 | $ | 5.59 | 1.11% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,085.90 | $ | 4.47 | $ | 1,000.00 | $ | 1,020.64 | $ | 4.33 | 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 182/365 (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 Global Research Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 98.2% | ||||||||||
| Aerospace & Defense – 1.1% | ||||||||||
| 87,692 | Precision Castparts Corp. | $ | 18,415,320 | |||||||
| 111,455 | United Technologies Corp. | 13,062,526 | ||||||||
| 31,477,846 | ||||||||||
| Air Freight & Logistics – 1.0% | ||||||||||
| 184,916 | Panalpina Welttransport Holding AG | 26,983,850 | ||||||||
| Airlines – 1.0% | ||||||||||
| 427,413 | United Continental Holdings, Inc.* | 28,743,524 | ||||||||
| Auto Components – 1.3% | ||||||||||
| 1,369,500 | NGK Spark Plug Co., Ltd. | 36,848,014 | ||||||||
| Beverages – 3.0% | ||||||||||
| 331,445 | PepsiCo, Inc. | 31,692,771 | ||||||||
| 184,361 | Pernod Ricard SA | 21,752,229 | ||||||||
| 578,372 | SABMiller PLC | 30,261,295 | ||||||||
| 83,706,295 | ||||||||||
| Biotechnology – 5.6% | ||||||||||
| 149,385 | Actelion, Ltd.* | 17,302,138 | ||||||||
| 194,704 | Amgen, Inc. | 31,123,434 | ||||||||
| 100,524 | Biogen, Inc.* | 42,445,254 | ||||||||
| 226,589 | Celgene Corp.* | 26,121,180 | ||||||||
| 1,335,010 | Ironwood Pharmaceuticals, Inc.* | 21,360,160 | ||||||||
| 44,224 | Regeneron Pharmaceuticals, Inc.* | 19,966,251 | ||||||||
| 158,318,417 | ||||||||||
| Capital Markets – 3.9% | ||||||||||
| 975,535 | Blackstone Group LP | 37,938,556 | ||||||||
| 497,952 | Deutsche Bank AG | 17,322,269 | ||||||||
| 771,520 | E*TRADE Financial Corp.* | 22,030,754 | ||||||||
| 1,778,769 | UBS Group AG* | 33,393,590 | ||||||||
| 110,685,169 | ||||||||||
| Chemicals – 1.9% | ||||||||||
| 159,894 | Air Products & Chemicals, Inc. | 24,188,765 | ||||||||
| 3,087,627 | Alent PLC | 17,062,733 | ||||||||
| 138,174 | LyondellBasell Industries NV – Class A | 12,131,677 | ||||||||
| 53,383,175 | ||||||||||
| Commercial Banks – 5.7% | ||||||||||
| 446,406 | Citigroup, Inc. | 22,998,837 | ||||||||
| 2,880,363 | HSBC Holdings PLC | 24,509,020 | ||||||||
| 1,816,291 | ING Groep NV* | 26,636,382 | ||||||||
| 383,923 | JPMorgan Chase & Co. | 23,258,055 | ||||||||
| 12,587,043 | Lloyds Banking Group PLC* | 14,607,493 | ||||||||
| 6,177,000 | Seven Bank, Ltd. | 30,509,454 | ||||||||
| 398,889 | U.S. Bancorp | 17,419,483 | ||||||||
| 159,938,724 | ||||||||||
| Communications Equipment – 0.8% | ||||||||||
| 395,448 | CommScope Holding Co., Inc.* | 11,286,086 | ||||||||
| 165,012 | Motorola Solutions, Inc. | 11,001,350 | ||||||||
| 22,287,436 | ||||||||||
| Consumer Finance – 0.6% | ||||||||||
| 213,270 | American Express Co. | 16,660,652 | ||||||||
| Containers & Packaging – 0.9% | ||||||||||
| 470,069 | Crown Holdings, Inc.* | 25,393,127 | ||||||||
| Diversified Financial Services – 0.7% | ||||||||||
| 84,621 | Intercontinental Exchange, Inc. | 19,739,541 | ||||||||
| Electric Utilities – 0.7% | ||||||||||
| 424,068 | Brookfield Infrastructure Partners LP | 19,312,057 | ||||||||
| Electrical Equipment – 1.8% | ||||||||||
| 299,984 | Schneider Electric SE | 23,330,505 | ||||||||
| 472,077 | Sensata Technologies Holding NV* | 27,120,823 | ||||||||
| 50,451,328 | ||||||||||
| Electronic Equipment, Instruments & Components – 1.6% | ||||||||||
| 56,700 | Keyence Corp. | 30,973,937 | ||||||||
| 218,320 | TE Connectivity, Ltd. (U.S. Shares) | 15,636,078 | ||||||||
| 46,610,015 | ||||||||||
| Energy Equipment & Services – 0.7% | ||||||||||
| 325,160 | Baker Hughes, Inc. | 20,673,673 | ||||||||
| Food & Staples Retailing – 1.9% | ||||||||||
| 538,919 | Kroger Co. | 41,313,531 | ||||||||
| 239,965 | Whole Foods Market, Inc. | 12,497,377 | ||||||||
| 53,810,908 | ||||||||||
| Food Products – 1.1% | ||||||||||
| 307,428 | Hershey Co. | 31,022,560 | ||||||||
| Health Care Equipment & Supplies – 0.9% | ||||||||||
| 1,498,792 | Boston Scientific Corp.* | 26,603,558 | ||||||||
| Health Care Providers & Services – 1.1% | ||||||||||
| 502,180 | Catamaran Corp. (U.S. Shares)* | 29,899,797 | ||||||||
| Hotels, Restaurants & Leisure – 1.1% | ||||||||||
| 3,952,337 | Bwin.Party Digital Entertainment PLC | 4,698,224 | ||||||||
| 294,075 | Starbucks Corp. | 27,848,903 | ||||||||
| 32,547,127 | ||||||||||
| Household Durables – 0.4% | ||||||||||
| 400,200 | Sony Corp.* | 10,700,551 | ||||||||
| Household Products – 1.0% | ||||||||||
| 405,399 | Colgate-Palmolive Co. | 28,110,367 | ||||||||
| Information Technology Services – 2.6% | ||||||||||
| 266,624 | Amdocs, Ltd. (U.S. Shares) | 14,504,345 | ||||||||
| 414,917 | MasterCard, Inc. – Class A | 35,844,680 | ||||||||
| 334,548 | Visa, Inc. – Class A | 21,882,785 | ||||||||
| 72,231,810 | ||||||||||
| Insurance – 4.6% | ||||||||||
| 10,487,100 | AIA Group, Ltd. | 65,730,067 | ||||||||
| 310,072 | Aon PLC | 29,804,121 | ||||||||
| 1,379,099 | Prudential PLC | 34,142,070 | ||||||||
| 129,676,258 | ||||||||||
| Internet & Catalog Retail – 0.9% | ||||||||||
| 31,263 | Amazon.com, Inc.* | 11,632,962 | ||||||||
| 11,081 | Priceline Group, Inc.* | 12,899,946 | ||||||||
| 24,532,908 | ||||||||||
| Internet Software & Services – 2.5% | ||||||||||
| 146,184 | Alibaba Group Holding, Ltd. (ADR)* | 12,168,356 | ||||||||
| 276,990 | Facebook, Inc. – Class A* | 22,772,733 | ||||||||
| 66,636 | Google, Inc. – Class C* | 36,516,528 | ||||||||
| 71,457,617 | ||||||||||
| Leisure Products – 0.4% | ||||||||||
| 452,532 | Mattel, Inc. | 10,340,356 | ||||||||
| Machinery – 1.2% | ||||||||||
| 267,110 | Colfax Corp.* | 12,749,160 | ||||||||
| 148,494 | Dover Corp. | 10,263,905 | ||||||||
| 365,792 | Rexnord Corp.* | 9,762,989 | ||||||||
| 32,776,054 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Media – 3.7% | ||||||||||
| 138,437 | CBS Corp. – Class B | $ | 8,393,435 | |||||||
| 370,941 | Comcast Corp. – Class A | 20,947,038 | ||||||||
| 475,003 | Liberty Global PLC – Class C* | 23,659,900 | ||||||||
| 57,832 | Time Warner Cable, Inc. | 8,667,860 | ||||||||
| 586,835 | Twenty-First Century Fox, Inc. – Class A | 19,858,496 | ||||||||
| 221,448 | Walt Disney Co. | 23,227,681 | ||||||||
| 104,754,410 | ||||||||||
| Metals & Mining – 0.5% | ||||||||||
| 586,183 | ThyssenKrupp AG | 15,390,055 | ||||||||
| Oil, Gas & Consumable Fuels – 9.4% | ||||||||||
| 402,629 | Anadarko Petroleum Corp. | 33,341,708 | ||||||||
| 888,384 | Enterprise Products Partners LP | 29,254,485 | ||||||||
| 455,715 | Exxon Mobil Corp. | 38,735,775 | ||||||||
| 1,323,800 | Inpex Corp. | 14,607,252 | ||||||||
| 327,609 | Koninklijke Vopak NV | 18,101,904 | ||||||||
| 545,192 | MarkWest Energy Partners LP | 36,037,191 | ||||||||
| 843,838 | MEG Energy Corp.* | 13,633,074 | ||||||||
| 394,904 | Phillips 66 | 31,039,454 | ||||||||
| 562,913 | Royal Dutch Shell PLC (ADR) | 33,577,761 | ||||||||
| 266,090 | Valero Energy Corp. | 16,928,646 | ||||||||
| 265,257,250 | ||||||||||
| Pharmaceuticals – 6.6% | ||||||||||
| 328,912 | Eli Lilly & Co. | 23,895,457 | ||||||||
| 429,185 | Endo International PLC* | 38,497,894 | ||||||||
| 228,566 | Mallinckrodt PLC* | 28,947,884 | ||||||||
| 1,143,071 | Meda AB – Class A | 18,078,537 | ||||||||
| 63,828 | Roche Holding AG | 17,605,540 | ||||||||
| 390,581 | Teva Pharmaceutical Industries, Ltd. (ADR) | 24,333,196 | ||||||||
| 169,816 | Valeant Pharmaceuticals International, Inc. (U.S. Shares)* | 33,728,854 | ||||||||
| 185,087,362 | ||||||||||
| Professional Services – 1.0% | ||||||||||
| 89,894 | IHS, Inc. – Class A* | 10,226,342 | ||||||||
| 243,391 | Verisk Analytics, Inc. – Class A* | 17,378,117 | ||||||||
| 27,604,459 | ||||||||||
| Real Estate Investment Trusts (REITs) – 1.5% | ||||||||||
| 174,245 | American Tower Corp. | 16,405,167 | ||||||||
| 816,375 | Lexington Realty Trust | 8,024,966 | ||||||||
| 93,738 | Simon Property Group, Inc. | 18,338,902 | ||||||||
| 42,769,035 | ||||||||||
| Real Estate Management & Development – 2.3% | ||||||||||
| 494,680 | Brookfield Asset Management, Inc. – Class A (U.S. Shares) | 26,519,795 | ||||||||
| 149,770 | Jones Lang LaSalle, Inc. | 25,520,808 | ||||||||
| 619,000 | Mitsubishi Estate Co., Ltd. | 14,369,278 | ||||||||
| 66,409,881 | ||||||||||
| Road & Rail – 3.0% | ||||||||||
| 261,359 | Canadian National Railway Co. | 17,505,109 | ||||||||
| 309,262 | Canadian Pacific Railway, Ltd. | 56,631,284 | ||||||||
| 109,177 | Kansas City Southern | 11,144,788 | ||||||||
| 85,281,181 | ||||||||||
| Semiconductor & Semiconductor Equipment – 2.9% | ||||||||||
| 1,863,817 | ARM Holdings PLC | 30,511,269 | ||||||||
| 1,243,832 | Atmel Corp. | 10,236,737 | ||||||||
| 78,318 | Avago Technologies, Ltd. | 9,944,820 | ||||||||
| 308,439 | Freescale Semiconductor, Ltd.* | 12,571,974 | ||||||||
| 3,931,000 | Taiwan Semiconductor Manufacturing Co., Ltd. | 18,240,083 | ||||||||
| 81,504,883 | ||||||||||
| Software – 1.8% | ||||||||||
| 73,910 | NetSuite, Inc.* | 6,855,892 | ||||||||
| 102,200 | Nintendo Co., Ltd. | 15,042,343 | ||||||||
| 400,873 | Oracle Corp. | 17,297,670 | ||||||||
| 222,549 | Solera Holdings, Inc. | 11,496,881 | ||||||||
| 50,692,786 | ||||||||||
| Specialty Retail – 3.1% | ||||||||||
| 8,761,316 | Chow Tai Fook Jewellery Group, Ltd. | 9,432,259 | ||||||||
| 7,348,781 | L’Occitane International SA | 20,959,468 | ||||||||
| 397,370 | Lowe’s Cos., Inc. | 29,560,354 | ||||||||
| 167,675 | Tiffany & Co. | 14,757,076 | ||||||||
| 157,856 | Williams-Sonoma, Inc. | 12,582,702 | ||||||||
| 87,291,859 | ||||||||||
| Technology Hardware, Storage & Peripherals – 3.2% | ||||||||||
| 438,274 | Apple, Inc. | 54,534,434 | ||||||||
| 409,876 | EMC Corp. | 10,476,430 | ||||||||
| 19,694 | Samsung Electronics Co., Ltd. | 25,535,136 | ||||||||
| 90,546,000 | ||||||||||
| Textiles, Apparel & Luxury Goods – 3.0% | ||||||||||
| 176,538 | Cie Financiere Richemont SA | 14,216,626 | ||||||||
| 588,214 | Gildan Activewear, Inc. | 17,364,077 | ||||||||
| 181,206 | NIKE, Inc. – Class B | 18,180,398 | ||||||||
| 2,026,092 | Prada SpA | 12,270,886 | ||||||||
| 6,733,438 | Samsonite International SA | 23,341,027 | ||||||||
| 85,373,014 | ||||||||||
| Trading Companies & Distributors – 2.6% | ||||||||||
| 793,023 | Brenntag AG | 47,535,373 | ||||||||
| 179,930 | MSC Industrial Direct Co., Inc. – Class A | 12,990,946 | ||||||||
| 556,186 | NOW, Inc.*,# | 12,035,865 | ||||||||
| 72,562,184 | ||||||||||
| Wireless Telecommunication Services – 1.6% | ||||||||||
| 591,768 | T-Mobile U.S., Inc.* | 18,753,128 | ||||||||
| 12,723,700 | Tower Bersama Infrastructure Tbk PT | 9,222,311 | ||||||||
| 4,871,376 | Vodafone Group PLC | 15,917,669 | ||||||||
| 43,893,108 | ||||||||||
| Total Common Stocks (cost $2,261,238,603) | 2,769,340,181 | |||||||||
| Preferred Stocks – 1.2% | ||||||||||
| Automobiles – 1.2% | ||||||||||
| 122,666 | Volkswagen AG (cost $31,961,278) | 32,638,253 | ||||||||
| Investment Companies – 1.3% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 0.3% | ||||||||||
| 9,384,750 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 9,384,750 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Research Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Money Markets – 1.0% | ||||||||||
| 27,855,710 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | $ | 27,855,710 | |||||||
| Total Investment Companies (cost $37,240,460) | 37,240,460 | |||||||||
| Total Investments (total cost $2,330,440,341) – 100.7% | 2,839,218,894 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0.7)% | (19,339,268) | |||||||||
| Net Assets – 100% | $ | 2,819,879,626 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 1,734,078,501 | 61 | .1% | ||||
| United Kingdom | 205,287,534 | 7 | .2 | |||||
| Canada | 195,281,990 | 6 | .9 | |||||
| Japan | 153,050,829 | 5 | .4 | |||||
| Germany | 112,885,950 | 4 | .0 | |||||
| Switzerland | 109,501,744 | 3 | .9 | |||||
| Hong Kong | 98,503,353 | 3 | .5 | |||||
| France | 66,042,202 | 2 | .3 | |||||
| Netherlands | 44,738,286 | 1 | .6 | |||||
| South Korea | 25,535,136 | 0 | .9 | |||||
| Israel | 24,333,196 | 0 | .9 | |||||
| Taiwan | 18,240,083 | 0 | .6 | |||||
| Sweden | 18,078,537 | 0 | .6 | |||||
| Italy | 12,270,886 | 0 | .4 | |||||
| China | 12,168,356 | 0 | .4 | |||||
| Indonesia | 9,222,311 | 0 | .3 | |||||
| Total | $ | 2,839,218,894 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| 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. | |
| 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. | |
| 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. |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Global Research Fund | |||||||||||||||||||||
| Janus Cash Collateral Fund LLC | – | 10,615,225 | (1,230,475) | 9,384,750 | $ | – | $ | – | $ | 9,384,750 | |||||||||||
| Janus Cash Liquidity Fund LLC | 10,289,000 | 279,128,499 | (261,561,789) | 27,855,710 | – | 9,936 | 27,855,710 | ||||||||||||||
| Total | $ | – | $ | 9,936 | $ | 37,240,460 | |||||||||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Global Research Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Air Freight & Logistics | $ | – | $ | 26,983,850 | $ | – | |||||
| Auto Components | – | 36,848,014 | – | ||||||||
| Beverages | 31,692,771 | 52,013,524 | – | ||||||||
| Biotechnology | 141,016,279 | 17,302,138 | – | ||||||||
| Capital Markets | 59,969,310 | 50,715,859 | – | ||||||||
| Chemicals | 36,320,442 | 17,062,733 | – | ||||||||
| Commercial Banks | 63,676,375 | 96,262,349 | – | ||||||||
| Electrical Equipment | 27,120,823 | 23,330,505 | – | ||||||||
| Electronic Equipment, Instruments & Components | 15,636,078 | 30,973,937 | – | ||||||||
| Hotels, Restaurants & Leisure | 27,848,903 | 4,698,224 | – | ||||||||
| Household Durables | – | 10,700,551 | – | ||||||||
| Insurance | 29,804,121 | 99,872,137 | – | ||||||||
| Metals & Mining | – | 15,390,055 | – | ||||||||
| Oil, Gas & Consumable Fuels | 232,548,094 | 32,709,156 | – | ||||||||
| Pharmaceuticals | 149,403,285 | 35,684,077 | – | ||||||||
| Real Estate Management & Development | 52,040,603 | 14,369,278 | – | ||||||||
| Semiconductor & Semiconductor Equipment | 32,753,531 | 48,751,352 | – | ||||||||
| Software | 35,650,443 | 15,042,343 | – | ||||||||
| Specialty Retail | 56,900,132 | 30,391,727 | – | ||||||||
| Technology Hardware, Storage & Peripherals | 65,010,864 | 25,535,136 | – | ||||||||
| Textiles, Apparel & Luxury Goods | 35,544,475 | 49,828,539 | – | ||||||||
| Trading Companies & Distributors | 25,026,811 | 47,535,373 | – | ||||||||
| Wireless Telecommunication Services | 18,753,128 | 25,139,980 | – | ||||||||
| All Other | 825,482,876 | – | – | ||||||||
Preferred Stocks | – | 32,638,253 | – | ||||||||
Investment Companies | – | 37,240,460 | – | ||||||||
Total Assets | $ | 1,962,199,344 | $ | 877,019,550 | $ | – | |||||
12 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Global Research Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 2,330,440,341 | ||
Unaffiliated investments, at value(1) | $ | 2,801,978,434 | ||
| Affiliated investments, at value | 37,240,460 | |||
| Cash | 296,969 | |||
Cash denominated in foreign currency(2) | 52,296 | |||
| Non-interested Trustees’ deferred compensation | 55,412 | |||
| Receivables: | ||||
| Fund shares sold | 919,988 | |||
| Dividends | 2,826,979 | |||
| Dividends from affiliates | 2,887 | |||
| Foreign dividend tax reclaim | 1,366,757 | |||
| Other assets | 22,073 | |||
| Total Assets | 2,844,762,255 | |||
| Liabilities: | ||||
| Collateral for securities loaned (Note 2) | 9,384,750 | |||
| Payables: | ||||
| Investments purchased | 11,552,706 | |||
| Fund shares repurchased | 1,463,059 | |||
| Advisory fees | 1,363,780 | |||
| Fund administration fees | 23,971 | |||
| Transfer agent fees and expenses | 586,352 | |||
| 12b-1 Distribution and shareholder servicing fees | 21,051 | |||
| Non-interested Trustees’ fees and expenses | 16,508 | |||
| Non-interested Trustees’ deferred compensation fees | 55,412 | |||
| Accrued expenses and other payables | 415,040 | |||
| Total Liabilities | 24,882,629 | |||
| Net Assets | $ | 2,819,879,626 | ||
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 March 31, 2015 (unaudited) | Janus Global Research Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,784,725,155 | ||
| Undistributed net investment income/(loss) | 2,494,197 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (475,938,238) | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 508,598,512 | |||
| Total Net Assets | $ | 2,819,879,626 | ||
| Net Assets - Class A Shares | $ | 15,317,265 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 225,042 | |||
Net Asset Value Per Share(3) | $ | 68.06 | ||
Maximum Offering Price Per Share(4) | $ | 72.21 | ||
| Net Assets - Class C Shares | $ | 8,100,347 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 120,785 | |||
Net Asset Value Per Share(3) | $ | 67.06 | ||
| Net Assets - Class D Shares | $ | 1,526,412,130 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 22,702,545 | |||
| Net Asset Value Per Share | $ | 67.24 | ||
| Net Assets - Class I Shares | $ | 167,416,224 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,456,701 | |||
| Net Asset Value Per Share | $ | 68.15 | ||
| Net Assets - Class R Shares | $ | 3,713,075 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 54,945 | |||
| Net Asset Value Per Share | $ | 67.58 | ||
| Net Assets - Class S Shares | $ | 45,334,463 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 664,521 | |||
| Net Asset Value Per Share | $ | 68.22 | ||
| Net Assets - Class T Shares | $ | 1,053,586,122 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,683,668 | |||
| Net Asset Value Per Share | $ | 67.18 | ||
| (1) | Includes $9,105,293 of securities on loan. See Note 2 in Notes to Financial Statements. | |
| (2) | Includes cost of $52,296. | |
| (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 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Global Research Fund | |||
| Investment Income: | ||||
| Dividends | $ | 18,181,679 | ||
| Dividends from affiliates | 9,936 | |||
| Other income | 523 | |||
| Foreign tax withheld | (493,163) | |||
| Total Investment Income | 17,698,975 | |||
| Expenses: | ||||
| Advisory fees | 7,741,044 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 15,801 | |||
| Class C Shares | 35,083 | |||
| Class R Shares | 7,364 | |||
| Class S Shares | 54,237 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 881,714 | |||
| Class R Shares | 3,682 | |||
| Class S Shares | 54,237 | |||
| Class T Shares | 1,257,415 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 5,410 | |||
| Class C Shares | 3,237 | |||
| Class I Shares | 50,763 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 765 | |||
| Class C Shares | 555 | |||
| Class D Shares | 225,133 | |||
| Class I Shares | 2,922 | |||
| Class R Shares | 35 | |||
| Class S Shares | 361 | |||
| Class T Shares | 8,515 | |||
| Shareholder reports expense | 257,444 | |||
| Registration fees | 71,352 | |||
| Custodian fees | 57,904 | |||
| Professional fees | 62,773 | |||
| Non-interested Trustees’ fees and expenses | 30,530 | |||
| Fund administration fees | 111,546 | |||
| Other expenses | 60,809 | |||
| Total Expenses | 11,000,631 | |||
| Net Expenses | 11,000,631 | |||
| Net Investment Income/(Loss) | 6,698,344 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 125,257,132 | |||
| Total Net Realized Gain/(Loss) on Investments | 125,257,132 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 92,898,318 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 92,898,318 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 224,853,794 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Global | ||||||||
| Research Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 6,698,344 | $ | 27,315,976 | ||||
| Net realized gain/(loss) on investments | 125,257,132 | 229,553,363 | ||||||
| Change in unrealized net appreciation/depreciation | 92,898,318 | 56,234,409 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 224,853,794 | 313,103,748 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (101,448) | (45,451) | ||||||
| Class C Shares | (14,009) | – | ||||||
| Class D Shares | (14,817,350) | (7,681,506) | ||||||
| Class I Shares | (1,619,477) | (731,958) | ||||||
| Class R Shares | (15,485) | (1,823) | ||||||
| Class S Shares | (279,908) | (96,560) | ||||||
| Class T Shares | (9,346,521) | (4,662,261) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (26,194,198) | (13,219,559) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 3,862,591 | 1,758,437 | ||||||
| Class C Shares | 1,621,226 | 1,228,357 | ||||||
| Class D Shares | 19,208,628 | 35,548,025 | ||||||
| Class I Shares | 27,615,652 | 41,105,094 | ||||||
| Class R Shares | 1,129,646 | 1,188,352 | ||||||
| Class S Shares | 5,764,021 | 7,151,614 | ||||||
| Class T Shares | 39,642,473 | 55,178,795 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 92,694 | 41,453 | ||||||
| Class C Shares | 12,349 | – | ||||||
| Class D Shares | 14,345,625 | 7,456,417 | ||||||
| Class I Shares | 1,569,556 | 707,144 | ||||||
| Class R Shares | 12,799 | 1,360 | ||||||
| Class S Shares | 277,212 | 95,759 | ||||||
| Class T Shares | 9,149,779 | 4,571,095 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (1,190,381) | (3,336,241) | ||||||
| Class C Shares | (591,054) | (1,008,465) | ||||||
| Class D Shares | (65,146,393) | (124,634,022) | ||||||
| Class I Shares | (10,683,310) | (20,762,555) | ||||||
| Class R Shares | (274,371) | (330,511) | ||||||
| Class S Shares | (6,856,116) | (16,861,980) | ||||||
| Class T Shares | (59,166,285) | (125,570,320) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (19,603,659) | (136,472,192) | ||||||
| Net Increase/(Decrease) in Net Assets | 179,055,937 | 163,411,997 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 2,640,823,689 | 2,477,411,692 | ||||||
| End of period | $ | 2,819,879,626 | $ | 2,640,823,689 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 2,494,197 | $ | 21,990,051 | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Research Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $63.24 | $56.34 | $47.32 | $39.39 | $42.44 | $35.83 | $30.89 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.12(3) | 0.54(3) | 0.20 | 0.25 | 0.35 | 0.16 | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.24 | 6.58 | 9.01 | 7.78 | (2.96) | 6.51 | 4.97 | |||||||||||||||||||||||
| Total from Investment Operations | 5.36 | 7.12 | 9.21 | 8.03 | (2.61) | 6.67 | 4.94 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.54) | (0.22) | (0.19) | (0.10) | (0.44) | (0.06) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | – | –(4) | – | |||||||||||||||||||||||
| Total Distributions | (0.54) | (0.22) | (0.19) | (0.10) | (0.44) | (0.06) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $68.06 | $63.24 | $56.34 | $47.32 | $39.39 | $42.44 | $35.83 | |||||||||||||||||||||||
| Total Return* | 8.54% | 12.67% | 19.55% | 20.40% | (6.33)% | 18.64% | 16.00% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $15,317 | $11,627 | $11,746 | $11,173 | $2,144 | $756 | $85 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $12,676 | $12,200 | $12,240 | $8,144 | $1,645 | $291 | $7 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.96% | 0.97% | 1.09% | 1.20% | 1.16% | 1.28% | 1.40% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.96% | 0.91% | 1.03% | 1.20% | 1.16% | 1.27% | 0.93% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.36% | 0.88% | 0.57% | 0.55% | 0.29% | 0.58% | (3.12)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | 99% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 | ||||||||||||||||||||||||||||||
| (unaudited), each year or period ended September 30 and the | Janus Global Research Fund | |||||||||||||||||||||||||||||
| period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $62.16 | $55.58 | $46.88 | $39.27 | $42.48 | $36.11 | $31.24 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.13)(3) | 0.07(3) | (0.07) | (0.03) | 0.06 | 0.03 | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.16 | 6.51 | 8.77 | 7.64 | (2.99) | 6.40 | 4.90 | |||||||||||||||||||||||
| Total from Investment Operations | 5.03 | 6.58 | 8.70 | 7.61 | (2.93) | 6.43 | 4.87 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.13) | – | – | – | (0.28) | (0.06) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | – | –(4) | – | |||||||||||||||||||||||
| Total Distributions | (0.13) | – | – | – | (0.28) | (0.06) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $67.06 | $62.16 | $55.58 | $46.88 | $39.27 | $42.48 | $36.11 | |||||||||||||||||||||||
| Total Return* | 8.10% | 11.84% | 18.56% | 19.38% | (7.02)% | 17.79% | 15.60% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $8,100 | $6,513 | $5,646 | $2,971 | $1,624 | $447 | $188 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $7,036 | $6,091 | $4,529 | $2,064 | $1,238 | $248 | $28 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.72% | 1.73% | 1.86% | 2.04% | 1.93% | 1.95% | 1.55% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.72% | 1.67% | 1.79% | 2.04% | 1.93% | 1.95% | 1.31% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.40)% | 0.11% | (0.16)% | (0.40)% | (0.49)% | (0.03)% | (1.32)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | 99% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | 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 D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or period | Janus Global Research Fund | |||||||||||||||||||||||||
| ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $62.54 | $55.69 | $46.78 | $38.91 | $41.86 | $36.53 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.17(2) | 0.65(2) | 0.32 | 0.25 | 0.21 | 0.28 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.18 | 6.52 | 8.87 | 7.75 | (2.76) | 5.05 | ||||||||||||||||||||
| Total from Investment Operations | 5.35 | 7.17 | 9.19 | 8.00 | (2.55) | 5.33 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.65) | (0.32) | (0.28) | (0.13) | (0.40) | – | ||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (0.65) | (0.32) | (0.28) | (0.13) | (0.40) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $67.24 | $62.54 | $55.69 | $46.78 | $38.91 | $41.86 | ||||||||||||||||||||
| Total Return* | 8.63% | 12.92% | 19.76% | 20.55% | (6.21)% | 14.59% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,526,412 | $1,450,165 | $1,365,936 | $118,021 | $104,911 | $111,287 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,473,561 | $1,448,769 | $771,544 | $116,961 | $124,160 | $106,191 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.79% | 0.77% | 0.85% | 1.03% | 1.00% | 1.09% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.79% | 0.71% | 0.74% | 1.03% | 1.00% | 1.08% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.53% | 1.07% | 1.11% | 0.56% | 0.41% | 1.21% | ||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended | Janus Global Research Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $63.41 | $56.50 | $47.45 | $39.49 | $42.51 | $35.81 | $30.87 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.21(2) | 0.72(2) | 0.35 | 0.25 | 0.28 | 0.28 | 0.09 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.24 | 6.58 | 9.05 | 7.87 | (2.80) | 6.48 | 4.85 | |||||||||||||||||||||||
| Total from Investment Operations | 5.45 | 7.30 | 9.40 | 8.12 | (2.52) | 6.76 | 4.94 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.71) | (0.39) | (0.35) | (0.16) | (0.50) | (0.06) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | – | |||||||||||||||||||||||
| Total Distributions | (0.71) | (0.39) | (0.35) | (0.16) | (0.50) | (0.06) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $68.15 | $63.41 | $56.50 | $47.45 | $39.49 | $42.51 | $35.81 | |||||||||||||||||||||||
| Total Return* | 8.69% | 12.98% | 19.92% | 20.59% | (6.10)% | 18.93% | 16.00% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $167,416 | $137,266 | $103,604 | $59,140 | $33,967 | $14,228 | $37 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $150,826 | $120,064 | $82,735 | $41,438 | $25,488 | $8,698 | $31 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.68% | 0.67% | 0.80% | 0.97% | 0.96% | 0.96% | 0.43% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.68% | 0.62% | 0.72% | 0.97% | 0.96% | 0.96% | 0.39% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.65% | 1.16% | 0.91% | 0.66% | 0.52% | 1.34% | 1.01% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | 99% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class R Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Janus Global Research Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $62.75 | $55.95 | $52.58 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | (0.01)(2) | 0.31(2) | 0.03 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.20 | 6.55 | 3.34 | |||||||||||
| Total from Investment Operations | 5.19 | 6.86 | 3.37 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.36) | (0.06) | – | |||||||||||
| Distributions (from capital gains) | – | – | – | |||||||||||
| Total Distributions | (0.36) | (0.06) | – | |||||||||||
| Net Asset Value, End of Period | $67.58 | $62.75 | $55.95 | |||||||||||
| Total Return* | 8.31% | 12.27% | 6.41% | |||||||||||
| Net Assets, End of Period (in thousands) | $3,713 | $2,624 | $1,567 | |||||||||||
| Average Net Assets for the Period (in thousands) | $2,954 | $2,026 | $1,373 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.36% | 1.35% | 1.41% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.36% | 1.29% | 1.30% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.04)% | 0.51% | 0.61% | |||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | |||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Research Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $63.33 | $56.38 | $47.36 | $39.59 | $42.57 | $36.01 | $31.10 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.07(2) | 0.45(2) | 0.38 | 0.03 | 0.29 | 0.10 | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.24 | 6.62 | 8.77 | 7.93 | (3.02) | 6.52 | 4.94 | |||||||||||||||||||||||
| Total from Investment Operations | 5.31 | 7.07 | 9.15 | 7.96 | (2.73) | 6.62 | 4.91 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.42) | (0.12) | (0.13) | (0.19) | (0.25) | (0.06) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | – | –(5) | – | |||||||||||||||||||||||
| Total Distributions | (0.42) | (0.12) | (0.13) | (0.19) | (0.25) | (0.06) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $68.22 | $63.33 | $56.38 | $47.36 | $39.59 | $42.57 | $36.01 | |||||||||||||||||||||||
| Total Return* | 8.44% | 12.56% | 19.38% | 20.13% | (6.50)% | 18.40% | 15.80% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $45,334 | $42,894 | $47,077 | $3,895 | $192 | $13 | $13 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $43,509 | $45,522 | $26,983 | $3,136 | $154 | $12 | $2 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.11% | 1.10% | 1.17% | 1.38% | 1.35% | 1.45% | 1.42% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.11% | 1.04% | 1.07% | 1.38% | 1.35% | 1.45% | 1.16% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.20% | 0.73% | 0.79% | 0.20% | 0.21% | 0.40% | (1.18)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | 99% | |||||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Period from March 15, 2013 (inception date) through September 30, 2013. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Period from November 1, 2009 through September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
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Financial Highlights (continued)
Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | Janus Global Research Fund | |||||||||||||||||||||||||||||
| ended September 30 and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $62.46 | $55.62 | $46.72 | $38.85 | $41.80 | $35.23 | $27.28 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.15(2) | 0.60(2) | 0.38 | 0.22 | 0.12 | 0.19 | 0.15 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 5.17 | 6.52 | 8.77 | 7.71 | (2.70) | 6.38 | 8.05 | |||||||||||||||||||||||
| Total from Investment Operations | 5.32 | 7.12 | 9.15 | 7.93 | (2.58) | 6.57 | 8.20 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.60) | (0.28) | (0.25) | (0.06) | (0.37) | –(3) | (0.25) | |||||||||||||||||||||||
| Distributions (from capital gains) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | –(4) | –(4) | |||||||||||||||||||||||
| Total Distributions | (0.60) | (0.28) | (0.25) | (0.06) | (0.37) | – | (0.25) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $67.18 | $62.46 | $55.62 | $46.72 | $38.85 | $41.80 | $35.23 | |||||||||||||||||||||||
| Total Return* | 8.59% | 12.85% | 19.66% | 20.42% | (6.27)% | 18.67% | 30.46% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,053,586 | $989,734 | $941,836 | $110,487 | $93,622 | $114,874 | $203,125 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,008,695 | $992,504 | $557,218 | $108,203 | $118,574 | $142,843 | $166,030 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.86% | 0.85% | 0.93% | 1.12% | 1.10% | 1.18% | 1.25% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.86% | 0.79% | 0.81% | 1.11% | 1.10% | 1.18% | 1.24% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.45% | 1.00% | 1.03% | 0.49% | 0.30% | 0.47% | 0.56% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 23% | 43% | 67% | 67% | 78% | 68% | 99% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | 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.
20 | MARCH 31, 2015
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Global Research 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. 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
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Notes to Financial Statements (unaudited) (continued)
that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which
22 | MARCH 31, 2015
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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). 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 | ||||||||||||||
| Deutsche Bank AG | $ | 9,105,293 | $ | – | $ | (9,105,293) | $ | – | ||||||||||
| (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
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.
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
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Notes to Financial Statements (unaudited) (continued)
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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Base Fee | ||||||
| Fund | Rate (%) | |||||
| Janus Global Research Fund | 0.60 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Global Research Fund | MSCI World IndexSM | |||||
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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Global Research Fund | 0.58 | |||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Global Research Fund | 1.07 | |||||
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
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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.
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
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Global Research Fund | $ | 4,110 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Global Research Fund | $ | 111 | ||||
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As of March 31, 2015, 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 Research Fund - Class A Shares | – | % | – | % | ||||||
| Janus Global Research Fund - Class C Shares | – | – | ||||||||
| Janus Global Research Fund - Class D Shares | – | – | ||||||||
| Janus Global Research Fund - Class I Shares | 22 | 1 | ||||||||
| Janus Global Research Fund - Class R Shares | – | – | ||||||||
| Janus Global Research Fund - Class S Shares | – | – | ||||||||
| Janus Global Research Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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 Research Fund | $ | 2,331,959,969 | $ | 588,603,176 | $ | (81,344,251) | $ | 507,258,925 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
| Accumulated | |||||||||||||||||||||||
| September 30, | September 30, | No Expiration | Capital | ||||||||||||||||||||
| Fund | 2016 | 2017 | Short-Term | Long-Term | Losses | ||||||||||||||||||
Janus Global Research Fund(1) | $ | (7,723,818) | $ | (593,778,199) | $ | – | $ | – | $ | (601,502,017) | |||||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(597,640,108) should be available in the next fiscal year. |
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Notes to Financial Statements (unaudited) (continued)
| 5. | Capital Share Transactions |
| Janus Global | ||||||||||
| For the period ended March 31 (unaudited) | Research Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 58,128 | 28,560 | ||||||||
| Reinvested dividends and distributions | 1,467 | 712 | ||||||||
| Shares repurchased | (18,399) | (53,925) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 41,196 | (24,653) | ||||||||
| Shares Outstanding, Beginning of Period | 183,846 | 208,499 | ||||||||
| Shares Outstanding, End of Period | 225,042 | 183,846 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 25,162 | 20,016 | ||||||||
| Reinvested dividends and distributions | 198 | – | ||||||||
| Shares repurchased | (9,351) | (16,821) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 16,009 | 3,195 | ||||||||
| Shares Outstanding, Beginning of Period | 104,776 | 101,581 | ||||||||
| Shares Outstanding, End of Period | 120,785 | 104,776 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 297,930 | 590,112 | ||||||||
| Reinvested dividends and distributions | 229,935 | 129,654 | ||||||||
| Shares repurchased | (1,013,894) | (2,058,356) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (486,029) | (1,338,590) | ||||||||
| Shares Outstanding, Beginning of Period | 23,188,574 | 24,527,164 | ||||||||
| Shares Outstanding, End of Period | 22,702,545 | 23,188,574 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 431,849 | 659,261 | ||||||||
| Reinvested dividends and distributions | 24,827 | 12,131 | ||||||||
| Shares repurchased | (164,766) | (340,200) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 291,910 | 331,192 | ||||||||
| Shares Outstanding, Beginning of Period | 2,164,791 | 1,833,599 | ||||||||
| Shares Outstanding, End of Period | 2,456,701 | 2,164,791 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 17,283 | 19,177 | ||||||||
| Reinvested dividends and distributions | 204 | 23 | ||||||||
| Shares repurchased | (4,362) | (5,376) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 13,125 | 13,824 | ||||||||
| Shares Outstanding, Beginning of Period | 41,820 | 27,996 | ||||||||
| Shares Outstanding, End of Period | 54,945 | 41,820 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 87,849 | 116,146 | ||||||||
| Reinvested dividends and distributions | 4,374 | 1,640 | ||||||||
| Shares repurchased | (105,063) | (275,342) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (12,840) | (157,556) | ||||||||
| Shares Outstanding, Beginning of Period | 677,361 | 834,917 | ||||||||
| Shares Outstanding, End of Period | 664,521 | 677,361 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 615,005 | 911,626 | ||||||||
| Reinvested dividends and distributions | 146,749 | 79,539 | ||||||||
| Shares repurchased | (924,728) | (2,076,513) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (162,974) | (1,085,348) | ||||||||
| Shares Outstanding, Beginning of Period | 15,846,642 | 16,931,990 | ||||||||
| Shares Outstanding, End of Period | 15,683,668 | 15,846,642 | ||||||||
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| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Research Fund | $ | 610,449,215 | $ | 642,419,154 | $ | – | $ | – | ||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87464 | 125-24-93045 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Enterprise Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Enterprise Fund
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| 12 | ||
| 14 | ||
| 15 | ||
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Janus Enterprise Fund (unaudited)
FUND SNAPSHOT We believe that investing in companies with sustainable growth and high return on invested capital can drive consistent returns and allow us to outperform our benchmark and peers over time with moderate risk. We seek to identify mid-cap companies with high-quality management teams that wisely allocate capital to fund and drive growth over time. |  Brian Demain portfolio manager |
PERFORMANCE OVERVIEW
Janus Enterprise Fund’s Class T Shares returned 15.25% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell Midcap Growth Index, returned 11.53%.
INVESTMENT ENVIRONMENT
Mid-cap equities had strong gains during the sixth-month period, but the march forward was not without volatility. Mid-cap stocks sold off early in the fourth quarter as several data points showed the economy outside the U.S. was weakening. Markets then rose for much of the period but were volatile again in December as investors considered whether the sharp slide in oil prices was a consequence of declining expectations of global growth. Stocks continued to advance in the first quarter, but were volatile in January and March. The health care sector was a particular area of strength for the mid-cap market during the period.
PERFORMANCE DISCUSSION
The Fund outperformed its benchmark, the Russell Midcap Growth Index, during the period. We were pleased with our results, given the fact this is not our most ideal investment environment for relative outperformance. Our Fund tends to emphasize companies that we believe have more predictable business models, recurring revenue streams and strong competitive positioning that can allow the companies to take market share and experience sustainable, long-term growth. We believe this focus should help the Fund outperform when markets are down and drive relative outperformance over full market cycles. In market environments where mid caps are up more sharply, we would still expect to generate positive returns but would not always expect to outperform.
Our performance this period was driven by strong results from a number of companies in our portfolio. Sensata Technologies was our top contributor. The stock is a large holding in our portfolio, and is a good example of many of the characteristics we tend to look for in companies. Sensata creates sensors and controls that go into a number of durable goods. We think the company is poised for long-term growth as sensors continue to be used more heavily in automobiles. We also like that much of the content Sensata produces helps make automobiles more fuel efficient and safe, two enduring areas of focus for the auto industry. We believe the company has durable growth characteristics because once a Sensata sensor is engineered into a product, there is little incentive for that company to go back and design a different sensor into the product. The stock was up this period after reporting strong fourth quarter results that topped consensus expectations.
Cimpress, which changed its name from Vistaprint during the period, was also a large contributor to performance. The company uses its scale and high-volume printing presses to manage and produce small-volume printing orders of marketing collateral and business cards for a wide range of small businesses and consumers. In recent quarters, the company has been navigating an important transition as it creates more uniform pricing for the products it offers across different marketing channels. We believe the transition should ultimately result in better pricing, higher margins and more customer value created by Cimpress, but in prior quarters the move away from discounting select items alienated some customers and hurt previous quarterly results.
Pharmacyclics was another top contributor. The stock was up significantly in the first quarter of 2015 after it was announced that AbbVie had won a bidding war to acquire the company. The high interest Pharmacyclics received from other companies bidding for it was further validation of our view that its blood cancer treatments are truly innovative and offer significant growth potential.
While generally pleased with our performance during the period, we did hold some stocks that had disappointing results. Aimia was our largest detractor from relative performance. The Canadian-based company manages a number of frequent-flier and other customer loyalty programs for different businesses. A new Canadian law
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Janus Enterprise Fund (unaudited)
reducing interchange fees is a headwind for the company and weighed on the stock at the end of 2014, but we continue to like Aimia’s business model and long-term growth potential. Aimia gets paid as the customer for an airline company or other business earns their airline miles or other rewards points, then holds that cash until the customer redeems their miles or rewards. We believe this is a highly cash generative business model. Recent investments to improve the reward profile for the underlying customers should help accelerate growth for the company as it will make customers more incentivized to use their rewards programs.
Athenahealth was also a detractor. The company’s services help physician groups become more efficient by providing technology solutions around practice management, electronic recordkeeping and care-coordination services. The company has been very successful selling its solutions to the ambulatory market, and is now making a broader push into larger hospitals. There is some concern on the time it will take athenahealth to grow in the hospital market, but as more focus is put on wringing costs from the health care industry, we think the value proposition of athenahealth’s solutions will continue to be in greater demand.
Precision Castparts was another detractor. The company makes a number of parts for the aerospace industry and other end markets. The stock was down after the company missed earnings, due in part to lower demand for some of its products that serve the oil and gas markets, and also due to destocking by some of the customers who use Precision Castparts’ products. We continue to have conviction in the company. The parts Precision Castparts manufactures for airplanes must be lightweight, yet strong and durable to withstand extremely harsh temperatures and conditions. This requires a difficult manufacturing process, and we believe there are very few companies that manufacture these parts to the standard that an airplane or engine manufacturer needs. The unique positioning and difficulty of the manufacturing process presents a significant barrier to entry for competitors, in our opinion, and should set Precision Castparts up for long-term growth as airplane and engine manufacturers meet a record-level backlog of orders from airline carriers.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
Markets have placed a lot of focus on when the Federal Reserve (Fed) will start tightening monetary policy, and the effects that will have on equity markets. Given this focus, we would expect greater volatility ahead as the Fed moves closer to raising interest rates. From a relative performance standpoint, we like how the Fund is positioned for this type of investment environment. We have maintained a lower beta, and have focused on companies with higher operating margins, stronger balance sheets and better returns on capital than many companies in the index. We believe this focus should work to our advantage in a more volatile market environment.
Thank you for your investment in Janus Enterprise Fund.
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(unaudited)
Janus Enterprise Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Sensata Technologies Holding NV | 0.89% | |||
| Cimpress NV | 0.88% | |||
| Pharmacyclics, Inc. | 0.75% | |||
| TE Connectivity, Ltd. (U.S. Shares) | 0.70% | |||
| Verisk Analytics, Inc. – Class A | 0.52% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Aimia, Inc. | –0.25% | |||
| Solera Holdings, Inc. | –0.19% | |||
| athenahealth, Inc. | –0.15% | |||
| Precision Castparts Corp. | –0.15% | |||
| Colfax Corp. | –0.15% | |||
5 Top Performers – Sectors*
| Russell Midcap® | ||||||||||||
| Fund Weighting | Growth Index | |||||||||||
| Fund Contribution | (Average % of Equity) | Weighting | ||||||||||
| Energy | 2.21% | 2.22% | 5.26% | |||||||||
| Information Technology | 1.61% | 31.19% | 18.06% | |||||||||
| Health Care | 1.07% | 18.15% | 13.78% | |||||||||
| Industrials | 0.15% | 22.21% | 16.00% | |||||||||
| Telecommunication Services | 0.08% | 0.00% | 1.01% | |||||||||
5 Bottom Performers – Sectors*
| Russell Midcap® | ||||||||||||
| Fund Weighting | Growth Index | |||||||||||
| Fund Contribution | (Average % of Equity) | Weighting | ||||||||||
| Consumer Staples | –0.58% | 0.87% | 8.00% | |||||||||
| Other** | –0.48% | 3.91% | 0.00% | |||||||||
| Consumer Discretionary | –0.23% | 9.66% | 23.40% | |||||||||
| Financials | –0.19% | 10.11% | 9.47% | |||||||||
| Materials | –0.03% | 1.67% | 4.82% | |||||||||
| 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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Janus Enterprise Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Sensata Technologies Holding NV Electrical Equipment | 3.2% | |||
| Verisk Analytics, Inc. – Class A Professional Services | 3.0% | |||
| Crown Castle International Corp. Real Estate Investment Trusts (REITs) | 2.7% | |||
| TE Connectivity, Ltd. (U.S. Shares) Electronic Equipment, Instruments & Components | 2.4% | |||
| Lamar Advertising Co. – Class A Real Estate Investment Trusts (REITs) | 2.3% | |||
| 13.6% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (5.0)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Enterprise Fund – Class A Shares | |||||||||||||
| NAV | 15.09% | 17.00% | 16.22% | 11.14% | 10.95% | 1.16% | |||||||
| MOP | 8.48% | 10.27% | 14.85% | 10.48% | 10.66% | ||||||||
| Janus Enterprise Fund – Class C Shares | |||||||||||||
| NAV | 14.73% | 16.27% | 15.39% | 10.32% | 10.15% | 1.82% | |||||||
| CDSC | 13.73% | 15.27% | 15.39% | 10.32% | 10.15% | ||||||||
| Janus Enterprise Fund – Class D Shares(1) | 15.28% | 17.39% | 16.55% | 11.33% | 11.06% | 0.84% | |||||||
| Janus Enterprise Fund – Class I Shares | 15.30% | 17.46% | 16.66% | 11.28% | 11.04% | 0.75% | |||||||
| Janus Enterprise Fund – Class N Shares | 15.38% | 17.58% | 16.46% | 11.28% | 11.04% | 0.68% | |||||||
| Janus Enterprise Fund – Class R Shares | 14.95% | 16.71% | 15.87% | 10.74% | 10.55% | 1.42% | |||||||
| Janus Enterprise Fund – Class S Shares | 15.10% | 17.01% | 16.17% | 11.01% | 10.81% | 1.17% | |||||||
| Janus Enterprise Fund – Class T Shares | 15.25% | 17.30% | 16.46% | 11.28% | 11.04% | 0.92% | |||||||
| Russell Midcap® Growth Index | 11.53% | 15.56% | 16.43% | 10.19% | 10.40% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 1st | 2nd | ||||||||
| Morningstar Ranking – based on total return for Mid-Cap Growth Funds | – | 37/768 | 97/680 | 67/616 | 76/205 | ||||||||
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 | 5
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Janus Enterprise Fund (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.
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 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 July 12, 2012. Performance shown for periods prior to July 12, 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, and therefore the ranking for the period.
© 2015 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 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,150.90 | $ | 6.06 | $ | 1,000.00 | $ | 1,019.30 | $ | 5.69 | 1.13% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,147.30 | $ | 9.58 | $ | 1,000.00 | $ | 1,016.01 | $ | 9.00 | 1.79% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,152.80 | $ | 4.51 | $ | 1,000.00 | $ | 1,020.74 | $ | 4.23 | 0.84% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,153.00 | $ | 3.92 | $ | 1,000.00 | $ | 1,021.29 | $ | 3.68 | 0.73% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,153.80 | $ | 3.60 | $ | 1,000.00 | $ | 1,021.59 | $ | 3.38 | 0.67% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,149.50 | $ | 7.61 | $ | 1,000.00 | $ | 1,017.85 | $ | 7.14 | 1.42% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,151.00 | $ | 6.27 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.89 | 1.17% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,152.50 | $ | 4.94 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.63 | 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 182/365 (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 Enterprise Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 95.4% | ||||||||||
| Aerospace & Defense – 2.2% | ||||||||||
| 487,109 | HEICO Corp. – Class A | $ | 24,131,380 | |||||||
| 204,004 | Precision Castparts Corp. | 42,840,840 | ||||||||
| 161,765 | TransDigm Group, Inc. | 35,381,241 | ||||||||
| 102,353,461 | ||||||||||
| Air Freight & Logistics – 1.1% | ||||||||||
| 1,027,684 | Expeditors International of Washington, Inc. | 49,513,815 | ||||||||
| Airlines – 1.4% | ||||||||||
| 940,721 | Ryanair Holdings PLC (ADR) | 62,811,941 | ||||||||
| Biotechnology – 4.7% | ||||||||||
| 774,212 | Celgene Corp.*,† | 89,251,159 | ||||||||
| 323,492 | Incyte Corp.* | 29,651,277 | ||||||||
| 351,971 | Medivation, Inc.* | 45,428,897 | ||||||||
| 202,322 | Pharmacyclics, Inc.* | 51,784,316 | ||||||||
| 216,115,649 | ||||||||||
| Building Products – 0.7% | ||||||||||
| 498,856 | AO Smith Corp | 32,754,885 | ||||||||
| Capital Markets – 2.7% | ||||||||||
| 2,046,066 | LPL Financial Holdings, Inc.# | 89,740,455 | ||||||||
| 914,661 | TD Ameritrade Holding Corp. | 34,080,269 | ||||||||
| 123,820,724 | ||||||||||
| Chemicals – 1.8% | ||||||||||
| 226,570 | Air Products & Chemicals, Inc. | 34,275,510 | ||||||||
| 1,431,640 | Potash Corp. of Saskatchewan, Inc. (U.S. Shares)# | 46,170,390 | ||||||||
| 80,445,900 | ||||||||||
| Commercial Services & Supplies – 1.7% | ||||||||||
| 1,045,024 | Edenred | 26,046,723 | ||||||||
| 1,962,336 | Ritchie Bros Auctioneers, Inc. (U.S. Shares)# | 48,940,660 | ||||||||
| 74,987,383 | ||||||||||
| Diversified Consumer Services – 0.5% | ||||||||||
| 660,007 | ServiceMaster Global Holdings, Inc.* | 22,275,236 | ||||||||
| Diversified Financial Services – 1.7% | ||||||||||
| 1,272,909 | MSCI, Inc. | 78,042,051 | ||||||||
| Electrical Equipment – 4.0% | ||||||||||
| 636,128 | AMETEK, Inc. | 33,422,165 | ||||||||
| 2,552,309 | Sensata Technologies Holding NV* | 146,630,152 | ||||||||
| 180,052,317 | ||||||||||
| Electronic Equipment, Instruments & Components – 5.9% | ||||||||||
| 1,279,636 | Amphenol Corp. – Class A | 75,408,950 | ||||||||
| 2,871,591 | Flextronics International, Ltd.* | 36,397,416 | ||||||||
| 1,543,173 | National Instruments Corp. | 49,443,263 | ||||||||
| 1,503,736 | TE Connectivity, Ltd. (U.S. Shares) | 107,697,572 | ||||||||
| 268,947,201 | ||||||||||
| Food Products – 0.9% | ||||||||||
| 420,044 | Mead Johnson Nutrition Co. | 42,227,023 | ||||||||
| Health Care Equipment & Supplies – 4.7% | ||||||||||
| 2,633,015 | Boston Scientific Corp.* | 46,736,016 | ||||||||
| 149,682 | IDEXX Laboratories, Inc.*,# | 23,122,875 | ||||||||
| 1,274,076 | Masimo Corp.* | 42,019,027 | ||||||||
| 1,088,638 | Varian Medical Systems, Inc.* | 102,429,949 | ||||||||
| 214,307,867 | ||||||||||
| Health Care Providers & Services – 1.7% | ||||||||||
| 550,809 | Henry Schein, Inc.* | 76,903,953 | ||||||||
| Health Care Technology – 1.3% | ||||||||||
| 489,434 | athenahealth, Inc.*,# | 58,433,525 | ||||||||
| Hotels, Restaurants & Leisure – 1.1% | ||||||||||
| 1,086,401 | Dunkin’ Brands Group, Inc. | 51,669,232 | ||||||||
| Industrial Conglomerates – 1.0% | ||||||||||
| 276,183 | Roper Industries, Inc. | 47,503,476 | ||||||||
| Information Technology Services – 8.6% | ||||||||||
| 1,830,409 | Amdocs, Ltd. (U.S. Shares) | 99,574,250 | ||||||||
| 1,096,014 | Broadridge Financial Solutions, Inc. | 60,291,730 | ||||||||
| 800,581 | Fidelity National Information Services, Inc. | 54,487,543 | ||||||||
| 651,350 | Gartner, Inc.* | 54,615,698 | ||||||||
| 1,101,107 | Jack Henry & Associates, Inc. | 76,956,368 | ||||||||
| 447,554 | WEX, Inc.* | 48,049,397 | ||||||||
| 393,974,986 | ||||||||||
| Insurance – 1.9% | ||||||||||
| 921,701 | Aon PLC | 88,593,900 | ||||||||
| Internet & Catalog Retail – 0.4% | ||||||||||
| 577,779 | Wayfair, Inc. – Class A*,# | 18,558,261 | ||||||||
| Internet Software & Services – 1.8% | ||||||||||
| 752,140 | Cimpress NV*,# | 63,465,573 | ||||||||
| 88,872 | CoStar Group, Inc.* | 17,581,548 | ||||||||
| 81,047,121 | ||||||||||
| Life Sciences Tools & Services – 3.7% | ||||||||||
| 408,753 | Bio-Techne Corp. | 40,993,839 | ||||||||
| 102,643 | Mettler-Toledo International, Inc.* | 33,733,622 | ||||||||
| 1,019,302 | PerkinElmer, Inc. | 52,127,104 | ||||||||
| 345,773 | Waters Corp.* | 42,986,499 | ||||||||
| 169,841,064 | ||||||||||
| Machinery – 3.4% | ||||||||||
| 575,079 | Colfax Corp.* | 27,448,521 | ||||||||
| 3,127,311 | Rexnord Corp.* | 83,467,931 | ||||||||
| 464,839 | Wabtec Corp. | 44,164,353 | ||||||||
| 155,080,805 | ||||||||||
| Media – 2.4% | ||||||||||
| 1,803,340 | Aimia, Inc. | 18,383,701 | ||||||||
| 614,730 | Discovery Communications, Inc. – Class C* | 18,119,167 | ||||||||
| 896,465 | Markit, Ltd.* | 24,114,908 | ||||||||
| 594,267 | Omnicom Group, Inc. | 46,340,941 | ||||||||
| 106,958,717 | ||||||||||
| Oil, Gas & Consumable Fuels – 2.1% | ||||||||||
| 729,342 | MarkWest Energy Partners LP | 48,209,506 | ||||||||
| 787,004 | World Fuel Services Corp. | 45,236,990 | ||||||||
| 93,446,496 | ||||||||||
| Pharmaceuticals – 1.7% | ||||||||||
| 843,215 | Endo International PLC* | 75,636,385 | ||||||||
| Professional Services – 3.0% | ||||||||||
| 1,932,882 | Verisk Analytics, Inc. – Class A* | 138,007,775 | ||||||||
| Real Estate Investment Trusts (REITs) – 5.0% | ||||||||||
| 1,475,173 | Crown Castle International Corp. | 121,760,779 | ||||||||
| 1,789,137 | Lamar Advertising Co. – Class A | 106,042,150 | ||||||||
| 227,802,929 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Road & Rail – 0.8% | ||||||||||
| 205,720 | Canadian Pacific Railway, Ltd. (U.S. Shares) | $ | 37,585,044 | |||||||
| Semiconductor & Semiconductor Equipment – 5.7% | ||||||||||
| 6,783,344 | Atmel Corp. | 55,826,921 | ||||||||
| 848,566 | KLA-Tencor Corp. | 49,462,912 | ||||||||
| 5,594,936 | ON Semiconductor Corp.* | 67,754,675 | ||||||||
| 2,071,340 | Xilinx, Inc. | 87,617,682 | ||||||||
| 260,662,190 | ||||||||||
| Software – 9.2% | ||||||||||
| 181,903 | Apptio, Inc.*,§ | 4,128,216 | ||||||||
| 4,154,146 | Cadence Design Systems, Inc.* | 76,602,452 | ||||||||
| 161,302 | Constellation Software, Inc.# | 55,757,710 | ||||||||
| 172,635 | FactSet Research Systems, Inc.# | 27,483,492 | ||||||||
| 627,738 | Intuit, Inc. | 60,865,476 | ||||||||
| 850,299 | NICE Systems, Ltd. (ADR) | 51,808,718 | ||||||||
| 1,556,624 | Solera Holdings, Inc.† | 80,415,196 | ||||||||
| 1,015,024 | SS&C Technologies Holdings, Inc. | 63,235,995 | ||||||||
| 420,297,255 | ||||||||||
| Textiles, Apparel & Luxury Goods – 4.6% | ||||||||||
| 609,600 | Carter’s, Inc. | 56,369,712 | ||||||||
| 2,448,322 | Gildan Activewear, Inc.# | 72,274,465 | ||||||||
| 31,869,389 | Li & Fung, Ltd. | 31,088,410 | ||||||||
| 1,542,588 | Wolverine World Wide, Inc. | 51,599,569 | ||||||||
| 211,332,156 | ||||||||||
| Trading Companies & Distributors – 2.0% | ||||||||||
| 551,218 | Fastenal Co.# | 22,839,718 | ||||||||
| 437,427 | MSC Industrial Direct Co., Inc. – Class A | 31,582,229 | ||||||||
| 147,033 | WW Grainger, Inc.# | 34,671,852 | ||||||||
| 89,093,799 | ||||||||||
| Total Common Stocks (cost $2,734,053,840) | 4,351,084,522 | |||||||||
| Investment Companies – 9.6% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 4.2% | ||||||||||
| 193,365,765 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 193,365,765 | ||||||||
| Money Markets – 5.4% | ||||||||||
| 246,336,216 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 246,336,216 | ||||||||
| Total Investment Companies (cost $439,701,981) | 439,701,981 | |||||||||
| Total Investments (total cost $3,173,755,821) – 105.0% | 4,790,786,503 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (5.0)% | (229,398,756) | |||||||||
| Net Assets – 100% | $ | 4,561,387,747 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 4,315,803,833 | 90 | .1% | ||||
| Canada | 279,111,970 | 5 | .8 | |||||
| Ireland | 62,811,941 | 1 | .3 | |||||
| Israel | 51,808,718 | 1 | .1 | |||||
| Hong Kong | 31,088,410 | 0 | .7 | |||||
| France | 26,046,723 | 0 | .5 | |||||
| United Kingdom | 24,114,908 | 0 | .5 | |||||
| Total | $ | 4,790,786,503 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| Canadian Dollar 4/16/15 | 6,900,000 | $ | 5,447,569 | $ | (4,980) | |||||||
| Euro 4/16/15 | 19,600,000 | 21,076,176 | (234,516) | |||||||||
| 26,523,745 | (239,496) | |||||||||||
| Credit Suisse International: | ||||||||||||
| Canadian Dollar 4/9/15 | 17,950,000 | 14,172,806 | 205,598 | |||||||||
| Euro 4/9/15 | 16,900,000 | 18,170,969 | 828,011 | |||||||||
| 32,343,775 | 1,033,609 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| Canadian Dollar 4/9/15 | 21,300,000 | 16,817,870 | 287,953 | |||||||||
| Euro 4/9/15 | 26,700,000 | 28,707,981 | 638,611 | |||||||||
| 45,525,851 | 926,564 | |||||||||||
| JPMorgan Chase & Co.: Euro 4/16/15 | 2,450,000 | 2,634,522 | 43,563 | |||||||||
| RBC Capital Markets Corp.: | ||||||||||||
| Canadian Dollar 4/16/15 | 20,500,000 | 16,184,807 | (65,287) | |||||||||
| Euro 4/16/15 | 11,400,000 | 12,258,592 | (36,652) | |||||||||
| 28,443,399 | (101,939) | |||||||||||
| Total | $ | 135,471,292 | $ | 1,662,301 | ||||||||
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)
| Russell Midcap® Growth Index | Measures the performance of those Russell Midcap® Index companies with higher price-to-book ratios and higher 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. | |
| † | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Enterprise Fund | $ | 89,234,000 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Enterprise Fund | ||||||||||||||
| Apptio, Inc. | 5/2/13 | $ | 4,128,216 | $ | 4,128,216 | 0.1 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Enterprise Fund | |||||||||||||||||||||
| Janus Cash Collateral Fund LLC | 190,422,903 | 643,805,752 | (640,862,890) | 193,365,765 | $ | – | $ | 258,442(1) | $ | 193,365,765 | |||||||||||
| Janus Cash Liquidity Fund LLC | 116,738,743 | 471,210,473 | (341,613,000) | 246,336,216 | – | 83,443 | 246,336,216 | ||||||||||||||
| Total | $ | – | $ | 341,885 | $ | 439,701,981 | |||||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Enterprise Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Commercial Services & Supplies | $ | 48,940,660 | $ | 26,046,723 | $ | – | |||||
| Software | 416,169,039 | – | 4,128,216 | ||||||||
| Textiles, Apparel & Luxury Goods | 180,243,746 | 31,088,410 | – | ||||||||
| All Other | 3,644,467,728 | – | – | ||||||||
Investment Companies | – | 439,701,981 | – | ||||||||
| Total Investments in Securities | $ | 4,289,821,173 | $ | 496,837,114 | $ | 4,128,216 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 2,003,736 | $ | – | |||||
Total Assets | $ | 4,289,821,173 | $ | 498,840,850 | $ | 4,128,216 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 341,435 | $ | – | |||||
| (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 | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Enterprise Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 3,173,755,821 | ||
Unaffiliated investments, at value(1) | $ | 4,351,084,522 | ||
| Affiliated investments, at value | 439,701,981 | |||
Cash denominated in foreign currency(2) | 54,504 | |||
| Forward currency contracts | 2,003,736 | |||
| Closed foreign currency contracts | 167 | |||
| Non-interested Trustees’ deferred compensation | 89,493 | |||
| Receivables: | ||||
| Fund shares sold | 10,041,507 | |||
| Dividends | 1,857,298 | |||
| Dividends from affiliates | 17,366 | |||
| Other assets | 28,557 | |||
| Total Assets | 4,804,879,131 | |||
| Liabilities: | ||||
| Due to custodian | 215,837 | |||
| Collateral for securities loaned (Note 3) | 193,365,765 | |||
| Forward currency contracts | 341,435 | |||
| Closed foreign currency contracts | 73,855 | |||
| Payables: | ||||
| Investments purchased | 42,507,860 | |||
| Fund shares repurchased | 3,293,618 | |||
| Advisory fees | 2,406,052 | |||
| Fund administration fees | 37,595 | |||
| Transfer agent fees and expenses | 784,769 | |||
| 12b-1 Distribution and shareholder servicing fees | 182,073 | |||
| Non-interested Trustees’ fees and expenses | 22,707 | |||
| Non-interested Trustees’ deferred compensation fees | 89,493 | |||
| Accrued expenses and other payables | 170,325 | |||
| Total Liabilities | 243,491,384 | |||
| Net Assets | $ | 4,561,387,747 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Enterprise Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,812,479,203 | ||
| Undistributed net investment income/(loss) | 10,827,866 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 119,375,885 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,618,704,793 | |||
| Total Net Assets | $ | 4,561,387,747 | ||
| Net Assets - Class A Shares | $ | 177,527,255 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,946,145 | |||
Net Asset Value Per Share(3) | $ | 91.22 | ||
Maximum Offering Price Per Share(4) | $ | 96.79 | ||
| Net Assets - Class C Shares | $ | 63,497,881 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 729,784 | |||
Net Asset Value Per Share(3) | $ | 87.01 | ||
| Net Assets - Class D Shares | $ | 1,328,712,709 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,344,061 | |||
| Net Asset Value Per Share | $ | 92.63 | ||
| Net Assets - Class I Shares | $ | 806,714,940 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,665,370 | |||
| Net Asset Value Per Share | $ | 93.10 | ||
| Net Assets - Class N Shares | $ | 222,056,389 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,380,785 | |||
| Net Asset Value Per Share | $ | 93.27 | ||
| Net Assets - Class R Shares | $ | 90,371,258 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,011,274 | |||
| Net Asset Value Per Share | $ | 89.37 | ||
| Net Assets - Class S Shares | $ | 255,280,577 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,809,788 | |||
| Net Asset Value Per Share | $ | 90.86 | ||
| Net Assets - Class T Shares | $ | 1,617,226,738 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 17,528,366 | |||
| Net Asset Value Per Share | $ | 92.27 | ||
| (1) | Includes $188,120,472 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes cost of $54,504. | |
| (3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
| (4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Enterprise Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 258,442 | ||
| Dividends | 28,453,827 | |||
| Dividends from affiliates | 83,443 | |||
| Foreign tax withheld | (391,746) | |||
| Total Investment Income | 28,403,966 | |||
| Expenses: | ||||
| Advisory fees | 12,475,251 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 166,140 | |||
| Class C Shares | 260,674 | |||
| Class R Shares | 194,599 | |||
| Class S Shares | 282,688 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 745,171 | |||
| Class R Shares | 97,300 | |||
| Class S Shares | 282,688 | |||
| Class T Shares | 1,744,163 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 136,125 | |||
| Class C Shares | 28,443 | |||
| Class I Shares | 191,139 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 7,296 | |||
| Class C Shares | 3,911 | |||
| Class D Shares | 188,003 | |||
| Class I Shares | 12,428 | |||
| Class N Shares | 502 | |||
| Class R Shares | 716 | |||
| Class S Shares | 1,438 | |||
| Class T Shares | 9,039 | |||
| Shareholder reports expense | 214,684 | |||
| Registration fees | 115,697 | |||
| Custodian fees | 22,343 | |||
| Professional fees | 33,528 | |||
| Non-interested Trustees’ fees and expenses | 43,668 | |||
| Fund administration fees | 163,161 | |||
| Other expenses | 82,867 | |||
| Total Expenses | 17,503,662 | |||
| Less: Excess Expense Reimbursement | (730) | |||
| Net Expenses | 17,502,932 | |||
| Net Investment Income/(Loss) | 10,901,034 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 157,095,923 | |||
| Total Net Realized Gain/(Loss) on Investments | 157,095,923 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 390,296,012 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 390,296,012 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 558,292,969 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus | ||||||||
| Enterprise Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 10,901,034 | $ | 24,696 | ||||
| Net realized gain/(loss) on investments | 157,095,923 | 235,047,187 | ||||||
| Change in unrealized net appreciation/depreciation | 390,296,012 | 145,606,344 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 558,292,969 | 380,678,227 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class D Shares | (371,719) | (1,574,457) | ||||||
| Class I Shares | (406,935) | (1,226,479) | ||||||
| Class N Shares | (131,019) | (38,396) | ||||||
| Class T Shares | (145,469) | (1,154,367) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (6,818,340) | (5,187,737) | ||||||
| Class C Shares | (2,966,580) | (2,057,270) | ||||||
| Class D Shares | (68,060,181) | (59,385,708) | ||||||
| Class I Shares | (32,562,629) | (27,253,992) | ||||||
| Class N Shares | (7,074,679) | (717,033) | ||||||
| Class R Shares | (4,272,568) | (3,334,026) | ||||||
| Class S Shares | (12,134,743) | (13,940,884) | ||||||
| Class T Shares | (76,075,338) | (59,092,470) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (211,020,200) | (174,962,819) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 73,056,498 | 39,659,375 | ||||||
| Class C Shares | 14,713,177 | 15,508,422 | ||||||
| Class D Shares | 32,157,550 | 52,943,933 | ||||||
| Class I Shares | 228,691,130 | 158,713,996 | ||||||
| Class N Shares | 129,840,403 | 71,727,680 | ||||||
| Class R Shares | 20,036,591 | 24,688,812 | ||||||
| Class S Shares | 70,570,971 | 54,616,007 | ||||||
| Class T Shares | 316,295,849 | 264,734,719 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 5,078,224 | 3,951,671 | ||||||
| Class C Shares | 2,547,736 | 1,622,727 | ||||||
| Class D Shares | 67,268,390 | 59,992,505 | ||||||
| Class I Shares | 18,470,007 | 15,761,735 | ||||||
| Class N Shares | 7,205,698 | 755,429 | ||||||
| Class R Shares | 3,891,955 | 2,997,804 | ||||||
| Class S Shares | 12,094,020 | 13,900,200 | ||||||
| Class T Shares | 74,921,491 | 59,272,086 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (16,940,418) | (39,580,205) | ||||||
| Class C Shares | (5,464,107) | (7,370,486) | ||||||
| Class D Shares | (58,006,528) | (114,963,599) | ||||||
| Class I Shares | (44,984,125) | (152,122,917) | ||||||
| Class N Shares | (10,003,441) | (4,825,429) | ||||||
| Class R Shares | (10,756,718) | (21,107,531) | ||||||
| Class S Shares | (48,274,518) | (133,240,178) | ||||||
| Class T Shares | (145,710,313) | (215,142,082) | ||||||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
| Janus | ||||||||
| Enterprise Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 736,699,522 | 152,494,674 | ||||||
| Net Increase/(Decrease) in Net Assets | 1,083,972,291 | 358,210,082 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 3,477,415,456 | 3,119,205,374 | ||||||
| End of period | $ | 4,561,387,747 | $ | 3,477,415,456 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 10,827,866 | $ | 981,974 | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $83.97 | $79.08 | $64.53 | $52.43 | $52.14 | $42.46 | $36.63 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.10(3)(4) | (0.21)(3) | 0.12 | (0.27) | (0.12) | (0.11) | –(5) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.12 | 9.44 | 16.70 | 12.37 | 0.41 | 9.79 | 5.83 | |||||||||||||||||||||||
| Total from Investment Operations | 12.22 | 9.23 | 16.82 | 12.10 | 0.29 | 9.68 | 5.83 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $91.22 | $83.97 | $79.08 | $64.53 | $52.43 | $52.14 | $42.46 | |||||||||||||||||||||||
| Total Return* | 15.09% | 12.07% | 26.78% | 23.08% | 0.56% | 22.80% | 15.92% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $177,527 | $104,169 | $93,983 | $70,811 | $61,773 | $75,980 | $74,709 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $133,277 | $101,667 | $80,016 | $69,350 | $77,990 | $76,703 | $79,792 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.13% | 1.16% | 1.12% | 1.23% | 1.05% | 1.15% | 1.21% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.13% | 1.16% | 1.09% | 1.17% | 1.04% | 1.15% | 1.19% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.23%(4) | (0.25)% | 0.18% | (0.39)% | (0.45)% | (0.41)% | (0.23)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $80.56 | $76.52 | $62.98 | $51.56 | $51.65 | $42.36 | $36.63 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.15)(3)(4) | (0.71)(3) | (0.14) | (0.73) | (0.61) | (0.48) | (0.10) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 11.57 | 9.09 | 15.95 | 12.15 | 0.52 | 9.77 | 5.83 | |||||||||||||||||||||||
| Total from Investment Operations | 11.42 | 8.38 | 15.81 | 11.42 | (0.09) | 9.29 | 5.73 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $87.01 | $80.56 | $76.52 | $62.98 | $51.56 | $51.65 | $42.36 | |||||||||||||||||||||||
| Total Return* | 14.73% | 11.34% | 25.81% | 22.15% | (0.17)% | 21.93% | 15.64% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $63,498 | $47,481 | $35,702 | $25,271 | $21,194 | $23,449 | $21,706 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $52,278 | $40,463 | $29,470 | $24,529 | $25,691 | $22,965 | $21,146 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.79% | 1.82% | 1.86% | 1.96% | 1.77% | 1.96% | 2.39% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.79% | 1.82% | 1.85% | 1.92% | 1.77% | 1.93% | 1.94% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.35)%(4) | (0.90)% | (0.59)% | (1.13)% | (1.18)% | (1.18)% | (0.98)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from KLA-Tencor Corp. in November 2014. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.31 and 0.72%, respectively, for Class A Shares and $0.30 and 0.72%, respectively, for Class C Shares. | |
| (5) | 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 | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or period | Janus Enterprise Fund | |||||||||||||||||||||||||
| ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $85.09 | $79.95 | $65.07 | $52.71 | $52.30 | $45.90 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.29(2)(3) | 0.05(2) | 0.25 | (0.05) | 0.05 | 0.06 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.25 | 9.55 | 16.90 | 12.41 | 0.36 | 6.34 | ||||||||||||||||||||
| Total from Investment Operations | 12.54 | 9.60 | 17.15 | 12.36 | 0.41 | 6.40 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.03) | (0.12) | – | – | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | ||||||||||||||||||||
| Total Distributions | (5.00) | (4.46) | (2.27) | – | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $92.63 | $85.09 | $79.95 | $65.07 | $52.71 | $52.30 | ||||||||||||||||||||
| Total Return* | 15.28% | 12.43% | 27.07% | 23.45% | 0.78% | 13.94% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,328,713 | $1,178,379 | $1,105,852 | $914,181 | $788,063 | $814,176 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,245,363 | $1,175,886 | $1,005,221 | $897,574 | $910,089 | $774,796 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.84% | 0.84% | 0.86% | 0.86% | 0.83% | 0.88% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.84% | 0.84% | 0.86% | 0.86% | 0.83% | 0.88% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.66%(3) | 0.06% | 0.41% | (0.08)% | (0.23)% | (0.08)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the period | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $85.51 | $80.37 | $65.32 | $52.86 | $52.39 | $42.51 | $36.63 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.29(2)(3) | 0.13(2) | 0.29 | 0.05 | 0.16 | 0.11 | 0.05 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.33 | 9.55 | 17.03 | 12.41 | 0.31 | 9.77 | 5.83 | |||||||||||||||||||||||
| Total from Investment Operations | 12.62 | 9.68 | 17.32 | 12.46 | 0.47 | 9.88 | 5.88 | |||||||||||||||||||||||
| Less Distributions: | �� | |||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.06) | (0.20) | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (5.03) | (4.54) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $93.10 | $85.51 | $80.37 | $65.32 | $52.86 | $52.39 | $42.51 | |||||||||||||||||||||||
| Total Return* | 15.30% | 12.47% | 27.23% | 23.57% | 0.90% | 23.24% | 16.05% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $806,715 | $547,204 | $490,913 | $367,419 | $344,500 | $417,965 | $416,272 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $631,177 | $545,347 | $415,493 | $373,454 | $464,985 | $487,246 | $395,409 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.73% | 0.75% | 0.74% | 0.75% | 0.72% | 0.81% | 0.82% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.73% | 0.75% | 0.74% | 0.75% | 0.72% | 0.74% | 0.81% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.67%(3) | 0.16% | 0.53% | 0.01% | (0.13)% | (0.01)% | 0.16% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
| * | 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 September 30, 2010. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from KLA-Tencor Corp. in November 2014. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.32 and 0.72%, respectively, for Class D Shares and $0.32 and 0.72%, respectively, for Class I Shares. | |
| (4) | Period from November 1, 2009 through September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended | Janus Enterprise Fund | |||||||||||||||||
| March 31, 2015 (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $85.63 | $80.41 | $65.32 | $61.87 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.29(2)(3) | 0.30(2) | 0.29 | 0.01 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.41 | 9.49 | 17.07 | 3.44 | ||||||||||||||
| Total from Investment Operations | 12.70 | 9.79 | 17.36 | 3.45 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.09) | (0.23) | – | – | ||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | ||||||||||||||
| Total Distributions | (5.06) | (4.57) | (2.27) | – | ||||||||||||||
| Net Asset Value, End of Period | $93.27 | $85.63 | $80.41 | $65.32 | ||||||||||||||
| Total Return* | 15.38% | 12.62% | 27.30% | 5.58% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $222,056 | $81,346 | $12,196 | $2,354 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $143,142 | $30,878 | $8,864 | $254 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.68% | 0.95% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.67% | 0.68% | 0.68% | 0.92% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.65%(3) | 0.36% | 0.57% | 0.37% | ||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $82.46 | $77.93 | $63.83 | $52.01 | $51.93 | $42.41 | $36.63 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.02(2)(3) | (0.42)(2) | (0.12) | (0.65) | (0.34) | (0.24) | (0.05) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 11.85 | 9.29 | 16.49 | 12.47 | 0.42 | 9.76 | 5.83 | |||||||||||||||||||||||
| Total from Investment Operations | 11.87 | 8.87 | 16.37 | 11.82 | 0.08 | 9.52 | 5.78 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $89.37 | $82.46 | $77.93 | $63.83 | $52.01 | $51.93 | $42.41 | |||||||||||||||||||||||
| Total Return* | 14.95% | 11.78% | 26.36% | 22.73% | 0.15% | 22.45% | 15.78% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $90,371 | $70,573 | $60,299 | $48,109 | $49,505 | $51,998 | $43,798 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $78,053 | $66,768 | $53,140 | $53,330 | $59,371 | $48,548 | $41,524 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.42% | 1.42% | 1.43% | 1.44% | 1.43% | 1.47% | 1.57% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.42% | 1.42% | 1.43% | 1.44% | 1.43% | 1.47% | 1.55% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.04%(3) | (0.51)% | (0.16)% | (0.67)% | (0.83)% | (0.72)% | (0.58)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
| * | 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 12, 2012 (inception date) through September 30, 2012. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from KLA-Tencor Corp. in November 2014. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.32 and 0.72%, respectively, for Class N Shares and $0.31 and 0.72%, respectively, for Class R Shares. | |
| (4) | Period from November 1, 2009 through September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 S Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year or | ||||||||||||||||||||||||||||||
| period ended September 30 and the period | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $83.65 | $78.80 | $64.36 | $52.31 | $52.09 | $42.45 | $36.63 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.12(3)(4) | (0.23)(3) | 0.06 | (0.33) | (0.20) | (0.15) | (0.02) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.05 | 9.42 | 16.65 | 12.38 | 0.42 | 9.79 | 5.84 | |||||||||||||||||||||||
| Total from Investment Operations | 12.17 | 9.19 | 16.71 | 12.05 | 0.22 | 9.64 | 5.82 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $90.86 | $83.65 | $78.80 | $64.36 | $52.31 | $52.09 | $42.45 | |||||||||||||||||||||||
| Total Return* | 15.10% | 12.07% | 26.68% | 23.04% | 0.42% | 22.71% | 15.89% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $255,281 | $199,831 | $252,212 | $196,402 | $186,891 | $213,550 | $218,354 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $226,772 | $228,373 | $216,096 | $192,030 | $226,170 | $213,868 | $215,750 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.17% | 1.17% | 1.18% | 1.19% | 1.18% | 1.22% | 1.31% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.17% | 1.16% | 1.17% | 1.19% | 1.18% | 1.22% | 1.30% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.29%(4) | (0.29)% | 0.09% | (0.41)% | (0.58)% | (0.48)% | (0.34)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the | ||||||||||||||||||||||||||||||
| period ended March 31, 2015 (unaudited), | ||||||||||||||||||||||||||||||
| each year or period ended September 30 | Janus Enterprise Fund | |||||||||||||||||||||||||||||
| and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $84.78 | $79.71 | $64.92 | $52.63 | $52.27 | $42.50 | $35.71 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.24(3)(4) | (0.01)(3) | 0.21 | (0.12) | (0.03) | (0.04) | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.22 | 9.50 | 16.85 | 12.41 | 0.39 | 9.81 | 6.80 | |||||||||||||||||||||||
| Total from Investment Operations | 12.46 | 9.49 | 17.06 | 12.29 | 0.36 | 9.77 | 6.79 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.01) | (0.08) | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (4.97) | (4.34) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (4.98) | (4.42) | (2.27) | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $92.27 | $84.78 | $79.71 | $64.92 | $52.63 | $52.27 | $42.50 | |||||||||||||||||||||||
| Total Return* | 15.25% | 12.33% | 27.00% | 23.35% | 0.69% | 22.99% | 19.01% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,617,227 | $1,248,431 | $1,068,048 | $826,846 | $723,261 | $816,087 | $1,521,578 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,399,163 | $1,179,729 | $938,951 | $814,223 | $900,476 | $1,074,011 | $1,335,838 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.92% | 0.92% | 0.93% | 0.94% | 0.93% | 0.95% | 0.99% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.92% | 0.92% | 0.92% | 0.94% | 0.93% | 0.95% | 0.98% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.55%(4) | (0.01)% | 0.34% | (0.16)% | (0.34)% | (0.23)% | (0.09)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 9% | 17% | 17% | 14% | 19% | 22% | 41% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from KLA-Tencor Corp. in November 2014. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.31 and 0.72%, respectively, for Class S Shares and $0.31 and 0.72%, respectively, for Class T Shares. |
See Notes to Financial Statements.
20 | MARCH 31, 2015
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Enterprise 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is
22 | MARCH 31, 2015
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recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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,
Janus Investment Fund | 23
Table of Contents
Notes to Financial Statements (unaudited) (continued)
options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
24 | MARCH 31, 2015
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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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Enterprise Fund | $ | 142,849,885 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| Asset Derivatives | Liability Derivatives | |||||||||||
| Statement of Assets | Statement of Assets | |||||||||||
| Derivatives not accounted for as hedging instruments | and Liabilities Location | Fair Value | and Liabilities Location | Fair Value | ||||||||
Janus Enterprise Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 2,003,736 | Forward currency contracts | $ | 341,435 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Janus Enterprise Fund | ||||
| Currency Contracts | $ | 22,444,363 | ||
| 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 | |||
Janus Enterprise Fund | ||||
| Currency Contracts | $ | (2,209,624 | ) | |
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 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
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Notes to Financial Statements (unaudited) (continued)
the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
26 | MARCH 31, 2015
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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 March 31, 2015” 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 | ||||||||||||||
| Credit Suisse International | $ 1,033,609 | $– | $ – | $1,033,609 | ||||||||||||||
| Deutsche Bank AG | 188,120,472 | – | (188,120,472) | – | ||||||||||||||
| HSBC Securities (USA), Inc. | 926,564 | – | – | 926,564 | ||||||||||||||
| JPMorgan Chase & Co. | 43,563 | – | – | 43,563 | ||||||||||||||
| Total | $190,124,208 | $– | $(188,120,472) | $2,003,736 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $239,496 | $– | $– | $239,496 | ||||||||||||||
| RBC Capital Markets Corp. | 101,939 | – | – | 101,939 | ||||||||||||||
| Total | $341,435 | $– | $– | $341,435 | ||||||||||||||
| (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.
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
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
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.
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 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.
| 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 Enterprise Fund | All Asset Levels | 0.64 | ||||||||
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
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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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Enterprise Fund | 0.87 | |||||
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
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Enterprise Fund | $ | 15,389 | ||||
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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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Enterprise Fund | $ | 930 | ||||
| 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 March 31, 2015 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 Enterprise Fund | $ | 3,173,793,469 | $ | 1,660,830,225 | $ | (43,837,191) | $ | 1,616,993,034 | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
| Accumulated | |||||||||||||||||||
| September 30, | No Expiration | Capital | |||||||||||||||||
| Fund | 2016 | Short-Term | Long-Term | Losses | |||||||||||||||
Janus Enterprise Fund(1) | $ | (33,811,386) | $ | – | $ | – | $ | (33,811,386) | |||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(29,275,428) should be available in the next fiscal year. |
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Notes to Financial Statements (unaudited) (continued)
| 6. | Capital Share Transactions |
| Janus | ||||||||||
| For the period ended March 31 (unaudited) | Enterprise Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 839,439 | 479,488 | ||||||||
| Reinvested dividends and distributions | 60,715 | 50,514 | ||||||||
| Shares repurchased | (194,585) | (477,857) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 705,569 | 52,145 | ||||||||
| Shares Outstanding, Beginning of Period | 1,240,576 | 1,188,431 | ||||||||
| Shares Outstanding, End of Period | 1,946,145 | 1,240,576 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 174,508 | 194,342 | ||||||||
| Reinvested dividends and distributions | 31,883 | 21,513 | ||||||||
| Shares repurchased | (66,018) | (93,019) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 140,373 | 122,836 | ||||||||
| Shares Outstanding, Beginning of Period | 589,411 | 466,575 | ||||||||
| Shares Outstanding, End of Period | 729,784 | 589,411 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 363,721 | 638,795 | ||||||||
| Reinvested dividends and distributions | 792,885 | 758,822 | ||||||||
| Shares repurchased | (661,283) | (1,380,377) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 495,323 | 17,240 | ||||||||
| Shares Outstanding, Beginning of Period | 13,848,738 | 13,831,498 | ||||||||
| Shares Outstanding, End of Period | 14,344,061 | 13,848,738 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 2,557,866 | 1,897,940 | ||||||||
| Reinvested dividends and distributions | 216,606 | 198,411 | ||||||||
| Shares repurchased | (508,440) | (1,805,281) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,266,032 | 291,070 | ||||||||
| Shares Outstanding, Beginning of Period | 6,399,338 | 6,108,268 | ||||||||
| Shares Outstanding, End of Period | 8,665,370 | 6,399,338 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 1,458,640 | 845,728 | ||||||||
| Reinvested dividends and distributions | 84,396 | 9,507 | ||||||||
| Shares repurchased | (112,226) | (56,927) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,430,810 | 798,308 | ||||||||
| Shares Outstanding, Beginning of Period | 949,975 | 151,667 | ||||||||
| Shares Outstanding, End of Period | 2,380,785 | 949,975 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 234,768 | 304,814 | ||||||||
| Reinvested dividends and distributions | 47,469 | 38,948 | ||||||||
| Shares repurchased | (126,820) | (261,636) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 155,417 | 82,126 | ||||||||
| Shares Outstanding, Beginning of Period | 855,857 | 773,731 | ||||||||
| Shares Outstanding, End of Period | 1,011,274 | 855,857 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 833,246 | 666,791 | ||||||||
| Reinvested dividends and distributions | 145,204 | 178,391 | ||||||||
| Shares repurchased | (557,570) | (1,656,907) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 420,880 | (811,725) | ||||||||
| Shares Outstanding, Beginning of Period | 2,388,908 | 3,200,633 | ||||||||
| Shares Outstanding, End of Period | 2,809,788 | 2,388,908 | ||||||||
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| Janus | ||||||||||
| For the period ended March 31 (unaudited) | Enterprise Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 3,577,885 | 3,169,012 | ||||||||
| Reinvested dividends and distributions | 886,435 | 751,898 | ||||||||
| Shares repurchased | (1,660,989) | (2,595,651) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,803,331 | 1,325,259 | ||||||||
| Shares Outstanding, Beginning of Period | 14,725,035 | 13,399,776 | ||||||||
| Shares Outstanding, End of Period | 17,528,366 | 14,725,035 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Enterprise Fund | $ | 815,992,359 | $ | 342,595,670 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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
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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).
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-0515-89270 | 125-24-93040 05-15 |
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semiannual report
March 31, 2015
Janus Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Fund
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Janus Fund (unaudited)
FUND SNAPSHOT We believe that buying high-quality growth franchises with sustainable, projected above-average earnings growth for the next five-plus years and a market leadership position driven by a clearly articulated strategy should allow us to outperform the benchmark and peers over the long term. We perform in-depth, fundamental research to build a diversified, moderately positioned portfolio aiming to deliver peer- and index-beating returns while managing for risk and volatility. |  Barney Wilson portfolio manager |
PERFORMANCE
Janus Fund’s Class T Shares returned 13.20% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the Russell 1000 Growth Index, returned 8.81% during the period and its secondary benchmark, the S&P 500 Index, returned 5.93%. The Core Growth Index returned 7.36% during the period.
INVESTMENT ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
PORTFOLIO MANAGER COMMENTS
As part of our investment process, we seek companies with clearly definable and sustainable long-term growth drivers. These companies often have a high barrier to entry, a notable competitive edge in an attractive, growing industry, or a strong management team with a clear vision for the future of their company. We believe that over a long time horizon, a collection of companies with these competitive advantages should lead to compounded growth in excess of the market. During the period we were pleased to see a number of companies in our portfolio put up impressive results and further demonstrate their competitive advantages.
Our stock selection in the health care sector was a particularly large driver of relative outperformance. Many of our holdings within the sector fall within a couple of themes. We own a number of mature biotech companies with breakthrough therapies addressing highly unmet medical needs. We also own a number of specialty pharmaceutical companies with smart management teams who are improving operations for their companies and making what we believe are intelligent acquisitions that help rationalize marketing, sales and research and development costs. Some of our top contributors to the Fund during the period fit within both of these themes.
Pharmacyclics was a large contributor. The stock was up significantly during the first quarter after it was announced that AbbVie had won a bidding war to acquire the company. The high interest Pharmacyclics received from other companies validated our view that its blood cancer treatments offer significant growth potential.
Endo International was another top contributor. The company’s CEO comes from one of the most successful specialty pharmaceutical companies of the last five years. That company had an impressive strategy of driving down its operating expenses and making shrewd acquisitions to help grow the business, and the same strategy is now in practice at Endo. In our view, the company has already made several prudent acquisitions. The stock was up during the first quarter after the company gave an outlook for future growth that was better than expected.
Outside of the health care sector, Apple was a top contributor to performance. The stock has been a top contributor in previous periods and our view on the company remains the same. Our basic view is that Apple is a strong brand and that as consumers get more familiar with Apple products, they get more deeply entrenched in the Apple ecosystem, branching out to buy new Apple products and returning to the brand when it is time to update existing ones. Recent innovations by the company, such as its mobile pay service, further entrench customers into that ecosystem. We see evidence of this trend by the
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fact that household spending on Apple products continues to increase.
While pleased with the performance of most stocks in the portfolio, our holdings in the industrial sector detracted from relative performance during the period. Within the sector, Colfax Corporation, a diversified manufacturing and engineering company, was a top detractor. The stock was down after Colfax missed earnings, due largely to weaker demand from some of its end markets in Europe and also in the oil and gas industry. We continue to like Colfax’s long-term growth potential, however. The chairman of Colfax’s board comes from one of the most successful multi-industrial companies of the past decade. That company had a history of making shrewd acquisitions of industrial companies operating in large, growing addressable markets that were very fragmented. The company would then grow earnings by consolidating these fragmented industries, and also by emphasizing lean and efficient manufacturing improvements with the companies it acquired. The chairman is implementing a similar focus on industry consolidation and lean manufacturing at Colfax, which we believe should lead to steady earnings growth over time.
Precision Castparts was another top detractor. The company makes a number of parts for the aerospace industry and other end markets. The stock was down after the company missed earnings, due in part to lower demand for some of its products that serve the oil and gas markets, and also due to destocking by some of the customers who use Precision Castparts’ products. After reporting disappointing results in recent quarters, we are taking a more critical look at the risk/reward profile of the business.
While our underweight to the energy sector contributed to our relative performance, we still had stocks within the sector that detracted from our performance during the period. Noble Energy was a top detractor. Falling oil prices were a headwind for Noble and other companies in the oil industry.
Due to certain circumstances and market conditions, we may initiate positions in call and put options in an attempt to hedge risk and generate income for the portfolio. We sometimes sell calls on portions of existing long holdings or optimize positions based on our fundamental view. We do this at stock prices at which we’d be willing to trim the securities. The option trades are initiated to generate income based on fundamental research and our view of volatility. We also sell puts on stocks that we would like to own at prices lower than today’s levels. To the extent we invest in foreign holdings, we may use forward exchange contracts to hedge the foreign currency. During the period, our aggregate derivative positions contributed to relative results.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for information about the derivatives used by the Fund.
OUTLOOK
We believe the U.S. is set up for moderate growth for an extended period, and that the country’s economic growth is more dependable than anywhere in the world right now. We are also encouraged by some long-term growth trends we see taking shape in some of the largest sectors of the market. The health care sector is going through dynamic changes. The last decade has brought about rapid changes in the way in which drugs are developed and clinical trials are conducted. This has led to more successful research and development efforts and a wave of breakthrough therapies for serious diseases. Meanwhile, we believe a number of technology companies are poised for growth as electronic devices connect and interact with each other and the world around them. Consumer sectors could also be set up for better near term growth due to the prospects of increased spending by a stronger U.S. consumer. These trends are longer term trends that should benefit large-cap stocks.
In the near-term, we feel there is now greater appreciation for the relative strength of the U.S. economy, and as such, we are unlikely to see macroeconomic factors play as large of a role in pushing all stocks forward. We welcome this environment, as we believe that a market that is beginning to differentiate the most successful companies should benefit investors that use a strong, bottom-up research process to identify what we believe are superior growth companies.
Thank you for your investment in Janus Fund.
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Janus Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Apple, Inc. | 1.42% | |||
| Pharmacyclics, Inc. | 1.12% | |||
| Freescale Semiconductor, Ltd. | 1.08% | |||
| Endo International PLC | 0.89% | |||
| Biogen, Inc. | 0.59% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Colfax Corp. | –0.33% | |||
| Noble Energy, Inc. | –0.27% | |||
| Precision Castparts Corp. | –0.25% | |||
| Antero Resources Corp. | –0.23% | |||
| Google, Inc. – Class A | –0.18% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Health Care | 2.68% | 20.10% | 14.28% | |||||||||
| Information Technology | 1.79% | 31.99% | 28.36% | |||||||||
| Materials | 0.50% | 4.14% | 4.03% | |||||||||
| Energy | 0.30% | 3.33% | 4.68% | |||||||||
| Financials | 0.25% | 4.69% | 5.28% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Industrials | –0.91% | 11.07% | 11.99% | |||||||||
| Other** | –0.32% | 1.51% | 0.00% | |||||||||
| Consumer Staples | –0.06% | 5.03% | 10.60% | |||||||||
| Consumer Discretionary | 0.09% | 16.63% | 18.47% | |||||||||
| Utilities | 0.12% | 0.92% | 0.09% | |||||||||
| 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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5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 6.0% | |||
| Endo International PLC Pharmaceuticals | 2.9% | |||
| Comcast Corp. – Class A Media | 2.7% | |||
| Google, Inc. – Class C Internet Software & Services | 2.4% | |||
| Home Depot, Inc. Specialty Retail | 2.1% | |||
| 16.1% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Fund – Class A Shares | |||||||||||||
| NAV | 13.08% | 20.12% | 12.98% | 7.89% | 12.53% | 0.90% | |||||||
| MOP | 6.59% | 13.22% | 11.66% | 7.25% | 12.38% | ||||||||
| Janus Fund – Class C Shares | |||||||||||||
| NAV | 12.55% | 19.01% | 12.16% | 7.10% | 11.90% | 1.65% | |||||||
| CDSC | 11.65% | 18.07% | 12.16% | 7.10% | 11.90% | ||||||||
| Janus Fund – Class D Shares(1) | 13.22% | 20.31% | 13.26% | 8.03% | 12.59% | 0.66% | |||||||
| Janus Fund – Class I Shares | 13.29% | 20.41% | 13.33% | 7.98% | 12.57% | 0.61% | |||||||
| Janus Fund – Class N Shares | 13.34% | 20.52% | 13.16% | 7.98% | 12.57% | 0.51% | |||||||
| Janus Fund – Class R Shares | 12.92% | 19.61% | 12.59% | 7.44% | 12.18% | 1.26% | |||||||
| Janus Fund – Class S Shares | 13.06% | 19.91% | 12.88% | 7.71% | 12.38% | 1.01% | |||||||
| Janus Fund – Class T Shares | 13.20% | 20.21% | 13.16% | 7.98% | 12.57% | 0.76% | |||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 15.63% | 9.36% | N/A** | ||||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 10.63% | ||||||||
| Core Growth Index | 7.36% | 14.41% | 15.06% | 8.70% | N/A** | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 3rd | 3rd | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Growth Funds | – | 50/1,759 | 1,049/1,538 | 832/1,334 | 8/177 | ||||||||
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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Janus Fund (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.
Investments in derivatives can be highly volatile and involve additional risks than if the underlying securities were held directly. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. There is also a possibility that derivatives may not perform as intended, which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities.
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 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, and therefore the ranking for the period.
© 2015 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 – February 5, 1970 | |
| ** | Since inception index return is not available for indices created subsequent to fund inception. | |
| (1) | Closed to new investors. |
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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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,130.80 | $ | 4.89 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.63 | 0.92% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,125.50 | $ | 8.85 | $ | 1,000.00 | $ | 1,016.60 | $ | 8.40 | 1.67% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,132.20 | $ | 3.77 | $ | 1,000.00 | $ | 1,021.39 | $ | 3.58 | 0.71% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,132.90 | $ | 3.51 | $ | 1,000.00 | $ | 1,021.64 | $ | 3.33 | 0.66% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,133.40 | $ | 2.93 | $ | 1,000.00 | $ | 1,022.19 | $ | 2.77 | 0.55% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,129.20 | $ | 6.95 | $ | 1,000.00 | $ | 1,018.40 | $ | 6.59 | 1.31% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,130.60 | $ | 5.58 | $ | 1,000.00 | $ | 1,019.70 | $ | 5.29 | 1.05% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,132.00 | $ | 4.25 | $ | 1,000.00 | $ | 1,020.94 | $ | 4.03 | 0.80% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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
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Janus Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 96.2% | ||||||||||
| Aerospace & Defense – 3.1% | ||||||||||
| 1,160,830 | Honeywell International, Inc. | $ | 121,086,177 | |||||||
| 710,589 | Precision Castparts Corp. | 149,223,690 | ||||||||
| 270,309,867 | ||||||||||
| Airlines – 0.3% | ||||||||||
| 395,716 | United Continental Holdings, Inc.* | 26,611,901 | ||||||||
| Auto Components – 0.8% | ||||||||||
| 859,153 | Delphi Automotive PLC | 68,508,860 | ||||||||
| Beverages – 1.0% | ||||||||||
| 1,200,016 | Diageo PLC | 33,083,721 | ||||||||
| 233,274 | Pernod Ricard SA | 27,523,335 | ||||||||
| 451,354 | SABMiller PLC | 23,615,521 | ||||||||
| 84,222,577 | ||||||||||
| Biotechnology – 5.7% | ||||||||||
| 880,204 | Amgen, Inc. | 140,700,609 | ||||||||
| 398,560 | Biogen, Inc.* | 168,287,975 | ||||||||
| 829,967 | Celgene Corp.* | 95,678,596 | ||||||||
| 77,652 | Pharmacyclics, Inc.* | 19,875,029 | ||||||||
| 158,556 | Regeneron Pharmaceuticals, Inc.* | 71,584,863 | ||||||||
| 496,127,072 | ||||||||||
| Capital Markets – 1.6% | ||||||||||
| 2,305,685 | Blackstone Group LP | 89,668,090 | ||||||||
| 1,720,378 | Charles Schwab Corp. | 52,368,306 | ||||||||
| 142,036,396 | ||||||||||
| Chemicals – 3.9% | ||||||||||
| 1,210,316 | Air Products & Chemicals, Inc. | 183,096,604 | ||||||||
| 447,055 | Monsanto Co. | 50,311,570 | ||||||||
| 463,950 | PPG Industries, Inc. | 104,639,283 | ||||||||
| 338,047,457 | ||||||||||
| Communications Equipment – 2.3% | ||||||||||
| 1,313,128 | Motorola Solutions, Inc. | 87,546,244 | ||||||||
| 1,697,733 | QUALCOMM, Inc. | 117,720,806 | ||||||||
| 205,267,050 | ||||||||||
| Electric Utilities – 1.0% | ||||||||||
| 1,823,918 | Brookfield Infrastructure Partners LP | 83,061,226 | ||||||||
| Electrical Equipment – 2.4% | ||||||||||
| 3,217,923 | Sensata Technologies Holding NV* | 184,869,676 | ||||||||
| 415,825 | SolarCity Corp.* | 21,323,506 | ||||||||
| 206,193,182 | ||||||||||
| Electronic Equipment, Instruments & Components – 0.6% | ||||||||||
| 852,759 | Amphenol Corp. – Class A | 50,253,088 | ||||||||
| Energy Equipment & Services – 0.8% | ||||||||||
| 569,587 | Baker Hughes, Inc. | 36,214,342 | ||||||||
| 828,658 | Halliburton Co. | 36,361,513 | ||||||||
| 72,575,855 | ||||||||||
| Food & Staples Retailing – 1.9% | ||||||||||
| 845,288 | Kroger Co. | 64,799,778 | ||||||||
| 1,892,614 | Sysco Corp. | 71,408,326 | ||||||||
| 618,255 | Whole Foods Market, Inc. | 32,198,721 | ||||||||
| 168,406,825 | ||||||||||
| Food Products – 1.1% | ||||||||||
| 927,084 | Hershey Co. | 93,552,046 | ||||||||
| Health Care Equipment & Supplies – 0.6% | ||||||||||
| 2,742,764 | Boston Scientific Corp.* | 48,684,061 | ||||||||
| Health Care Technology – 0.9% | ||||||||||
| 662,813 | athenahealth, Inc.* | 79,133,244 | ||||||||
| Hotels, Restaurants & Leisure – 3.1% | ||||||||||
| 59,347 | Chipotle Mexican Grill, Inc.*,† | 38,607,598 | ||||||||
| 2,867,372 | Dunkin’ Brands Group, Inc. | 136,372,212 | ||||||||
| 796,309 | Starbucks Corp. | 75,410,462 | ||||||||
| 290,692 | Starwood Hotels & Resorts Worldwide, Inc. | 24,272,782 | ||||||||
| 274,663,054 | ||||||||||
| Household Products – 0.5% | ||||||||||
| 656,085 | Colgate-Palmolive Co. | 45,492,934 | ||||||||
| Information Technology Services – 3.3% | ||||||||||
| 1,767,689 | MasterCard, Inc. – Class A† | 152,710,653 | ||||||||
| 2,133,112 | Visa, Inc. – Class A | 139,526,856 | ||||||||
| 292,237,509 | ||||||||||
| Insurance – 1.3% | ||||||||||
| 1,143,176 | Aon PLC | 109,882,077 | ||||||||
| Internet & Catalog Retail – 1.9% | ||||||||||
| 249,161 | Amazon.com, Inc.* | 92,712,808 | ||||||||
| 399,293 | Ctrip.com International, Ltd. (ADR)* | 23,406,556 | ||||||||
| 46,208 | Priceline Group, Inc.* | 53,793,043 | ||||||||
| 169,912,407 | ||||||||||
| Internet Software & Services – 6.8% | ||||||||||
| 442,565 | Alibaba Group Holding, Ltd. (ADR)* | 36,839,111 | ||||||||
| 382,901 | CoStar Group, Inc.* | 75,749,305 | ||||||||
| 2,054,176 | Facebook, Inc. – Class A* | 168,884,080 | ||||||||
| 130,940 | Google, Inc. – Class A† | 72,632,418 | ||||||||
| 382,993 | Google, Inc. – Class C*,† | 209,880,164 | ||||||||
| 110,933 | LinkedIn Corp. – Class A* | 27,717,719 | ||||||||
| 591,702,797 | ||||||||||
| Machinery – 1.5% | ||||||||||
| 2,761,114 | Colfax Corp.* | 131,787,971 | ||||||||
| Media – 4.5% | ||||||||||
| 4,114,276 | Comcast Corp. – Class A† | 232,333,166 | ||||||||
| 2,410,979 | Twenty-First Century Fox, Inc. – Class A | 81,587,529 | ||||||||
| 735,510 | Walt Disney Co. | 77,147,644 | ||||||||
| 391,068,339 | ||||||||||
| Oil, Gas & Consumable Fuels – 2.8% | ||||||||||
| 379,390 | Antero Midstream Partners LP | 9,177,444 | ||||||||
| 1,055,866 | Antero Resources Corp.* | 37,293,187 | ||||||||
| 806,904 | Enterprise Products Partners LP | 26,571,349 | ||||||||
| 138,290 | EOG Resources, Inc. | 12,679,810 | ||||||||
| 1,280,380 | MarkWest Energy Partners LP | 84,633,118 | ||||||||
| 1,123,914 | Noble Energy, Inc. | 54,959,394 | ||||||||
| 831,430 | Southwestern Energy Co.* | 19,280,862 | ||||||||
| 244,595,164 | ||||||||||
| Personal Products – 0.5% | ||||||||||
| 565,094 | Estee Lauder Cos., Inc. – Class A | 46,993,217 | ||||||||
| Pharmaceuticals – 10.3% | ||||||||||
| 1,183,690 | AbbVie, Inc. | 69,293,213 | ||||||||
| 495,348 | Actavis PLC* | 147,425,472 | ||||||||
| 1,822,244 | Bristol-Myers Squibb Co. | 117,534,738 | ||||||||
| 772,706 | Eli Lilly & Co. | 56,137,091 | ||||||||
| 2,839,589 | Endo International PLC* | 254,711,133 | ||||||||
| 500,700 | Jazz Pharmaceuticals PLC* | 86,515,953 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Pharmaceuticals – (continued) | ||||||||||
| 705,099 | Mallinckrodt PLC* | $ | 89,300,788 | |||||||
| 411,058 | Valeant Pharmaceuticals International, Inc. (U.S. Shares)* | 81,644,340 | ||||||||
| 902,562,728 | ||||||||||
| Professional Services – 0.9% | ||||||||||
| 1,127,521 | Verisk Analytics, Inc. – Class A* | 80,504,999 | ||||||||
| Real Estate Investment Trusts (REITs) – 1.3% | ||||||||||
| 1,250,922 | American Tower Corp. | 117,774,306 | ||||||||
| Real Estate Management & Development – 1.8% | ||||||||||
| 2,196,153 | CBRE Group, Inc. – Class A* | 85,013,083 | ||||||||
| 63,440,528 | Colony American Homes Holdings III LP*,§ | 72,956,607 | ||||||||
| 157,969,690 | ||||||||||
| Road & Rail – 2.4% | ||||||||||
| 619,820 | Canadian Pacific Railway, Ltd. (U.S. Shares) | 113,241,114 | ||||||||
| 868,379 | Union Pacific Corp. | 94,054,130 | ||||||||
| 207,295,244 | ||||||||||
| Semiconductor & Semiconductor Equipment – 4.3% | ||||||||||
| 9,108,352 | ARM Holdings PLC | 149,106,582 | ||||||||
| 5,522,731 | Atmel Corp. | 45,452,076 | ||||||||
| 274,161 | Avago Technologies, Ltd. | 34,812,964 | ||||||||
| 2,711,294 | Freescale Semiconductor, Ltd.* | 110,512,343 | ||||||||
| 7,576,814 | Taiwan Semiconductor Manufacturing Co., Ltd. | 35,156,885 | ||||||||
| 375,040,850 | ||||||||||
| Software – 7.2% | ||||||||||
| 570,089 | Adobe Systems, Inc.* | 42,152,381 | ||||||||
| 399,782 | ANSYS, Inc.* | 35,256,775 | ||||||||
| 9,772,435 | Cadence Design Systems, Inc.* | 180,203,701 | ||||||||
| 1,385,427 | NetSuite, Inc.* | 128,512,208 | ||||||||
| 2,172,900 | Salesforce.com, Inc.* | 145,171,449 | ||||||||
| 301,056 | ServiceNow, Inc.* | 23,717,192 | ||||||||
| 410,007 | Ultimate Software Group, Inc.* | 69,682,740 | ||||||||
| 624,696,446 | ||||||||||
| Specialty Retail – 6.3% | ||||||||||
| 109,457 | AutoZone, Inc.* | 74,667,187 | ||||||||
| 1,640,215 | Home Depot, Inc. | 186,344,826 | ||||||||
| 3,939,275 | Sally Beauty Holdings, Inc.* | 135,392,882 | ||||||||
| 2,172,398 | TJX Cos., Inc. | 152,176,480 | ||||||||
| 548,581,375 | ||||||||||
| Technology Hardware, Storage & Peripherals – 6.3% | ||||||||||
| 4,197,566 | Apple, Inc.† | 522,303,137 | ||||||||
| 1,094,500 | EMC Corp. | 27,975,420 | ||||||||
| 550,278,557 | ||||||||||
| Textiles, Apparel & Luxury Goods – 0.5% | ||||||||||
| 1,450,088 | Gildan Activewear, Inc. | 42,806,598 | ||||||||
| Trading Companies & Distributors – 0.1% | ||||||||||
| 170,829 | MSC Industrial Direct Co., Inc. – Class A | 12,333,854 | ||||||||
| Wireless Telecommunication Services – 0.6% | ||||||||||
| 1,614,693 | T-Mobile U.S., Inc.* | 51,169,621 | ||||||||
| Total Common Stocks (cost $6,463,509,208) | 8,402,340,444 | |||||||||
| Counterparty/Reference Asset | ||||||||||
| OTC Purchased Options – Calls – 0% | ||||||||||
| Credit Suisse International: Oracle Corp.* expires May 2015 11,834 contracts exercise price $45.00 | 296,740 | |||||||||
| Morgan Stanley & Co. International PLC: TD Ameritrade Holding Corp.* expires August 2015 6,888 contracts exercise price $39.00 | 890,352 | |||||||||
| Total OTC Purchased Options – Calls (premiums paid $2,264,452) | 1,187,092 | |||||||||
| Counterparty/Reference Asset | ||||||||||
| OTC Purchased Options – Puts – 0.1% | ||||||||||
| Credit Suisse International: Market Vectors Semiconductor (ETF)* expires August 2015 23,132 contracts exercise price $52.00 | 4,190,695 | |||||||||
Morgan Stanley & Co. International PLC: SPDR S&P 500® Trust (ETF)* expires April 2015 8,338 contracts exercise price $211.00 | 4,368,670 | |||||||||
| Total OTC Purchased Options – Puts (premiums paid $9,148,000) | 8,559,365 | |||||||||
| Investment Companies – 3.5% | ||||||||||
| Money Markets – 3.5% | ||||||||||
| 303,226,087 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $303,226,087) | 303,226,087 | ||||||||
| Total Investments (total cost $6,778,147,747) – 99.8% | 8,715,312,988 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 13,632,388 | |||||||||
| Net Assets – 100% | $ | 8,728,945,376 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 8,148,889,225 | 93 | .5% | ||||
| Canada | 237,692,052 | 2 | .7 | |||||
| United Kingdom | 205,805,824 | 2 | .4 | |||||
| China | 60,245,667 | 0 | .7 | |||||
| Taiwan | 35,156,885 | 0 | .4 | |||||
| France | 27,523,335 | 0 | .3 | |||||
| Total | $ | 8,715,312,988 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Fund
Schedule of Investments (unaudited)
As of March 31, 2015
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 24,500,000 | $ | 36,334,515 | $ | 248,260 | |||||||
| Euro 4/16/15 | 2,027,000 | 2,179,664 | (28,177) | |||||||||
| 38,514,179 | 220,083 | |||||||||||
| Credit Suisse International: | ||||||||||||
| British Pound 4/9/15 | 21,590,000 | 32,020,527 | 1,306,815 | |||||||||
| Euro 4/9/15 | 3,050,000 | 3,279,376 | 149,434 | |||||||||
| 35,299,903 | 1,456,249 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| British Pound 4/9/15 | 23,208,000 | 34,420,212 | 967,579 | |||||||||
| Euro 4/9/15 | 3,920,000 | 4,214,805 | 123,655 | |||||||||
| 38,635,017 | 1,091,234 | |||||||||||
| JPMorgan Chase & Co.: Euro 4/16/15 | 2,565,000 | 2,758,183 | 45,608 | |||||||||
| RBC Capital Markets Corp.: | ||||||||||||
| British Pound 4/16/15 | 19,500,000 | 28,919,308 | (47,608) | |||||||||
| Euro 4/16/15 | 4,950,000 | 5,322,810 | (15,915) | |||||||||
| 34,242,118 | (63,523) | |||||||||||
| Total | $ | 149,449,400 | $ | 2,749,651 | ||||||||
Schedule of OTC Written Options – Puts
| Counterparty/Reference Asset | Value | |||
| Credit Suisse International: Oracle Corp. expires May 2015 11,834 contracts exercise price $42.00 | $ | (823,402) | ||
| Morgan Stanley & Co. International PLC: TD Ameritrade Holding Corp. expires August 2015 6,888 contracts exercise price $36.00 | (1,194,547) | |||
| Total OTC Written Options – Puts (premiums received $2,271,522) | $ | (2,017,949) | ||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| Core Growth Index | An internally-calculated, hypothetical combination of total returns from the Russell 1000® Growth Index (50%) and the S&P 500® Index (50%). | |
| Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| ETF | Exchange-Traded Fund | |
| LLC | Limited Liability Company | |
| LP | Limited Partnership | |
| OTC | Over-the-Counter | |
| PLC | Public Limited Company | |
| SPDR | Standard & Poor’s Depositary Receipt | |
| U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
| * | Non-income producing security. | |
| † | A portion of this security has been segregated 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Fund | $ | 186,167,090 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||
Janus Fund | ||||||||||||
| Colony American Homes Holdings III LP | 1/30/13 | $63,520,047 | $72,956,607 | 0.8 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||
Janus Fund | ||||||||||||||||
| Janus Cash Liquidity Fund LLC | 97,632,403 | 1,112,521,533 | (906,927,849) | 303,226,087 | $– | $97,680 | $303,226,087 | |||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Beverages | $ | – | $ | 84,222,577 | $ | – | |||||
| Real Estate Management & Development | 85,013,083 | – | 72,956,607 | ||||||||
| Semiconductor & Semiconductor Equipment | 190,777,383 | 184,263,467 | – | ||||||||
| All Other | 7,785,107,327 | – | – | ||||||||
OTC Purchased Options – Calls | – | 1,187,092 | – | ||||||||
OTC Purchased Options – Puts | – | 8,559,365 | – | ||||||||
Investment Companies | – | 303,226,087 | – | ||||||||
| Total Investments in Securities | $ | 8,060,897,793 | $ | 581,458,588 | $ | 72,956,607 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 2,841,351 | $ | – | |||||
Total Assets | $ | 8,060,897,793 | $ | 584,299,939 | $ | 72,956,607 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 91,700 | $ | – | |||||
Options Written, at Value | – | 2,017,949 | – | ||||||||
Total Liabilities | $ | – | $ | 2,109,649 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 6,778,147,747 | ||
| Unaffiliated investments, at value | $ | 8,412,086,901 | ||
| Affiliated investments, at value | 303,226,087 | |||
| Cash | 2,647,438 | |||
| Forward currency contracts | 2,841,351 | |||
| Closed foreign currency contracts | 627,482 | |||
| Non-interested Trustees’ deferred compensation | 171,485 | |||
| Receivables: | ||||
| Investments sold | 36,368,347 | |||
| Fund shares sold | 3,199,977 | |||
| Dividends | 4,620,431 | |||
| Dividends from affiliates | 32,186 | |||
| Foreign dividend tax reclaim | 131,903 | |||
| Other assets | 63,937 | |||
| Total Assets | 8,766,017,525 | |||
| Liabilities: | ||||
| Forward currency contracts | 91,700 | |||
| Closed foreign currency contracts | 74,795 | |||
Options written, at value(1) | 2,017,949 | |||
| Payables: | ||||
| Investments purchased | 25,829,467 | |||
| Fund shares repurchased | 2,538,321 | |||
| Advisory fees | 4,227,000 | |||
| Fund administration fees | 74,544 | |||
| Transfer agent fees and expenses | 1,562,068 | |||
| 12b-1 Distribution and shareholder servicing fees | 17,985 | |||
| Non-interested Trustees’ fees and expenses | 49,288 | |||
| Non-interested Trustees’ deferred compensation fees | 171,485 | |||
| Accrued expenses and other payables | 417,547 | |||
| Total Liabilities | 37,072,149 | |||
| Net Assets | $ | 8,728,945,376 | ||
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 March 31, 2015 (unaudited) | Janus Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 6,213,416,264 | ||
| Undistributed net investment income/(loss) | 10,391,294 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 564,986,865 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,940,150,953 | |||
| Total Net Assets | $ | 8,728,945,376 | ||
| Net Assets - Class A Shares | $ | 15,687,872 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 402,056 | |||
Net Asset Value Per Share(2) | $ | 39.02 | ||
Maximum Offering Price Per Share(3) | $ | 41.40 | ||
| Net Assets - Class C Shares | $ | 5,954,676 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 157,333 | |||
Net Asset Value Per Share(2) | $ | 37.85 | ||
| Net Assets - Class D Shares | $ | 6,267,737,204 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 159,517,549 | |||
| Net Asset Value Per Share | $ | 39.29 | ||
| Net Assets - Class I Shares | $ | 552,751,031 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,069,045 | |||
| Net Asset Value Per Share | $ | 39.29 | ||
| Net Assets - Class N Shares | $ | 21,531,979 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 547,240 | |||
| Net Asset Value Per Share | $ | 39.35 | ||
| Net Assets - Class R Shares | $ | 3,413,226 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 88,355 | |||
| Net Asset Value Per Share | $ | 38.63 | ||
| Net Assets - Class S Shares | $ | 31,951,653 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 813,519 | |||
| Net Asset Value Per Share | $ | 39.28 | ||
| Net Assets - Class T Shares | $ | 1,829,917,735 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 46,450,165 | |||
| Net Asset Value Per Share | $ | 39.40 | ||
| (1) | Premiums received $2,271,522. | |
| (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.
14 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Fund | |||
| Investment Income: | ||||
| Dividends | $ | 40,258,326 | ||
| Dividends from affiliates | 97,680 | |||
| Other income | 1,775 | |||
| Foreign tax withheld | (119,377) | |||
| Total Investment Income | 40,238,404 | |||
| Expenses: | ||||
| Advisory fees | 21,723,400 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 18,687 | |||
| Class C Shares | 27,630 | |||
| Class R Shares | 7,527 | |||
| Class S Shares | 38,484 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 3,585,221 | |||
| Class R Shares | 3,763 | |||
| Class S Shares | 38,484 | |||
| Class T Shares | 2,113,383 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 8,169 | |||
| Class C Shares | 2,946 | |||
| Class I Shares | 209,458 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 833 | |||
| Class C Shares | 422 | |||
| Class D Shares | 540,675 | |||
| Class I Shares | 7,838 | |||
| Class N Shares | 61 | |||
| Class R Shares | 35 | |||
| Class S Shares | 215 | |||
| Class T Shares | 9,909 | |||
| Shareholder reports expense | 539,034 | |||
| Registration fees | 79,672 | |||
| Custodian fees | 43,556 | |||
| Professional fees | 61,864 | |||
| Non-interested Trustees’ fees and expenses | 92,899 | |||
| Fund administration fees | 339,827 | |||
| Other expenses | 192,537 | |||
| Total Expenses | 29,686,529 | |||
| Net Expenses | 29,686,529 | |||
| Net Investment Income/(Loss) | 10,551,875 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 568,813,380 | |||
| Written options contracts | 3,250,921 | |||
| Total Net Realized Gain/(Loss) on Investments | 572,064,301 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 431,152,557 | |||
| Written options contracts | 3,295,359 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 434,447,916 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,017,064,092 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 10,551,875 | $ | 25,785,388 | ||||
| Net realized gain/(loss) on investments | 572,064,301 | 1,596,532,305 | ||||||
| Change in unrealized net appreciation/depreciation | 434,447,916 | (485,206,038) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,017,064,092 | 1,137,111,655 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class D Shares | (7,400,532) | (19,624,172) | ||||||
| Class I Shares | (1,022,659) | (593,856) | ||||||
| Class N Shares | (51,550) | (66,656) | ||||||
| Class R Shares | – | (2,106) | ||||||
| Class S Shares | – | (64,152) | ||||||
| Class T Shares | (450,536) | (5,280,453) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (2,992,735) | (88,185) | ||||||
| Class C Shares | (1,080,157) | (25,299) | ||||||
| Class D Shares | (1,178,745,975) | (26,654,269) | ||||||
| Class I Shares | (88,223,078) | (715,340) | ||||||
| Class N Shares | (3,898,330) | (92,497) | ||||||
| Class R Shares | (575,708) | (17,718) | ||||||
| Class S Shares | (5,993,183) | (200,134) | ||||||
| Class T Shares | (332,194,832) | (8,242,065) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (1,622,629,275) | (61,666,902) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 2,472,308 | 2,766,428 | ||||||
| Class C Shares | 1,481,008 | 678,833 | ||||||
| Class D Shares | 71,809,482 | 92,655,179 | ||||||
| Class I Shares | 246,701,613 | 135,042,753 | ||||||
| Class N Shares | 1,356,109 | 1,370,479 | ||||||
| Class R Shares | 1,128,422 | 1,077,684 | ||||||
| Class S Shares | 3,229,608 | 7,703,346 | ||||||
| Class T Shares | 175,482,359 | 142,408,479 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 2,709,700 | 81,516 | ||||||
| Class C Shares | 680,023 | 14,468 | ||||||
| Class D Shares | 1,147,048,956 | 44,826,283 | ||||||
| Class I Shares | 87,688,411 | 1,249,915 | ||||||
| Class N Shares | 3,949,880 | 159,153 | ||||||
| Class R Shares | 575,699 | 18,271 | ||||||
| Class S Shares | 5,950,323 | 262,629 | ||||||
| Class T Shares | 321,902,783 | 13,137,853 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (3,016,260) | (8,236,474) | ||||||
| Class C Shares | (1,122,728) | (1,058,385) | ||||||
| Class D Shares | (245,835,589) | (461,797,495) | ||||||
| Class I Shares | (13,103,278) | (30,705,982) | ||||||
| Class N Shares | (1,173,932) | (12,004,931) | ||||||
| Class R Shares | (859,024) | (2,020,220) | ||||||
| Class S Shares | (5,752,964) | (23,746,270) | ||||||
| Class T Shares | (160,826,500) | (420,047,436) | ||||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
| Janus Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 1,642,476,409 | (516,163,924) | ||||||
| Net Increase/(Decrease) in Net Assets | 1,036,911,226 | 559,280,829 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 7,692,034,150 | 7,132,753,321 | ||||||
| End of period | $ | 8,728,945,376 | $ | 7,692,034,150 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 10,391,294 | $ | 8,764,696 | ||||
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 | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $43.19 | $37.33 | $31.74 | $25.33 | $26.81 | $23.96 | $20.86 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.01(3) | 0.06(3) | (7.61) | 0.11 | 0.11 | 0.05 | 0.01 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.86 | 5.99 | 13.41 | 6.44 | (1.45) | 2.83 | 3.09 | |||||||||||||||||||||||
| Total from Investment Operations | 4.87 | 6.05 | 5.80 | 6.55 | (1.34) | 2.88 | 3.10 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | (0.21) | (0.14) | (0.14) | (0.03) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.04) | (0.19) | (0.21) | (0.14) | (0.14) | (0.03) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $39.02 | $43.19 | $37.33 | $31.74 | $25.33 | $26.81 | $23.96 | |||||||||||||||||||||||
| Total Return* | 13.08% | 16.27% | 18.39% | 25.96% | (5.08)% | 12.03% | 14.86% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $15,688 | $14,675 | $17,579 | $1,117,172 | $851,546 | $383,332 | $4,237 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $14,990 | $16,911 | $982,481 | $986,388 | $640,709 | $159,151 | $5,256 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.92% | 0.86% | 0.99% | 1.02% | 1.07% | 1.22% | 1.07% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.92% | 0.86% | 0.95% | 0.89% | 0.98% | 1.06% | 1.03% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.06% | 0.16% | 0.65% | 0.48% | 0.41% | 0.42% | 0.09% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $42.33 | $36.88 | $31.32 | $25.06 | $26.59 | $23.90 | $20.86 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.13)(3) | (0.25)(3) | (0.24) | (0.14) | (0.14) | (0.13) | (0.05) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.69 | 5.89 | 5.80 | 6.40 | (1.39) | 2.82 | 3.09 | |||||||||||||||||||||||
| Total from Investment Operations | 4.56 | 5.64 | 5.56 | 6.26 | (1.53) | 2.69 | 3.04 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $37.85 | $42.33 | $36.88 | $31.32 | $25.06 | $26.59 | $23.90 | |||||||||||||||||||||||
| Total Return* | 12.55% | 15.35% | 17.75% | 24.98% | (5.75)% | 11.26% | 14.57% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $5,955 | $5,349 | $4,998 | $5,498 | $4,599 | $5,687 | $5,443 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,541 | $5,245 | $4,814 | $5,620 | $5,722 | $5,919 | $5,221 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.67% | 1.65% | 1.67% | 1.69% | 1.70% | 1.96% | 1.89% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.67% | 1.65% | 1.63% | 1.64% | 1.70% | 1.78% | 1.78% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.69)% | (0.63)% | (0.09)% | (0.29)% | (0.32)% | (0.48)% | (0.69)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
18 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year | Janus Fund | |||||||||||||||||||||||||
| or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $43.44 | $37.60 | $31.89 | $25.43 | $26.83 | $25.24 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.06(2) | 0.15(2) | 0.22 | 0.18 | 0.17 | 0.10 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.89 | 6.02 | 5.76 | 6.45 | (1.46) | 1.49 | ||||||||||||||||||||
| Total from Investment Operations | 4.95 | 6.17 | 5.98 | 6.63 | (1.29) | 1.59 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.06) | (0.14) | (0.27) | (0.17) | (0.11) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (9.10) | (0.33) | (0.27) | (0.17) | (0.11) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $39.29 | $43.44 | $37.60 | $31.89 | $25.43 | $26.83 | ||||||||||||||||||||
| Total Return* | 13.22% | 16.52% | 18.92% | 26.18% | (4.86)% | 6.30% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $6,267,737 | $5,736,396 | $5,260,579 | $4,785,902 | $4,119,798 | $4,706,894 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,991,784 | $5,607,909 | $4,928,021 | $4,622,266 | $4,895,030 | $4,678,358 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.71% | 0.66% | 0.68% | 0.68% | 0.77% | 0.93% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.71% | 0.66% | 0.68% | 0.68% | 0.77% | 0.93% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.28% | 0.36% | 0.85% | 0.69% | 0.60% | 0.61% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period ended | Janus Fund | |||||||||||||||||||||||||||||
| September 30 and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $43.46 | $37.63 | $31.91 | $25.44 | $26.87 | $23.96 | $20.86 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.07(2) | 0.17(2) | 0.25 | 0.21 | 0.17 | 0.12 | 0.02 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.90 | 6.01 | 5.76 | 6.45 | (1.45) | 2.82 | 3.08 | |||||||||||||||||||||||
| Total from Investment Operations | 4.97 | 6.18 | 6.01 | 6.66 | (1.28) | 2.94 | 3.10 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.10) | (0.16) | (0.29) | (0.19) | (0.15) | (0.03) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.14) | (0.35) | (0.29) | (0.19) | (0.15) | (0.03) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $39.29 | $43.46 | $37.63 | $31.91 | $25.44 | $26.87 | $23.96 | |||||||||||||||||||||||
| Total Return* | 13.29% | 16.53% | 18.98% | 26.30% | (4.83)% | 12.28% | 14.86% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $552,751 | $265,667 | $140,367 | $143,353 | $147,597 | $135,877 | $25,857 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $437,872 | $158,634 | $135,903 | $156,600 | $159,134 | $93,710 | $18,996 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.66% | 0.61% | 0.61% | 0.63% | 0.72% | 0.86% | 0.73% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.66% | 0.61% | 0.61% | 0.63% | 0.72% | 0.80% | 0.71% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.35% | 0.41% | 0.94% | 0.73% | 0.67% | 0.67% | 0.31% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | 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 N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Fund | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $43.51 | $37.61 | $31.92 | $29.54 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.09(2) | 0.21(2) | (1.56) | 0.04 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.91 | 6.02 | 7.59 | 2.34 | ||||||||||||||
| Total from Investment Operations | 5.00 | 6.23 | 6.03 | 2.38 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.12) | (0.14) | (0.34) | – | ||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | ||||||||||||||
| Total Distributions | (9.16) | (0.33) | (0.34) | – | ||||||||||||||
| Net Asset Value, End of Period | $39.35 | $43.51 | $37.61 | $31.92 | ||||||||||||||
| Total Return* | 13.34% | 16.66% | 19.08% | 8.06% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $21,532 | $18,843 | $26,202 | $24,587 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $20,046 | $20,018 | $202,860 | $17,258 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.55% | 0.51% | 0.52% | 0.55% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.55% | 0.51% | 0.52% | 0.55% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.43% | 0.51% | 1.33% | 0.91% | ||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $42.90 | $37.26 | $31.54 | $25.22 | $26.68 | $23.91 | $20.86 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(2) | (0.10)(2) | 0.03 | (0.04) | 0.01 | (0.02) | (0.02) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.83 | 5.95 | 5.71 | 6.44 | (1.47) | 2.79 | 3.07 | |||||||||||||||||||||||
| Total from Investment Operations | 4.77 | 5.85 | 5.74 | 6.40 | (1.46) | 2.77 | 3.05 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.02) | (0.02) | (0.08) | – | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.04) | (0.21) | (0.02) | (0.08) | – | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $38.63 | $42.90 | $37.26 | $31.54 | $25.22 | $26.68 | $23.91 | |||||||||||||||||||||||
| Total Return* | 12.92% | 15.77% | 18.21% | 25.44% | (5.47)% | 11.59% | 14.62% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,413 | $2,787 | $3,259 | $2,427 | $2,175 | $1,299 | $781 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,019 | $3,267 | $2,801 | $2,600 | $1,644 | $1,097 | $776 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.31% | 1.26% | 1.28% | 1.29% | 1.37% | 1.47% | 1.45% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.31% | 1.26% | 1.28% | 1.29% | 1.37% | 1.47% | 1.44% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.33)% | (0.24)% | 0.23% | 0.07% | 0.00%(5) | (0.10)% | (0.34)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (4) | Period from July 6, 2009 (inception date) through October 31, 2009. | |
| (5) | Less than 0.005%. |
See Notes to Financial Statements.
20 | MARCH 31, 2015
Table of Contents
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $43.43 | $37.65 | $31.84 | $25.35 | $26.77 | $23.95 | $20.86 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(3) | 0.01(3) | 0.14 | 0.09 | 0.06 | 0.01 | –(4) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.90 | 6.02 | 5.75 | 6.44 | (1.46) | 2.81 | 3.09 | |||||||||||||||||||||||
| Total from Investment Operations | 4.89 | 6.03 | 5.89 | 6.53 | (1.40) | 2.82 | 3.09 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.06) | (0.08) | (0.04) | (0.02) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.04) | (0.25) | (0.08) | (0.04) | (0.02) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $39.28 | $43.43 | $37.65 | $31.84 | $25.35 | $26.77 | $23.95 | |||||||||||||||||||||||
| Total Return* | 13.06% | 16.10% | 18.55% | 25.79% | (5.25)% | 11.77% | 14.81% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $31,952 | $30,752 | $41,000 | $43,993 | $60,817 | $76,034 | $84,350 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $30,872 | $37,988 | $41,378 | $54,961 | $76,115 | $79,758 | $85,637 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.05% | 1.01% | 1.02% | 1.03% | 1.14% | 1.25% | 1.20% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.05% | 0.98% | 0.99% | 1.02% | 1.14% | 1.25% | 1.19% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.07)% | 0.04% | 0.55% | 0.32% | 0.23% | 0.04% | (0.08)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period | ||||||||||||||||||||||||||||||
| ended March 31, 2015 (unaudited), each year | ||||||||||||||||||||||||||||||
| or period ended September 30 and the year | Janus Fund | |||||||||||||||||||||||||||||
| ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $43.50 | $37.68 | $31.90 | $25.42 | $26.82 | $23.95 | $20.35 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.04(3) | 0.11(3) | 0.28 | 0.18 | 0.16 | 0.09 | 0.11 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.91 | 6.02 | 5.69 | 6.43 | (1.50) | 2.80 | 3.76 | |||||||||||||||||||||||
| Total from Investment Operations | 4.95 | 6.13 | 5.97 | 6.61 | (1.34) | 2.89 | 3.87 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.01) | (0.12) | (0.19) | (0.13) | (0.06) | (0.02) | (0.27) | |||||||||||||||||||||||
| Distributions (from capital gains) | (9.04) | (0.19) | – | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (9.05) | (0.31) | (0.19) | (0.13) | (0.06) | (0.02) | (0.27) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $39.40 | $43.50 | $37.68 | $31.90 | $25.42 | $26.82 | $23.95 | |||||||||||||||||||||||
| Total Return* | 13.20% | 16.37% | 18.83% | 26.07% | (5.01)% | 12.06% | 19.35% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,829,918 | $1,617,564 | $1,638,769 | $1,987,992 | $2,032,008 | $2,800,369 | $8,100,358 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,695,351 | $1,689,483 | $1,591,600 | $2,149,222 | $2,583,683 | $5,138,181 | $7,312,389 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.80% | 0.76% | 0.78% | 0.78% | 0.89% | 0.94% | 0.89% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.80% | 0.75% | 0.76% | 0.78% | 0.89% | 0.94% | 0.88% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.18% | 0.27% | 0.75% | 0.58% | 0.48% | 0.21% | 0.49% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 62% | 46% | 46% | 90% | 40% | 60% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 21
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market
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quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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
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Notes to Financial Statements (unaudited) (continued)
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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.
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The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for
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Notes to Financial Statements (unaudited) (continued)
nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Fund | $ | 187,308,067 | ||||
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by such Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on various equity securities for the purpose of increasing exposure to individual equity risk.
During the period, the Fund purchased put options on various equity securities, and ETFs, for the purpose of decreasing exposure to individual equity risk.
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The following table provides average ending monthly market value amounts on purchased call and put options during the period ended March 31, 2015.
| Purchased | Purchased | |||||||||
| Fund | Call Options | Put Options | ||||||||
| Janus Fund | $ | 8,558,978 | $ | 5,168,404 | ||||||
In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. When an option is written, the Fund receives a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written, at value” (if applicable). The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
During the period, the Fund wrote put options on various 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 put options during the period ended March 31, 2015.
| Fund | Written Put Options | |||||
| Janus Fund | $ | 3,311,986 | ||||
Written option activity for the period ended March 31, 2015 is indicated in the table below:
| Number of | Premiums | |||||||||
| Put Options | Contracts | Received | ||||||||
Janus Fund | ||||||||||
| Options outstanding at September 30, 2014 | 31,222 | $ | 6,197,828 | |||||||
| Options written | 29,667 | 2,923,194 | ||||||||
| Options closed | (23,669) | (3,300,507) | ||||||||
| Options expired | (7,553) | (2,897,321) | ||||||||
| Options exercised | (10,945) | (651,672) | ||||||||
| Options outstanding at March 31, 2015 | 18,722 | $ | 2,271,522 | |||||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 2,841,351 | Forward currency contracts | $ | 91,700 | ||||||
| Equity Contracts | Unaffiliated investments, at value | 9,746,457* | Options written, at value | $ | 2,017,949 | |||||||
| Total | $ | 12,587,808 | $ | 2,109,649 | ||||||||
| * | Amount relates to purchased options. |
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| 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 | |||||||||
Janus Fund | ||||||||||||
| Currency Contracts | $ | 17,496,923 | $ | – | $ | 17,496,923 | ||||||
| Equity Contracts | (8,285,429 | )* | 3,250,921 | (5,034,508 | ) | |||||||
| Total | $ | 9,211,494 | $ | 3,250,921 | $ | 12,462,415 | ||||||
| * | Amount relates to purchased options. |
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Notes to Financial Statements (unaudited) (continued)
| 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 | |||||||||
Janus Fund | ||||||||||||
| Currency Contracts | $ 83,720 | $ – | $ 83,720 | |||||||||
| Equity Contracts | 3,220,990* | 3,295,359 | 6,516,349 | |||||||||
| Total | $ 3,304,710 | $3,295,359 | $6,600,069 | |||||||||
| * | Amount relates to purchased options. |
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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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 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 March 31, 2015” 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 | ||||||||||||||
| Bank of America | $ 248,260 | $ (28,177) | $ – | $ 220,083 | ||||||||||||||
| Credit Suisse International | 5,943,684 | (823,402) | (4,183,803) | 936,479 | ||||||||||||||
| HSBC Securities (USA), Inc. | 1,091,234 | – | – | 1,091,234 | ||||||||||||||
| JPMorgan Chase & Co. | 45,608 | – | – | 45,608 | ||||||||||||||
| Morgan Stanely & Co. International PLC | 5,259,022 | (1,194,547) | (2,810,369) | 1,254,106 | ||||||||||||||
| Total | $12,587,808 | $(2,046,126) | $(6,994,172) | $3,547,510 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ 28,177 | $ (28,177) | $– | $ – | ||||||||||||||
| Credit Suisse International | 823,402 | (823,402) | – | – | ||||||||||||||
| Morgan Stanley & Co. International PLC | 1,194,547 | (1,194,547) | – | – | ||||||||||||||
| RBC Capital Markets Corp. | 63,523 | – | – | 63,523 | ||||||||||||||
| Total | $2,109,649 | $(2,046,126) | $– | $63,523 | ||||||||||||||
| (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
Janus Investment Fund | 29
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Notes to Financial Statements (unaudited) (continued)
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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Janus Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Fund | Core Growth 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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Fund | 0.53 | |||||
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
30 | MARCH 31, 2015
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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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Fund | 0.83 | |||||
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
Janus Investment Fund | 31
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Fund | $ | 4,394 | ||||
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
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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 March 31, 2015.
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 March 31, 2015.
As of March 31, 2015, 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 Fund - Class A Shares | – | % | – | % | ||||||
| Janus Fund - Class C Shares | – | – | ||||||||
| Janus Fund - Class D Shares | – | – | ||||||||
| Janus Fund - Class I Shares | – | – | ||||||||
| Janus Fund - Class N Shares | 49 | 0 | ||||||||
| Janus Fund - Class R Shares | – | – | ||||||||
| Janus Fund - Class S Shares | – | – | ||||||||
| Janus Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Fund | $6,739,355,011 | $2,056,070,010 | $(80,112,033) | $1,975,957,977 | ||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 September 30, 2014
For the year ended September 30, 2014
| Accumulated | |||||||||||||||||||
| September 30, | No Expiration | Capital | |||||||||||||||||
| Fund | 2016 | Short-Term | Long-Term | Losses | |||||||||||||||
Janus Fund(1) | $(9,444,811) | $– | $– | $(9,444,811) | |||||||||||||||
| (1) | Capital loss carryovers subject to annual limitations, $(4,722,405) should be available in the next fiscal year. |
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Notes to Financial Statements (unaudited) (continued)
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 63,967 | 68,236 | ||||||||
| Reinvested dividends and distributions | 75,437 | 2,077 | ||||||||
| Shares repurchased | (77,122) | (201,414) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 62,282 | (131,101) | ||||||||
| Shares Outstanding, Beginning of Period | 339,774 | 470,875 | ||||||||
| Shares Outstanding, End of Period | 402,056 | 339,774 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 40,250 | 16,938 | ||||||||
| Reinvested dividends and distributions | 19,457 | 374 | ||||||||
| Shares repurchased | (28,755) | (26,444) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 30,952 | (9,132) | ||||||||
| Shares Outstanding, Beginning of Period | 126,381 | 135,513 | ||||||||
| Shares Outstanding, End of Period | 157,333 | 126,381 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 1,797,763 | 2,265,391 | ||||||||
| Reinvested dividends and distributions | 31,739,042 | 1,137,146 | ||||||||
| Shares repurchased | (6,086,705) | (11,229,515) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 27,450,100 | (7,826,978) | ||||||||
| Shares Outstanding, Beginning of Period | 132,067,449 | 139,894,427 | ||||||||
| Shares Outstanding, End of Period | 159,517,549 | 132,067,449 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 5,858,131 | 3,099,447 | ||||||||
| Reinvested dividends and distributions | 2,427,025 | 31,692 | ||||||||
| Shares repurchased | (328,422) | (749,042) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 7,956,734 | 2,382,097 | ||||||||
| Shares Outstanding, Beginning of Period | 6,112,311 | 3,730,214 | ||||||||
| Shares Outstanding, End of Period | 14,069,045 | 6,112,311 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 34,775 | 33,574 | ||||||||
| Reinvested dividends and distributions | 109,203 | 4,034 | ||||||||
| Shares repurchased | (29,817) | (301,241) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 114,161 | (263,633) | ||||||||
| Shares Outstanding, Beginning of Period | 433,079 | 696,712 | ||||||||
| Shares Outstanding, End of Period | 547,240 | 433,079 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 28,337 | 26,430 | ||||||||
| Reinvested dividends and distributions | 16,176 | 467 | ||||||||
| Shares repurchased | (21,112) | (49,417) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 23,401 | (22,520) | ||||||||
| Shares Outstanding, Beginning of Period | 64,954 | 87,474 | ||||||||
| Shares Outstanding, End of Period | 88,355 | 64,954 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 80,934 | 188,074 | ||||||||
| Reinvested dividends and distributions | 164,555 | 6,645 | ||||||||
| Shares repurchased | (140,062) | (575,727) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 105,427 | (381,008) | ||||||||
| Shares Outstanding, Beginning of Period | 708,092 | 1,089,100 | ||||||||
| Shares Outstanding, End of Period | 813,519 | 708,092 | ||||||||
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| For the period ended March 31 (unaudited) | Janus Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 4,430,420 | 3,457,191 | ||||||||
| Reinvested dividends and distributions | 8,880,077 | 332,520 | ||||||||
| Shares repurchased | (4,043,844) | (10,101,437) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 9,266,653 | (6,311,726) | ||||||||
| Shares Outstanding, Beginning of Period | 37,183,512 | 43,495,238 | ||||||||
| Shares Outstanding, End of Period | 46,450,165 | 37,183,512 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Fund | $1,940,128,756 | $2,105,007,575 | $– | $– | ||||||||||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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
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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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87820 | 125-24-93042 05-15 |
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semiannual report
March 31, 2015
Janus Global Life Sciences Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Global Life Sciences Fund
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Janus Global Life Sciences Fund (unaudited)
FUND SNAPSHOT We take a global approach to identify high-quality or improving businesses in the life sciences sector trading at a discount to our estimate of intrinsic value. We believe the rapidly growing global health care sector offers fertile opportunities for differentiated research. We believe what sets us apart is the quality of our team, the depth of our research and our commitment to delivering superior long-term results for our clients. |  Andy Acker portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Life Sciences Fund’s Class T Shares returned 25.11% over the six-month period ended March 31, 2015, significantly ahead of its primary benchmark, the MSCI World Health Care Index, which returned 11.57%. The Fund also outperformed the S&P 500 Index, the Fund’s secondary benchmark, which returned 5.93% during the period.
INVESTMENT ENVIRONMENT
Strong returns in managed health care, health care technology and health care distributors led to gains for the sector as broader equity indices rose over the quarter. Segments focused on health care delivery stand to reap continued benefits from more people entering the health care system due to the implementation of the Affordable Care Act. Biotechnology remained in favor, in part driven by announcements and presentations at the American Society of Hematology conference in December. Excitement at the conference centered upon the continued progress in immuno-oncology treatments.
The early part of 2015 proved that merger and acquisition activity in the health care sector is alive and well. During the period, there were several high-profile acquisitions, including a few of our holdings that were targets in such deals. As has been the case of late, buyers were attracted to innovative companies developing novel therapies aimed at major, unmet medical needs. Biotechnology companies were well represented in these transactions, but other pockets of the sector also benefited, including specialty pharmaceuticals and health care services. While consolidation fueled optimism, innovation in its own right continued to provide a fertile environment, especially within biotech.
We remain vigilant in monitoring valuations, which at first glance may appear rich, but the rally experienced over the past few years has only brought valuations for the health care sector back to the long-term average of the past 20 years. Furthermore, positive data from important clinical trials and accelerated approvals for some of the most effective treatments provide some justification for recent market appreciation. Nevertheless, we do see pockets of over-exuberance and believe taking a selective approach will become increasingly important going forward.
PERFORMANCE DISCUSSION
The Fund seeks to uncover opportunities that span the life sciences spectrum, including stocks in the biotechnology, pharmaceutical, health care service and medical technology arenas. Our bottom-up fundamental approach utilizes extensive proprietary research in an effort to discover the most compelling investment ideas across the globe. Our primary focus remains on companies that are addressing high, unmet medical needs and those that we believe can make the health care system more efficient.
Our selection of biotechnology and pharmaceuticals stocks drove the Fund’s relative performance, while our underweight of managed health care and holdings in health care facilities detracted from results. Pharmacyclics was the leading individual contributor for the period. This commercial-stage biotechnology company is focused on discovering and developing innovative small-molecule drugs for the treatment of cancer and immune-mediated diseases. The company’s stock surged in January on a consensus-beating report as well as upbeat guidance for its lead blood-cancer drug, Imbruvica. It was then announced that AbbVie would acquire the company for $21 billion, validating our view of Imbruvica’s vast commercial potential for the treatment of leukemia, lymphoma and other potential cancers.
Valeant Pharmaceuticals was also active in industry consolidation, but as a buyer, agreeing to acquire Salix Pharmaceuticals, a maker of gastrointestinal treatments, and another one of our holdings. We have long been attracted to Valeant as we believe management has transformed the specialty pharmaceutical company by improving margins, incentives and the company’s growth profile. Valeant has a strong and growing presence in key
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Janus Global Life Sciences Fund (unaudited)
emerging markets, including Latin America, Eastern Europe and Southeast Asia, and it has demonstrated an ability to make value-enhancing acquisitions.
Another top contributor was Biogen, Inc. The company’s stock gained on strong fourth quarter earnings, positive 2015 guidance, and enthusiastic feedback about its drug pipeline, including impressive early data for its Alzheimer’s disease treatment. Biogen develops therapies focusing on neurology, immunology and hematologic diseases. Biogen has a dominant position in the $18 billion multiple sclerosis market, with leading therapies in all three categories of treatment (oral, injectable and the high-efficacy segment). The company has four significant product launches underway, including Tecfidera for multiple sclerosis and two long-acting hemophilia products. We believe the company’s multiple sclerosis franchise and other pipeline products can drive strong long-term growth.
Hospital operator Tenet Healthcare detracted from performance as enrollment projections released during the autumn by the Congressional Budget Office covering the second year of the Affordable Care Act (ACA) underwhelmed. Originally estimated to be 13 million, enrollments were revised down to nine million. While numbers may end up being slightly higher, the enthusiasm surrounding hospitals during the ACA roll out has been replaced recently by concern about a pending decision by the Supreme Court that could impact implementation of the law. Given the looming threat from this decision and the company’s continued high financial leverage, we decided to exit the position.
Our small position in biotech firm Arrowhead Research Corp. was another detractor as the stock collapsed when the company failed to meet the high expectations it had established for its new treatment for hepatitis B. Given the disappointing initial data, we decided to sell the position.
Gilead Sciences was also a relative detractor as fears of price competition arose for its hepatitis C treatment. Express Scripts, a pharmacy benefits management organization, chose AbbVie’s competing treatment for their national formularies due to the significant discount offered. This development did not come as a complete surprise as we had already expected AbbVie to take share in the price-sensitive part of the market. While we reduced our position in Gilead, we still see high cash flows and low valuation as supportive of the company’s shares.
The Fund continued with its “value at risk” approach as part of a comprehensive risk management framework. This approach focuses our attention on downside risks, especially those arising from binary events (such as clinical trial announcements or regulatory decisions) that can lead to significant share price volatility. In practice, this means we limit the position size of any one holding so that, in a worst-case scenario, the estimated adverse impact from a particular event should not exceed 1% of the Fund’s performance.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
We see significant growth opportunities ahead for the biotech and pharmaceutical industries. Improvements in genetic analysis have led to a wave of innovative therapies addressing many of the world’s highest unmet medical needs. This year we will likely see the launch of breakthrough therapies for several cancers, psoriasis and cystic fibrosis. We are also expecting several new treatments for heart disease, an area that hasn’t seen dramatic improvement in more than 20 years. New drugs advancing in development for Crohn’s disease and Alzheimer’s also look promising. The substantial improvement new therapies represent over existing options has also led to a more favorable regulatory environment. In fact, we believe the Food and Drug Administration is approving innovative therapies at a faster rate than at any point in its history. Innovation has also accelerated in the medical device market, especially with regard to new products aimed at more effectively monitoring and managing cardiovascular disease.
While we have a positive outlook for the sector, there are risks we continue to monitor. The emergence of biosimilars in the U.S. could create generic competition for biologics manufacturers for the first time. We think this will be a significant development, but believe the number of companies creating meaningful biosimilars will be limited, and that the price differential between biotech drugs and biosimilars will not be as wide as for traditional drugs and generic substitutes. In Europe, where biosimilars have already been available for over five years, the impact on branded biologic drugs has been modest. Should biosimilars gain a strong foothold within the marketplace, we believe pharmacy benefit managers would be key beneficiaries.
We are also monitoring the looming U.S. Supreme Court ruling on whether residents in states with federally established health care exchanges will remain eligible for federal tax subsidies to purchase health insurance. If the original law remains intact, we should continue to see a substantial increase in the insured population, which would
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(unaudited)
benefit hospital operators and many insurance companies. In the event of a negative decision, we believe there would be short term disruption, but believe the long term effects could be mitigated by new legislation or state-based workarounds.
Thank you for your continued investment in Janus Global Life Sciences Fund.
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Janus Global Life Sciences Fund (unaudited)
Janus Global Life Sciences Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pharmacyclics, Inc. | 2.29% | |||
| Valeant Pharmaceuticals International, Inc. (U.S. Shares) | 1.22% | |||
| Biogen, Inc. | 0.88% | |||
| Boston Scientific Corp. | 0.82% | |||
| NPS Pharmaceuticals, Inc. | 0.79% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Tenet Healthcare Corp. | –0.25% | |||
| Arrowhead Research Corp. | –0.20% | |||
| Gilead Sciences, Inc. | –0.17% | |||
| athenahealth, Inc. | –0.11% | |||
| Johnson & Johnson | –0.11% | |||
3 Top Performers – Sectors*
| Fund Weighting | MSCI World Health Care | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Health Care | 12.53% | 95.50% | 100.00% | |||||||||
| Consumer Staples | 0.04% | 0.91% | 0.00% | |||||||||
| Financials | 0.02% | 1.19% | 0.00% | |||||||||
2 Bottom Performers – Sectors*
| Fund Weighting | MSCI World Health Care | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Other** | –0.17% | 2.40% | 0.00% | |||||||||
| Consumer Discretionary | 0.01% | 0.00% | 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. |
4 | MARCH 31, 2015
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Johnson & Johnson Pharmaceuticals | 3.0% | |||
| Amgen, Inc. Biotechnology | 2.8% | |||
| Biogen, Inc. Biotechnology | 2.7% | |||
| Actavis PLC Pharmaceuticals | 2.4% | |||
| Valeant Pharmaceuticals International, Inc. (U.S. Shares) Pharmaceuticals | 2.4% | |||
| 13.3% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Securities Sold Short of (0.6)% and Other of (4.9)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
Janus Investment Fund | 5
Table of Contents
Janus Global Life Sciences Fund (unaudited)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Global Life Sciences Fund – Class A Shares | |||||||||||||
| NAV | 25.01% | 42.25% | 26.86% | 15.63% | 13.01% | 1.03% | |||||||
| MOP | 17.82% | 34.07% | 25.36% | 14.94% | 12.60% | ||||||||
| Janus Global Life Sciences Fund – Class C Shares | |||||||||||||
| NAV | 24.54% | 41.16% | 25.89% | 14.76% | 12.18% | 1.80% | |||||||
| CDSC | 23.54% | 40.16% | 25.89% | 14.76% | 12.18% | ||||||||
| Janus Global Life Sciences Fund – Class D Shares(1) | 25.15% | 42.53% | 27.07% | 15.80% | 13.18% | 0.84% | |||||||
| Janus Global Life Sciences Fund – Class I Shares | 25.07% | 42.46% | 27.12% | 15.75% | 13.16% | 0.77% | |||||||
| Janus Global Life Sciences Fund – Class S Shares | 24.96% | 42.03% | 26.66% | 15.44% | 12.85% | 1.18% | |||||||
| Janus Global Life Sciences Fund – Class T Shares | 25.11% | 42.40% | 26.97% | 15.75% | 13.16% | 0.93% | |||||||
| MSCI World Health Care Index | 11.57% | 20.91% | 17.72% | 10.44% | 6.41% | ||||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 5.20% | ||||||||
| Morningstar Quartile – Class T Shares | – | 1st | 1st | 2nd | 1st | ||||||||
| Morningstar Ranking – based on total return for Health Funds | – | 19/128 | 28/122 | 35/117 | 15/70 | ||||||||
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 | MARCH 31, 2015
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.
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.
High absolute short-term performance is not typical and may not be achieved in the future. Such results should not be the sole basis for evaluating material facts in making an investment decision.
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 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.
© 2015 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.
Effective January 28, 2015, the Fund’s primary benchmark index changed from the S&P 500® Index to the MSCI World Health Care Index. Janus Capital believes that the change provides a more appropriate comparison for the Fund’s investment strategy.
See “Useful Information About Your Fund Report.”
| * | The Fund’s inception date – December 31, 1998 | |
| (1) | Closed to new investors. |
Janus Investment Fund | 7
Table of Contents
Janus Global Life Sciences 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,250.10 | $ | 5.67 | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 | 1.01% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,245.40 | $ | 9.96 | $ | 1,000.00 | $ | 1,016.06 | $ | 8.95 | 1.78% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,251.50 | $ | 4.66 | $ | 1,000.00 | $ | 1,020.79 | $ | 4.18 | 0.83% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,250.70 | $ | 4.21 | $ | 1,000.00 | $ | 1,021.19 | $ | 3.78 | 0.75% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,249.60 | $ | 6.62 | $ | 1,000.00 | $ | 1,019.05 | $ | 5.94 | 1.18% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,251.10 | $ | 5.22 | $ | 1,000.00 | $ | 1,020.29 | $ | 4.68 | 0.93% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 98.4% | ||||||||||
| Biotechnology – 34.8% | ||||||||||
| 726,040 | ACADIA Pharmaceuticals, Inc.*,# | $ | 23,661,644 | |||||||
| 2,447,681 | Achillion Pharmaceuticals, Inc.*,# | 24,134,135 | ||||||||
| 356,790 | Actelion, Ltd.* | 41,324,295 | ||||||||
| 2,478,821 | Aduro Biotech, Inc.*,§ | 21,243,496 | ||||||||
| 184,501 | Agios Pharmaceuticals, Inc.*,# | 17,398,444 | ||||||||
| 373,268 | Alexion Pharmaceuticals, Inc.* | 64,687,344 | ||||||||
| 519,509 | Alkermes PLC* | 31,674,464 | ||||||||
| 388,276 | AMAG Pharmaceuticals, Inc.*,# | 21,223,166 | ||||||||
| 767,256 | Amgen, Inc. | 122,645,872 | ||||||||
| 265,891 | Anacor Pharmaceuticals, Inc.* | 15,381,794 | ||||||||
| 715,616 | Ascendis Pharma A/S*,§,£ | 11,174,344 | ||||||||
| 377,622 | Auspex Pharmaceuticals, Inc.* | 37,864,158 | ||||||||
| 278,545 | Biogen, Inc.* | 117,612,841 | ||||||||
| 809,724 | Celgene Corp.* | 93,344,983 | ||||||||
| 847,159 | Chimerix, Inc.* | 31,929,423 | ||||||||
| 208,656 | Clovis Oncology, Inc.*,# | �� | 15,488,535 | |||||||
| 3,259,574 | Dyax Corp.* | 54,614,162 | ||||||||
| 196,311 | Fibrogen, Inc.*,# | 6,160,239 | ||||||||
| 508,728 | Fibrogen, Inc. (PP)*,§ | 15,165,690 | ||||||||
| 729,530 | Gilead Sciences, Inc.*,† | 71,588,779 | ||||||||
| 361,627 | Incyte Corp.* | 33,146,731 | ||||||||
| 1,252,348 | Insmed, Inc.* | 26,048,838 | ||||||||
| 719,405 | Insys Therapeutics, Inc.* | 41,819,013 | ||||||||
| 3,295,107 | Ironwood Pharmaceuticals, Inc.* | 52,721,712 | ||||||||
| 457,875 | Juno Therapeutics, Inc.*,§ | 26,385,963 | ||||||||
| 320,516 | Medivation, Inc.* | 41,369,000 | ||||||||
| 816,886 | Neurocrine Biosciences, Inc.* | 32,438,543 | ||||||||
| 1,487,768 | OvaScience, Inc.*,#,£ | 51,670,183 | ||||||||
| 321,173 | Pharmacyclics, Inc.* | 82,204,229 | ||||||||
| 5,714,285 | Pronai Therapeutics, Inc.*,§ | 3,999,999 | ||||||||
| 499,417 | ProQR Therapeutics NV* | 10,927,244 | ||||||||
| 404,881 | PTC Therapeutics, Inc.* | 24,637,009 | ||||||||
| 211,256 | Puma Biotechnology, Inc.*,# | 49,879,654 | ||||||||
| 254,328 | Receptos, Inc.* | 41,936,144 | ||||||||
| 136,900 | Regeneron Pharmaceuticals, Inc.* | 61,807,612 | ||||||||
| 1,114,616 | Sangamo BioSciences, Inc.*,# | 17,477,179 | ||||||||
| 146,025 | Spark Therapeutics, Inc.* | 11,316,937 | ||||||||
| 359,285 | Vertex Pharmaceuticals, Inc.* | 42,384,851 | ||||||||
| 502,221 | Zafgen, Inc.*,# | 19,892,974 | ||||||||
| 1,510,381,623 | ||||||||||
| Food & Staples Retailing – 0.4% | ||||||||||
| 596,496 | Diplomat Pharmacy, Inc.*,§ | 19,595,490 | ||||||||
| Food Products – 0.6% | ||||||||||
| 6,193,906 | Biostime International Holdings, Ltd.# | 25,899,462 | ||||||||
| Health Care Equipment & Supplies – 9.2% | ||||||||||
| 1,265,102 | Abbott Laboratories | 58,612,176 | ||||||||
| 702,611 | Baxter International, Inc. | 48,128,853 | ||||||||
| 4,788,648 | Boston Scientific Corp.* | 84,998,502 | ||||||||
| 1,185,878 | DBV Technologies SA (ADR)*,# | 27,702,110 | ||||||||
| 1,565,126 | Endologix, Inc.* | 26,716,701 | ||||||||
| 407,128 | HeartWare International, Inc.*,# | 35,733,624 | ||||||||
| 827,736 | Novadaq Technologies, Inc.* | 13,442,433 | ||||||||
| 390,821 | Varian Medical Systems, Inc.* | 36,772,348 | ||||||||
| 571,036 | Zimmer Holdings, Inc. | 67,108,151 | ||||||||
| 399,214,898 | ||||||||||
| Health Care Providers & Services – 11.5% | ||||||||||
| 684,851 | Aetna, Inc. | 72,957,177 | ||||||||
| 473,542 | AmerisourceBergen Corp. | 53,827,519 | ||||||||
| 1,019,442 | Catamaran Corp. (U.S. Shares)* | 60,697,577 | ||||||||
| 436,211 | DaVita HealthCare Partners, Inc.* | 35,455,230 | ||||||||
| 721,523 | Express Scripts Holding Co.* | 62,606,551 | ||||||||
| 699,925 | HCA Holdings, Inc.* | 52,655,358 | ||||||||
| 204,659 | Henry Schein, Inc.* | 28,574,489 | ||||||||
| 508,933 | MEDNAX, Inc.* | 36,902,732 | ||||||||
| 605,279 | Omnicare, Inc. | 46,642,800 | ||||||||
| 4,224,000 | Sinopharm Group Co., Ltd. – Class H | 17,204,698 | ||||||||
| 259,775 | Universal Health Services, Inc. – Class B | 30,578,115 | ||||||||
| 498,102,246 | ||||||||||
| Health Care Technology – 1.4% | ||||||||||
| 390,228 | athenahealth, Inc.*,# | 46,589,321 | ||||||||
| 968,664 | HMS Holdings Corp.*,# | 14,965,859 | ||||||||
| 61,555,180 | ||||||||||
| Insurance – 1.0% | ||||||||||
| 451,728 | Aon PLC | 43,420,095 | ||||||||
| Life Sciences Tools & Services – 1.2% | ||||||||||
| 80,570 | Mettler-Toledo International, Inc.* | 26,479,330 | ||||||||
| 187,949 | Thermo Fisher Scientific, Inc. | 25,249,069 | ||||||||
| 51,728,399 | ||||||||||
| Pharmaceuticals – 38.3% | ||||||||||
| 1,648,956 | AbbVie, Inc. | 96,529,884 | ||||||||
| 352,372 | Actavis PLC* | 104,872,955 | ||||||||
| 614,082 | Aerie Pharmaceuticals, Inc.* | 19,245,330 | ||||||||
| 365,233 | Bayer AG | 54,870,273 | ||||||||
| 1,127,860 | Bristol-Myers Squibb Co. | 72,746,970 | ||||||||
| 1,079,798 | Eli Lilly & Co. | 78,447,325 | ||||||||
| 904,394 | Endo International PLC* | 81,124,142 | ||||||||
| 1,196,329 | Flamel Technologies SA (ADR)*,# | 21,509,995 | ||||||||
| 336,345 | GW Pharmaceuticals PLC (ADR)*,# | 30,651,120 | ||||||||
| 16,173,273 | Indivior PLC* | 45,499,547 | ||||||||
| 298,863 | Jazz Pharmaceuticals PLC* | 51,640,538 | ||||||||
| 1,287,759 | Johnson & Johnson† | 129,548,519 | ||||||||
| 643,169 | Mallinckrodt PLC* | 81,457,354 | ||||||||
| 2,495,604 | Meda AB – Class A | 39,469,874 | ||||||||
| 940,173 | Nektar Therapeutics*,# | 10,341,903 | ||||||||
| 606,801 | Novartis AG | 60,024,569 | ||||||||
| 1,435,583 | Novo Nordisk A/S – Class B | 76,829,144 | ||||||||
| 405,720 | Pacira Pharmaceuticals, Inc.* | 36,048,222 | ||||||||
| 244,031 | Perrigo Co. PLC | 40,399,332 | ||||||||
| 1,103,419 | Relypsa, Inc.* | 39,800,323 | ||||||||
| 338,288 | Roche Holding AG | 93,309,251 | ||||||||
| 332,291 | Salix Pharmaceuticals, Ltd.*,# | 57,423,208 | ||||||||
| 781,098 | Sanofi | 76,849,805 | ||||||||
| 271,894 | Shire PLC (ADR) | 65,061,515 | ||||||||
| 1,251,592 | Teva Pharmaceutical Industries, Ltd. (ADR) | 77,974,181 | ||||||||
| 518,176 | Valeant Pharmaceuticals International, Inc. (U.S. Shares)* | 102,920,117 | ||||||||
| 417,446 | ZS Pharma, Inc.*,# | 17,566,128 | ||||||||
| 1,662,161,524 | ||||||||||
| Total Common Stocks (cost $3,030,370,733) | 4,272,058,917 | |||||||||
| Investment Companies – 7.1% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 5.0% | ||||||||||
| 218,230,663 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 218,230,663 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Money Markets – 2.1% | ||||||||||
| 89,389,689 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | $ | 89,389,689 | |||||||
| Total Investment Companies (cost $307,620,352) | 307,620,352 | |||||||||
| Total Investments (total cost $3,337,991,085) – 105.5% | 4,579,679,269 | |||||||||
| Securities Sold Short – (0.6)% | ||||||||||
| Common Stocks Sold Short – (0.6)% | ||||||||||
| Biotechnology – (0.6)% | ||||||||||
| 460,149 | Juno Therapeutics, Inc.* (proceeds $23,572,004) | (27,912,638) | ||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (4.9)% | (211,770,496) | |||||||||
| Net Assets – 100% | $ | 4,339,996,135 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 3,659,022,054 | 79 | .9% | ||||
| Switzerland | 194,658,115 | 4 | .2 | |||||
| Canada | 177,060,127 | 3 | .9 | |||||
| United Kingdom | 141,212,182 | 3 | .1 | |||||
| France | 104,551,915 | 2 | .3 | |||||
| Israel | 77,974,181 | 1 | .7 | |||||
| Denmark | 76,829,144 | 1 | .7 | |||||
| Germany | 54,870,273 | 1 | .2 | |||||
| China | 43,104,160 | 0 | .9 | |||||
| Sweden | 39,469,874 | 0 | .9 | |||||
| Netherlands | 10,927,244 | 0 | .2 | |||||
| Total | $ | 4,579,679,269 | 100 | .0% | ||||
Summary of Investments by Country – (Short Positions) (unaudited)
| % of Securities | ||||||||
| Country | Value | Sold Short | ||||||
| United States | $ | (27,912,638) | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| Swedish Krona 4/16/15 | 60,600,000 | $ | 7,041,874 | $ | (15,155) | |||||||
| Swiss Franc 4/16/15 | 34,300,000 | 35,328,788 | (1,042,503) | |||||||||
| 42,370,662 | (1,057,658) | |||||||||||
| Credit Suisse International: | ||||||||||||
| Swedish Krona 4/9/15 | 59,300,000 | 6,889,995 | 201,932 | |||||||||
| Swiss Franc 4/9/15 | 30,460,000 | 31,363,595 | 346,858 | |||||||||
| 38,253,590 | 548,790 | |||||||||||
| HSBC Securities (USA), Inc.: Swiss Franc 4/9/15 | 14,075,000 | 14,492,534 | 86,613 | |||||||||
| JPMorgan Chase & Co.: Swedish Krona 4/16/15 | 9,800,000 | 1,138,785 | 9,558 | |||||||||
| RBC Capital Markets Corp.: | ||||||||||||
| Swedish Krona 4/16/15 | 39,800,000 | 4,624,861 | (23,705) | |||||||||
| Swiss Franc 4/16/15 | 15,170,000 | 15,625,006 | (182,445) | |||||||||
| 20,249,867 | (206,150) | |||||||||||
| Total | $ | 116,505,438 | $ | (618,847) | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| MSCI World Health Care Index | A capitalization weighted index that monitors the performance of health care stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| PLC | Public Limited Company | |
| PP | Private Placement | |
| U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
| * | Non-income producing security. | |
| † | A portion of this security has been segregated 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Global Life Sciences Fund | $ | 76,606,500 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Life Sciences Fund | ||||||||||||||
| Aduro Biotech, Inc. | 12/19/14 | $ | 6,700,005 | $ | 21,243,496 | 0.5 | % | |||||||
| Ascendis Pharma A/S | 11/24/14 | 7,000,019 | 11,174,344 | 0.3 | ||||||||||
| Diplomat Pharmacy, Inc. | 3/31/14 | 9,987,448 | 19,595,490 | 0.5 | ||||||||||
| Fibrogen, Inc. | 12/28/04 – 11/8/05 | 5,786,781 | 15,165,690 | 0.3 | ||||||||||
| Juno Therapeutics, Inc. | 8/1/14 | 4,999,995 | 26,385,963 | 0.6 | ||||||||||
| Pronai Therapeutics, Inc. | 4/17/14 | 3,999,999 | 3,999,999 | 0.1 | ||||||||||
| Total | $ | 38,474,247 | $ | 97,564,982 | 2.3 | % | ||||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Global Life Sciences Fund | |||||||||||||||||||||
| Ascendis Pharma A/S | – | 715,616 | – | 715,616 | $ | – | $ | – | $ | 11,174,344 | |||||||||||
| Janus Cash Collateral Fund LLC | 154,989,666 | 737,271,571 | (674,030,574) | 218,230,663 | – | 807,065(1) | 218,230,663 | ||||||||||||||
| Janus Cash Liquidity Fund LLC | 78,179,785 | 541,787,318 | (530,577,414) | 89,389,689 | – | 42,815 | 89,389,689 | ||||||||||||||
| OvaScience, Inc. | 1,239,297 | 328,937 | (80,466) | 1,487,768 | 876,589 | – | 51,670,183 | ||||||||||||||
| Total | $ | 876,589 | $ | 849,880 | $ | 370,464,879 | |||||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Global Life Sciences Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Biotechnology | $ | 1,391,087,836 | $ | 94,050,292 | $ | 25,243,495 | |||||
| Food & Staples Retailing | – | 19,595,490 | – | ||||||||
| Food Products | – | 25,899,462 | – | ||||||||
| Health Care Providers & Services | 480,897,548 | 17,204,698 | – | ||||||||
| Pharmaceuticals | 1,215,309,061 | 446,852,463 | – | ||||||||
| All Other | 555,918,572 | – | – | ||||||||
Investment Companies | – | 307,620,352 | – | ||||||||
| Total Investments in Securities | $ | 3,643,213,017 | $ | 911,222,757 | $ | 25,243,495 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 644,961 | $ | – | |||||
Total Assets | $ | 3,643,213,017 | $ | 911,867,718 | $ | 25,243,495 | |||||
Liabilities | |||||||||||
Investments in Securities Sold Short: | |||||||||||
Common Stocks | $ | 27,912,638 | $ | – | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,263,808 | $ | – | |||||
Total Liabilities | $ | 27,912,638 | $ | 1,263,808 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Global Life Sciences Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 3,337,991,085 | ||
Unaffiliated investments, at value(1) | $ | 4,209,214,390 | ||
Affiliated investments, at value(2) | 370,464,879 | |||
| Cash | 2,501,160 | |||
| Deposits with broker for short sales | 23,572,004 | |||
| Forward currency contracts | 644,961 | |||
| Non-interested Trustees’ deferred compensation | 84,733 | |||
| Receivables: | ||||
| Investments sold | 13,651,203 | |||
| Fund shares sold | 20,072,355 | |||
| Dividends | 742,575 | |||
| Dividends from affiliates | 8,538 | |||
| Foreign dividend tax reclaim | 1,641,632 | |||
| Interest | 125,801 | |||
| Other assets | 98,691 | |||
| Total Assets | 4,642,822,922 | |||
| Liabilities: | ||||
Foreign cash due to custodian(3) | 9,550,502 | |||
| Collateral for securities loaned (Note 3) | 218,230,663 | |||
Short sales, at value(4) | 27,912,638 | |||
| Forward currency contracts | 1,263,808 | |||
| Closed foreign currency contracts | 83,789 | |||
| Payables: | ||||
| Investments purchased | 40,451,416 | |||
| Fund shares repurchased | 1,928,390 | |||
| Advisory fees | 2,294,065 | |||
| Fund administration fees | 35,845 | |||
| Transfer agent fees and expenses | 719,292 | |||
| 12b-1 Distribution and shareholder servicing fees | 157,725 | |||
| Non-interested Trustees’ fees and expenses | 18,125 | |||
| Non-interested Trustees’ deferred compensation fees | 84,733 | |||
| Accrued expenses and other payables | 95,796 | |||
| Total Liabilities | 302,826,787 | |||
| Net Assets | $ | 4,339,996,135 | ||
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 March 31, 2015 (unaudited) | Janus Global Life Sciences Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 2,922,161,898 | ||
| Undistributed net investment income/(loss) | (2,796,426) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 183,811,785 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,236,818,878 | |||
| Total Net Assets | $ | 4,339,996,135 | ||
| Net Assets - Class A Shares | $ | 242,694,023 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,104,501 | |||
Net Asset Value Per Share(5) | $ | 59.13 | ||
Maximum Offering Price Per Share(6) | $ | 62.74 | ||
| Net Assets - Class C Shares | $ | 129,667,116 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,302,387 | |||
Net Asset Value Per Share(5) | $ | 56.32 | ||
| Net Assets - Class D Shares | $ | 1,712,310,286 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 28,626,427 | |||
| Net Asset Value Per Share | $ | 59.82 | ||
| Net Assets - Class I Shares | $ | 430,624,416 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,192,248 | |||
| Net Asset Value Per Share | $ | 59.87 | ||
| Net Assets - Class S Shares | $ | 9,140,647 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 156,021 | |||
| Net Asset Value Per Share | $ | 58.59 | ||
| Net Assets - Class T Shares | $ | 1,815,559,647 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 30,438,056 | |||
| Net Asset Value Per Share | $ | 59.65 | ||
| (1) | Includes $184,699,190, of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes $27,678,286, of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (3) | Includes cost of $9,415,159. | |
| (4) | Proceeds $23,572,004. | |
| (5) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
| (6) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Global Life Sciences Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 807,065 | ||
| Dividends | 12,747,154 | |||
| Dividends from affiliates | 42,815 | |||
| Foreign tax withheld | (896,193) | |||
| Total Investment Income | 12,700,841 | |||
| Expenses: | ||||
| Advisory fees | 10,758,290 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 179,766 | |||
| Class C Shares | 365,326 | |||
| Class S Shares | 8,218 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 869,136 | |||
| Class S Shares | 8,218 | |||
| Class T Shares | 1,698,112 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 49,766 | |||
| Class C Shares | 31,669 | |||
| Class I Shares | 122,899 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 7,857 | |||
| Class C Shares | 4,990 | |||
| Class D Shares | 146,254 | |||
| Class I Shares | 6,252 | |||
| Class S Shares | 75 | |||
| Class T Shares | 10,329 | |||
| Shareholder reports expense | 158,645 | |||
| Registration fees | 126,607 | |||
| Custodian fees | 29,863 | |||
| Professional fees | 36,014 | |||
| Non-interested Trustees’ fees and expenses | 39,675 | |||
| Stock loan fees | 68,879 | |||
| Fund administration fees | 142,668 | |||
| Other expenses | 81,682 | |||
| Total Expenses | 14,951,190 | |||
| Net Expenses | 14,951,190 | |||
| Net Investment Income/(Loss) | (2,250,349) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 219,392,563 | |||
| Investments in affiliates | 876,589 | |||
| Total Net Realized Gain/(Loss) on Investments | 220,269,152 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 559,341,329 | |||
| Short sales | (4,340,634) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 555,000,695 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 773,019,498 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Global | ||||||||
| Life Sciences Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (2,250,349) | $ | (608,106) | ||||
| Net realized gain/(loss) on investments | 220,269,152 | 288,451,802 | ||||||
| Change in unrealized net appreciation/depreciation | 555,000,695 | 251,221,361 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 773,019,498 | 539,065,057 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (12,343,389) | (1,479,375) | ||||||
| Class C Shares | (6,209,412) | (763,180) | ||||||
| Class D Shares | (131,584,676) | (69,260,876) | ||||||
| Class I Shares | (29,972,775) | (2,030,678) | ||||||
| Class S Shares | (515,374) | (719,491) | ||||||
| Class T Shares | (121,378,974) | (42,705,610) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (302,004,600) | (116,959,210) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 150,066,705 | 63,164,781 | ||||||
| Class C Shares | 77,490,967 | 32,787,365 | ||||||
| Class D Shares | 206,612,326 | 237,810,460 | ||||||
| Class I Shares | 152,585,235 | 240,228,615 | ||||||
| Class S Shares | 5,137,390 | 10,534,557 | ||||||
| Class T Shares | 690,072,084 | 559,644,930 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 10,553,872 | 1,462,186 | ||||||
| Class C Shares | 5,251,289 | 737,583 | ||||||
| Class D Shares | 129,724,525 | 68,340,423 | ||||||
| Class I Shares | 15,597,243 | 1,768,370 | ||||||
| Class S Shares | 513,583 | 719,491 | ||||||
| Class T Shares | 118,782,620 | 41,730,311 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (14,522,663) | (10,158,478) | ||||||
| Class C Shares | (4,559,177) | (3,109,938) | ||||||
| Class D Shares | (69,045,534) | (141,400,079) | ||||||
| Class I Shares | (38,899,597) | (26,315,250) | ||||||
| Class S Shares | (3,491,284) | (16,282,528) | ||||||
| Class T Shares | (185,712,150) | (240,799,231) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 1,246,157,434 | 820,863,568 | ||||||
| Net Increase/(Decrease) in Net Assets | 1,717,172,332 | 1,242,969,415 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 2,622,823,803 | 1,379,854,388 | ||||||
| End of period | $ | 4,339,996,135 | $ | 2,622,823,803 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (2,796,426) | $ | (546,077) | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Life Sciences Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $52.09 | $42.09 | $30.94 | $22.72 | $22.16 | $19.69 | $17.81 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(3) | (0.12)(3) | 0.09 | 0.05 | (0.24) | 0.21 | (0.01) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.50 | 13.56 | 12.19 | 8.17 | 0.94 | 2.28 | 1.89 | |||||||||||||||||||||||
| Total from Investment Operations | 12.44 | 13.44 | 12.28 | 8.22 | 0.70 | 2.49 | 1.88 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | (0.14) | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | – | (0.14) | (0.02) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $59.13 | $52.09 | $42.09 | $30.94 | $22.72 | $22.16 | $19.69 | |||||||||||||||||||||||
| Total Return* | 25.44% | 34.20% | 41.11% | 36.18% | 3.14% | 12.65% | 10.56% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $242,694 | $75,566 | $12,847 | $3,324 | $1,072 | $1,571 | $61 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $144,208 | $36,354 | $6,325 | $1,801 | $1,628 | $849 | $27 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.01% | 1.03% | 1.04% | 1.09% | 1.07% | 1.11% | 1.10% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.01% | 1.03% | 1.04% | 1.09% | 1.07% | 1.11% | 1.05% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.20)% | (0.25)% | (0.45)% | (0.42)% | (0.68)% | 1.66% | (0.19)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | 70% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Life Sciences Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $50.02 | $40.85 | $30.30 | $22.41 | $21.97 | $19.64 | $17.81 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.25)(3) | (0.47)(3) | 0.34 | (0.34) | (0.18) | 0.13 | (0.03) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 11.95 | 13.08 | 11.34 | 8.23 | 0.71 | 2.20 | 1.86 | |||||||||||||||||||||||
| Total from Investment Operations | 11.70 | 12.61 | 11.68 | 7.89 | 0.53 | 2.33 | 1.83 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | (0.09) | – | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | – | |||||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | – | (0.09) | – | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $56.32 | $50.02 | $40.85 | $30.30 | $22.41 | $21.97 | $19.64 | |||||||||||||||||||||||
| Total Return* | 24.96% | 33.13% | 39.97% | 35.21% | 2.39% | 11.86% | 10.28% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $129,667 | $41,251 | $6,686 | $510 | $461 | $187 | $21 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $73,266 | $19,533 | $2,021 | $456 | $289 | $75 | $7 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.78% | 1.80% | 1.83% | 1.83% | 1.77% | 1.88% | 1.87% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.78% | 1.80% | 1.83% | 1.83% | 1.77% | 1.88% | 1.80% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.96)% | (1.04)% | (1.31)% | (1.16)% | (1.23)% | 1.27% | (1.09)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | 70% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year or period | Janus Global Life Sciences Fund | |||||||||||||||||||||||||
| ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $52.58 | $42.39 | $31.10 | $22.83 | $22.21 | $21.65 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(2) | 0.02(2) | 0.06 | (0.04) | (0.10) | 0.24 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.66 | 13.61 | 12.36 | 8.35 | 0.84 | 0.32 | ||||||||||||||||||||
| Total from Investment Operations | 12.64 | 13.63 | 12.42 | 8.31 | 0.74 | 0.56 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | (0.04) | (0.12) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | (0.04) | (0.12) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $59.82 | $52.58 | $42.39 | $31.10 | $22.83 | $22.21 | ||||||||||||||||||||
| Total Return* | 25.59% | 34.41% | 41.36% | 36.43% | 3.32% | 2.59% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,712,310 | $1,243,470 | $846,769 | $559,004 | $421,225 | $432,620 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,452,540 | $1,052,112 | $664,124 | $491,822 | $455,425 | $426,969 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.83% | 0.84% | 0.87% | 0.90% | 0.90% | 1.00% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.83% | 0.84% | 0.87% | 0.90% | 0.90% | 1.00% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.09)% | 0.03% | (0.24)% | (0.21)% | (0.45)% | 1.74% | ||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Janus Global Life Sciences Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $52.66 | $42.41 | $31.09 | $22.82 | $22.22 | $19.71 | $17.81 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | –(2)(6) | (0.04)(2) | 0.10 | (0.01) | (0.11) | 0.24 | –(6) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.61 | 13.73 | 12.35 | 8.32 | 0.86 | 2.28 | 1.90 | |||||||||||||||||||||||
| Total from Investment Operations | 12.61 | 13.69 | 12.45 | 8.31 | 0.75 | 2.52 | 1.90 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | (0.04) | (0.15) | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | 0.01 | – | |||||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | (0.04) | (0.15) | (0.01) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $59.87 | $52.66 | $42.41 | $31.09 | $22.82 | $22.22 | $19.71 | |||||||||||||||||||||||
| Total Return* | 25.48% | 34.55% | 41.47% | 36.49% | 3.37% | 12.85% | 10.67% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $430,624 | $255,398 | $18,712 | $7,392 | $4,313 | $4,319 | $991 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $332,374 | $104,365 | $10,670 | $5,822 | $4,654 | $2,645 | $249 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.75% | 0.77% | 0.77% | 0.86% | 0.87% | 0.92% | 0.87% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.75% | 0.77% | 0.77% | 0.86% | 0.87% | 0.91% | 0.77% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.01% | (0.08)% | (0.17)% | (0.16)% | (0.45)% | 1.81% | 0.10% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | 70% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
18 | MARCH 31, 2015
Table of Contents
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and | Janus Global Life Sciences Fund | |||||||||||||||||||||||||||||
| the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $51.68 | $41.85 | $30.82 | $22.66 | $22.09 | $19.66 | $17.81 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.10)(3) | (0.13)(3) | 0.28 | (0.23) | (0.20) | 0.21 | –(4) | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.41 | 13.40 | 11.88 | 8.39 | 0.85 | 2.23 | 1.85 | |||||||||||||||||||||||
| Total from Investment Operations | 12.31 | 13.27 | 12.16 | 8.16 | 0.65 | 2.44 | 1.85 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | (0.08) | (0.02) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | 0.01 | – | |||||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | – | (0.08) | (0.01) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $58.59 | $51.68 | $41.85 | $30.82 | $22.66 | $22.09 | $19.66 | |||||||||||||||||||||||
| Total Return* | 25.39% | 33.97% | 40.88% | 36.01% | 2.94% | 12.46% | 10.39% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $9,141 | $6,146 | $9,021 | $161 | $181 | $189 | $11 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $6,592 | $11,077 | $2,122 | $199 | $207 | $149 | $1 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.18% | 1.18% | 1.20% | 1.23% | 1.24% | 1.33% | 1.48% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.18% | 1.16% | 1.20% | 1.23% | 1.24% | 1.33% | 1.24% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.38)% | (0.27)% | (0.89)% | (0.52)% | (0.80)% | 1.16% | (0.07)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | 70% | |||||||||||||||||||||||
Class T Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||||||
| March 31, 2015 (unaudited), each year or period | Janus Global Life Sciences Fund | |||||||||||||||||||||||||||||
| ended September 30 and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $52.47 | $42.34 | $31.09 | $22.81 | $22.19 | $19.70 | $17.78 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(3) | (0.04)(3) | 0.03 | (0.06) | (0.12) | 0.27 | 0.04 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 12.63 | 13.61 | 12.35 | 8.35 | 0.84 | 2.22 | 1.94 | |||||||||||||||||||||||
| Total from Investment Operations | 12.58 | 13.57 | 12.38 | 8.29 | 0.72 | 2.49 | 1.98 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | (0.01) | (0.10) | –(4) | (0.06) | |||||||||||||||||||||||
| Distributions (from capital gains) | (5.40) | (3.44) | (1.13) | – | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | –(5) | –(5) | –(5) | |||||||||||||||||||||||
| Total Distributions | (5.40) | (3.44) | (1.13) | (0.01) | (0.10) | – | (0.06) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $59.65 | $52.47 | $42.34 | $31.09 | $22.81 | $22.19 | $19.70 | |||||||||||||||||||||||
| Total Return* | 25.53% | 34.31% | 41.24% | 36.34% | 3.26% | 12.65% | 11.21% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,815,560 | $1,000,993 | $485,819 | $266,444 | $203,916 | $230,708 | $646,206 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,362,222 | $723,035 | $328,041 | $233,296 | $232,934 | $381,186 | $618,360 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.93% | 0.93% | 0.95% | 0.98% | 1.00% | 1.01% | 1.04% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.93% | 0.92% | 0.94% | 0.98% | 1.00% | 1.01% | 1.03% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.16)% | (0.08)% | (0.32)% | (0.28)% | (0.56)% | 0.80% | 0.28% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 22% | 52% | 47% | 50% | 54% | 42% | 70% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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. |
See Notes to Financial Statements.
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Global Life Sciences 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in
20 | MARCH 31, 2015
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good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
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 3 | ||||||
| Fund | to Level 2 | |||||
| Janus Global Life Sciences Fund | $ | 20,977,723 | ||||
Financial assets were transferred out of Level 3 to Level 2 since certain security’s prices were determined using other significant observable inputs at the end of the current period and significant unobservable inputs at the end of the prior fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from
Janus Investment Fund | 21
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Notes to Financial Statements (unaudited) (continued)
foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, 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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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,
22 | MARCH 31, 2015
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options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The
Janus Investment Fund��| 23
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Notes to Financial Statements (unaudited) (continued)
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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Global Life Sciences Fund | $ | 97,135,012 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Life Sciences Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 644,961 | Forward currency contracts | $ | 1,263,808 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Janus Global Life Sciences Fund | ||||
| Currency Contracts | $ | 5,491,247 | ||
| 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 | |||
Janus Global Life Sciences Fund | ||||
| Currency Contracts | $ | (2,287,965 | ) | |
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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Notes to Financial Statements (unaudited) (continued)
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 March 31, 2015” 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 | ||||||||||||||
| Credit Suisse International | $ | 548,790 | $ | – | $ | – | $ | 548,790 | ||||||||||
| Deutsche Bank AG | 212,377,476 | – | (212,377,476) | – | ||||||||||||||
| HSBC Securities (USA), Inc. | 86,613 | – | – | 86,613 | ||||||||||||||
| JPMorgan Chase & Co. | 9,558 | – | – | 9,558 | ||||||||||||||
| Total | $ | 213,022,437 | $ | – | $ | (212,377,476) | $ | 644,961 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ | 1,057,658 | $ | – | $ | – | $ | 1,057,658 | ||||||||||
| Goldman Sachs International | 27,912,638 | – | (27,912,638) | – | ||||||||||||||
| RBC Capital Markets Corp. | 206,150 | – | – | 206,150 | ||||||||||||||
| Total | $ | 29,176,446 | $ | – | $ | (27,912,638) | $ | 1,263,808 | ||||||||||
| (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.
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.
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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.
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 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.
Short Sales
The Fund may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Fund owns or selling short a security that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Fund does not deliver from its portfolio the securities sold short and does not immediately receive the proceeds of the short sale. The Fund borrows the securities sold short and receives proceeds from the short sale only when it delivers the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain.
The Fund may also engage in other short sales. The Fund may engage in short sales when the portfolio manager anticipates that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. No more than 10% of the Fund’s net assets may be invested in short positions (through
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Notes to Financial Statements (unaudited) (continued)
short sales of stocks, structured products, futures, swaps, and uncovered written calls). The Fund may engage in short sales “against the box” and options for hedging purposes that are not subject to this 10% limit. Although the potential for gain as a result of a short sale is limited to the price at which the Fund sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance the Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. Short sales held by the Fund are fully collateralized by restricted cash or other securities, which are denoted on the accompanying Schedule of Investments. The Fund is also required to pay the lender of the security any dividends or interest that accrue on a borrowed security during the period of the loan. Depending on the arrangements made with the broker or custodian, the Fund may or may not receive any payments (including interest) on collateral it has deposited with the broker. The Fund pays stock loan fees, disclosed on the Statement of Operations, on assets borrowed from the security broker.
The Fund may also enter into short positions through derivative instruments, such as options contracts, futures contracts, and swap agreements, which may expose the Fund to similar risks. To the extent that the Fund enters into short derivative positions, the Fund may be exposed to risks similar to those associated with short sales, including the risk that the Fund’s losses are theoretically unlimited.
| 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 Life Sciences Fund | All Asset Levels | 0.64 | ||||||||
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity
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Notes to Financial Statements (unaudited) (continued)
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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Global Life Sciences Fund | $ | 275,206 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Global Life Sciences Fund | $ | 9,427 | ||||
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Global Life Sciences Fund | $ | 3,352,174,811 | $ | 1,239,397,442 | $ | (11,892,984) | $ | 1,227,504,458 | ||||||||||
Information on the tax components of securities sold short as of March 31, 2015 is as follows:
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | (Appreciation)/ | |||||||||||||||
| Fund | Cost | (Appreciation) | Depreciation | Depreciation | ||||||||||||||
| Janus Global Life Sciences Fund | $ | (23,572,004) | $ | (4,340,634) | $ | – | $ | (4,340,634) | ||||||||||
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| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Global Life Sciences Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 2,715,495 | 1,327,255 | ||||||||
| Reinvested dividends and distributions | 205,328 | 35,855 | ||||||||
| Shares repurchased | (267,082) | (217,587) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,653,741 | 1,145,523 | ||||||||
| Shares Outstanding, Beginning of Period | 1,450,760 | 305,237 | ||||||||
| Shares Outstanding, End of Period | 4,104,501 | 1,450,760 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 1,458,259 | 712,167 | ||||||||
| Reinvested dividends and distributions | 107,038 | 18,716 | ||||||||
| Shares repurchased | (87,526) | (69,923) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,477,771 | 660,960 | ||||||||
| Shares Outstanding, Beginning of Period | 824,616 | 163,656 | ||||||||
| Shares Outstanding, End of Period | 2,302,387 | 824,616 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 3,731,013 | 5,071,090 | ||||||||
| Reinvested dividends and distributions | 2,497,104 | 1,662,379 | ||||||||
| Shares repurchased | (1,250,957) | (3,060,792) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,977,160 | 3,672,677 | ||||||||
| Shares Outstanding, Beginning of Period | 23,649,267 | 19,976,590 | ||||||||
| Shares Outstanding, End of Period | 28,626,427 | 23,649,267 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 2,728,321 | 4,921,829 | ||||||||
| Reinvested dividends and distributions | 299,659 | 42,974 | ||||||||
| Shares repurchased | (685,715) | (555,987) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,342,265 | 4,408,816 | ||||||||
| Shares Outstanding, Beginning of Period | 4,849,983 | 441,167 | ||||||||
| Shares Outstanding, End of Period | 7,192,248 | 4,849,983 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 96,008 | 233,324 | ||||||||
| Reinvested dividends and distributions | 10,084 | 17,756 | ||||||||
| Shares repurchased | (68,989) | (347,705) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 37,103 | (96,625) | ||||||||
| Shares Outstanding, Beginning of Period | 118,918 | 215,543 | ||||||||
| Shares Outstanding, End of Period | 156,021 | 118,918 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 12,458,652 | 11,783,584 | ||||||||
| Reinvested dividends and distributions | 2,292,216 | 1,016,573 | ||||||||
| Shares repurchased | (3,390,168) | (5,197,142) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 11,360,700 | 7,603,015 | ||||||||
| Shares Outstanding, Beginning of Period | 19,077,356 | 11,474,341 | ||||||||
| Shares Outstanding, End of Period | 30,438,056 | 19,077,356 | ||||||||
Janus Investment Fund | 31
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Notes to Financial Statements (unaudited) (continued)
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Life Sciences Fund | $ | 1,687,323,234 | $ | 734,723,056 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 and through the date of issuance of the Fund’s financial statements and determined that there were material events or transactions that would require recognition or disclosure in the Fund’s financial statements as discussed below.
Taking into consideration certain factors, the fair value of Aduro Biotech, Inc. has been adjusted in accordance with generally accepted accounting principles required at the period end for financial reporting purposes. As a result, the net asset values and total returns of the Fund differ from those reflected for shareholder transactions. On April 15, 2015, Aduro Biotech, Inc. issued an IPO and its fair market value increased 341% compared to the aforementioned fair value. The impacts of April 15, 2015 are not reflected in the March 31, 2015 financial statements of the Fund. The Fund’s investment in this issuer exposes shareholders to positive and negative performance resulting from this and other events.
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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 | 33
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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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Useful Information About Your Fund Report (unaudited) (continued)
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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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).
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-0515-87560 | 125-24-93043 05-15 |
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semiannual report
March 31, 2015
Perkins Global Value Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Perkins Global Value Fund
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Perkins Global 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. |  Tadd Chessen co-portfolio manager |  Christian Kirtley co-portfolio manager |  Gregory Kolb co-portfolio manager |
PERFORMANCE OVERVIEW
Perkins Global Value Fund’s Class T Shares returned 1.01% over the six-month period ended March 31, 2015. It underperformed its primary benchmark, the MSCI World Index, which returned 3.35%, and its secondary benchmark, the MSCI All Country World Index, which returned 2.73% in the period. Though we are pleased that the Fund has largely kept pace with the market since the bottom in March 2009 while exhibiting substantially lower beta (a measure of volatility as compared to the index) and standard deviation (a measure of historical volatility), it is not surprising that we would lag in this environment, which we believe is short on bargains but long on risk. We continue to work to position the portfolio in such a manner that it can participate should further gains lie ahead, while at the same time attempting to limit our exposure to turbulence or an outright drawdown should a more negative scenario unfold.
MARKET & ECONOMIC COMMENTARY
On a recent research trip to Japan, we were struck by one area of Prime Minister Shinzo Abe’s structural reform agenda that seems to be making real, tangible progress: corporate governance. This appears to be a high priority for the government, with the ultimate goals of boosting industrial competitiveness and luring more Japanese investors to their own stock market, where allocations are low relative to other developed nations. The latest initiative, Japan’s first-ever “Corporate Governance Code,” which takes effect in June, urges companies to actively engage with their minority shareholders, take on at least two independent board directors (only 35% of listed firms meet this requirement), reconsider anti-takeover measures, and disclose annually the economic rationale behind their cross-shareholdings. On the last point in particular, we are hopeful that this disclosure and explanation requirement will encourage companies to liquidate shares where ownership rationale is questionable. Unwinding of cross-shareholdings should result in major improvements in capital efficiency and potentially lead to increased mergers and acquisitions activity. The new Corporate Governance Code complements two important governance-related initiatives introduced in 2014: the Stewardship Code, which urges institutional investors to engage with their portfolio companies, and the launch of a major new stock market index (the JPX-Nikkei 400, also known as the “shame index), which emphasizes return on equity and governance factors in its weightings, in addition to market capitalization. Exclusion from this index has prompted several Japanese firms to boost shareholder returns for the first time. Importantly, the Abe administration has convinced the GPIF, the country’s leading public pension fund, to increasingly benchmark domestic equities with this benchmark rather than the Nikkei or TOPIX, so that the shame of being left out or receiving a low weighting is compounded by the prospect of capital outflows. While we have doubts about other elements of Abenomics, and whether it can put Japan on a sustainably better macroeconomic path, we do believe the corporate governance initiatives have the potential to unlock considerable corporate value over time.
Japan posted the best returns of the major global developed markets during the period, with the TOPIX Index returning 17% in yen and a little over 7% in U.S. dollars. The U.S. stock market also performed well, returning roughly 6% and continuing a rally that has now entered its seventh year. Europe’s STOXX 600 Index returned 17% in euros, as the European Central Bank’s introduction of its quantitative easing program and its impact on eurozone bond yields seemed to outweigh continued weak economic performance and the increasingly fractious relationship between Greece and the rest of the currency bloc. However, this strong performance in local terms was negated by weakness in the euro, with the STOXX slightly negative in U.S. dollars.
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Perkins Global Value Fund (unaudited)
DETRACTORS FROM PERFORMANCE
Our holdings in consumer staples, telecommunication services and health care, as well as our underweight in consumer discretionary, hurt relative performance. From a country perspective, stock selection in the U.S., Mexico and Canada detracted from performance. Our substantial cash holdings, which averaged roughly 16% during the period, also detracted from relative performance.
Individual detractors were led by Cenovus Energy, an integrated oil and gas company based in Canada. Formed in 2009 after splitting from Encana, the company has a strong production growth profile with low cost and long-lived oil sands reserves. Global oil and gas companies have suffered mightily in the face of the approximately 50% drop in global crude oil prices since mid-2014, and Cenovus has been no exception. During the period, management reduced its 2015 cash flow and capital expenditure guidance, now based on $50/barrel West Texas Intermediate. Cash flow is expected to be more than 50% below the levels Cenovus achieved in 2012 and 2013, making its cash flow-based debt metrics worse. Because of this, and management’s desire to maintain an adequate capital buffer as it continues to invest in its long-lived assets, the company later announced an equity financing that is 8% to 9% dilutive. While this move caught us and the market by surprise (we do not believe they needed it), we continue to see a good risk-reward ratio in the company’s world-class asset base.
Another leading detractor, America Movil, is one of the world’s largest integrated telecommunications companies with over 368 million access lines in 25 countries, principally in Latin America. The shares underperformed in the period on the back of the announcement that AT&T will acquire Nextel’s Mexican business, which was near bankruptcy. While AT&T had already signaled its ambition to compete with America Movil in Mexico (through its earlier acquisition of a 50% stake in Iusacell), AT&T’s purchase of the Nextel assets could mean that America Movil has a harder time receiving fair value for the disposal of a portion of its own Mexican asset base (which it is doing to appease regulators). The significant weakening of the Mexican peso during the period, which fell more than 10% against the U.S. dollar, also negatively impacted performance. On the positive side, America Movil announced a larger-than-expected regular dividend, an additional special dividend, and a buyback program, which taken together will return approximately 7% of the company’s market value to shareholders.
Royal Dutch Shell, an oil and gas super-major based in the UK, was also a top detractor. Following a series of operational missteps over the past few years that allowed us to build a large position on attractive terms, new CEO Ben van Beurden appears to be setting the company on a better path by streamlining the asset base and lowering overall capital intensity. During the first quarter of 2015, the company reported weak operating results as lower commodity prices and higher exploration expenses weighed on profits. The stock also reacted poorly to management’s decision to reinstate its scrip dividend program, in which shareholders may elect to receive additional shares in lieu of cash dividends. While the scrip program gives the company increased financial flexibility, investors were surprised by the announcement given the retirement of the previous scrip program in May 2014.
CONTRIBUTORS TO PERFORMANCE
Stock selection in financials and industrials, as well as our underweight in materials, aided relative performance. Stock selection in Hong Kong, Switzerland and Japan aided results. Our hedges overall were positive in the period, as both the euro and the yen weakened against the U.S. dollar.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
Global pharmaceutical company Pfizer was the largest individual contributor to performance. During the past few years, the company has taken steps to unlock shareholder value by divesting noncore businesses such as animal health and nutrition, and focusing on its core pharmaceutical business. Furthermore, starting in 2014, the company began to manage commercial operations and provide financial transparency through a new global structure consisting of three businesses: Global Innovative Pharmaceutical business (GIP), Global Vaccines, Oncology and Consumer Health business (VOC), and Global Established Pharmaceutical business (GEP). This structural change could lead to further divestments or spin-offs. The stock outperformed during the period mainly on the announced acquisition of Hospira, a generic injectable pharmaceutical manufacturer and a global leader in biosimilars. The deal is expected to close by the end of 2015 and be immediately accretive.
Tesco, another leading contributor, is a grocery and general merchandise retailer based in the UK. For the past 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. 2014 proved to be an annus horribilis for Tesco, with multiple profit warnings, accounting
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irregularities, and ultimately, the firing of previous management. During the most recent quarter, however, some positives have begun to emerge. For the first time in many quarters, Tesco’s UK market share and sales data have begun to improve. Investors have some reason to hope this will continue as highly respected retailer Matt Davies (most recently CEO of Halfords) has been appointed to run the UK business. The company also announced a raft of cost savings measures and potential asset sales that should allow it to fund its turnaround internally, without issuing expensive equity.
Oracle was also one of the top contributors. The company is among the world’s largest software vendors, with particular strength in database software and related applications. Oracle posted continued strength in its core database and applications business software products. Additionally, the growth rate in its cloud based businesses accelerated in the period. After being late to recognize the large potential growth in cloud offerings, Oracle’s renewed focus over the past two years has resulted in stronger than expected cloud-based revenue growth. We expect much of Oracle’s future growth to come from its expanding array of cloud-based offerings. Additionally, Oracle is keeping a very tight lid on expenses, and this was evident again in the most recent period. Despite the strong performance of the shares, we continue to hold our position given what we view to be a still attractive price, a strong balance sheet, and consistent free cash flow generation.
PORTFOLIO POSITIONING & OUTLOOK
With global stock indices up strongly over the last six years and the U.S. Federal Reserve (Fed) potentially embarking on a monetary tightening cycle following years of ultra-accommodative policy, we believe the investment climate calls for caution. Tightening too soon potentially risks sending a deflationary impulse through the global economy at a time of already feeble growth. On the other hand, to not tighten means the Fed would have little ammunition to stimulate the economy the next time a recession strikes. (In the past, the U.S. has been able to cut rates to combat economic downturns.) It is a real conundrum for policy makers, and how they navigate this period will likely have ramifications for equity markets. At Perkins, we also worry about higher-than-average equity valuations almost everywhere, high corporate profit margins (particularly in the U.S.), ongoing dysfunction in the eurozone currency union, the effective tightening of monetary conditions in emerging markets due to the recent strengthening of the U.S. dollar, and geopolitical tensions in the Middle East and elsewhere, to name a few of the more visible risks.
We continue to hold significant stakes in U.S. blue chips and European multinationals, stocks which typically exhibit stable cash flows that are relatively less economically sensitive than the broad market. Our exposure to Japan is lower than it was 12 to 18 months ago, given trims after the strong run in many of our holdings. We remain very selective with our emerging market positions. Cash continues to run high due to a lack of bargain securities. We continue to hedge 60% of our yen exposure and 50% of our euro exposure. In building the portfolio, we try to maintain the mindset that “things change” – including the global financial markets. As such, we are aiming to be prepared for whatever comes our way over the next few years.
Thank you for your investment and continued confidence in Perkins Global Value Fund.
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Perkins Global Value Fund (unaudited)
Perkins Global Value Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pfizer, Inc. | 0.39% | |||
| Tesco PLC | 0.35% | |||
| Oracle Corp. | 0.34% | |||
| CK Hutchison Holdings, Ltd. | 0.24% | |||
| Medtronic PLC | 0.21% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Cenovus Energy, Inc. | –0.59% | |||
| America Movil SAB de CV – Series L | –0.48% | |||
| Royal Dutch Shell PLC – Class A | –0.40% | |||
| Stock Spirits Group PLC | –0.29% | |||
| Microsoft Corp. | –0.28% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Financials | 0.94% | 13.33% | 20.72% | |||||||||
| Materials | 0.35% | 1.02% | 5.23% | |||||||||
| Industrials | 0.26% | 7.76% | 10.91% | |||||||||
| Energy | 0.21% | 6.62% | 8.07% | |||||||||
| Utilities | 0.21% | 4.54% | 3.30% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Consumer Staples | –1.36% | 20.37% | 9.94% | |||||||||
| Consumer Discretionary | –1.13% | 3.00% | 12.31% | |||||||||
| Telecommunication Services | –0.78% | 6.98% | 3.37% | |||||||||
| Health Care | –0.73% | 13.50% | 12.88% | |||||||||
| Other** | –0.58% | 16.05% | 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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5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Oracle Corp. Software | 2.9% | |||
| Wells Fargo & Co. Commercial Banks | 2.8% | |||
| Coca-Cola Co. Beverages | 2.8% | |||
| Johnson & Johnson Pharmaceuticals | 2.7% | |||
| Procter & Gamble Co. Household Products | 2.6% | |||
| 13.8% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Perkins Global Value Fund (unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Perkins Global Value Fund – Class A Shares | |||||||||||||
| NAV | 0.91% | 2.88% | 9.19% | 5.54% | 6.66% | 1.09% | |||||||
| MOP | –4.87% | –3.06% | 7.90% | 4.92% | 6.20% | ||||||||
| Perkins Global Value Fund – Class C Shares | |||||||||||||
| NAV | 0.52% | 2.09% | 8.55% | 4.84% | 5.94% | 1.85% | |||||||
| CDSC | –0.43% | 1.12% | 8.55% | 4.84% | 5.94% | ||||||||
| Perkins Global Value Fund – Class D Shares(1) | 0.97% | 3.06% | 9.37% | 5.75% | 6.88% | 0.95% | |||||||
| Perkins Global Value Fund – Class I Shares | 1.02% | 3.14% | 9.42% | 5.71% | 6.85% | 0.81% | |||||||
| Perkins Global Value Fund – Class N Shares | 1.12% | 3.25% | 9.30% | 5.71% | 6.85% | 0.76% | |||||||
| Perkins Global Value Fund – Class S Shares | 0.86% | 2.74% | 9.04% | 5.46% | 6.57% | 1.26% | |||||||
| Perkins Global Value Fund – Class T Shares | 1.01% | 2.96% | 9.30% | 5.71% | 6.85% | 1.01% | |||||||
| MSCI World IndexSM | 3.35% | 6.03% | 10.01% | 6.39% | 5.50% | ||||||||
| MSCI All Country World IndexSM | 2.73% | 5.42% | 8.99% | 6.44% | 5.71% | ||||||||
| Morningstar Quartile – Class T Shares | – | 3rd | 3rd | 3rd | 2nd | ||||||||
| Morningstar Ranking – based on total return for World Stock Funds | – | 801/1,213 | 453/808 | 353/508 | 158/394 | ||||||||
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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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.
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 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.
© 2015 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 – June 29, 2001 | |
| (1) | Closed to new investors. |
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Perkins Global 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,009.10 | $ | 4.91 | $ | 1,000.00 | $ | 1,020.04 | $ | 4.94 | 0.98% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,005.20 | $ | 8.75 | $ | 1,000.00 | $ | 1,016.21 | $ | 8.80 | 1.75% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,009.70 | $ | 4.26 | $ | 1,000.00 | $ | 1,020.69 | $ | 4.28 | 0.85% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,010.20 | $ | 3.66 | $ | 1,000.00 | $ | 1,021.29 | $ | 3.68 | 0.73% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,011.20 | $ | 3.21 | $ | 1,000.00 | $ | 1,021.74 | $ | 3.23 | 0.64% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,008.60 | $ | 5.71 | $ | 1,000.00 | $ | 1,019.25 | $ | 5.74 | 1.14% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,010.10 | $ | 4.46 | $ | 1,000.00 | $ | 1,020.49 | $ | 4.48 | 0.89% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Global Value Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Common Stocks – 86.1% | ||||||||||
| Air Freight & Logistics – 1.0% | ||||||||||
| 227,322 | UTi Worldwide, Inc. (U.S. Shares)* | $ | 2,796,061 | |||||||
| Automobiles – 1.0% | ||||||||||
| 18,177 | Hyundai Motor Co. | 2,759,535 | ||||||||
| Beverages – 6.7% | ||||||||||
| 187,926 | Coca-Cola Co. | 7,620,399 | ||||||||
| 69,690 | Diageo PLC | 1,921,312 | ||||||||
| 68,079 | PepsiCo, Inc. | 6,509,714 | ||||||||
| 785,645 | Stock Spirits Group PLC | 2,408,688 | ||||||||
| 18,460,113 | ||||||||||
| Chemicals – 1.1% | ||||||||||
| 32,464 | Mosaic Co. | 1,495,292 | ||||||||
| 75,200 | Nippon Fine Chemical Co., Ltd. | 574,655 | ||||||||
| 137,000 | Nitto FC Co., Ltd. | 887,523 | ||||||||
| 2,957,470 | ||||||||||
| Commercial Banks – 9.1% | ||||||||||
| 73,241 | BB&T Corp. | 2,855,667 | ||||||||
| 125,690 | CIT Group, Inc. | 5,671,133 | ||||||||
| 112,066 | Citizens Financial Group, Inc. | 2,704,152 | ||||||||
| 149,191 | Fifth Third Bancorp | 2,812,250 | ||||||||
| 143,772 | Wells Fargo & Co. | 7,821,197 | ||||||||
| 126,560 | Zions Bancorporation | 3,417,120 | ||||||||
| 25,281,519 | ||||||||||
| Commercial Services & Supplies – 3.6% | ||||||||||
| 1,177,825 | G4S PLC | 5,165,178 | ||||||||
| 34,001 | Republic Services, Inc. | 1,379,081 | ||||||||
| 35,900 | Secom Co., Ltd. | 2,399,416 | ||||||||
| 33,200 | Secom Joshinetsu Co., Ltd. | 871,882 | ||||||||
| 9,815,557 | ||||||||||
| Communications Equipment – 0.2% | ||||||||||
| 26,600 | Icom, Inc. | 638,671 | ||||||||
| Diversified Consumer Services – 0.2% | ||||||||||
| 8,363 | Daekyo Co., Ltd. | 51,543 | ||||||||
| 121,900 | Shingakukai Co., Ltd. | 544,641 | ||||||||
| 596,184 | ||||||||||
| Diversified Telecommunication Services – 0.5% | ||||||||||
| 73,261 | Telenor ASA | 1,481,339 | ||||||||
| Electric Utilities – 2.9% | ||||||||||
| 73,741 | Exelon Corp. | 2,478,435 | ||||||||
| 164,974 | PPL Corp. | 5,553,025 | ||||||||
| 8,031,460 | ||||||||||
| Electrical Equipment – 1.3% | ||||||||||
| 67,828 | Babcock & Wilcox Co. | 2,176,601 | ||||||||
| 122,946 | Cosel Co., Ltd. | 1,379,999 | ||||||||
| 3,556,600 | ||||||||||
| Electronic Equipment, Instruments & Components – 0.3% | ||||||||||
| 69,800 | Kitagawa Industries Co., Ltd. | 739,326 | ||||||||
| Food & Staples Retailing – 3.2% | ||||||||||
| 80,382 | Sysco Corp. | 3,032,813 | ||||||||
| 1,650,697 | Tesco PLC | 5,906,568 | ||||||||
| 8,939,381 | ||||||||||
| Food Products – 6.2% | ||||||||||
| 95,326 | Danone SA | 6,414,245 | ||||||||
| 45,625 | Nestle SA | 3,445,726 | ||||||||
| 536,015 | Orkla ASA | 4,056,561 | ||||||||
| 73,606 | Unilever NV | 3,078,777 | ||||||||
| 16,995,309 | ||||||||||
| Health Care Equipment & Supplies – 2.5% | ||||||||||
| 5,900 | Medikit Co., Ltd. | 183,061 | ||||||||
| 35,040 | Medtronic PLC | 2,732,770 | ||||||||
| 17,900 | Nakanishi, Inc. | 697,281 | ||||||||
| 36,595 | Stryker Corp. | 3,375,889 | ||||||||
| 6,989,001 | ||||||||||
| Health Care Providers & Services – 0.4% | ||||||||||
| 39,278 | As One Corp. | 1,190,092 | ||||||||
| Household Products – 2.6% | ||||||||||
| 86,818 | Procter & Gamble Co. | 7,113,867 | ||||||||
| Insurance – 0.8% | ||||||||||
| 72,200 | Sompo Japan Nipponkoa Holdings, Inc. | 2,245,527 | ||||||||
| Machinery – 0.6% | ||||||||||
| 20,185 | Pfeiffer Vacuum Technology AG | 1,717,874 | ||||||||
| Media – 2.1% | ||||||||||
| 103,389 | Grupo Televisa SAB (ADR)* | 3,412,871 | ||||||||
| 285,908 | UBM PLC | 2,242,779 | ||||||||
| 5,655,650 | ||||||||||
| Multi-Utilities – 0.7% | ||||||||||
| 61,587 | GDF Suez | 1,218,475 | ||||||||
| 45,539 | Suez Environment Co. | 781,878 | ||||||||
| 2,000,353 | ||||||||||
| Oil, Gas & Consumable Fuels – 6.0% | ||||||||||
| 137,849 | BP PLC (ADR) | 5,391,274 | ||||||||
| 50,403 | Canadian Natural Resources, Ltd. | 1,545,045 | ||||||||
| 172,683 | Cenovus Energy, Inc. | 2,911,230 | ||||||||
| 36,252 | Devon Energy Corp. | 2,186,358 | ||||||||
| 155,647 | Royal Dutch Shell PLC – Class A | 4,625,012 | ||||||||
| 16,658,919 | ||||||||||
| Personal Products – 0.2% | ||||||||||
| 10,800 | Pola Orbis Holdings, Inc. | 573,381 | ||||||||
| Pharmaceuticals – 11.4% | ||||||||||
| 287,897 | GlaxoSmithKline PLC | 6,591,911 | ||||||||
| 74,910 | Johnson & Johnson | 7,535,946 | ||||||||
| 61,774 | Novartis AG | 6,110,665 | ||||||||
| 188,266 | Pfizer, Inc. | 6,549,774 | ||||||||
| 9,135 | Roche Holding AG | 2,519,688 | ||||||||
| 23,271 | Sanofi | 2,289,561 | ||||||||
| 31,597,545 | ||||||||||
| Real Estate Investment Trusts (REITs) – 2.7% | ||||||||||
| 80,135 | American Capital Agency Corp. | 1,709,280 | ||||||||
| 68,040 | Hatteras Financial Corp. | 1,235,606 | ||||||||
| 340,149 | Two Harbors Investment Corp. | 3,612,382 | ||||||||
| 64,033 | Western Asset Mortgage Capital Corp. | 965,618 | ||||||||
| 7,522,886 | ||||||||||
| Real Estate Management & Development – 1.1% | ||||||||||
| 153,000 | CK Hutchison Holdings, Ltd. | 3,130,166 | ||||||||
| Software – 6.0% | ||||||||||
| 106,445 | Lectra | 1,499,029 | ||||||||
| 170,799 | Microsoft Corp. | 6,943,833 | ||||||||
| 188,216 | Oracle Corp. | 8,121,521 | ||||||||
| 16,564,383 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Global Value Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Specialty Retail – 0.9% | ||||||||||
| 103,012 | Matas A/S | $ | 2,349,501 | |||||||
| Technology Hardware, Storage & Peripherals – 0.5% | ||||||||||
| 40,400 | Canon, Inc. | 1,428,877 | ||||||||
| Thrifts & Mortgage Finance – 1.2% | ||||||||||
| 258,644 | Capitol Federal Financial, Inc. | 3,233,050 | ||||||||
| Tobacco – 2.1% | ||||||||||
| 16,000 | KT&G Corp. | 1,279,403 | ||||||||
| 154,432 | Swedish Match AB | 4,544,760 | ||||||||
| 5,824,163 | ||||||||||
| Transportation Infrastructure – 1.1% | ||||||||||
| 319,529 | BBA Aviation PLC | 1,593,353 | ||||||||
| 73,668 | Hamburger Hafen und Logistik AG | 1,547,860 | ||||||||
| 3,141,213 | ||||||||||
| Wireless Telecommunication Services – 5.9% | ||||||||||
| 6,009,267 | America Movil SAB de CV – Series L | 6,170,342 | ||||||||
| 105,000 | NTT DOCOMO, Inc. | 1,824,598 | ||||||||
| 141,845 | Rogers Communications, Inc. – Class B | 4,749,075 | ||||||||
| 1,120,822 | Vodafone Group PLC | 3,662,389 | ||||||||
| 16,406,404 | ||||||||||
| Total Common Stocks (cost $217,404,974) | 238,391,377 | |||||||||
| Repurchase Agreements – 8.8% | ||||||||||
| $20,000,000 | Undivided interest of 20% in a joint repurchase agreement (principal amount $100,000,000 with a maturity value of $100,000,278) with RBC Capital Markets Corp., 0.1000%, dated 3/31/15, maturing 4/1/15 to be repurchased at $20,000,056 collateralized by $112,117,024 in U.S. Treasuries, 0% – 8.8750%, 4/2/15 – 2/15/44, with a value of $102,000,032 | 20,000,000 | ||||||||
| 4,400,000 | Undivided interest of 9% in a joint repurchase agreement (principal amount $50,000,000 with a maturity value of $50,000,111) with ING Financial Markets LLC, 0.0800%, dated 3/31/15, maturing 4/1/15 to be repurchased at $4,400,010 collateralized by $39,980,000 in U.S. Treasuries, 3.7500% – 4.2500%, 5/15/39 – 11/15/43, with a value of $51,005,640 | 4,400,000 | ||||||||
| Total Repurchase Agreements (cost $24,400,000) | 24,400,000 | |||||||||
| Total Investments (total cost $241,804,974) – 94.9% | 262,791,377 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 5.1% | 13,986,575 | |||||||||
| Net Assets – 100% | $ | 276,777,952 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 138,038,834 | 52 | .5% | ||||
| United Kingdom | 39,508,464 | 15 | .0 | |||||
| Japan | 16,178,930 | 6 | .2 | |||||
| France | 12,203,188 | 4 | .6 | |||||
| Switzerland | 12,076,079 | 4 | .6 | |||||
| Mexico | 9,583,213 | 3 | .7 | |||||
| Canada | 9,205,350 | 3 | .5 | |||||
| Norway | 5,537,900 | 2 | .1 | |||||
| Sweden | 4,544,760 | 1 | .7 | |||||
| South Korea | 4,090,481 | 1 | .6 | |||||
| Germany | 3,265,734 | 1 | .2 | |||||
| Hong Kong | 3,130,166 | 1 | .2 | |||||
| Netherlands | 3,078,777 | 1 | .2 | |||||
| Denmark | 2,349,501 | 0 | .9 | |||||
| Total | $ | 262,791,377 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Credit Suisse International: | ||||||||||||
| Euro 4/9/15 | 2,135,000 | $ | 2,295,563 | $ | 104,604 | |||||||
| Japanese Yen 4/9/15 | 371,000,000 | 3,094,106 | 16,483 | |||||||||
| 5,389,669 | 121,087 | |||||||||||
| HSBC Securities (USA), Inc.: Japanese Yen 4/9/15 | 353,000,000 | 2,943,988 | (9,974) | |||||||||
| JPMorgan Chase & Co.: Euro 4/16/15 | 3,379,000 | 3,633,490 | 60,082 | |||||||||
| RBC Capital Markets Corp.: | ||||||||||||
| Euro 4/16/15 | 3,093,000 | 3,325,950 | (9,944) | |||||||||
| Japanese Yen 4/16/15 | 451,820,000 | 3,768,596 | (33,003) | |||||||||
| 7,094,546 | (42,947) | |||||||||||
| Total | $ | 19,061,693 | $ | 128,248 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| 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. | |
| 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. | |
| ADR | American Depositary Receipt | |
| 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. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Perkins Global Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Automobiles | $ | – | $ | 2,759,535 | $ | – | |||||
| Beverages | 14,130,113 | 4,330,000 | – | ||||||||
| Chemicals | 1,495,292 | 1,462,178 | – | ||||||||
| Commercial Services & Supplies | 1,379,081 | 8,436,476 | – | ||||||||
| Communications Equipment | – | 638,671 | – | ||||||||
| Diversified Consumer Services | – | 596,184 | – | ||||||||
| Diversified Telecommunication Services | – | 1,481,339 | – | ||||||||
| Electrical Equipment | 2,176,601 | 1,379,999 | – | ||||||||
| Electronic Equipment, Instruments & Components | – | 739,326 | – | ||||||||
| Food & Staples Retailing | 3,032,813 | 5,906,568 | – | ||||||||
| Food Products | – | 16,995,309 | – | ||||||||
| Health Care Equipment & Supplies | 6,108,659 | 880,342 | – | ||||||||
| Health Care Providers & Services | – | 1,190,092 | – | ||||||||
| Insurance | – | 2,245,527 | – | ||||||||
| Machinery | – | 1,717,874 | – | ||||||||
| Media | 3,412,871 | 2,242,779 | – | ||||||||
| Multi-Utilities | – | 2,000,353 | – | ||||||||
| Oil, Gas & Consumable Fuels | 12,033,907 | 4,625,012 | – | ||||||||
| Personal Products | – | 573,381 | – | ||||||||
| Pharmaceuticals | 14,085,720 | 17,511,825 | – | ||||||||
| Real Estate Management & Development | – | 3,130,166 | – | ||||||||
| Software | 15,065,354 | 1,499,029 | – | ||||||||
| Specialty Retail | – | 2,349,501 | – | ||||||||
| Technology Hardware, Storage & Peripherals | – | 1,428,877 | – | ||||||||
| Tobacco | – | 5,824,163 | – | ||||||||
| Transportation Infrastructure | – | 3,141,213 | – | ||||||||
| Wireless Telecommunication Services | 10,919,417 | 5,486,987 | – | ||||||||
| All Other | 53,978,843 | – | – | ||||||||
Repurchase Agreements | – | 24,400,000 | – | ||||||||
| Total Investments in Securities | $ | 137,818,671 | $ | 124,972,706 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 181,169 | $ | – | |||||
Total Assets | $ | 137,818,671 | $ | 125,153,875 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited) (continued)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 52,921 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| Perkins Global | ||||
| As of March 31, 2015 (unaudited) | Value Fund | |||
| Assets: | ||||
Investments, at cost(1) | $ | 241,804,974 | ||
| Investments, at value | $ | 238,391,377 | ||
| Repurchase agreements, at value | 24,400,000 | |||
| Cash | 13,155,899 | |||
Cash denominated in foreign currency(2) | 30,798 | |||
| Forward currency contracts | 181,169 | |||
| Non-interested Trustees’ deferred compensation | 7,187 | |||
| Receivables: | ||||
| Investments sold | 1,106,463 | |||
| Fund shares sold | 124,598 | |||
| Dividends | 704,968 | |||
| Foreign dividend tax reclaim | 254,924 | |||
| Interest | 65 | |||
| Other assets | 1,667 | |||
| Total Assets | 278,359,115 | |||
| Liabilities: | ||||
| Forward currency contracts | 52,921 | |||
| Closed foreign currency contracts | 100,995 | |||
| Payables: | ||||
| Investments purchased | 900,809 | |||
| Fund shares repurchased | 229,092 | |||
| Advisory fees | 130,961 | |||
| Fund administration fees | 2,380 | |||
| Transfer agent fees and expenses | 60,103 | |||
| 12b-1 Distribution and shareholder servicing fees | 20,105 | |||
| Non-interested Trustees’ fees and expenses | 1,740 | |||
| Non-interested Trustees’ deferred compensation fees | 7,187 | |||
| Accrued expenses and other payables | 74,870 | |||
| Total Liabilities | 1,581,163 | |||
| Net Assets | $ | 276,777,952 | ||
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)
| Perkins Global | ||||
| As of March 31, 2015 (unaudited) | Value Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 248,206,954 | ||
| Undistributed net investment income/(loss) | 490,649 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 6,982,307 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 21,098,042 | |||
| Total Net Assets | $ | 276,777,952 | ||
| Net Assets - Class A Shares | $ | 25,287,127 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,814,034 | |||
Net Asset Value Per Share(3) | $ | 13.94 | ||
Maximum Offering Price Per Share(4) | $ | 14.79 | ||
| Net Assets - Class C Shares | $ | 13,269,918 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 972,785 | |||
Net Asset Value Per Share(3) | $ | 13.64 | ||
| Net Assets - Class D Shares | $ | 98,372,474 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,991,906 | |||
| Net Asset Value Per Share | $ | 14.07 | ||
| Net Assets - Class I Shares | $ | 63,515,752 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,586,013 | |||
| Net Asset Value Per Share | $ | 13.85 | ||
| Net Assets - Class N Shares | $ | 3,229,236 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 233,997 | |||
| Net Asset Value Per Share | $ | 13.80 | ||
| Net Assets - Class S Shares | $ | 206,467 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,613 | |||
| Net Asset Value Per Share | $ | 14.13 | ||
| Net Assets - Class T Shares | $ | 72,896,978 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,191,807 | |||
| Net Asset Value Per Share | $ | 14.04 | ||
| (1) | Includes cost of repurchase agreements of $24,400,000. | |
| (2) | Includes cost of $30,798. | |
| (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 | MARCH 31, 2015
Table of Contents
Statement of Operations
| Perkins Global | ||||
| For the period ended March 31, 2015 (unaudited) | Value Fund | |||
| Investment Income: | ||||
| Interest | $ | 12,280 | ||
| Dividends | 3,443,854 | |||
| Foreign tax withheld | (135,954) | |||
| Total Investment Income | 3,320,180 | |||
| Expenses: | ||||
| Advisory fees | 770,329 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 32,067 | |||
| Class C Shares | 63,163 | |||
| Class S Shares | 364 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 59,770 | |||
| Class S Shares | 364 | |||
| Class T Shares | 93,322 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 9,876 | |||
| Class C Shares | 6,223 | |||
| Class I Shares | 30,888 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,564 | |||
| Class C Shares | 999 | |||
| Class D Shares | 22,063 | |||
| Class I Shares | 1,455 | |||
| Class N Shares | 22 | |||
| Class S Shares | 1 | |||
| Class T Shares | 724 | |||
| Shareholder reports expense | 36,624 | |||
| Registration fees | 36,894 | |||
| Custodian fees | 8,186 | |||
| Professional fees | 26,732 | |||
| Non-interested Trustees’ fees and expenses | 3,176 | |||
| Fund administration fees | 11,605 | |||
| Other expenses | 24,855 | |||
| Total Expenses | 1,241,266 | |||
| Net Expenses | 1,241,266 | |||
| Net Investment Income/(Loss) | 2,078,914 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 8,329,531 | |||
| Total Net Realized Gain/(Loss) on Investments | 8,329,531 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (7,578,505) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (7,578,505) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,829,940 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| �� | ||||||||
| Perkins Global | ||||||||
| Value Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 2,078,914 | $ | 5,068,532 | ||||
| Net realized gain/(loss) on investments | 8,329,531 | 11,923,646 | ||||||
| Change in unrealized net appreciation/depreciation | (7,578,505) | 5,950,211 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,829,940 | 22,942,389 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (464,728) | (452,496) | ||||||
| Class C Shares | (171,925) | (116,724) | ||||||
| Class D Shares | (1,888,347) | (2,091,204) | ||||||
| Class I Shares | (1,388,152) | (610,338) | ||||||
| Class N Shares | (69,139) | (133,908) | ||||||
| Class S Shares | (5,088) | (5,793) | ||||||
| Class T Shares | (1,415,384) | (1,382,163) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (1,020,002) | (694,173) | ||||||
| Class C Shares | (509,481) | (198,570) | ||||||
| Class D Shares | (3,855,106) | (3,110,966) | ||||||
| Class I Shares | (2,600,830) | (837,537) | ||||||
| Class N Shares | (127,929) | (183,829) | ||||||
| Class S Shares | (12,365) | (10,074) | ||||||
| Class T Shares | (2,939,937) | (2,033,367) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (16,468,413) | (11,861,142) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 5,825,563 | 19,427,912 | ||||||
| Class C Shares | 2,535,290 | 8,069,153 | ||||||
| Class D Shares | 3,787,819 | 10,828,229 | ||||||
| Class I Shares | 13,220,327 | 51,890,864 | ||||||
| Class N Shares | 388,357 | 716,805 | ||||||
| Class S Shares | – | 39,962 | ||||||
| Class T Shares | 11,801,923 | 34,686,065 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 1,449,955 | 1,135,793 | ||||||
| Class C Shares | 488,826 | 196,937 | ||||||
| Class D Shares | 5,679,889 | 5,152,299 | ||||||
| Class I Shares | 3,208,227 | 1,074,822 | ||||||
| Class N Shares | 197,068 | 317,737 | ||||||
| Class S Shares | 17,453 | 15,867 | ||||||
| Class T Shares | 4,299,539 | 3,372,081 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (5,063,035) | (19,515,545) | ||||||
| Class C Shares | (1,075,793) | (834,358) | ||||||
| Class D Shares | (7,821,416) | (14,432,622) | ||||||
| Class I Shares | (15,142,548) | (11,628,999) | ||||||
| Class N Shares | (374,542) | (3,941,404) | ||||||
| Class S Shares | (117,131) | (60,543) | ||||||
| Class T Shares | (14,941,506) | (19,217,268) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 8,364,265 | 67,293,787 | ||||||
| Net Increase/(Decrease) in Net Assets | (5,274,208) | 78,375,034 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 282,052,160 | 203,677,126 | ||||||
| End of period | $ | 276,777,952 | $ | 282,052,160 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 490,649 | $ | 3,814,498 | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Perkins Global Value Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.64 | $13.97 | $12.88 | $11.62 | $11.60 | $10.90 | $9.44 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.10(3) | 0.28(3) | 0.34 | 0.36 | 0.25 | 0.19 | 0.06 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.03 | 1.16 | 1.58 | 1.60 | (0.01) | 0.68 | 1.40 | |||||||||||||||||||||||
| Total from Investment Operations | 0.13 | 1.44 | 1.92 | 1.96 | 0.24 | 0.87 | 1.46 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.26) | (0.30) | (0.28) | (0.36) | (0.22) | (0.17) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | –(4) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.83) | (0.77) | (0.83) | (0.70) | (0.22) | (0.17) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.94 | $14.64 | $13.97 | $12.88 | $11.62 | $11.60 | $10.90 | |||||||||||||||||||||||
| Total Return* | 0.91% | 10.71% | 15.78% | 17.58% | 1.97% | 8.08% | 15.47% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $25,287 | $24,291 | $21,864 | $10,379 | $248 | $160 | $16 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $25,724 | $25,640 | $14,952 | $4,748 | $184 | $189 | $6 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.98% | 1.09% | 1.10% | 1.21% | 1.27% | 1.40% | 0.93% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.98% | 1.09% | 1.10% | 1.21% | 1.26% | 1.40% | 0.84% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.39% | 1.95% | 1.87% | 2.17% | 2.01% | 2.45% | 0.50% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | 62% | |||||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Perkins Global Value Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009(2) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.33 | $13.77 | $12.75 | $11.50 | $11.52 | $10.92 | $9.44 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.04(3) | 0.17(3) | 0.28 | 0.27 | 0.23 | 0.16 | 0.03 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.03 | 1.13 | 1.52 | 1.65 | (0.06) | 0.60 | 1.45 | |||||||||||||||||||||||
| Total from Investment Operations | 0.07 | 1.30 | 1.80 | 1.92 | 0.17 | 0.76 | 1.48 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.19) | (0.27) | (0.23) | (0.33) | (0.19) | (0.16) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | –(4) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.76) | (0.74) | (0.78) | (0.67) | (0.19) | (0.16) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.64 | $14.33 | $13.77 | $12.75 | $11.50 | $11.52 | $10.92 | |||||||||||||||||||||||
| Total Return* | 0.52% | 9.80% | 14.87% | 17.35% | 1.38% | 7.03% | 15.68% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $13,270 | $11,928 | $4,296 | $902 | $133 | $15 | $13 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $12,667 | $7,782 | $1,828 | $492 | $56 | $13 | $3 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.75% | 1.85% | 1.89% | 1.59%(5) | 1.90% | 1.92% | 1.79% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.75% | 1.85% | 1.89% | 1.59%(5) | 1.90% | 1.91% | 1.63% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.62% | 1.18% | 1.04% | 1.56% | 1.73% | 1.62% | 0.31% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | 62% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
| (5) | A non-recurring expense adjustment impacted the Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets and Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets. The ratio would be 2.03% and 2.03%, respectively, without the inclusion of the non-recurring expense adjustment. |
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 March 31, | Perkins Global Value Fund | |||||||||||||||||||||||||
| 2015 (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.77 | $14.09 | $12.97 | $11.67 | $11.65 | $11.16 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.11(2) | 0.31(2) | 0.38 | 0.26 | 0.30 | 0.19 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.04 | 1.15 | 1.57 | 1.73 | (0.02) | 0.30 | ||||||||||||||||||||
| Total from Investment Operations | 0.15 | 1.46 | 1.95 | 1.99 | 0.28 | 0.49 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.28) | (0.31) | (0.28) | (0.35) | (0.26) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (0.85) | (0.78) | (0.83) | (0.69) | (0.26) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $14.07 | $14.77 | $14.09 | $12.97 | $11.67 | $11.65 | ||||||||||||||||||||
| Total Return* | 0.97% | 10.76% | 15.91% | 17.72% | 2.30% | 4.39% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $98,372 | $101,486 | $94,989 | $79,206 | $70,479 | $74,552 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $99,891 | $100,443 | $86,385 | $75,550 | $76,920 | $74,175 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.85% | 0.95% | 0.98% | 1.04% | 1.03% | 1.30% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.85% | 0.95% | 0.98% | 1.04% | 1.03% | 1.30% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.51% | 2.10% | 1.97% | 2.12% | 2.25% | 2.61% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Perkins Global Value Fund | |||||||||||||||||||||||||||||
| and the period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(4) | 2009(5) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.57 | $13.92 | $12.78 | $11.51 | $11.52 | $10.92 | $9.44 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.11(2) | 0.32(2) | 0.43 | 0.37 | 0.38 | 0.16 | 0.02 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.05 | 1.14 | 1.52 | 1.60 | (0.09) | 0.61 | 1.46 | |||||||||||||||||||||||
| Total from Investment Operations | 0.16 | 1.46 | 1.95 | 1.97 | 0.29 | 0.77 | 1.48 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.31) | (0.34) | (0.26) | (0.36) | (0.30) | (0.17) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | – | – | |||||||||||||||||||||||
| Total Distributions | (0.88) | (0.81) | (0.81) | (0.70) | (0.30) | (0.17) | – | |||||||||||||||||||||||
| Net Asset Value, End of Period | $13.85 | $14.57 | $13.92 | $12.78 | $11.51 | $11.52 | $10.92 | |||||||||||||||||||||||
| Total Return* | 1.02% | 10.89% | 16.15% | 17.87% | 2.40% | 7.15% | 15.68% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $63,516 | $65,529 | $22,746 | $3,452 | $4,517 | $2,675 | $562 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $65,562 | $39,067 | $14,092 | $6,386 | $3,934 | $600 | $58 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.73% | 0.81% | 0.82% | 0.95% | 0.91% | 1.28% | 0.85% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.73% | 0.81% | 0.82% | 0.95% | 0.90% | 1.27% | 0.54% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.62% | 2.23% | 2.30% | 2.20% | 2.55% | 1.33% | (0.10)% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | 62% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 30. | |
| (5) | Period from July 6, 2009 (inception date) through October 31, 2009. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Perkins Global Value Fund | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $14.52 | $13.86 | $12.78 | $11.55 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.12(2) | 0.28(2) | 0.41 | 0.03 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.04 | 1.19 | 1.54 | 1.20 | ||||||||||||||
| Total from Investment Operations | 0.16 | 1.47 | 1.95 | 1.23 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.31) | (0.34) | (0.32) | – | ||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | – | ||||||||||||||
| Total Distributions | (0.88) | (0.81) | (0.87) | – | ||||||||||||||
| Net Asset Value, End of Period | $13.80 | $14.52 | $13.86 | $12.78 | ||||||||||||||
| Total Return* | 1.12% | 11.01% | 16.17% | 10.65% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $3,229 | $3,180 | $6,009 | $5,317 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,245 | $3,989 | $5,797 | $791 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.64% | 0.76% | 0.78% | 1.03% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.64% | 0.76% | 0.78% | 1.02% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.73% | 1.99% | 2.16% | 4.09% | ||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | ||||||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 and the | Perkins Global Value Fund | |||||||||||||||||||||||||||||
| period ended October 31, 2009 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(3) | 2009(4) | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.81 | $14.12 | $12.99 | $11.68 | $11.67 | $11.02 | $9.44 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.08(2) | 0.26(2) | 0.34 | 0.22 | 0.27 | 0.18 | 0.16 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.05 | 1.17 | 1.58 | 1.73 | (0.03) | 0.64 | 1.25 | |||||||||||||||||||||||
| Total from Investment Operations | 0.13 | 1.43 | 1.92 | 1.95 | 0.24 | 0.82 | 1.41 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.24) | (0.27) | (0.24) | (0.30) | (0.23) | (0.17) | – | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | – | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | – | –(5) | – | 0.17 | |||||||||||||||||||||||
| Total Distributions | (0.81) | (0.74) | (0.79) | (0.64) | (0.23) | (0.17) | 0.17 | |||||||||||||||||||||||
| Net Asset Value, End of Period | $14.13 | $14.81 | $14.12 | $12.99 | $11.68 | $11.67 | $11.02 | |||||||||||||||||||||||
| Total Return* | 0.86% | 10.46% | 15.56% | 17.32% | 1.96% | 7.51% | 16.74% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $206 | $320 | $310 | $310 | $370 | $653 | $11 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $292 | $319 | $301 | $333 | $510 | $439 | $9 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.14% | 1.26% | 1.29% | 1.36% | 1.36% | 1.64% | 1.13% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.14% | 1.26% | 1.29% | 1.35% | 1.36% | 1.64% | 1.09% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.15% | 1.77% | 1.60% | 1.79% | 1.67% | 2.34% | 1.10% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | 62% | |||||||||||||||||||||||
| * | 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 September 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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 | 19
Table of Contents
Financial Highlights (continued)
Class T Shares
| For a share outstanding during the period ended March 31, | ||||||||||||||||||||||||||||||
| 2015 (unaudited), each year or period ended September 30 | Perkins Global Value Fund | |||||||||||||||||||||||||||||
| and the year ended October 31 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | 2009 | |||||||||||||||||||||||
| Net Asset Value, Beginning of Period | $14.74 | $14.07 | $12.95 | $11.66 | $11.64 | $10.95 | $9.36 | |||||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||||||
| Net investment income/(loss) | 0.11(2) | 0.30(2) | 0.38 | 0.27 | 0.29 | 0.18 | 0.23 | |||||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.04 | 1.16 | 1.57 | 1.70 | (0.03) | 0.66 | 2.11 | |||||||||||||||||||||||
| Total from Investment Operations | 0.15 | 1.46 | 1.95 | 1.97 | 0.26 | 0.84 | 2.34 | |||||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.28) | (0.32) | (0.28) | (0.34) | (0.24) | (0.15) | (0.13) | |||||||||||||||||||||||
| Distributions (from capital gains) | (0.57) | (0.47) | (0.55) | (0.34) | – | – | (0.62) | |||||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | –(3) | |||||||||||||||||||||||
| Total Distributions | (0.85) | (0.79) | (0.83) | (0.68) | (0.24) | (0.15) | (0.75) | |||||||||||||||||||||||
| Net Asset Value, End of Period | $14.04 | $14.74 | $14.07 | $12.95 | $11.66 | $11.64 | $10.95 | |||||||||||||||||||||||
| Total Return* | 1.01% | 10.74% | 15.90% | 17.58% | 2.18% | 7.70% | 27.37% | |||||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $72,897 | $75,318 | $53,463 | $39,079 | $19,582 | $20,883 | $98,415 | |||||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $74,863 | $68,538 | $41,903 | $26,585 | $21,082 | $48,157 | $84,893 | |||||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.89% | 1.01% | 1.03% | 1.12% | 1.09% | 1.09% | 1.31% | |||||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.89% | 1.00% | 1.03% | 1.11% | 1.09% | 1.09% | 1.30% | |||||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 1.47% | 2.06% | 1.90% | 2.02% | 2.18% | 2.41% | 1.05% | |||||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 19% | 22% | 37% | 51% | 49% | 62% | |||||||||||||||||||||||
| * | 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 September 30, 2010. The Fund changed its fiscal year end from October 31 to September 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.
20 | MARCH 31, 2015
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Perkins Global 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) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus 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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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. 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
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Notes to Financial Statements (unaudited) (continued)
price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 is discussed in further
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Notes to Financial Statements (unaudited) (continued)
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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar
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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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Perkins Global Value Fund | $ | 18,359,139 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| Asset Derivatives | Liability Derivatives | |||||||||||
| Derivatives not accounted for as | Statement of Assets and | Statement of Assets and | ||||||||||
| hedging instruments | Liabilities Location | Fair Value | Liabilities Location | Fair Value | ||||||||
Perkins Global Value Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $181,169 | Forward currency contracts | $52,921 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Investments and foreign | ||||
| Derivatives not accounted for as hedging instruments | currency transactions | |||
Perkins Global Value Fund | ||||
| Currency Contracts | $2,657,688 | |||
| 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 | |||
Perkins Global Value Fund | ||||
| Currency Contracts | $(439,657 | ) | ||
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets,
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Notes to Financial Statements (unaudited) (continued)
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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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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 March 31, 2015” 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 | ||||||||||||||
| Credit Suisse International | $ 121,087 | $ – | $ – | $121,087 | ||||||||||||||
| ING Financial Markets LLC | 4,400,000 | – | (4,400,000) | – | ||||||||||||||
| JPMorgan Chase & Co. | 60,082 | – | – | 60,082 | ||||||||||||||
| RBC Capital Markets Corp. | 20,000,000 | (42,947) | (19,957,053) | – | ||||||||||||||
| Total | $24,581,169 | $(42,947) | $(24,357,053) | $181,169 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| HSBC Securities (USA), Inc. | $ 9,974 | $ – | $– | $9,974 | ||||||||||||||
| RBC Capital Markets Corp. | 42,947 | (42,947) | – | – | ||||||||||||||
| Total | $52,921 | $(42,947) | $– | $9,974 | ||||||||||||||
| (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.
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.
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.
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Notes to Financial Statements (unaudited) (continued)
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Perkins Global Value Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 Global Value Fund | MSCI World IndexSM | |||||
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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Perkins Global Value Fund | 0.55 | |||||
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). 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 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
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 are included in “Non-interested Trustees’ fees and
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Notes to Financial Statements (unaudited) (continued)
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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Perkins Global Value Fund | $ | 5,900 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Perkins Global Value Fund | $ | 1,570 | ||||
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Perkins Global Value Fund | $242,234,217 | $31,799,227 | $(11,242,067) | $20,557,160 | ||||||||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Perkins Global Value Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 407,473 | 1,342,763 | ||||||||
| Reinvested dividends and distributions | 104,163 | 83,208 | ||||||||
| Shares repurchased | (357,297) | (1,330,967) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 154,339 | 95,004 | ||||||||
| Shares Outstanding, Beginning of Period | 1,659,695 | 1,564,691 | ||||||||
| Shares Outstanding, End of Period | 1,814,034 | 1,659,695 | ||||||||
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| For the period ended March 31 (unaudited) | Perkins Global Value Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 182,028 | 563,970 | ||||||||
| Reinvested dividends and distributions | 35,811 | 14,653 | ||||||||
| Shares repurchased | (77,652) | (58,097) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 140,187 | 520,526 | ||||||||
| Shares Outstanding, Beginning of Period | 832,598 | 312,072 | ||||||||
| Shares Outstanding, End of Period | 972,785 | 832,598 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 265,789 | 749,116 | ||||||||
| Reinvested dividends and distributions | 404,550 | 374,168 | ||||||||
| Shares repurchased | (547,336) | (996,132) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 123,003 | 127,152 | ||||||||
| Shares Outstanding, Beginning of Period | 6,868,903 | 6,741,751 | ||||||||
| Shares Outstanding, End of Period | 6,991,906 | 6,868,903 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 931,799 | 3,584,904 | ||||||||
| Reinvested dividends and distributions | 232,144 | 79,264 | ||||||||
| Shares repurchased | (1,074,157) | (802,557) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 89,786 | 2,861,611 | ||||||||
| Shares Outstanding, Beginning of Period | 4,496,227 | 1,634,616 | ||||||||
| Shares Outstanding, End of Period | 4,586,013 | 4,496,227 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 27,421 | 50,017 | ||||||||
| Reinvested dividends and distributions | 14,311 | 23,519 | ||||||||
| Shares repurchased | (26,684) | (288,203) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 15,048 | (214,667) | ||||||||
| Shares Outstanding, Beginning of Period | 218,949 | 433,616 | ||||||||
| Shares Outstanding, End of Period | 233,997 | 218,949 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | – | 2,712 | ||||||||
| Reinvested dividends and distributions | 1,236 | 1,147 | ||||||||
| Shares repurchased | (8,246) | (4,199) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (7,010) | (340) | ||||||||
| Shares Outstanding, Beginning of Period | 21,623 | 21,963 | ||||||||
| Shares Outstanding, End of Period | 14,613 | 21,623 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 827,142 | 2,386,459 | ||||||||
| Reinvested dividends and distributions | 306,672 | 245,421 | ||||||||
| Shares repurchased | (1,050,444) | (1,322,693) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 83,370 | 1,309,187 | ||||||||
| Shares Outstanding, Beginning of Period | 5,108,437 | 3,799,250 | ||||||||
| Shares Outstanding, End of Period | 5,191,807 | 5,108,437 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Global Value Fund | $34,215,647 | $27,171,888 | $– | $– | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
Janus Investment Fund | 45
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Useful Information About Your Fund Report (unaudited) (continued)
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
48 | MARCH 31, 2015
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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).
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-0515-87738 | 125-24-93057 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Global Real Estate Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Global Real Estate Fund
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Janus Global Real Estate Fund (unaudited)
FUND SNAPSHOT We believe global real estate investments can be a long-term source of wealth creation through attractive current income and substantial capital appreciation over time. We use intensive fundamental research in an effort to uncover companies with prime assets in strategic locations that practice disciplined capital allocation and show a clear ability to create value. |  Patrick Brophy portfolio manager |
PERFORMANCE
For the six-month period ending March 31, 2015, the Janus Global Real Estate Fund’s Class I Shares returned 8.56%, while its benchmark, the FTSE EPRA/NAREIT Global Index, returned 11.37%.
INVESTMENT ENVIRONMENT
Real estate’s outperformance in 2014 continued through the end of the year as the potentially bearish expectations of rising rates failed to materialize. U.S. assets especially benefited from the continuation of the low rate environment. Entering 2015, it was our sense that real estate could languish a bit in the first quarter of the new year. That’s not what happened. To the contrary, the sector continued its winning ways, finishing the six-month period through March well ahead of the broader markets. We suspect that to a large degree the sustained momentum was due to the fact that many of the tailwinds providing a constructive backdrop for real estate – easy monetary policies/low rates, improving debt markets, abundant capital chasing assets, limited new construction – remain prevalent. Couple that with a thirst for yield that appears as unquenchable as ever, and the sector seems poised to stay in the catbird seat. This, of course, makes us nervous.
To be fair, not all markets are basking in the glow of soaring asset prices; in fact, some are enduring deteriorating values. Take Brazil, for example, where rates are rising, the economy is on the brink of slipping into recession, and real estate stocks are getting clobbered. Or China, where it’s clear that in many cities there has been significant overbuilding, and not just in residential (in many cases, there appears to be a supply glut in office and retail as well). Again, as we’ve discussed in numerous past commentaries, these wide variances by geography – and property sector – are a large part of the appeal/advantage of being a global investor.
PERFORMANCE DISCUSSION
Underperformance for the period was driven by a variety of factors. On a geographical basis, our stock selection in the U.S. and Hong Kong weighed most on relative performance. That was partially offset by strong stock selection in Canada. Also detracting from performance relative to the benchmark was our overweight of Mexico and underweight China. Contributing were our significant overweight the U.S. and our lack of exposure to the United Arab Emirates, which was a drag on the benchmark.
On a sector basis, diversified metals and mining, along with construction and engineering delivered the lowest absolute returns in the Fund. The strongest sectors were asset management and custody banks, along with electric utilities. Relative to the benchmark, our holdings in real estate operating companies and residential real estate investment trusts (REITs) weighed most on results, while our selection of hotel and resort REITs and a combination of stock selection and underweight in diversified REITs contributed.
The leading individual detractors for the period were Cyrela Commercial Properties and Concentradora Fibra Hotelera Mexicana. With high-quality assets strategically situated in the most desirable submarkets of Sao Paulo and Rio de Janeiro, as well as an enviable pipeline of development opportunities in the retail, office and industrial sectors, we believe Cyrela Commercial has the potential to deliver outsize returns for a multiyear period. At this juncture, execution risks stand out as the biggest concern, as the company continues work on several ambitious and complex development projects. That the company has very little debt, a solid track record, and a predictable income stream from its stabilized properties is a plus and, in our opinion, significantly skews the risk/reward equation in our favor.
With regard to Concentradora Fibra Hotelera Mexicana, the FIBRA is essentially the Mexican version of an REIT. Because there is a tax advantage for a property owner to sell to a FIBRA and receive shares (all upside in the shares after the sale are tax free for the seller), it is logical that FIBRAs will wind up being consolidators of commercial property in Mexico. Fibra Hotelera has already
Janus Investment Fund | 1
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Janus Global Real Estate Fund (unaudited)
started that process in the hotel sector, and we like both its acquisitions to date and the large size of its potential deal pipeline. We also believe that Mexican commercial property is still some of the cheapest in our global investment universe.
The period’s top contributors were Chatham Lodging and Simon Property Group. Chatham is a U.S. REIT that was launched in 2010 to invest in upscale extended-stay and branded select-service hotels. In its brief existence, the company has assembled what we consider a solid portfolio of hotel properties, and its focus on select service, a sector most of the hotel REITs shy away from, provides an attractive growth opportunity, in our opinion. The stock was buoyed earlier in the year by news of share purchases by activist investors, one of whom floated an offer to buy the company, and more recently by a large, strategic joint-venture that greatly expanded and, in our view, enhanced its portfolio.
Simon, an owner of regional malls and outlet centers, is the largest of the U.S. REITs and the largest component of the global index. We believe the company has top-of-the-line assets; relatively stable cash flows; a strong balance sheet; a disciplined external growth strategy that extends overseas; and liquidity, which we think makes it the go-to stock for generalist investors when they want to increase their real estate allocations. Moreover, fundamentals for higher-quality Class A malls remain very strong, while there are ongoing significant concerns about the health of the B and C markets (this actually further benefits Simon given it recently completed the spin-off of its lower-quality properties – mostly Class B malls and strip centers).
As always, we continue to seek out opportunistic investments, concentrating on the key characteristics of our long-established investment philosophy: focused businesses, disciplined allocation of capital, compelling valuation, high barrier-to-entry markets, attractive/irreplaceable real estate assets, development expertise and quality management.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
Clearly our performance could have been better during the period, especially given that we increasingly appear to have had it right in 2014 when we wrote that “we think the lower-for-longer rate environment is likely to persist for longer than consensus seems to be anticipating.” Yet, while we were likely correct to be skeptical of near-term rate hikes in the U.S. – still the most important real estate market in the listed space, accounting for over 40% of the global index – we failed to anticipate how strongly European stock prices would react to the well-telegraphed launch of quantitative easing on the continent (many of the large-cap real estate companies were up double digits in the quarter). Even with some additional cap rate compression and stable-to-improving operating fundamentals, we think most of the bellwether European property companies screen expensive. The problem is that when you compare the dividend yields of these same companies to the yields being offered in the European sovereign debt markets, they look like exceptional bargains (it’s a bit of a crazy analysis when countries like Germany are offering negative yields on their short- and intermediate-term bonds). So the song remains the same: a race to the bottom for several of the key global currencies, a Federal Reserve that seems afraid to remove the training wheels, a forced move out the risk spectrum for savers/investors, and continued asset-price inflation (at least in many important markets). This is not to say that we’ve abandoned our belief that all of this unprecedented money printing will have significant unintended consequences, and likely not good ones, but we must acknowledge once again that we’ve been saying this for a while and until this low-rate, high-liquidity environment shows signs of reversing, hard assets with predictable yields should remain very much in demand.
Thank you for your continued investment in Janus Global Real Estate Fund.
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(unaudited)
Janus Global Real Estate Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Chatham Lodging Trust | 0.95% | |||
| Simon Property Group, Inc. | 0.51% | |||
| Brookfield Infrastructure Partners LP | 0.37% | |||
| Pebblebrook Hotel Trust | 0.36% | |||
| Kennedy-Wilson Holdings, Inc. | 0.36% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Cyrela Commercial Properties SA Empreendimentos e Participacoes | –0.20% | |||
| Concentradora Fibra Hotelera Mexicana SA de CV | –0.17% | |||
| CSI Properties, Ltd. | –0.16% | |||
| Kennedy Wilson Europe Real Estate PLC | –0.15% | |||
| Atrium European Real Estate, Ltd. | –0.14% | |||
4 Top Performers – Sectors*
| Fund Weighting | FTSE EPRA/NAREIT Global | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Health Care | 0.11% | 0.97% | 0.04% | |||||||||
| Information Technology | 0.05% | 0.19% | 0.00% | |||||||||
| Energy | –0.01% | 0.76% | 0.00% | |||||||||
| Utilities | –0.02% | 1.97% | 0.00% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | FTSE EPRA/NAREIT Global | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Financials | –1.18% | 80.67% | 99.49% | |||||||||
| Other** | –0.80% | 6.80% | 0.08% | |||||||||
| Consumer Discretionary | –0.39% | 7.68% | 0.39% | |||||||||
| Industrials | –0.16% | 0.84% | 0.00% | |||||||||
| Materials | –0.15% | 0.12% | 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. |
Janus Investment Fund | 3
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Janus Global Real Estate Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Kennedy-Wilson Holdings, Inc. Real Estate Management & Development | 3.7% | |||
| Chatham Lodging Trust Real Estate Investment Trusts (REITs) | 3.5% | |||
| American Tower Corp. Real Estate Investment Trusts (REITs) | 2.5% | |||
| Simon Property Group, Inc. Real Estate Investment Trusts (REITs) | 2.4% | |||
| Kennedy Wilson Europe Real Estate PLC Real Estate Management & Development | 2.3% | |||
| 14.4% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (3.8)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||||
| Fiscal | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
| Year-to-Date | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
| Janus Global Real Estate Fund – Class A Shares | |||||||||||||
| NAV | 8.39% | 12.46% | 10.16% | 5.30% | 1.32% | 1.32% | |||||||
| MOP | 2.15% | 5.97% | 8.87% | 4.46% | |||||||||
| Janus Global Real Estate Fund – Class C Shares | |||||||||||||
| NAV | 7.88% | 11.51% | 9.34% | 4.61% | 2.08% | 2.08% | |||||||
| CDSC | 6.88% | 10.51% | 9.34% | 4.61% | |||||||||
| Janus Global Real Estate Fund – Class D Shares(1) | 8.49% | 12.65% | 10.44% | 4.19% | 1.15% | 1.12% | |||||||
| Janus Global Real Estate Fund – Class I Shares | 8.56% | 12.81% | 10.53% | 5.59% | 1.01% | 1.01% | |||||||
| Janus Global Real Estate Fund – Class S Shares | 8.31% | 12.22% | 10.04% | 5.18% | 1.45% | 1.45% | |||||||
| Janus Global Real Estate Fund – Class T Shares | 8.49% | 12.53% | 10.37% | 4.69% | 1.18% | 1.18% | |||||||
| FTSE EPRA/NAREIT Global Index | 11.37% | 14.80% | 11.04% | 2.92% | |||||||||
| Morningstar Quartile – Class I Shares | – | 3rd | 2nd | 1st | |||||||||
| Morningstar Ranking – based on total return for Global Real Estate Funds | – | 155/232 | 85/188 | 7/154 | |||||||||
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 February 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 5
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Janus Global Real Estate Fund (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.
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.
Investments in 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.
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.
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.
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 periods prior to February 16, 2010, 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 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 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.
© 2015 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 – November 28, 2007 |
(1) Closed to new investors.
6 | MARCH 31, 2015
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,083.90 | $ | 6.65 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.44 | 1.28% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,078.80 | $ | 10.73 | $ | 1,000.00 | $ | 1,014.61 | $ | 10.40 | 2.07% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,084.90 | $ | 5.87 | $ | 1,000.00 | $ | 1,019.30 | $ | 5.69 | 1.13% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,085.60 | $ | 5.25 | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 | 1.01% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,083.10 | $ | 7.53 | $ | 1,000.00 | $ | 1,017.70 | $ | 7.29 | 1.45% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,084.90 | $ | 6.13 | $ | 1,000.00 | $ | 1,019.05 | $ | 5.94 | 1.18% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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
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Janus Global Real Estate Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Common Stocks – 94.3% | ||||||||||
| Capital Markets – 1.7% | ||||||||||
| 111,477 | NorthStar Asset Management Group, Inc., New York | $ | 2,601,873 | |||||||
| 290,295 | Tricon Capital Group, Inc. | 2,567,360 | ||||||||
| 5,169,233 | ||||||||||
| Construction & Engineering – 0% | ||||||||||
| 48,959 | UGL, Ltd. | 54,143 | ||||||||
| Electric Utilities – 1.3% | ||||||||||
| 83,059 | Brookfield Infrastructure Partners LP# | 3,782,507 | ||||||||
| Health Care Providers & Services – 1.0% | ||||||||||
| 109,699 | Capital Senior Living Corp.* | 2,845,592 | ||||||||
| Hotels, Restaurants & Leisure – 3.9% | ||||||||||
| 161,501 | ClubCorp Holdings, Inc. | 3,126,659 | ||||||||
| 147,608 | Crown Resorts, Ltd. | 1,497,228 | ||||||||
| 51,862 | Las Vegas Sands Corp. | 2,854,485 | ||||||||
| 15,741 | Vail Resorts, Inc.† | 1,627,934 | ||||||||
| 33,305 | Whitbread PLC | 2,587,980 | ||||||||
| 11,694,286 | ||||||||||
| Household Durables – 2.6% | ||||||||||
| 67,600 | First Juken Co., Ltd. | 840,653 | ||||||||
| 81,700 | Iida Group Holdings Co., Ltd. | 1,016,108 | ||||||||
| 81,354 | LGI Homes, Inc.*,# | 1,355,358 | ||||||||
| 273,617 | New Home Co., Inc.*,† | 4,364,191 | ||||||||
| 435,800 | PDG Realty SA Empreendimentos e Participacoes* | 68,292 | ||||||||
| 7,644,602 | ||||||||||
| Industrial Conglomerates – 0.7% | ||||||||||
| 4,300,000 | Shun Tak Holdings, Ltd. | 2,075,094 | ||||||||
| Internet Software & Services – 0.8% | ||||||||||
| 9,752 | Equinix, Inc. | 2,270,753 | ||||||||
| Media – 0.3% | ||||||||||
| 65,000 | Fuji Media Holdings, Inc. | 922,975 | ||||||||
| Metals & Mining – 0.1% | ||||||||||
| 228,787 | Copper Mountain Mining Corp.*,# | 209,565 | ||||||||
| Oil, Gas & Consumable Fuels – 0.9% | ||||||||||
| 122,071 | Hoegh LNG Partners LP# | 2,648,941 | ||||||||
| Real Estate Investment Trusts (REITs) – 51.7% | ||||||||||
| 3,571,261 | AIMS AMP Capital Industrial REIT | 3,875,839 | ||||||||
| 14,594 | Alexandria Real Estate Equities, Inc. | 1,430,796 | ||||||||
| 56,219 | American Assets Trust, Inc. | 2,433,158 | ||||||||
| 79,450 | American Tower Corp. | 7,480,217 | ||||||||
| 186,772 | Armada Hoffler Properties, Inc. | 1,990,990 | ||||||||
| 2,186,800 | Ascott Residence Trust | 1,983,546 | ||||||||
| 60,337 | Associated Estates Realty Corp. | 1,489,117 | ||||||||
| 816,241 | Astro Japan Property Group | 3,107,574 | ||||||||
| 13,729 | AvalonBay Communities, Inc. | 2,392,278 | ||||||||
| 26,732 | Boston Properties, Inc. | 3,755,311 | ||||||||
| 23,923 | Camden Property Trust | 1,869,104 | ||||||||
| 697,430 | Charter Hall Group | 2,700,863 | ||||||||
| 350,047 | Chatham Lodging Trust | 10,294,882 | ||||||||
| 104,051 | Colony Financial, Inc.# | 2,697,002 | ||||||||
| 922,858 | Concentradora Fibra Danhos SA de CV | 2,207,424 | ||||||||
| 1,516,413 | Concentradora Fibra Hotelera Mexicana SA de CV | 2,035,314 | ||||||||
| 1,516,055 | Cromwell Property Group | 1,308,818 | ||||||||
| 49,026 | Digital Realty Trust, Inc. | 3,233,755 | ||||||||
| 36,611 | DuPont Fabros Technology, Inc. | 1,196,447 | ||||||||
| 77,388 | Easterly Government Properties, Inc.* | 1,242,077 | ||||||||
| 120,407 | Equity Commonwealth* | 3,196,806 | ||||||||
| 56,958 | Gramercy Property Trust, Inc. | 1,598,811 | ||||||||
| 153,018 | Great Portland Estates PLC | 1,840,367 | ||||||||
| 1,665 | Hulic REIT, Inc. | 2,557,093 | ||||||||
| 507 | Kenedix Office Investment Corp. | 2,779,498 | ||||||||
| 780 | Kenedix Residential Investment Corp. | 2,422,705 | ||||||||
| 1,300 | Kenedix Retail REIT Corp.* | 3,016,928 | ||||||||
| 56,589 | Kite Realty Group Trust | 1,594,112 | ||||||||
| 51,880 | Lamar Advertising Co. – Class A | 3,074,928 | ||||||||
| 132,195 | Land Securities Group PLC | 2,455,981 | ||||||||
| 386,745 | Lexington Realty Trust# | 3,801,703 | ||||||||
| 28,803 | Macerich Co.† | 2,428,957 | ||||||||
| 70,664 | Mack-Cali Realty Corp. | 1,362,402 | ||||||||
| 684,198 | Mirvac Group | 1,044,658 | ||||||||
| 31,000 | Morguard Real Estate Investment Trust | 421,526 | ||||||||
| 1,810 | Mori Hills REIT Investment Corp. | 2,550,533 | ||||||||
| 2,813,543 | National Storage REIT* | 3,423,044 | ||||||||
| 539 | Nippon Prologis REIT, Inc. | 1,187,329 | ||||||||
| 238,906 | NorthStar Realty Finance Corp. | 4,328,977 | ||||||||
| 74,409 | Parkway Properties, Inc. | 1,290,996 | ||||||||
| 84,752 | Pebblebrook Hotel Trust | 3,946,901 | ||||||||
| 68,710 | Post Properties, Inc.† | 3,911,660 | ||||||||
| 1,182,012 | Prologis Property Mexico SA de CV* | 2,115,829 | ||||||||
| 37,310 | Prologis, Inc. | 1,625,224 | ||||||||
| 352,532 | Pure Industrial Real Estate Trust | 1,405,785 | ||||||||
| 92,675 | QTS Realty Trust, Inc. – Class A | 3,374,297 | ||||||||
| 109,798 | Ramco-Gershenson Properties Trust | 2,042,243 | ||||||||
| 37,814 | Retrocom Real Estate Investment Trust# | 117,945 | ||||||||
| 321,912 | Scentre Group | 914,447 | ||||||||
| 36,651 | Simon Property Group, Inc. | 7,170,402 | ||||||||
| 67,929 | STAG Industrial, Inc. | 1,597,690 | ||||||||
| 152,354 | Starwood Property Trust, Inc. | 3,702,202 | ||||||||
| 71,476 | Starwood Waypoint Residential Trust# | 1,847,655 | ||||||||
| 178,001 | Terreno Realty Corp. | 4,058,423 | ||||||||
| 5,797 | Unibail-Rodamco SE | 1,564,282 | ||||||||
| 5,545 | Urban Edge Properties | 131,417 | ||||||||
| 66,892 | Ventas, Inc. | 4,884,454 | ||||||||
| 11,091 | Vornado Realty Trust | 1,242,192 | ||||||||
| 118,872 | WP GLIMCHER, Inc. | 1,976,841 | ||||||||
| 152,731,755 | ||||||||||
| Real Estate Management & Development – 29.3% | ||||||||||
| 29,493 | Arealink Co., Ltd. | 29,718 | ||||||||
| 929,476 | Atrium European Real Estate, Ltd.* | 4,345,573 | ||||||||
| 53,551 | Brookfield Asset Management, Inc. – Class A (U.S. Shares) | 2,870,869 | ||||||||
| 2,301,000 | CapitaLand, Ltd. | 5,994,425 | ||||||||
| 50,470 | CBRE Group, Inc. – Class A* | 1,953,694 | ||||||||
| 1,308,268 | Colony American Homes Holdings III LP*,§ | 1,504,508 | ||||||||
| 415,406 | Corp. Inmobiliaria Vesta SAB de CV | 772,186 | ||||||||
| 415,095 | Countrywide PLC | 3,158,826 | ||||||||
| 69,140,000 | CSI Properties, Ltd. | 2,452,357 | ||||||||
| 130,500 | Cyrela Commercial Properties SA Empreendimentos e Participacoes | 444,584 | ||||||||
| 347,776 | Dalian Wanda Commercial Properties Co., Ltd. – Class H* | 2,152,368 | ||||||||
| 2,680 | Deutsche Annington Immobilien SE | 90,539 | ||||||||
| 167,913 | First Capital Realty, Inc. | 2,616,017 | ||||||||
| 1,008,630 | Global Logistic Properties, Ltd. | 1,943,318 | ||||||||
| 1,904,000 | Hang Lung Properties, Ltd. | 5,360,899 | ||||||||
| 116,157 | Hispania Activos Inmobiliarios SAU* | 1,529,058 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Real Estate Management & Development – (continued) | ||||||||||
| 171,000 | Hysan Development Co., Ltd. | $ | 750,899 | |||||||
| 124,300 | Iguatemi Empresa de Shopping Centers SA | 1,098,587 | ||||||||
| 417,903 | Kennedy Wilson Europe Real Estate PLC | 6,809,574 | ||||||||
| 423,644 | Kennedy-Wilson Holdings, Inc.† | 11,074,054 | ||||||||
| 532,368 | Kingdom Construction Corp. | 483,462 | ||||||||
| 51,719 | LEG Immobilien AG* | 4,111,187 | ||||||||
| 80,800 | LPS Brasil Consultoria de Imoveis SA | 130,417 | ||||||||
| 146,000 | Mitsubishi Estate Co., Ltd. | 3,389,200 | ||||||||
| 71,000 | Mitsui Fudosan Co., Ltd. | 2,086,914 | ||||||||
| 112,584 | Phoenix Mills, Ltd. | 642,055 | ||||||||
| 718,146 | Primecity Investment PLC*,ß | 2,555,166 | ||||||||
| 170,850 | Savills PLC | 2,056,500 | ||||||||
| 331,734 | St Joe Co.* | 6,156,983 | ||||||||
| 6,750 | Sun Hung Kai Properties, Ltd. | 103,917 | ||||||||
| 264,888 | TLG Immobilien AG* | 4,158,590 | ||||||||
| 548,080 | Wharf Holdings, Ltd. | 3,820,765 | ||||||||
| 86,647,209 | ||||||||||
| Total Common Stocks (cost $248,750,024) | 278,696,655 | |||||||||
| Corporate Bonds – 0.2% | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.2% | ||||||||||
| $653,000 | Consolidated-Tomoka Land Co.§ 4.5000%, 3/15/20 (cost $653,000) | 712,586 | ||||||||
| Preferred Stocks – 0.1% | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.1% | ||||||||||
| 8,975 | American Homes 4 Rent, 5.5000% (cost $219,439) | 233,530 | ||||||||
| Investment Companies – 9.2% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 3.2% | ||||||||||
| 9,449,865 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 9,449,865 | ||||||||
| Money Markets – 6.0% | ||||||||||
| 17,628,286 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 17,628,286 | ||||||||
| Total Investment Companies (cost $27,078,151) | 27,078,151 | |||||||||
| Total Investments (total cost $276,700,614) – 103.8% | 306,720,922 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (3.8)% | (11,350,501) | |||||||||
| Net Assets – 100% | $ | 295,370,421 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 179,237,285 | 58 | .4% | ||||
| Japan | 22,799,654 | 7 | .4 | |||||
| United Kingdom | 18,909,228 | 6 | .2 | |||||
| Hong Kong | 14,563,931 | 4 | .7 | |||||
| Australia | 14,050,775 | 4 | .6 | |||||
| Singapore | 13,797,128 | 4 | .5 | |||||
| Germany | 10,915,482 | 3 | .6 | |||||
| Canada | 10,209,067 | 3 | .3 | |||||
| Mexico | 7,130,753 | 2 | .3 | |||||
| Austria | 4,345,573 | 1 | .4 | |||||
| Norway | 2,648,941 | 0 | .9 | |||||
| China | 2,152,368 | 0 | .7 | |||||
| Brazil | 1,741,880 | 0 | .6 | |||||
| France | 1,564,282 | 0 | .5 | |||||
| Spain | 1,529,058 | 0 | .5 | |||||
| India | 642,055 | 0 | .2 | |||||
| Taiwan | 483,462 | 0 | .2 | |||||
| Total | $ | 306,720,922 | 100 | .0% | ||||
Schedule of OTC Written Options – Puts
| Counterparty/Reference Asset | Value | |||
| Morgan Stanley & Co. International PLC: Starwood Hotels & Resorts expires May 2015 730 contracts exercise price $62.50 (premiums received $89,060) | $ | (22,255) | ||
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)
| FTSE EPRA/NAREIT Global Index | A global market capitalization weighted index composed of listed real estate securities in the North American, European, Asian, and South American real estate markets including both developed and emerging markets. | |
| 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. |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Global Real Estate Fund | $ | 9,575,850 | |||
| ß | Security is illiquid. | |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Real Estate Fund | ||||||||||||||
| Colony American Homes Holdings III LP | 1/30/13 | $ | 1,310,000 | $ | 1,504,508 | 0.5 | % | |||||||
| Consolidated-Tomoka Land Co. | 3/6/15 | 653,000 | 712,586 | 0.2 | ||||||||||
| Total | $ | 1,963,000 | $ | 2,217,094 | 0.7 | % | ||||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Global Real Estate Fund | |||||||||||||||||||||
| Janus Cash Collateral Fund LLC | 5,845,918 | 36,280,557 | (32,676,610) | 9,449,865 | $ | – | $ | 7,931(1) | $ | 9,449,865 | |||||||||||
| Janus Cash Liquidity Fund LLC | 12,511,341 | 69,016,945 | (63,900,000) | 17,628,286 | – | 9,375 | 17,628,286 | ||||||||||||||
| Total | $ | – | $ | 17,306 | $ | 27,078,151 | |||||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Global Real Estate Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Construction & Engineering | $ | – | $ | 54,143 | $ | – | |||||
| Hotels, Restaurants & Leisure | 7,609,078 | 4,085,208 | – | ||||||||
| Household Durables | 5,787,841 | 1,856,761 | – | ||||||||
| Industrial Conglomerates | – | 2,075,094 | – | ||||||||
| Media | – | 922,975 | – | ||||||||
| Real Estate Investment Trusts (REITs) | 117,015,178 | 35,716,577 | – | ||||||||
| Real Estate Management & Development | 27,117,391 | 58,025,310 | 1,504,508 | ||||||||
| All Other | 16,926,591 | – | – | ||||||||
Corporate Bonds | – | 712,586 | – | ||||||||
Preferred Stocks | – | 233,530 | – | ||||||||
Investment Companies | – | 27,078,151 | – | ||||||||
Total Assets | $ | 174,456,079 | $ | 130,760,335 | $ | 1,504,508 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Options Written, at Value | $ | – | $ | 22,255 | $ | – | |||||
| (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 | 11
Table of Contents
Statement of Assets and Liabilities
| Janus Global | ||||
| As of March 31, 2015 (unaudited) | Real Estate Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 276,700,614 | ||
Unaffiliated investments, at value(1) | $ | 279,642,771 | ||
| Affiliated investments, at value | 27,078,151 | |||
Cash denominated in foreign currency(2) | 66,832 | |||
| Non-interested Trustees’ deferred compensation | 5,800 | |||
| Receivables: | ||||
| Fund shares sold | 467,200 | |||
| Dividends | 814,465 | |||
| Dividends from affiliates | 1,472 | |||
| Foreign dividend tax reclaim | 7,777 | |||
| Interest | 1,633 | |||
| Other assets | 9,244 | |||
| Total Assets | 308,095,345 | |||
| Liabilities: | ||||
| Due to custodian | 14,566 | |||
| Collateral for securities loaned (Note 3) | 9,449,865 | |||
Options written, at value(3) | 22,255 | |||
| Payables: | ||||
| Investments purchased | 2,522,061 | |||
| Fund shares repurchased | 292,163 | |||
| Dividends | 97,489 | |||
| Advisory fees | 200,410 | |||
| Fund administration fees | 2,472 | |||
| Transfer agent fees and expenses | 44,784 | |||
| 12b-1 Distribution and shareholder servicing fees | 18,179 | |||
| Non-interested Trustees’ fees and expenses | 1,394 | |||
| Non-interested Trustees’ deferred compensation fees | 5,800 | |||
| Accrued expenses and other payables | 53,486 | |||
| Total Liabilities | 12,724,924 | |||
| Net Assets | $ | 295,370,421 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| Janus Global | ||||
| As of March 31, 2015 (unaudited) | Real Estate Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 263,626,534 | ||
| Undistributed net investment income/(loss) | (3,560,191) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 5,228,261 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 30,075,817 | |||
| Total Net Assets | $ | 295,370,421 | ||
| Net Assets - Class A Shares | $ | 28,224,889 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,445,858 | |||
Net Asset Value Per Share(4) | $ | 11.54 | ||
Maximum Offering Price Per Share(5) | $ | 12.24 | ||
| Net Assets - Class C Shares | $ | 9,954,731 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 869,848 | |||
Net Asset Value Per Share(4) | $ | 11.44 | ||
| Net Assets - Class D Shares | $ | 48,044,054 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,131,691 | |||
| Net Asset Value Per Share | $ | 11.63 | ||
| Net Assets - Class I Shares | $ | 131,743,677 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 11,341,805 | |||
| Net Asset Value Per Share | $ | 11.62 | ||
| Net Assets - Class S Shares | $ | 2,993,253 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 259,221 | |||
| Net Asset Value Per Share | $ | 11.55 | ||
| Net Assets - Class T Shares | $ | 74,409,817 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,405,074 | |||
| Net Asset Value Per Share | $ | 11.62 | ||
| (1) | Includes $9,175,732 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes cost of $66,832. | |
| (3) | Premiums received $89,060. | |
| (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
| Janus Global | ||||
| For the period ended March 31, 2015 (unaudited) | Real Estate Fund | |||
| Investment Income: | ||||
| Interest | $ | 1,633 | ||
| Affiliated securities lending income, net | 7,931 | |||
| Dividends | 2,462,697 | |||
| Dividends from affiliates | 9,375 | |||
| Other income | 68 | |||
| Foreign tax withheld | (91,540) | |||
| Total Investment Income | 2,390,164 | |||
| Expenses: | ||||
| Advisory fees | 1,024,753 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 29,540 | |||
| Class C Shares | 44,456 | |||
| Class S Shares | 3,289 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 27,953 | |||
| Class S Shares | 3,289 | |||
| Class T Shares | 67,030 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 10,232 | |||
| Class C Shares | 5,484 | |||
| Class I Shares | 44,324 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,439 | |||
| Class C Shares | 740 | |||
| Class D Shares | 9,094 | |||
| Class I Shares | 2,223 | |||
| Class S Shares | 255 | |||
| Class T Shares | 470 | |||
| Shareholder reports expense | 17,409 | |||
| Registration fees | 54,838 | |||
| Custodian fees | 14,538 | |||
| Professional fees | 33,002 | |||
| Non-interested Trustees’ fees and expenses | 3,108 | |||
| Fund administration fees | 10,657 | |||
| Other expenses | 26,039 | |||
| Total Expenses | 1,434,162 | |||
| Net Expenses | 1,434,162 | |||
| Net Investment Income/(Loss) | 956,002 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 6,057,158 | |||
| Written options contracts | 77,390 | |||
| Total Net Realized Gain/(Loss) on Investments | 6,134,548 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 12,070,129 | |||
| Written options contracts | 89,518 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 12,159,647 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 19,250,197 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Global | ||||||||
| Real Estate Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 956,002 | $ | 2,629,040 | ||||
| Net realized gain/(loss) on investments | 6,134,548 | 4,126,466 | ||||||
| Change in unrealized net appreciation/depreciation | 12,159,647 | 6,501,464 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 19,250,197 | 13,256,970 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (326,990) | (287,497) | ||||||
| Class C Shares | (89,539) | (90,730) | ||||||
| Class D Shares | (653,918) | (750,608) | ||||||
| Class I Shares | (1,827,458) | (1,299,730) | ||||||
| Class S Shares | (36,539) | (28,227) | ||||||
| Class T Shares | (748,748) | (444,152) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (344,598) | (597,253) | ||||||
| Class C Shares | (131,450) | (275,716) | ||||||
| Class D Shares | (680,578) | (1,472,610) | ||||||
| Class I Shares | (1,808,395) | (2,296,498) | ||||||
| Class S Shares | (41,597) | (58,445) | ||||||
| Class T Shares | (724,513) | (804,528) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (7,414,323) | (8,405,994) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 9,693,854 | 12,288,800 | ||||||
| Class C Shares | 2,707,397 | 2,345,894 | ||||||
| Class D Shares | 9,842,549 | 18,267,670 | ||||||
| Class I Shares | 55,543,781 | 42,944,312 | ||||||
| Class S Shares | 1,072,841 | 1,103,827 | ||||||
| Class T Shares | 42,439,127 | 23,117,138 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 581,914 | 860,978 | ||||||
| Class C Shares | 164,676 | 259,922 | ||||||
| Class D Shares | 1,317,368 | 2,195,064 | ||||||
| Class I Shares | 2,714,707 | 2,571,362 | ||||||
| Class S Shares | 78,136 | 86,672 | ||||||
| Class T Shares | 1,468,920 | 1,241,751 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (3,605,090) | (6,523,885) | ||||||
| Class C Shares | (861,811) | (1,577,348) | ||||||
| Class D Shares | (9,919,812) | (15,804,153) | ||||||
| Class I Shares | (14,886,973) | (10,616,455) | ||||||
| Class S Shares | (396,417) | (471,886) | ||||||
| Class T Shares | (7,484,633) | (8,654,500) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 90,470,534 | 63,635,163 | ||||||
| Net Increase/(Decrease) in Net Assets | 102,306,408 | 68,486,139 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 193,064,013 | 124,577,874 | ||||||
| End of period | $ | 295,370,421 | $ | 193,064,013 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (3,560,191) | $ | (833,001) | ||||
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 March 31, 2015 | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $10.96 | $10.46 | $9.91 | $7.60 | $9.09 | $7.49 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(1) | 0.18(1) | 0.25 | 0.15 | 0.21 | 0.16 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.88 | 0.99 | 0.64 | 2.31 | (1.50) | 1.58 | ||||||||||||||||||||
| Total from Investment Operations | 0.91 | 1.17 | 0.89 | 2.46 | (1.29) | 1.74 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.16) | (0.20) | (0.34) | (0.15) | (0.20) | (0.14) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (0.33) | (0.67) | (0.34) | (0.15) | (0.20) | (0.14) | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.54 | $10.96 | $10.46 | $9.91 | $7.60 | $9.09 | ||||||||||||||||||||
| Total Return* | 8.39% | 11.84% | 9.04% | 32.82% | (14.60)% | 23.57% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $28,225 | $20,441 | $13,178 | $10,195 | $6,625 | $6,197 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $23,697 | $16,004 | $11,812 | $7,615 | $8,323 | $3,136 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.28% | 1.32% | 1.26% | 1.54% | 1.48% | 2.04% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.28% | 1.32% | 1.26% | 1.52% | 1.47% | 1.57% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.58% | 1.65% | 1.61% | 1.62% | 2.28% | 1.82% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $10.88 | $10.40 | $9.85 | $7.56 | $9.06 | $7.52 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(1) | 0.09(1) | 0.18 | 0.08 | 0.17 | 0.10 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.86 | 1.01 | 0.61 | 2.30 | (1.52) | 1.58 | ||||||||||||||||||||
| Total from Investment Operations | 0.85 | 1.10 | 0.79 | 2.38 | (1.35) | 1.68 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.12) | (0.15) | (0.24) | (0.09) | (0.15) | (0.14) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (0.29) | (0.62) | (0.24) | (0.09) | (0.15) | (0.14) | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.44 | $10.88 | $10.40 | $9.85 | $7.56 | $9.06 | ||||||||||||||||||||
| Total Return* | 7.88% | 11.14% | 8.11% | 31.81% | (15.18)% | 22.72% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $9,955 | $7,518 | $6,162 | $3,825 | $3,531 | $1,252 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $8,916 | $6,936 | $5,387 | $3,482 | $3,237 | $844 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.07% | 2.08% | 2.00% | 2.37% | 2.18% | 2.78% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.07% | 2.08% | 2.00% | 2.28% | 2.18% | 2.32% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.16)% | 0.85% | 0.90% | 0.89% | 1.36% | 1.04% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Class D Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $11.04 | $10.52 | $9.99 | $7.66 | $9.15 | $7.64 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.04(2) | 0.20(2) | 0.25 | 0.16 | 0.22 | 0.05 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.88 | 1.01 | 0.65 | 2.34 | (1.51) | 1.45 | ||||||||||||||||||||
| Total from Investment Operations | 0.92 | 1.21 | 0.90 | 2.50 | (1.29) | 1.50 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.16) | (0.22) | (0.37) | (0.17) | (0.21) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | 0.01 | 0.01 | ||||||||||||||||||||
| Total Distributions | (0.33) | (0.69) | (0.37) | (0.17) | (0.20) | 0.01 | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.63 | $11.04 | $10.52 | $9.99 | $7.66 | $9.15 | ||||||||||||||||||||
| Total Return* | 8.49% | 12.15% | 9.11% | 33.21% | (14.41)% | 19.76% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $48,044 | $44,443 | $38,341 | $31,503 | $15,105 | $11,388 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $46,716 | $37,602 | $44,646 | $19,495 | $17,244 | $4,756 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.13% | 1.15% | 1.05% | 1.34% | 1.34% | 1.83% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.13% | 1.12% | 1.05% | 1.34% | 1.34% | 1.43% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.79% | 1.79% | 1.79% | 1.87% | 2.34% | 2.21% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| 2015 (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $11.03 | $10.51 | $9.98 | $7.66 | $9.14 | $7.51 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.05(2) | 0.21(2) | 0.23 | 0.19 | 0.24 | 0.16 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.88 | 1.01 | 0.68 | 2.31 | (1.51) | 1.61 | ||||||||||||||||||||
| Total from Investment Operations | 0.93 | 1.22 | 0.91 | 2.50 | (1.27) | 1.77 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.17) | (0.23) | (0.38) | (0.18) | (0.21) | (0.14) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (0.34) | (0.70) | (0.38) | (0.18) | (0.21) | (0.14) | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.62 | $11.03 | $10.51 | $9.98 | $7.66 | $9.14 | ||||||||||||||||||||
| Total Return* | 8.56% | 12.28% | 9.27% | 33.26% | (14.29)% | 23.97% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $131,744 | $82,915 | $45,983 | $34,134 | $24,921 | $23,199 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $117,864 | $61,878 | $39,107 | $30,270 | $31,267 | $17,714 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.01% | 1.01% | 0.96% | 1.17% | 1.20% | 1.74% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.01% | 1.01% | 0.96% | 1.17% | 1.20% | 1.32% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.92% | 1.95% | 1.96% | 2.05% | 2.47% | 2.02% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
| * | 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 September 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. |
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 March 31, 2015 | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $10.97 | $10.47 | $9.93 | $7.62 | $9.08 | $7.50 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(1) | 0.16(1) | 0.23 | 0.14 | 0.21 | 0.12 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.87 | 1.01 | 0.64 | 2.32 | (1.52) | 1.60 | ||||||||||||||||||||
| Total from Investment Operations | 0.90 | 1.17 | 0.87 | 2.46 | (1.31) | 1.72 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.15) | (0.20) | (0.33) | (0.15) | (0.15) | (0.14) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(2) | – | – | ||||||||||||||||||||
| Total Distributions | (0.32) | (0.67) | (0.33) | (0.15) | (0.15) | (0.14) | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.55 | $10.97 | $10.47 | $9.93 | $7.62 | $9.08 | ||||||||||||||||||||
| Total Return* | 8.31% | 11.75% | 8.89% | 32.69% | (14.67)% | 23.32% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,993 | $2,112 | $1,317 | $654 | $346 | $543 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,638 | $1,701 | $1,061 | $589 | $539 | $477 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.45% | 1.45% | 1.40% | 1.57% | 1.62% | 2.19% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.45% | 1.45% | 1.38% | 1.54% | 1.62% | 1.82% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.49% | 1.49% | 1.58% | 1.53% | 2.22% | 1.49% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
Class T Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Global Real Estate Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $11.03 | $10.52 | $9.99 | $7.64 | $9.12 | $7.50 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.03(1) | 0.20(1) | 0.25 | 0.12 | 0.27 | 0.15 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.89 | 1.00 | 0.65 | 2.37 | (1.56) | 1.61 | ||||||||||||||||||||
| Total from Investment Operations | 0.92 | 1.20 | 0.90 | 2.49 | (1.29) | 1.76 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.16) | (0.22) | (0.37) | (0.14) | (0.21) | (0.14) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.17) | (0.47) | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(2) | 0.02 | –(2) | ||||||||||||||||||||
| Total Distributions | (0.33) | (0.69) | (0.37) | (0.14) | (0.19) | (0.14) | ||||||||||||||||||||
| Net Asset Value, End of Period | $11.62 | $11.03 | $10.52 | $9.99 | $7.64 | $9.12 | ||||||||||||||||||||
| Total Return* | 8.49% | 12.02% | 9.15% | 33.08% | (14.33)% | 23.86% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $74,410 | $35,636 | $19,597 | $9,291 | $3,180 | $2,801 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $53,771 | $21,807 | $20,814 | $5,114 | $6,456 | $528 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.18% | 1.18% | 1.13% | 1.31% | 1.34% | 2.22% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.18% | 1.18% | 1.13% | 1.30% | 1.34% | 1.58% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.60% | 1.82% | 1.76% | 1.81% | 2.14% | 2.39% | ||||||||||||||||||||
| Portfolio Turnover Rate | 11% | 24% | 32% | 29% | 68% | 14% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (2) | 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 | MARCH 31, 2015
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Global Real Estate 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. 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
Janus Investment Fund | 19
Table of Contents
Notes to Financial Statements (unaudited) (continued)
opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed quarterly, 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 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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of
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Notes to Financial Statements (unaudited) (continued)
assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent
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reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. When an option is written, the Fund receives a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written, at value” (if applicable). The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
During the period, the Fund wrote put options on various 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 put options during the period ended March 31, 2015.
| Fund | Written Put Options | |||||
| Janus Global Real Estate Fund | $ | 58,193 | ||||
Written option activity for the period ended March 31, 2015 is indicated in the table below:
| Number of | Premiums | |||||||||
| Put Options | Contracts | Received | ||||||||
Janus Global Real Estate Fund | ||||||||||
| Options outstanding at September 30, 2014 | 1,490 | $ | 63,995 | |||||||
| Options written | 1,440 | 166,450 | ||||||||
| Options closed | – | – | ||||||||
| Options expired | (710) | (77,390) | ||||||||
| Options exercised | (1,490) | (63,995) | ||||||||
| Options outstanding at March 31, 2015 | 730 | $ | 89,060 | |||||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| Liability Derivatives | ||||||||
| Derivatives not accounted for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | ||||||
Janus Global Real Estate Fund | ||||||||
| Equity Contracts | Options written, at value | $ | 22,255 | |||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Net Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
| Derivatives not accounted for as | ||||
| hedging instruments | Written options contracts | |||
Janus Global Real Estate Fund | ||||
| Equity Contracts | $ | 77,390 | ||
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Notes to Financial Statements (unaudited) (continued)
| Change in Unrealized Net Appreciation/Depreciation on Derivatives Recognized in Income | ||||
| Derivatives not accounted for as | ||||
| hedging instruments | Written options contracts | |||
Janus Global Real Estate Fund | ||||
| Equity Contracts | $ | 89,518 | ||
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 financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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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 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 March 31, 2015” 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 | ||||||||||||||
| Deutsche Bank AG | $9,175,732 | $– | $(9,175,732) | $– | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Morgan Stanley & Co. International PLC | $22,255 | $– | $– | $22,255 | ||||||||||||||
| (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.
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 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.
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| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Janus Global Real Estate Fund | 0.75 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Global Real Estate Fund | FTSE EPRA/NAREIT Global 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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Global Real Estate Fund | 0.81 | |||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Global Real Estate Fund | 0.97 | |||||
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
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.”
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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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Global Real Estate Fund | $ | 4,447 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Global Real Estate Fund | $ | 497 | ||||
As of March 31, 2015, 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 Real Estate Fund - Class A Shares | – | % | – | % | ||||||
| Janus Global Real Estate Fund - Class C Shares | – | – | ||||||||
| Janus Global Real Estate Fund - Class D Shares | – | – | ||||||||
| Janus Global Real Estate Fund - Class I Shares | 21 | 9 | ||||||||
| Janus Global Real Estate Fund - Class S Shares | – | – | ||||||||
| Janus Global Real Estate Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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.
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Notes to Financial Statements (unaudited) (continued)
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 March 31, 2015 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 Real Estate Fund | $ | 280,312,322 | $ | 35,370,104 | $ | (8,961,504) | $ | 26,408,600 | ||||||||||
| 6. | Capital Share Transactions |
| Janus Global Real | ||||||||||
| For the period ended March 31 (unaudited) | Estate Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 849,725 | 1,123,422 | ||||||||
| Reinvested dividends and distributions | 52,248 | 85,733 | ||||||||
| Shares repurchased | (321,072) | (604,440) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 580,901 | 604,715 | ||||||||
| Shares Outstanding, Beginning of Period | 1,864,957 | 1,260,242 | ||||||||
| Shares Outstanding, End of Period | 2,445,858 | 1,864,957 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 240,250 | 218,558 | ||||||||
| Reinvested dividends and distributions | 14,944 | 26,182 | ||||||||
| Shares repurchased | (76,568) | (145,791) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 178,626 | 98,949 | ||||||||
| Shares Outstanding, Beginning of Period | 691,222 | 592,273 | ||||||||
| Shares Outstanding, End of Period | 869,848 | 691,222 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 860,334 | 1,633,610 | ||||||||
| Reinvested dividends and distributions | 117,435 | 216,581 | ||||||||
| Shares repurchased | (871,580) | (1,467,524) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 106,189 | 382,667 | ||||||||
| Shares Outstanding, Beginning of Period | 4,025,502 | 3,642,835 | ||||||||
| Shares Outstanding, End of Period | 4,131,691 | 4,025,502 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 4,887,230 | 3,880,982 | ||||||||
| Reinvested dividends and distributions | 242,101 | 253,453 | ||||||||
| Shares repurchased | (1,305,381) | (990,780) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 3,823,950 | 3,143,655 | ||||||||
| Shares Outstanding, Beginning of Period | 7,517,855 | 4,374,200 | ||||||||
| Shares Outstanding, End of Period | 11,341,805 | 7,517,855 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 94,777 | 102,299 | ||||||||
| Reinvested dividends and distributions | 7,015 | 8,609 | ||||||||
| Shares repurchased | (35,133) | (44,102) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 66,659 | 66,806 | ||||||||
| Shares Outstanding, Beginning of Period | 192,562 | 125,756 | ||||||||
| Shares Outstanding, End of Period | 259,221 | 192,562 | ||||||||
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| Janus Global Real | ||||||||||
| For the period ended March 31 (unaudited) | Estate Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 3,699,142 | 2,044,929 | ||||||||
| Reinvested dividends and distributions | 130,888 | 122,329 | ||||||||
| Shares repurchased | (655,015) | (799,937) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 3,175,015 | 1,367,321 | ||||||||
| Shares Outstanding, Beginning of Period | 3,230,059 | 1,862,738 | ||||||||
| Shares Outstanding, End of Period | 6,405,074 | 3,230,059 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Real Estate Fund | $ | 106,934,550 | $ | 26,351,905 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87739 | 125-24-93044 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Forty Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Forty Fund
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FUND SNAPSHOT We believe that constructing a concentrated portfolio of quality growth companies will allow us to outperform our benchmark over time. We define quality as companies that enjoy sustainable “moats” around their businesses, potentially allowing companies to grow faster, with higher returns, than their competitors. We believe the market often underestimates these companies’ sustainable competitive advantage periods. |  Doug Rao portfolio manager |
PERFORMANCE OVERVIEW
For the six-month period ended March 31, 2015, Janus Forty Fund’s Class S Shares returned 14.85% versus a return of 8.81% for the Fund’s primary benchmark, the Russell 1000 Growth Index. The Fund’s secondary benchmark, the S&P 500 Index, returned 5.93% for the period.
INVESTMENT ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
OVERVIEW
As part of our investment strategy, we seek companies that have built clear, sustainable competitive moats around their businesses, which should help them grow market share within their respective industries over time. Important competitive advantages could include a strong brand, network effects from a product or service that would be hard for a competitor to replicate, a lower cost structure than competitors in the industry, a distribution advantage or patent protection over valuable intellectual property. We think emphasizing these sustainable competitive advantages can be a meaningful driver of outperformance over longer time horizons because the market often underestimates the duration of growth for these companies and the long-term potential return to shareholders. During the period, we saw a number of companies in our portfolio put up impressive results, further validating our view that they are well positioned to grow in excess of the market.
Some of our largest contributors to performance during the period were biotech and pharmaceutical companies. Valeant Pharmaceuticals was our largest contributor. The stock was up after the company acquired Salix Pharmaceuticals, a maker of gastrointestinal treatments. The acquisition of another company with good products that were poorly managed is an example of the playbook Valeant has been running for much of the past decade. We feel this strategy has set the company apart from many of its competitors. High research and development costs have been value destructive for many pharmaceutical companies, but Valeant has largely avoided high R&D spending by making a series of value accretive acquisitions of pharmaceutical companies with lower product risk. Valeant then takes many of the costs out of those companies and essentially acts as a distributor of a number of valuable drugs, rather than a research and development company whose future growth is dependent on new discoveries. Going forward, the Canadian-domiciled company can use its lower tax rate as an advantage when it competes against U.S. private equity firms that may also try to acquire pharmaceutical companies.
Pharmacyclics was another top contributor to performance during the period. The stock was up significantly the first quarter of 2015 after it was announced that AbbVie had won a bidding war to acquire the company. The high interest Pharmacyclics received from other companies bidding for it validated our view that its blood cancer treatments are truly innovative and offer significant growth potential. We sold the stock after the announcement.
Lowe’s was another top contributor during the period. Lowe’s embodies many of the company characteristics we like to emphasize in our portfolio. With only one other large competitor, Lowe’s operates in a much friendlier market structure than many other retail companies. Many
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Janus Forty Fund (unaudited)
of its products don’t lend themselves to e-commerce, which means the company is less impacted by the consumers’ migration to online shopping. Furthermore, the company’s size and scale give it a favorable cost structure compared to smaller hardware stores. A housing rebound and an increase in consumer spending on home improvement projects, which was suppressed for the last half decade coming out of the financial crisis, are also a tailwind for Lowe’s. Signs the consumer was spending more on home improvement were evident during the period, as Lowe’s reported strong same store sales growth, which helped drive the stock’s performance.
While pleased with our performance during the period, we did hold companies that detracted from performance. Precision Castparts was a large detractor. The company makes a number of parts for the aerospace industry and other end markets. The stock was down after the company missed earnings, due in part to lower demand for some of its products that serve the oil and gas markets, and also due to destocking by some of the customers who use Precision Castparts’ products. After reporting disappointing results in recent quarters, the stock is currently under review.
Canadian Pacific Railway was also a detractor. The stock declined due to expectations of less demand to transport crude oil by rail. We had actually trimmed the position after substantial gains during 2014, but Canadian Pacific remains a holding in our portfolio due to the long-term growth potential inherent in the company. In short, we believe Canadian Pacific’s railroad network across Canada and the U.S. is a valuable asset that would be nearly impossible for other transportation and logistics companies to replicate. The company also has a significant cost advantage over the trucking industry. Going forward, we believe the company can continue to grow revenues and railroad volumes as it improves execution around its railroad network. Canadian Pacific has made substantial investments to improve its service and reliability to customers. As service and reliability improves, it will likely drive more shippers to use Canadian Pacific instead of trucking services.
Finally, Alibaba Group was another detractor, but we continue to have high conviction in the company. The stock enjoyed a strong climb after its initial public offering, and its second quarterly results after the IPO were a little disappointing, which weighed on the stock. We also think there was some heightened selling of the stock in advance of a lock-up period that was expiring for some Alibaba shareholders. Neither of these short-term issues change our long-term outlook for the company. The Chinese e-commerce company provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web and mobile platforms. The company benefits not only from increasing consumer spending power in China, but also from the rapid growth in online and mobile shopping in a market where e-commerce has leapfrogged traditional brick and mortar retail.
OUTLOOK
We expect modestly accelerating growth for the U.S. economy in the coming quarters. Lower oil prices have been a hit to a portion of the economy, and that hit has already impacted economic growth. The benefits of lower oil prices, including lower input costs for some companies and increased consumer spending power due to lower gas prices, tend to work their way through the economy a little slower. We would expect to see those benefits trickle through the economy in the coming months. A housing market that is in the middle of a recovery should also benefit the U.S. economy.
On a broad basis equity valuations appear reasonable at this point, but we continue to see potential for U.S. equities. A strong dollar is a headwind for many large multinational companies, but these companies also benefit from the economic expansion taking place in the U.S.
Thank you for your investment in Janus Forty Fund.
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Janus Forty Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Valeant Pharmaceuticals International, Inc. (U.S. Shares) | 1.89% | |||
| Lowe’s Cos., Inc. | 1.65% | |||
| Pharmacyclics, Inc. | 1.50% | |||
| Endo International PLC | 1.39% | |||
| Delphi Automotive PLC | 0.99% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Precision Castparts Corp. | –0.55% | |||
| Canadian Pacific Railway, Ltd. (U.S. Shares) | –0.42% | |||
| MGM Resorts International | –0.40% | |||
| Google, Inc. – Class C | –0.33% | |||
| Alibaba Group Holding, Ltd. (ADR) | –0.28% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Health Care | 4.78% | 20.78% | 14.28% | |||||||||
| Energy | 1.49% | 0.41% | 4.68% | |||||||||
| Consumer Discretionary | 1.37% | 23.72% | 18.47% | |||||||||
| Materials | 0.54% | 2.72% | 4.03% | |||||||||
| Financials | 0.47% | 11.83% | 5.28% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 1000® | |||||||||||
| Fund Contribution | (Average % of Equity) | Growth Index Weighting | ||||||||||
| Industrials | –2.10% | 11.45% | 11.99% | |||||||||
| Consumer Staples | –0.27% | 0.00% | 10.60% | |||||||||
| Other** | –0.10% | 1.74% | 0.00% | |||||||||
| Utilities | 0.00% | 0.00% | 0.09% | |||||||||
| Telecommunication Services | 0.24% | 1.18% | 2.22% | |||||||||
| 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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Janus Forty Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Lowe’s Cos., Inc. Specialty Retail | 5.1% | |||
| Delphi Automotive PLC Auto Components | 3.9% | |||
| Google, Inc. – Class C Internet Software & Services | 3.7% | |||
| Valeant Pharmaceuticals International, Inc. (U.S. Shares) Pharmaceuticals | 3.6% | |||
| Endo International PLC Pharmaceuticals | 3.5% | |||
| 19.8% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Performance
| Expense Ratios – | |||||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectus | ||||||||||||
| Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
| Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
| Janus Forty Fund – Class A Shares | |||||||||||||
| NAV | 14.79% | 19.89% | 12.55% | 10.28% | 11.03% | 0.92% | |||||||
| MOP | 8.18% | 12.99% | 11.22% | 9.63% | 10.77% | ||||||||
| Janus Forty Fund – Class C Shares | |||||||||||||
| NAV | 14.29% | 18.96% | 11.67% | 9.44% | 10.43% | 1.67% | |||||||
| CDSC | 13.55% | 18.18% | 11.67% | 9.44% | 10.43% | ||||||||
| Janus Forty Fund – Class I Shares | 15.02% | 20.34% | 12.86% | 10.10% | 11.03% | 0.60% | |||||||
| Janus Forty Fund – Class N Shares | 15.15% | 20.51% | 12.43% | 10.10% | 11.03% | 0.52% | |||||||
| Janus Forty Fund – Class R Shares | 14.66% | 19.53% | 12.12% | 9.81% | 10.77% | 1.27% | |||||||
| Janus Forty Fund – Class S Shares | 14.85% | 19.91% | 12.43% | 10.10% | 11.03% | 1.02% | |||||||
| Janus Forty Fund – Class T Shares | 15.04% | 20.21% | 12.70% | 10.10% | 11.03% | 0.77% | |||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 15.63% | 9.36% | 6.79% | ||||||||
| S&P 500® Index | 5.93% | 12.73% | 14.47% | 8.01% | 7.42% | ||||||||
| Morningstar Quartile – Class S Shares | – | 1st | 4th | 1st | 1st | ||||||||
| Morningstar Ranking – based on total return for Large Growth Funds | – | 70/1,759 | 1,221/1,538 | 192/1,334 | 31/801 | ||||||||
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.
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.
See important disclosures on the next page.
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Janus Forty Fund (unaudited)
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, Class R Shares, and Class S Shares commenced operations on July 6, 2009 after the reorganization of each class of Janus Adviser Forty Fund (the “JAD predecessor fund”) into corresponding shares of the Fund.
Performance shown for Class S Shares reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares) from August 1, 2000 to July 6, 2009, calculated using the fees and expenses of the JAD predecessor fund’s Class S Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to August 1, 2000, the performance shown for Class S Shares reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization of the Retirement Shares into the JAD predecessor fund). Performance shown for certain periods prior to August 1, 2000 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers.
Performance shown for Class C Shares reflects the historical performance of the JAD predecessor fund’s Class C Shares from September 30, 2002 to July 6, 2009, calculated using the fees and expenses of the JAD predecessor fund’s Class C Shares, net of any applicable fee and expense limitations or waivers. For the periods August 1, 2000 to September 30, 2002, the performance shown for Class C Shares reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares). For the periods prior to August 1, 2000, the performance shown for Class C Shares reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization). Performance shown for certain periods prior to September 30, 2002 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitation or waivers.
Performance shown for Class A Shares and Class R Shares reflects the historical performance of each corresponding class of the JAD predecessor fund from September 30, 2004 to July 6, 2009, calculated using the fees and expenses of the corresponding class of the JAD predecessor fund respectively, net of any applicable fee and expense limitations or waivers. Performance shown for each class for the periods August 1, 2000 to September 30, 2004 reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares). Performance shown for each class for the periods prior to August 1, 2000 reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization). Performance shown for Class A Shares for certain periods prior to September 30, 2004 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers. Performance shown for Class R Shares for certain periods prior to September 30, 2004 was calculated using the fees and expenses of Class R Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers.
Performance shown for Class I Shares reflects the historical performance of the JAD predecessor fund’s Class I Shares from November 28, 2005 to July 6, 2009, calculated using the fees and expenses of the JAD predecessor fund’s Class I Shares, net of any applicable fee and expense limitations or waivers. For the periods August 1, 2000 to November 28, 2005, the performance shown for Class I Shares reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares). For the periods prior to August 1, 2000, the performance shown for Class I Shares reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization). Performance shown for certain periods prior to November 28, 2005 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for Class T Shares reflects the historical performance of the JAD predecessor fund’s Class S Shares (formerly named Class I Shares) from August 1, 2000 to July 6, 2009, calculated using the fees and expenses of the JAD predecessor fund’s Class S Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to August 1, 2000, the performance shown for Class T Shares reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization). Performance shown for certain periods prior to August 1, 2000 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for Class N Shares reflects the performance of the Fund’s Class S Shares from July 6, 2009 to May 31, 2012, calculated using the fees and expenses of Class S Shares, net of any applicable fee and expense limitations or waivers. For the periods August 1, 2000 to July 6, 2009, the performance shown for Class N Shares reflects the performance of Class S Shares (formerly named Class I Shares) of the JAD predecessor fund (prior to the reorganization), calculated using the fees and expenses of the JAD predecessor fund’s Class S Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to August 1, 2000, the performance shown for Class N Shares reflects the historical performance of the Retirement Shares of Janus Aspen Series – Forty Portfolio (as a result of a separate prior reorganization). Performance shown for certain periods prior to August 1, 2000 was calculated using the fees and expenses of Class S Shares of the JAD predecessor fund, without the effect of any fee and expense limitations or waivers.
If 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.
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.
© 2015 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 — May 1, 1997 |
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,147.90 | $ | 5.41 | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 | 1.01% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,142.90 | $ | 9.46 | $ | 1,000.00 | $ | 1,016.11 | $ | 8.90 | 1.77% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,150.20 | $ | 3.91 | $ | 1,000.00 | $ | 1,021.29 | $ | 3.68 | 0.73% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,151.50 | $ | 3.49 | $ | 1,000.00 | $ | 1,021.69 | $ | 3.28 | 0.65% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,146.60 | $ | 7.49 | $ | 1,000.00 | $ | 1,017.95 | $ | 7.04 | 1.40% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,148.50 | $ | 6.16 | $ | 1,000.00 | $ | 1,019.20 | $ | 5.79 | 1.15% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,150.40 | $ | 4.83 | $ | 1,000.00 | $ | 1,020.44 | $ | 4.53 | 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 182/365 (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. |
Janus Investment Fund | 7
Table of Contents
Janus Forty Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 98.4% | ||||||||||
| Aerospace & Defense – 3.0% | ||||||||||
| 342,310 | Precision Castparts Corp. | $ | 71,885,100 | |||||||
| Airlines – 1.0% | ||||||||||
| 355,321 | United Continental Holdings, Inc.* | 23,895,337 | ||||||||
| Auto Components – 3.9% | ||||||||||
| 1,170,173 | Delphi Automotive PLC | 93,309,595 | ||||||||
| Biotechnology – 5.8% | ||||||||||
| 149,783 | Biogen, Inc.* | 63,244,374 | ||||||||
| 356,610 | Celgene Corp.* | 41,110,001 | ||||||||
| 76,081 | Regeneron Pharmaceuticals, Inc.* | 34,349,050 | ||||||||
| 138,703,425 | ||||||||||
| Capital Markets – 4.5% | ||||||||||
| 1,644,174 | Charles Schwab Corp. | 50,048,657 | ||||||||
| 2,027,168 | E*TRADE Financial Corp.* | 57,885,782 | ||||||||
| 107,934,439 | ||||||||||
| Commercial Banks – 2.0% | ||||||||||
| 1,085,097 | U.S. Bancorp | 47,386,186 | ||||||||
| Construction Materials – 2.4% | ||||||||||
| 672,975 | Vulcan Materials Co. | 56,731,792 | ||||||||
| Diversified Financial Services – 2.0% | ||||||||||
| 209,240 | Intercontinental Exchange, Inc. | 48,809,415 | ||||||||
| Energy Equipment & Services – 1.3% | ||||||||||
| 499,236 | Baker Hughes, Inc. | 31,741,425 | ||||||||
| Health Care Equipment & Supplies – 1.4% | ||||||||||
| 1,943,969 | Boston Scientific Corp.* | 34,505,450 | ||||||||
| Health Care Technology – 0.1% | ||||||||||
| 16,509 | athenahealth, Inc.* | 1,971,010 | ||||||||
| Hotels, Restaurants & Leisure – 8.4% | ||||||||||
| 72,334 | Chipotle Mexican Grill, Inc.* | 47,056,160 | ||||||||
| 579,659 | Las Vegas Sands Corp. | 31,904,431 | ||||||||
| 1,019,108 | Norwegian Cruise Line Holdings, Ltd.* | 55,042,023 | ||||||||
| 706,151 | Starbucks Corp. | 66,872,500 | ||||||||
| 200,875,114 | ||||||||||
| Information Technology Services – 3.0% | ||||||||||
| 835,190 | MasterCard, Inc. – Class A | 72,152,064 | ||||||||
| Insurance – 2.5% | ||||||||||
| 628,729 | Aon PLC | 60,433,431 | ||||||||
| Internet & Catalog Retail – 5.9% | ||||||||||
| 173,868 | Amazon.com, Inc.* | 64,696,283 | ||||||||
| 65,899 | Priceline Group, Inc.* | 76,716,321 | ||||||||
| 141,412,604 | ||||||||||
| Internet Software & Services – 11.2% | ||||||||||
| 626,706 | Alibaba Group Holding, Ltd. (ADR)* | 52,167,007 | ||||||||
| 194,024 | CoStar Group, Inc.* | 38,383,768 | ||||||||
| 163,544 | Google, Inc. – Class C* | 89,622,112 | ||||||||
| 156,537 | LinkedIn Corp. – Class A* | 39,112,335 | ||||||||
| 2,543,000 | Tencent Holdings, Ltd. | 48,076,033 | ||||||||
| 267,361,255 | ||||||||||
| Media – 2.0% | ||||||||||
| 839,259 | Comcast Corp. – Class A | 47,392,956 | ||||||||
| Pharmaceuticals – 10.1% | ||||||||||
| 925,756 | Endo International PLC* | 83,040,313 | ||||||||
| 432,855 | Valeant Pharmaceuticals International, Inc. (U.S. Shares)* | 85,973,660 | ||||||||
| 1,558,072 | Zoetis, Inc. | 72,123,153 | ||||||||
| 241,137,126 | ||||||||||
| Professional Services – 3.1% | ||||||||||
| 1,685,256 | Nielsen NV | 75,111,860 | ||||||||
| Real Estate Investment Trusts (REITs) – 2.7% | ||||||||||
| 796,850 | Crown Castle International Corp. | 65,771,999 | ||||||||
| Road & Rail – 2.7% | ||||||||||
| 359,691 | Canadian Pacific Railway, Ltd. (U.S. Shares) | 65,715,546 | ||||||||
| Semiconductor & Semiconductor Equipment – 1.7% | ||||||||||
| 817,925 | ARM Holdings PLC (ADR) | 40,323,702 | ||||||||
| Software – 6.1% | ||||||||||
| 608,649 | Adobe Systems, Inc.* | 45,003,507 | ||||||||
| 232,599 | NetSuite, Inc.* | 21,575,883 | ||||||||
| 1,182,852 | Salesforce.com, Inc.* | 79,026,342 | ||||||||
| 145,605,732 | ||||||||||
| Specialty Retail – 7.4% | ||||||||||
| 1,638,347 | Lowe’s Cos., Inc. | 121,876,634 | ||||||||
| 800,685 | TJX Cos., Inc. | 56,087,984 | ||||||||
| 177,964,618 | ||||||||||
| Technology Hardware, Storage & Peripherals – 2.9% | ||||||||||
| 559,136 | Apple, Inc. | 69,573,292 | ||||||||
| Wireless Telecommunication Services – 1.3% | ||||||||||
| 986,752 | T-Mobile U.S., Inc.* | 31,270,171 | ||||||||
| Total Common Stocks (cost $1,818,520,770) | 2,358,974,644 | |||||||||
| Investment Companies – 1.4% | ||||||||||
| Money Markets – 1.4% | ||||||||||
| 33,434,902 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $33,434,902) | 33,434,902 | ||||||||
| Total Investments (total cost $1,851,955,672) – 99.8% | 2,392,409,546 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 4,586,429 | |||||||||
| Net Assets – 100% | $ | 2,396,995,975 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 2,100,153,598 | 87 | .8% | ||||
| Canada | 151,689,206 | 6 | .3 | |||||
| China | 100,243,040 | 4 | .2 | |||||
| United Kingdom | 40,323,702 | 1 | .7 | |||||
| Total | $ | 2,392,409,546 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
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. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| 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 March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||
Janus Forty Fund | ||||||||||||||||
| Janus Cash Liquidity Fund LLC | 29,639,000 | 524,205,669 | (520,409,767) | 33,434,902 | $ – | $17,231 | $33,434,902 | |||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | |||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
| Janus Forty Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | ||||||||
| Internet Software & Services | $ 219,285,222 | $48,076,033 | $ – | |||||
| All Other | 2,091,613,389 | – | – | |||||
Investment Companies | – | 33,434,902 | – | |||||
Total Assets | $2,310,898,611 | $81,510,935 | $ – | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Forty Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 1,851,955,672 | ||
| Unaffiliated investments, at value | $ | 2,358,974,644 | ||
| Affiliated investments, at value | 33,434,902 | |||
| Cash | 16,445 | |||
| Non-interested Trustees’ deferred compensation | 47,171 | |||
| Receivables: | ||||
| Investments sold | 16,641,723 | |||
| Fund shares sold | 1,210,177 | |||
| Dividends | 561,284 | |||
| Dividends from affiliates | 6,692 | |||
| Foreign dividend tax reclaim | 411,236 | |||
| Other assets | 22,901 | |||
| Total Assets | 2,411,327,175 | |||
| Liabilities: | ||||
| Payables: | ||||
| Investments purchased | 2,913,550 | |||
| Fund shares repurchased | 7,905,356 | |||
| Advisory fees | 1,350,919 | |||
| Fund administration fees | 20,738 | |||
| Transfer agent fees and expenses | 874,820 | |||
| 12b-1 Distribution and shareholder servicing fees | 998,534 | |||
| Non-interested Trustees’ fees and expenses | 15,541 | |||
| Non-interested Trustees’ deferred compensation fees | 47,171 | |||
| Accrued expenses and other payables | 204,571 | |||
| Total Liabilities | 14,331,200 | |||
| Net Assets | $ | 2,396,995,975 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Forty Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 1,590,727,928 | ||
| Undistributed net investment income/(loss) | (4,523,641) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 270,343,368 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 540,448,320 | |||
| Total Net Assets | $ | 2,396,995,975 | ||
| Net Assets - Class A Shares | $ | 227,893,434 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,030,625 | |||
Net Asset Value Per Share(1) | $ | 32.41 | ||
Maximum Offering Price Per Share(2) | $ | 34.39 | ||
| Net Assets - Class C Shares | $ | 280,827,692 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,704,348 | |||
Net Asset Value Per Share(1) | $ | 28.94 | ||
| Net Assets - Class I Shares | $ | 985,136,373 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 29,917,673 | |||
| Net Asset Value Per Share | $ | 32.93 | ||
| Net Assets - Class N Shares | $ | 78,357,120 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,378,044 | |||
| Net Asset Value Per Share | $ | 32.95 | ||
| Net Assets - Class R Shares | $ | 131,906,916 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,337,515 | |||
| Net Asset Value Per Share | $ | 30.41 | ||
| Net Assets - Class S Shares | $ | 662,564,229 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 20,937,681 | |||
| Net Asset Value Per Share | $ | 31.64 | ||
| Net Assets - Class T Shares | $ | 30,310,211 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 951,729 | |||
| Net Asset Value Per Share | $ | 31.85 | ||
| (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 | 11
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Forty Fund | |||
| Investment Income: | ||||
| Dividends | $ | 8,234,929 | ||
| Dividends from affiliates | 17,231 | |||
| Foreign tax withheld | (176,210) | |||
| Total Investment Income | 8,075,950 | |||
| Expenses: | ||||
| Advisory fees | 7,533,892 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 293,029 | |||
| Class C Shares | 1,428,842 | |||
| Class R Shares | 333,273 | |||
| Class S Shares | 839,233 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class R Shares | 166,636 | |||
| Class S Shares | 839,233 | |||
| Class T Shares | 33,649 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 126,715 | |||
| Class C Shares | 151,918 | |||
| Class I Shares | 398,481 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 14,330 | |||
| Class C Shares | 21,731 | |||
| Class I Shares | 21,430 | |||
| Class N Shares | 174 | |||
| Class R Shares | 770 | |||
| Class S Shares | 4,149 | |||
| Class T Shares | 180 | |||
| Shareholder reports expense | 25,692 | |||
| Registration fees | 80,825 | |||
| Custodian fees | 9,681 | |||
| Professional fees | 30,420 | |||
| Non-interested Trustees’ fees and expenses | 26,070 | |||
| Fund administration fees | 100,322 | |||
| Other expenses | 65,438 | |||
| Total Expenses | 12,546,113 | |||
| Net Expenses | 12,546,113 | |||
| Net Investment Income/(Loss) | (4,470,163) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 314,116,719 | |||
| Total Net Realized Gain/(Loss) on Investments | 314,116,719 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 26,805,360 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 26,805,360 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 336,451,916 | ||
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Forty Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (4,470,163) | $ | (9,212,076) | ||||
| Net realized gain/(loss) on investments | 314,116,719 | 782,228,804 | ||||||
| Change in unrealized net appreciation/depreciation | 26,805,360 | (413,512,874) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 336,451,916 | 359,503,854 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | – | (3,139,527) | ||||||
| Class C Shares | – | (474,345) | ||||||
| Class I Shares | – | (8,593,212) | ||||||
| Class N Shares | – | (509,610) | ||||||
| Class R Shares | – | (753,082) | ||||||
| Class S Shares | – | (10,406,759) | ||||||
| Class T Shares | – | (330,275) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (76,599,108) | (70,676,995) | ||||||
| Class C Shares | (100,957,668) | (64,091,310) | ||||||
| Class I Shares | (330,717,742) | (140,020,751) | ||||||
| Class N Shares | (23,301,135) | (7,536,473) | ||||||
| Class R Shares | (44,670,003) | (29,361,579) | ||||||
| Class S Shares | (219,832,349) | (260,008,601) | ||||||
| Class T Shares | (9,432,103) | (6,842,546) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (805,510,108) | (602,745,065) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 38,720,763 | 67,703,786 | ||||||
| Class C Shares | 45,209,779 | 44,493,349 | ||||||
| Class I Shares | 110,006,764 | 679,790,681 | ||||||
| Class N Shares | 7,449,751 | 58,465,490 | ||||||
| Class R Shares | 15,713,367 | 24,717,937 | ||||||
| Class S Shares | 48,732,082 | 98,214,598 | ||||||
| Class T Shares | 12,427,010 | 12,469,867 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 58,942,182 | 60,863,618 | ||||||
| Class C Shares | 60,620,850 | 37,966,676 | ||||||
| Class I Shares | 285,623,669 | 108,875,283 | ||||||
| Class N Shares | 23,301,135 | 8,046,083 | ||||||
| Class R Shares | 38,662,376 | 26,232,840 | ||||||
| Class S Shares | 218,133,378 | 268,748,610 | ||||||
| Class T Shares | 9,416,855 | 7,164,719 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (75,869,329) | (239,032,377) | ||||||
| Class C Shares | (59,650,067) | (83,826,728) | ||||||
| Class I Shares | (316,653,384) | (459,897,811) | ||||||
| Class N Shares | (8,412,894) | (16,874,469) | ||||||
| Class R Shares | (32,687,202) | (63,704,485) | ||||||
| Class S Shares | (164,801,623) | (981,297,271) | ||||||
| Class T Shares | (11,552,213) | (27,914,031) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 303,333,249 | (368,793,635) | ||||||
| Net Increase/(Decrease) in Net Assets | (165,724,943) | (612,034,846) | ||||||
| Net Assets: | ||||||||
| Beginning of period | 2,562,720,918 | 3,174,755,764 | ||||||
| End of period | $ | 2,396,995,975 | $ | 2,562,720,918 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (4,523,641) | $ | (53,478) | ||||
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year ended | Janus Forty Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $41.89 | $45.79 | $38.43 | $29.11 | $31.00 | $30.52 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(1) | (0.13)(1) | 0.53 | 0.35 | 0.34 | 0.12 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.78 | 5.38 | 6.98 | 9.12 | (2.23) | 0.36 | ||||||||||||||||||||
| Total from Investment Operations | 4.72 | 5.25 | 7.51 | 9.47 | (1.89) | 0.48 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.39) | (0.15) | (0.15) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (9.15) | (0.15) | (0.15) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $32.41 | $41.89 | $45.79 | $38.43 | $29.11 | $31.00 | ||||||||||||||||||||
| Total Return* | 14.79% | 12.72% | 19.61% | 32.66% | (6.10)% | 1.57% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $227,893 | $251,009 | $390,945 | $425,598 | $452,606 | $854,798 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $235,068 | $353,889 | $409,492 | $437,738 | $741,870 | $956,800 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.01% | 0.92% | 0.86% | 1.00% | 0.97% | 1.09% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.01% | 0.92% | 0.84% | 0.88% | 0.97% | 1.03% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.36)% | (0.30)% | 0.71% | 0.41% | 0.35% | (0.17)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and the each year ended | Janus Forty Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $39.00 | $43.19 | $36.40 | $27.65 | $29.69 | $29.44 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.18)(1) | (0.41)(1) | (0.36) | (0.46) | (0.46) | (0.16) | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.32 | 5.04 | 7.15 | 9.21 | (1.58) | 0.41 | ||||||||||||||||||||
| Total from Investment Operations | 4.14 | 4.63 | 6.79 | 8.75 | (2.04) | 0.25 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.06) | – | – | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (8.82) | – | – | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $28.94 | $39.00 | $43.19 | $36.40 | $27.65 | $29.69 | ||||||||||||||||||||
| Total Return* | 14.29% | 11.89% | 18.65% | 31.65% | (6.87)% | 0.85% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $280,828 | $297,564 | $327,004 | $341,806 | $354,291 | $612,674 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $286,553 | $320,463 | $324,884 | $354,737 | $548,885 | $613,080 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.77% | 1.67% | 1.65% | 1.71% | 1.77% | 1.85% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.77% | 1.67% | 1.63% | 1.62% | 1.77% | 1.78% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.11)% | (1.04)% | (0.07)% | (0.34)% | (0.44)% | (1.00)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Class I Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year ended | Janus Forty Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $42.28 | $46.14 | $38.72 | $29.35 | $31.19 | $30.61 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(1) | 0.02(1) | 0.79 | 0.36 | 0.41 | –(2) | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.86 | 5.42 | 6.88 | 9.26 | (2.25) | 0.58 | ||||||||||||||||||||
| Total from Investment Operations | 4.85 | 5.44 | 7.67 | 9.62 | (1.84) | 0.58 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.54) | (0.25) | (0.25) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (9.30) | (0.25) | (0.25) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $32.93 | $42.28 | $46.14 | $38.72 | $29.35 | $31.19 | ||||||||||||||||||||
| Total Return* | 15.02% | 13.11% | 19.94% | 33.00% | (5.90)% | 1.89% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $985,136 | $1,095,564 | $811,918 | $1,033,018 | $951,430 | $1,891,800 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,020,329 | $773,534 | $984,309 | $989,708 | $1,591,680 | $1,607,834 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.73% | 0.60% | 0.55% | 0.60% | 0.74% | 0.77% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.73% | 0.60% | 0.55% | 0.60% | 0.74% | 0.77% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.07)% | 0.05% | 1.02% | 0.70% | 0.57% | (0.03)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Forty Fund | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(3) | ||||||||||||||
| Net Asset Value, Beginning of Period | $42.26 | $46.15 | $38.73 | $35.26 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | –(1)(2) | 0.06(1) | 0.28 | 0.02 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.89 | 5.40 | 7.43 | 3.45 | ||||||||||||||
| Total from Investment Operations | 4.89 | 5.46 | 7.71 | 3.47 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | (0.59) | (0.29) | – | ||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | ||||||||||||||
| Total Distributions | (14.20) | (9.35) | (0.29) | – | ||||||||||||||
| Net Asset Value, End of Period | $32.95 | $42.26 | $46.15 | $38.73 | ||||||||||||||
| Total Return* | 15.15% | 13.17% | 20.03% | 9.84% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $78,357 | $68,810 | $23,029 | $1,347 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $73,474 | $54,492 | $23,323 | $176 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.65% | 0.52% | 0.47% | 0.52% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.65% | 0.52% | 0.47% | 0.52% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.02% | 0.15% | 0.89% | 1.43% | ||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | ||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (2) | Less than $0.005 on a per share basis. | |
| (3) | Period from May 31, 2012 (inception date) through June 30, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class R Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year ended | Janus Forty Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $40.19 | $44.25 | $37.14 | $28.14 | $30.11 | $29.76 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.12)(1) | (0.26)(1) | 0.05 | (0.08) | (0.06) | (0.04) | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.54 | 5.18 | 7.06 | 9.11 | (1.91) | 0.39 | ||||||||||||||||||||
| Total from Investment Operations | 4.42 | 4.92 | 7.11 | 9.03 | (1.97) | 0.35 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.22) | – | (0.03) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (8.98) | – | (0.03) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $30.41 | $40.19 | $44.25 | $37.14 | $28.14 | $30.11 | ||||||||||||||||||||
| Total Return* | 14.66% | 12.35% | 19.14% | 32.12% | (6.54)% | 1.18% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $131,907 | $136,575 | $161,383 | $181,124 | $188,830 | $241,690 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $133,675 | $150,821 | $164,019 | $189,329 | $247,138 | $203,710 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.40% | 1.27% | 1.21% | 1.27% | 1.42% | 1.46% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.40% | 1.27% | 1.21% | 1.27% | 1.42% | 1.46% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.74)% | (0.64)% | 0.35% | 0.01% | (0.09)% | (0.66)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
Class S Shares
| For a share outstanding during the period ended | ||||||||||||||||||||||||||
| March 31, 2015 (unaudited) and each year ended | Janus Forty Fund | |||||||||||||||||||||||||
| September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $41.21 | $45.16 | $37.89 | $28.68 | $30.60 | $30.17 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.08)(1) | (0.15)(1) | 0.30 | 0.09 | 0.06 | (0.02) | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.71 | 5.31 | 7.07 | 9.20 | (1.98) | 0.45 | ||||||||||||||||||||
| Total from Investment Operations | 4.63 | 5.16 | 7.37 | 9.29 | (1.92) | 0.43 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.35) | (0.10) | (0.08) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (9.11) | (0.10) | (0.08) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $31.64 | $41.21 | $45.16 | $37.89 | $28.68 | $30.60 | ||||||||||||||||||||
| Total Return* | 14.85% | 12.69% | 19.49% | 32.47% | (6.27)% | 1.43% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $662,564 | $687,469 | $1,423,516 | $1,692,436 | $1,904,767 | $2,994,743 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $673,231 | $1,215,799 | $1,581,421 | $1,831,407 | $2,870,863 | $2,964,526 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.15% | 1.02% | 0.96% | 1.02% | 1.17% | 1.20% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.15% | 0.97% | 0.91% | 1.00% | 1.17% | 1.20% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.48)% | (0.35)% | 0.66% | 0.28% | 0.16% | (0.42)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Class T Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Forty Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $41.34 | $45.27 | $38.02 | $28.83 | $30.69 | $30.18 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(1) | (0.06)(1) | 0.48 | 0.17 | 0.15 | 0.02 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 4.75 | 5.31 | 6.99 | 9.23 | (2.01) | 0.49 | ||||||||||||||||||||
| Total from Investment Operations | 4.71 | 5.25 | 7.47 | 9.40 | (1.86) | 0.51 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | – | (0.42) | (0.22) | (0.21) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (14.20) | (8.76) | – | – | – | – | ||||||||||||||||||||
| Total Distributions | (14.20) | (9.18) | (0.22) | (0.21) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $31.85 | $41.34 | $45.27 | $38.02 | $28.83 | $30.69 | ||||||||||||||||||||
| Total Return* | 15.04% | 12.90% | 19.74% | 32.79% | (6.06)% | 1.69% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $30,310 | $25,731 | $36,961 | $53,755 | $31,178 | $29,048 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $26,993 | $30,580 | $52,021 | $41,299 | $38,574 | $10,232 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.90% | 0.77% | 0.71% | 0.76% | 0.92% | 1.02% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.90% | 0.76% | 0.71% | 0.75% | 0.92% | 1.02% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.22)% | (0.13)% | 0.84% | 0.54% | 0.40% | (0.11)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 24% | 51% | 43% | 9% | 51% | 40% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Forty 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 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.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in
18 | MARCH 31, 2015
Table of Contents
good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
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Notes to Financial Statements (unaudited) (continued)
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets,
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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
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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Base Fee | ||||||
| Fund | Rate (%) | |||||
| Janus Forty Fund | 0.64 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Forty Fund | Russell 1000® Growth 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
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Notes to Financial Statements (unaudited) (continued)
fee rate before any waivers and/or reimbursements of expenses for the period ended March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Forty Fund | 0.62 | |||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Forty Fund | 0.83 | |||||
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.
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.
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
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Forty Fund | $ | 7,945 | ||||
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
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Notes to Financial Statements (unaudited) (continued)
shareholders of Class A Shares to Janus Distributors during the period ended March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Forty Fund | $ | 7,318 | ||||
| 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 March 31, 2015 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 Forty Fund | $ | 1,852,664,161 | $ | 547,194,592 | $ | (7,449,207) | $ | 539,745,385 | ||||||||||
| 5. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Forty Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 1,204,351 | 1,620,422 | ||||||||
| Reinvested dividends and distributions | 2,007,568 | 1,545,154 | ||||||||
| Shares repurchased | (2,172,988) | (5,712,330) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,038,931 | (2,546,754) | ||||||||
| Shares Outstanding, Beginning of Period | 5,991,694 | 8,538,448 | ||||||||
| Shares Outstanding, End of Period | 7,030,625 | 5,991,694 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 1,675,307 | 1,169,574 | ||||||||
| Reinvested dividends and distributions | 2,305,852 | 1,029,465 | ||||||||
| Shares repurchased | (1,907,267) | (2,140,502) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,073,892 | 58,537 | ||||||||
| Shares Outstanding, Beginning of Period | 7,630,456 | 7,571,919 | ||||||||
| Shares Outstanding, End of Period | 9,704,348 | 7,630,456 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 3,436,178 | 16,433,819 | ||||||||
| Reinvested dividends and distributions | 9,587,904 | 2,745,909 | ||||||||
| Shares repurchased | (9,019,966) | (10,861,577) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,004,116 | 8,318,151 | ||||||||
| Shares Outstanding, Beginning of Period | 25,913,557 | 17,595,406 | ||||||||
| Shares Outstanding, End of Period | 29,917,673 | 25,913,557 | ||||||||
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| For the period ended March 31 (unaudited) | Janus Forty Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 208,888 | 1,341,574 | ||||||||
| Reinvested dividends and distributions | 782,442 | 203,081 | ||||||||
| Shares repurchased | (241,415) | (415,536) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 749,915 | 1,129,119 | ||||||||
| Shares Outstanding, Beginning of Period | 1,628,129 | 499,010 | ||||||||
| Shares Outstanding, End of Period | 2,378,044 | 1,628,129 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 515,570 | 615,949 | ||||||||
| Reinvested dividends and distributions | 1,402,844 | 692,342 | ||||||||
| Shares repurchased | (979,264) | (1,556,879) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 939,150 | (248,588) | ||||||||
| Shares Outstanding, Beginning of Period | 3,398,365 | 3,646,953 | ||||||||
| Shares Outstanding, End of Period | 4,337,515 | 3,398,365 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 1,455,792 | 2,303,411 | ||||||||
| Reinvested dividends and distributions | 7,616,389 | 6,933,659 | ||||||||
| Shares repurchased | (4,817,260) | (24,074,974) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 4,254,921 | (14,837,904) | ||||||||
| Shares Outstanding, Beginning of Period | 16,682,760 | 31,520,664 | ||||||||
| Shares Outstanding, End of Period | 20,937,681 | 16,682,760 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 362,278 | 299,782 | ||||||||
| Reinvested dividends and distributions | 326,974 | 184,515 | ||||||||
| Shares repurchased | (359,893) | (678,385) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 329,359 | (194,088) | ||||||||
| Shares Outstanding, Beginning of Period | 622,370 | 816,458 | ||||||||
| Shares Outstanding, End of Period | 951,729 | 622,370 | ||||||||
| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Forty Fund | $ | 572,798,400 | $ | 1,104,328,306 | $ | – | $ | – | ||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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| • | 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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 | 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).
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-0515-87741 | 125-24-93041 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus International Equity Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus International Equity Fund
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Janus International Equity Fund (unaudited)
FUND SNAPSHOT We invest in international companies that we believe have a sustainable competitive advantage, high or improving returns on capital and long-term growth. We invest where we believe we have differentiated research, in an effort to deliver superior risk-adjusted results over the long term. |  Julian McManus co-portfolio manager |  Guy Scott co-portfolio manager |  Carmel Wellso co-portfolio manager |
PERFORMANCE
Janus International Equity Fund’s Class I Shares returned 1.58% over the six-month period ended March 31, 2015. The Fund’s primary benchmark, the MSCI EAFE Index, returned 1.13%, and its secondary benchmark, the MSCI All Country World ex-U.S. Index, returned -0.51% during the period.
MARKET ENVIRONMENT
Volatility returned to global equity markets early in the period as concerns about global growth resurfaced. In late autumn, stocks recovered as global central banks reiterated their commitment to loose monetary policy. The European Central Bank (ECB) vowed to raise the level of its balance sheet by 1 trillion euros, the People’s Bank of China unexpectedly lowered a key interest rate and the Bank of Japan ventured even further into unprecedented easing. The rapid decline in crude prices that has unfolded since mid-2014 piqued concern about global growth prospects. Buttressing the slowing growth argument, data outside of the U.S. remained muted. China’s fourth quarter GDP, for example, expanded at a lower-than-expected 7.3%, well below its 25-year average.
Conditions in Europe contributed to market angst as prices within the eurozone dipped deeper into deflationary territory. Sentiment was also hindered by the victory of Syriza, an anti-austerity party, in Greece’s parliamentary election. European stocks regained favor upon the ECB’s announcement of its own quantitative easing program. As yields on many short- and mid-term European bonds entered negative territory, the region’s stocks appeared highly attractive on a relative basis. Weakness in the common currency helped boost corporate confidence, especially with export-centric German manufacturers. While the geopolitical noise surrounding Greece has subsided, for now, concerns still remain with Turkey and Russia. The Petrobras scandal has cast a pall over Brazil. Partly due to this, we have exited our Latin American positions.
PERFORMANCE DISCUSSION
Outperformance for the period was driven by our stock selection in the information technology and health care sectors, both of which enjoyed robust merger and acquisition activity. On an individual basis, German automotive giant Volkswagen contributed most to performance. Recent developments are shaping up to be a validation of the investment thesis which originally led us to favor the stock. Clearly the rapidly depreciating euro has provided a tailwind for exports as the carmaker’s products are more competitively priced outside the eurozone. Economic data showing signs of a nascent recovery within Europe also bode well for the region’s largest car manufacturer. As that occurs, we believe that the company’s improved cost-cutting efforts and operational efficiencies, as evidenced by new platforms upon which multiple vehicle models can be built, will lead to an acceleration in earnings growth.
Within health care, pharmacy benefits manager (PBM) Catamaran was a strong contributor. In March the company agreed to be purchased by UnitedHealth Group for $12.8 billion and we sold our position. Before the acquisition was announced, we favored the stock as we believed PBMs, in general, would benefit from another strong wave of drugs presently going generic.
Another contributor, Insurer AIA Group, reported earnings that exceeded market expectations on the back of continued progress in developing new business in Asia. Even with the recent gains in stock price, we see potential upside as we expect that management can expand operating margins.
Relative detractors were concentrated in our consumer discretionary and consumer staples holdings.
As the third-largest copper producer and largest supplier of seaborne thermal coal, Glencore underperformed due to ongoing weakness in underlying commodities. We believe that both copper and thermal coal prices are in the process of bottoming and Glencore is best positioned to create value in the next up cycle.
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Janus International Equity Fund (unaudited)
Japanese exploration and production company Inpex was also a relative detractor. The company was also caught in the crude price downdraft as its liquefied natural gas products are priced off of oil. The stock did not decline nearly as aggressively as crude prices given the promising assets the company holds. Still, current price levels, in our view, are well below fair value, and consequently, we see significant upside to the stock.
Weighing down the consumer discretionary sector was gaming company Melco. The company faces headwinds in its Macau-focused business as China’s economy has decelerated and the government continues its crackdown on corruption, which has, for now, doused cold water on extravagant spending. The market has also punished gaming stocks as short-term traders react to weekly data, which is being skewed by exaggerated year-on-year comparisons. We believe that Melco, by contrast, is well positioned given that it is owns one of only two new hotels that will open in Macau later this year. This new property should drive revenue growth, in our view. Also the company focuses on the “mass market” and “premium mass market” rather that the VIP segment, which has been acutely affected by the anti-corruption crackdown.
OUTLOOK
We are in the camp that global growth will surprise to the upside, especially during the year’s second half. In our view, we expect China to be a key driver as it reverses earlier steps to keep a lid on the housing sector. It is our belief that cyclicals, namely materials and commodities, stand to benefit from China’s stimulative efforts. Another contributor to our bullish outlook is Europe. We are beginning to see signs of a potentially sustained recovery. Not only is a diminished euro a tailwind for the region’s companies, but also long overdue restructuring efforts have increased the corporate sector’s operating leverage. This development should lead to operating margins expanding from current lows, spurring robust earnings growth. Ironically, it is in the region’s cyclicals that one sees the deepest discounts on a price-earnings basis, but it is these names that stand to benefit most from an economic rebound.
We have a positive view on German industrials as well as Italian banks. Recent reforms undertaken in Italy address the country’s highly fragmented financial sector and could finally facilitate efficiency-enhancing consolidation. Despite this positive development, along with expected improving loan demand throughout the eurozone, banks face headwinds in the form of low-to-negative interest rates, which, according to our analysis, should depress the sector’s earnings. Although both inflation and GDP expectations remain soft in Japan, we believe the environment is favorable for equities. With the government cajoling public pension funds to load up on stocks, and similar measures undertaken by the Bank of Japan, the supply/demand dynamics of the equities market remains supportive, in our view. While Australian stocks have not moved much in U.S. dollar terms, valuations remain elevated in local currency. As a consequence we are very much underweight the country.
Thank you for your investment in Janus International Equity Fund.
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(unaudited)
Janus International Equity Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Volkswagen AG | 0.73% | |||
| Catamaran Corp. | 0.62% | |||
| AIA Group, Ltd. | 0.61% | |||
| Sumco Corp. | 0.48% | |||
| Seven Bank, Ltd. | 0.45% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Glencore PLC | –0.61% | |||
| Inpex Corp. | –0.48% | |||
| National Bank of Greece SA | –0.45% | |||
| Melco International Development, Ltd. | –0.45% | |||
| LyondellBasell Industries NV – Class A | –0.35% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI EAFE® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Information Technology | 1.42% | 11.36% | 4.73% | |||||||||
| Health Care | 0.94% | 10.53% | 11.20% | |||||||||
| Industrials | 0.59% | 7.16% | 12.54% | |||||||||
| Utilities | 0.27% | 0.14% | 3.79% | |||||||||
| Energy | 0.06% | 4.71% | 5.81% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI EAFE® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Consumer Discretionary | –0.78% | 15.68% | 12.38% | |||||||||
| Consumer Staples | –0.60% | 9.69% | 11.17% | |||||||||
| Financials | –0.52% | 27.20% | 25.82% | |||||||||
| Materials | –0.46% | 11.01% | 7.58% | |||||||||
| Telecommunication Services | –0.07% | 1.37% | 4.98% | |||||||||
| 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 codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
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Janus International Equity Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Volkswagen AG Automobiles | 3.3% | |||
| AIA Group, Ltd. Insurance | 3.1% | |||
| NGK Spark Plug Co., Ltd. Auto Components | 2.9% | |||
| Prudential PLC Insurance | 2.6% | |||
| Panalpina Welttransport Holding AG Air Freight & Logistics | 2.6% | |||
| 14.5% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 8.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Five | Since | Total Annual Fund | |||||||
| Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
| Janus International Equity Fund – Class A Shares | |||||||||||
| NAV | 1.43% | 0.09% | 6.13% | 4.77% | 1.10% | ||||||
| MOP | –4.38% | –5.63% | 4.88% | 4.03% | |||||||
| Janus International Equity Fund – Class C Shares | |||||||||||
| NAV | 1.00% | –0.66% | 5.28% | 3.89% | 1.90% | ||||||
| CDSC | 0.04% | –1.60% | 5.28% | 3.89% | |||||||
| Janus International Equity Fund – Class D Shares(1) | 1.67% | 0.40% | 6.36% | 4.98% | 0.91% | ||||||
| Janus International Equity Fund – Class I Shares | 1.58% | 0.39% | 6.47% | 5.06% | 0.80% | ||||||
| Janus International Equity Fund – Class N Shares | 1.64% | 0.44% | 6.47% | 5.06% | 0.75% | ||||||
| Janus International Equity Fund – Class R Shares | 1.27% | –0.31% | 5.72% | 4.27% | 1.50% | ||||||
| Janus International Equity Fund – Class S Shares | 1.37% | –0.07% | 6.28% | 4.92% | 1.25% | ||||||
| Janus International Equity Fund – Class T Shares | 1.48% | 0.21% | 6.27% | 4.87% | 1.00% | ||||||
| MSCI EAFE® Index | 1.13% | –0.92% | 6.16% | 2.08% | |||||||
| MSCI All Country World ex-U.S. IndexSM | –0.51% | –1.01% | 4.82% | 2.37% | |||||||
| Morningstar Quartile – Class I Shares | – | 3rd | 3rd | 1st | |||||||
| Morningstar Ranking – based on total return for Foreign Large Growth Funds | – | 207/351 | 182/314 | 13/269 | |||||||
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 | 5
Table of Contents
Janus International Equity Fund (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.
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, Class R 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 periods prior to February 16, 2010, 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 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 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 Class T Shares 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.
© 2015 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 — November 28, 2006 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,014.30 | $ | 5.37 | $ | 1,000.00 | $ | 1,019.60 | $ | 5.39 | 1.07% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,010.00 | $ | 9.32 | $ | 1,000.00 | $ | 1,015.66 | $ | 9.35 | 1.86% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,016.70 | $ | 3.97 | $ | 1,000.00 | $ | 1,020.99 | $ | 3.98 | 0.79% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,015.80 | $ | 4.02 | $ | 1,000.00 | $ | 1,020.94 | $ | 4.03 | 0.80% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 1,016.40 | $ | 3.67 | $ | 1,000.00 | $ | 1,021.29 | $ | 3.68 | 0.73% | |||||||||||||||||
| Class R Shares | $ | 1,000.00 | $ | 1,012.70 | $ | 7.43 | $ | 1,000.00 | $ | 1,017.55 | $ | 7.44 | 1.48% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,013.70 | $ | 6.18 | $ | 1,000.00 | $ | 1,018.80 | $ | 6.19 | 1.23% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,014.80 | $ | 4.92 | $ | 1,000.00 | $ | 1,020.04 | $ | 4.94 | 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 182/365 (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 International Equity Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 93.5% | ||||||||||
| Air Freight & Logistics – 3.4% | ||||||||||
| 52,027 | Panalpina Welttransport Holding AG | $ | 7,592,035 | |||||||
| 350,411 | TNT Express NV | 2,227,474 | ||||||||
| 9,819,509 | ||||||||||
| Auto Components – 3.5% | ||||||||||
| 34,584 | Hella KGaA Hueck & Co.* | 1,664,301 | ||||||||
| 313,600 | NGK Spark Plug Co., Ltd. | 8,437,778 | ||||||||
| 10,102,079 | ||||||||||
| Beverages – 4.6% | ||||||||||
| 210,407 | Diageo PLC | 5,800,795 | ||||||||
| 140,775 | SABMiller PLC | 7,365,560 | ||||||||
| 13,166,355 | ||||||||||
| Capital Markets – 1.7% | ||||||||||
| 137,753 | Deutsche Bank AG | 4,792,017 | ||||||||
| Chemicals – 4.7% | ||||||||||
| 824,579 | Alent PLC | 4,556,759 | ||||||||
| 25,996 | LyondellBasell Industries NV – Class A | 2,282,449 | ||||||||
| 102,200 | Shin-Etsu Chemical Co., Ltd. | 6,681,587 | ||||||||
| 13,520,795 | ||||||||||
| Commercial Banks – 10.9% | ||||||||||
| 1,708,995 | Banca Popolare di Milano Scarl* | 1,723,870 | ||||||||
| 508,705 | Banco Bilbao Vizcaya Argentaria SA | 5,133,055 | ||||||||
| 493,800 | Bangkok Bank PCL (NVDR) | 2,797,254 | ||||||||
| 87,742 | BNP Paribas SA | 5,335,511 | ||||||||
| 270,301 | HSBC Holdings PLC | 2,299,992 | ||||||||
| 517,832 | ICICI Bank, Ltd. | 2,608,888 | ||||||||
| 49,689 | Intesa Sanpaolo SpA | 168,593 | ||||||||
| 1,116,607 | Lloyds Banking Group PLC* | 1,295,843 | ||||||||
| 452,400 | Seven Bank, Ltd. | 2,234,495 | ||||||||
| 67,917 | Societe Generale SA | 3,283,139 | ||||||||
| 261,450 | Turkiye Halk Bankasi A/S | 1,289,353 | ||||||||
| 502,860 | UniCredit SpA | 3,410,307 | ||||||||
| 31,580,300 | ||||||||||
| Electrical Equipment – 1.9% | ||||||||||
| 72,420 | Schneider Electric SE | 5,632,284 | ||||||||
| Electronic Equipment, Instruments & Components – 2.4% | ||||||||||
| 68,760 | Hexagon AB – Class B | 2,446,519 | ||||||||
| 8,100 | Keyence Corp. | 4,424,848 | ||||||||
| 6,871,367 | ||||||||||
| Food Products – 1.3% | ||||||||||
| 87,092 | Unilever NV | 3,642,867 | ||||||||
| Health Care Equipment & Supplies – 2.2% | ||||||||||
| 55,015 | Essilor International SA | 6,316,113 | ||||||||
| Hotels, Restaurants & Leisure – 0.7% | ||||||||||
| 1,183,000 | Melco International Development, Ltd. | 1,996,910 | ||||||||
| Household Durables – 2.1% | ||||||||||
| 457,000 | Sekisui Chemical Co., Ltd. | 5,935,645 | ||||||||
| Household Products – 2.1% | ||||||||||
| 72,468 | Reckitt Benckiser Group PLC | 6,209,952 | ||||||||
| Information Technology Services – 0.9% | ||||||||||
| 2,361,000 | TravelSky Technology, Ltd. – Class H | 2,716,672 | ||||||||
| Insurance – 5.7% | ||||||||||
| 1,424,600 | AIA Group, Ltd. | 8,928,975 | ||||||||
| 307,537 | Prudential PLC | 7,613,630 | ||||||||
| 16,542,605 | ||||||||||
| Internet Software & Services – 1.9% | ||||||||||
| 33,423 | Alibaba Group Holding, Ltd. (ADR)* | 2,782,131 | ||||||||
| 330,115 | Auto Trader Group PLC* | 1,232,631 | ||||||||
| 85,500 | Tencent Holdings, Ltd. | 1,616,398 | ||||||||
| 5,631,160 | ||||||||||
| Media – 2.1% | ||||||||||
| 120,477 | Liberty Global PLC – Class A* | 6,200,951 | ||||||||
| Metals & Mining – 6.3% | ||||||||||
| 54,648 | APERAM SA* | 2,193,873 | ||||||||
| 1,505,807 | Glencore PLC* | 6,338,554 | ||||||||
| 372,579 | Outokumpu Oyj* | 2,961,846 | ||||||||
| 195,000 | Sumitomo Metal Mining Co., Ltd. | 2,854,848 | ||||||||
| 143,391 | ThyssenKrupp AG | 3,764,687 | ||||||||
| 18,113,808 | ||||||||||
| Multi-Utilities – 1.0% | ||||||||||
| 164,500 | Suez Environment Co. | 2,824,369 | ||||||||
| Oil, Gas & Consumable Fuels – 5.3% | ||||||||||
| 521,100 | Inpex Corp. | 5,749,992 | ||||||||
| 22,464 | Koninklijke Vopak NV | 1,241,239 | ||||||||
| 64,850 | MEG Energy Corp.* | 1,047,719 | ||||||||
| 78,137 | PrairieSky Royalty, Ltd. | 1,843,599 | ||||||||
| 90,440 | Royal Dutch Shell PLC – Class A | 2,700,415 | ||||||||
| 57,591 | Total SA | 2,864,816 | ||||||||
| 15,447,780 | ||||||||||
| Pharmaceuticals – 7.7% | ||||||||||
| 33,916 | Bayer AG | 5,095,323 | ||||||||
| 1,198,297 | Indivior PLC* | 3,371,115 | ||||||||
| 105,763 | Novo Nordisk A/S – Class B | 5,660,196 | ||||||||
| 22,109 | Roche Holding AG | 6,098,278 | ||||||||
| 25,372 | Shire PLC | 2,017,312 | ||||||||
| 22,242,224 | ||||||||||
| Real Estate Investment Trusts (REITs) – 1.1% | ||||||||||
| 2,197 | Mori Hills REIT Investment Corp. | 3,095,868 | ||||||||
| Real Estate Management & Development – 5.1% | ||||||||||
| 420,118 | Countrywide PLC | 3,197,050 | ||||||||
| 385,947 | Dalian Wanda Commercial Properties Co., Ltd. – Class H* | 2,388,607 | ||||||||
| 353,167 | Kennedy Wilson Europe Real Estate PLC | 5,754,725 | ||||||||
| 148,000 | Mitsubishi Estate Co., Ltd. | 3,435,627 | ||||||||
| 14,776,009 | ||||||||||
| Semiconductor & Semiconductor Equipment – 4.7% | ||||||||||
| 359,821 | ARM Holdings PLC | 5,890,383 | ||||||||
| 164,267 | Sumco Corp. | 2,762,948 | ||||||||
| 1,046,000 | Taiwan Semiconductor Manufacturing Co., Ltd. | 4,853,504 | ||||||||
| 13,506,835 | ||||||||||
| Specialty Retail – 1.5% | ||||||||||
| 1,516,492 | L’Occitane International SA | 4,325,189 | ||||||||
| Textiles, Apparel & Luxury Goods – 3.8% | ||||||||||
| 78,103 | Cie Financiere Richemont SA | 6,289,644 | ||||||||
| 1,391,500 | Samsonite International SA | 4,823,545 | ||||||||
| 11,113,189 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Thrifts & Mortgage Finance – 0.7% | ||||||||||
| 91,212 | Housing Development Finance Corp., Ltd. | $ | 1,917,207 | |||||||
| Tobacco – 0.6% | ||||||||||
| 308,876 | ITC, Ltd. | 1,606,763 | ||||||||
| Trading Companies & Distributors – 2.3% | ||||||||||
| 110,822 | Brenntag AG | 6,642,891 | ||||||||
| Wireless Telecommunication Services – 1.3% | ||||||||||
| 1,185,420 | Vodafone Group PLC | 3,873,469 | ||||||||
| Total Common Stocks (cost $243,390,197) | 270,163,182 | |||||||||
| Preferred Stocks – 3.3% | ||||||||||
| Automobiles – 3.3% | ||||||||||
| 35,690 | Volkswagen AG (cost $8,957,092) | 9,496,187 | ||||||||
| Rights – 0% | ||||||||||
| Commercial Banks – 0% | ||||||||||
| 508,705 | Banco Bilbao Vizcaya Argentaria SA* (cost $72,064) | 73,285 | ||||||||
| Investment Companies – 1.4% | ||||||||||
| Money Markets – 1.4% | ||||||||||
| 3,949,000 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $3,949,000) | 3,949,000 | ||||||||
| Total Investments (total cost $256,368,353) – 98.2% | 283,681,654 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 1.8% | 5,088,265 | |||||||||
| Net Assets – 100% | $ | 288,769,919 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United Kingdom | $ | 69,518,185 | 24 | .5% | ||||
| Japan | 45,613,636 | 16 | .1 | |||||
| France | 32,775,294 | 11 | .6 | |||||
| Germany | 31,455,406 | 11 | .1 | |||||
| Switzerland | 19,979,957 | 7 | .0 | |||||
| Hong Kong | 15,749,430 | 5 | .5 | |||||
| United States | 12,432,400 | 4 | .4 | |||||
| China | 9,503,808 | 3 | .3 | |||||
| Netherlands | 7,111,580 | 2 | .5 | |||||
| India | 6,132,858 | 2 | .2 | |||||
| Denmark | 5,660,196 | 2 | .0 | |||||
| Italy | 5,302,770 | 1 | .9 | |||||
| Spain | 5,206,340 | 1 | .8 | |||||
| Taiwan | 4,853,504 | 1 | .7 | |||||
| Finland | 2,961,846 | 1 | .0 | |||||
| Canada | 2,891,318 | 1 | .0 | |||||
| Thailand | 2,797,254 | 1 | .0 | |||||
| Sweden | 2,446,519 | 0 | .9 | |||||
| Turkey | 1,289,353 | 0 | .5 | |||||
| Total | $ | 283,681,654 | 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 All Country World ex-U.S. IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| 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. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| NVDR | Non-Voting Depositary Receipt | |
| PCL | Public Company Limited | |
| PLC | Public Limited Company |
| * | Non-income producing security. |
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus International Equity Fund | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | 4,524,322 | 49,968,795 | (50,544,117) | 3,949,000 | $ | – | $ | 1,340 | $ | 3,949,000 | |||||||||||
10 | MARCH 31, 2015
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus International Equity Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Air Freight & Logistics | $ | – | $ | 9,819,509 | $ | – | |||||
| Auto Components | – | 10,102,079 | – | ||||||||
| Beverages | – | 13,166,355 | – | ||||||||
| Capital Markets | – | 4,792,017 | – | ||||||||
| Chemicals | 2,282,449 | 11,238,346 | – | ||||||||
| Commercial Banks | – | 31,580,300 | – | ||||||||
| Electrical Equipment | – | 5,632,284 | – | ||||||||
| Electronic Equipment, Instruments & Components | – | 6,871,367 | – | ||||||||
| Food Products | – | 3,642,867 | – | ||||||||
| Health Care Equipment & Supplies | – | 6,316,113 | – | ||||||||
| Hotels, Restaurants & Leisure | – | 1,996,910 | – | ||||||||
| Household Durables | – | 5,935,645 | – | ||||||||
| Household Products | – | 6,209,952 | – | ||||||||
| Information Technology Services | – | 2,716,672 | – | ||||||||
| Insurance | – | 16,542,605 | – | ||||||||
| Internet Software & Services | 4,014,762 | 1,616,398 | – | ||||||||
| Media | 6,200,951 | – | – | ||||||||
| Metals & Mining | – | 18,113,808 | – | ||||||||
| Multi-Utilities | – | 2,824,369 | – | ||||||||
| Oil, Gas & Consumable Fuels | 2,891,318 | 12,556,462 | – | ||||||||
| Pharmaceuticals | – | 22,242,224 | – | ||||||||
| Real Estate Investment Trusts (REITs) | – | 3,095,868 | – | ||||||||
| Real Estate Management & Development | – | 14,776,009 | – | ||||||||
| Semiconductor & Semiconductor Equipment | – | 13,506,835 | – | ||||||||
| Specialty Retail | – | 4,325,189 | – | ||||||||
| Textiles, Apparel & Luxury Goods | – | 11,113,189 | – | ||||||||
| Thrifts & Mortgage Finance | – | 1,917,207 | – | ||||||||
| Tobacco | – | 1,606,763 | – | ||||||||
| Trading Companies & Distributors | – | 6,642,891 | – | ||||||||
| Wireless Telecommunication Services | – | 3,873,469 | – | ||||||||
Preferred Stocks | – | 9,496,187 | – | ||||||||
Rights | 73,285 | – | – | ||||||||
Investment Companies | – | 3,949,000 | – | ||||||||
Total Assets | $ | 15,462,765 | $ | 268,218,889 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus International Equity Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 256,368,353 | ||
| Unaffiliated investments, at value | $ | 279,732,654 | ||
| Affiliated investments, at value | 3,949,000 | |||
Cash denominated in foreign currency(1) | 5,744 | |||
| Non-interested Trustees’ deferred compensation | 5,679 | |||
| Receivables: | ||||
| Investments sold | 6,538,968 | |||
| Fund shares sold | 327,391 | |||
| Dividends | 640,422 | |||
| Dividends from affiliates | 40 | |||
| Foreign dividend tax reclaim | 445,749 | |||
| Other assets | 2,533 | |||
| Total Assets | 291,648,180 | |||
| Liabilities: | ||||
| Due to custodian | 57,081 | |||
| Payables: | ||||
| Investments purchased | 2,008,145 | |||
| Fund shares repurchased | 513,465 | |||
| Advisory fees | 137,000 | |||
| Fund administration fees | 2,461 | |||
| Transfer agent fees and expenses | 27,440 | |||
| 12b-1 Distribution and shareholder servicing fees | 27,397 | |||
| Non-interested Trustees’ fees and expenses | 1,832 | |||
| Non-interested Trustees’ deferred compensation fees | 5,679 | |||
| Foreign tax liability | 2,480 | |||
| Accrued expenses and other payables | 95,281 | |||
| Total Liabilities | 2,878,261 | |||
| Net Assets | $ | 288,769,919 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus International Equity Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 262,137,684 | ||
| Undistributed net investment income/(loss) | (723,752) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 78,895 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(2) | 27,277,092 | |||
| Total Net Assets | $ | 288,769,919 | ||
| Net Assets - Class A Shares | $ | 47,263,403 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,680,195 | |||
Net Asset Value Per Share(3) | $ | 12.84 | ||
Maximum Offering Price Per Share(4) | $ | 13.62 | ||
| Net Assets - Class C Shares | $ | 15,083,625 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,199,017 | |||
Net Asset Value Per Share(3) | $ | 12.58 | ||
| Net Assets - Class D Shares | $ | 20,779,670 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,625,372 | |||
| Net Asset Value Per Share | $ | 12.78 | ||
| Net Assets - Class I Shares | $ | 68,279,289 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,339,790 | |||
| Net Asset Value Per Share | $ | 12.79 | ||
| Net Assets - Class N Shares | $ | 111,278,452 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,711,581 | |||
| Net Asset Value Per Share | $ | 12.77 | ||
| Net Assets - Class R Shares | $ | 4,320,026 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 342,579 | |||
| Net Asset Value Per Share | $ | 12.61 | ||
| Net Assets - Class S Shares | $ | 12,484,934 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 947,999 | |||
| Net Asset Value Per Share | $ | 13.17 | ||
| Net Assets - Class T Shares | $ | 9,280,520 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 731,262 | |||
| Net Asset Value Per Share | $ | 12.69 | ||
| (1) | Includes cost of $5,860. | |
| (2) | Net of foreign tax on investments of $2,480. | |
| (3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
| (4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus International Equity Fund | |||
| Investment Income: | ||||
| Dividends | $ | 1,727,544 | ||
| Dividends from affiliates | 1,340 | |||
| Other income | 12 | |||
| Foreign tax withheld | (110,715) | |||
| Total Investment Income | 1,618,181 | |||
| Expenses: | ||||
| Advisory fees | 903,803 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 60,524 | |||
| Class C Shares | 76,647 | |||
| Class R Shares | 10,087 | |||
| Class S Shares | 15,239 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 12,285 | |||
| Class R Shares | 5,044 | |||
| Class S Shares | 15,239 | |||
| Class T Shares | 11,095 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 18,618 | |||
| Class C Shares | 9,041 | |||
| Class I Shares | 23,941 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 3,004 | |||
| Class C Shares | 1,230 | |||
| Class D Shares | 3,623 | |||
| Class I Shares | 1,624 | |||
| Class N Shares | 227 | |||
| Class R Shares | 107 | |||
| Class S Shares | 344 | |||
| Class T Shares | 81 | |||
| Shareholder reports expense | 4,891 | |||
| Registration fees | 65,339 | |||
| Custodian fees | 23,873 | |||
| Professional fees | 33,557 | |||
| Non-interested Trustees’ fees and expenses | 3,262 | |||
| Fund administration fees | 11,943 | |||
| Other expenses | 257 | |||
| Total Expenses | 1,314,925 | |||
| Net Expenses | 1,314,925 | |||
| Net Investment Income/(Loss) | 303,256 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 1,901,774 | |||
| Total Net Realized Gain/(Loss) on Investments | 1,901,774 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,588,485 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 1,588,485 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 3,793,515 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| �� | ||||||||
| Janus International | ||||||||
| Equity Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 303,256 | $ | 4,608,069 | ||||
| Net realized gain/(loss) on investments | 1,901,774 | 27,481,407 | ||||||
| Change in unrealized net appreciation/depreciation | 1,588,485 | (23,132,570) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 3,793,515 | 8,956,906 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (878,083) | (331,303) | ||||||
| Class C Shares | (162,619) | – | ||||||
| Class D Shares | (421,618) | (211,368) | ||||||
| Class I Shares | (1,547,184) | (550,553) | ||||||
| Class N Shares | (2,419,928) | (1,168,608) | ||||||
| Class R Shares | (69,920) | (8,810) | ||||||
| Class S Shares | (216,419) | (64,977) | ||||||
| Class T Shares | (170,989) | (77,503) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (2,044,383) | – | ||||||
| Class C Shares | (668,422) | – | ||||||
| Class D Shares | (879,285) | – | ||||||
| Class I Shares | (3,015,600) | – | ||||||
| Class N Shares | (4,612,882) | – | ||||||
| Class R Shares | (171,667) | – | ||||||
| Class S Shares | (509,157) | – | ||||||
| Class T Shares | (375,771) | – | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (18,163,927) | (2,413,122) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 3,699,739 | 23,762,718 | ||||||
| Class C Shares | 1,466,517 | 5,316,918 | ||||||
| Class D Shares | 2,275,980 | 5,561,849 | ||||||
| Class I Shares | 11,909,129 | 50,034,520 | ||||||
| Class N Shares | 3,731,546 | 7,310,815 | ||||||
| Class R Shares | 1,102,669 | 2,364,001 | ||||||
| Class S Shares | 2,246,293 | 8,169,141 | ||||||
| Class T Shares | 1,094,712 | 3,394,456 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 2,784,070 | 314,124 | ||||||
| Class C Shares | 603,837 | – | ||||||
| Class D Shares | 1,269,590 | 208,004 | ||||||
| Class I Shares | 3,545,835 | 448,039 | ||||||
| Class N Shares | 7,032,810 | 1,168,608 | ||||||
| Class R Shares | 241,587 | 8,810 | ||||||
| Class S Shares | 710,550 | 64,285 | ||||||
| Class T Shares | 537,714 | 77,406 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (8,805,506) | (20,290,836) | ||||||
| Class C Shares | (2,963,690) | (3,505,743) | ||||||
| Class D Shares | (3,899,732) | (5,736,065) | ||||||
| Class I Shares | (25,667,997) | (20,160,907) | ||||||
| Class N Shares | (6,748,841) | (9,495,134) | ||||||
| Class R Shares | (759,747) | (452,080) | ||||||
| Class S Shares | (3,160,672) | (3,078,851) | ||||||
| Class T Shares | (876,351) | (5,061,456) | ||||||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
| Janus International | ||||||||
| Equity Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (8,629,958) | 40,422,622 | ||||||
| Net Increase/(Decrease) in Net Assets | (23,000,370) | 46,966,406 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 311,770,289 | 264,803,883 | ||||||
| End of period | $ | 288,769,919 | �� | $ | 311,770,289 | |||
| Undistributed Net Investment Income/(Loss) | $ | (723,752) | $ | 4,859,752 | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.49 | $13.16 | $10.60 | $9.41 | $10.90 | $9.65 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | –(1)(2) | 0.19(1) | 0.12 | 0.14 | 0.14 | 0.06 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 0.23 | 2.54 | 1.17 | (1.57) | 1.20 | ||||||||||||||||||||
| Total from Investment Operations | 0.15 | 0.42 | 2.66 | 1.31 | (1.43) | 1.26 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.24) | (0.09) | (0.10) | (0.12) | (0.06) | (0.01) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | – | –(3) | ||||||||||||||||||||
| Total Distributions | (0.80) | (0.09) | (0.10) | (0.12) | (0.06) | (0.01) | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.84 | $13.49 | $13.16 | $10.60 | $9.41 | $10.90 | ||||||||||||||||||||
| Total Return* | 1.43% | 3.22% | 25.26% | 14.06% | (13.21)% | 13.04% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $47,263 | $51,903 | $46,617 | $45,259 | $51,188 | $75,583 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $48,552 | $54,632 | $45,869 | $49,289 | $76,011 | $68,357 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.07% | 1.10% | 1.16% | 1.31% | 1.22% | 1.34% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.07% | 1.10% | 1.16% | 1.31% | 1.22% | 1.34% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.04% | 1.36% | 0.88% | 1.01% | 1.02% | 0.76% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.18 | $12.87 | $10.37 | $9.19 | $10.68 | $9.52 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(1) | 0.07(1) | –(2) | 0.02 | 0.02 | (0.02) | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 0.24 | 2.51 | 1.18 | (1.51) | 1.18 | ||||||||||||||||||||
| Total from Investment Operations | 0.10 | 0.31 | 2.51 | 1.20 | (1.49) | 1.16 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.14) | – | (0.01) | (0.02) | – | – | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | – | –(3) | ||||||||||||||||||||
| Total Distributions | (0.70) | – | (0.01) | (0.02) | – | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.58 | $13.18 | $12.87 | $10.37 | $9.19 | $10.68 | ||||||||||||||||||||
| Total Return* | 1.00% | 2.41% | 24.26% | 13.11% | (13.95)% | 12.18% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $15,084 | $16,700 | $14,574 | $14,108 | $15,027 | $21,096 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $15,371 | $16,391 | $14,616 | $14,752 | $20,507 | $18,979 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.86% | 1.90% | 1.99% | 2.13% | 1.98% | 2.13% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.86% | 1.90% | 1.99% | 2.13% | 1.98% | 2.13% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.76)% | 0.56% | 0.07% | 0.18% | 0.26% | (0.04)% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (2) | Less than $0.005 on a per share basis. | |
| (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.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010(1) | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.44 | $13.12 | $10.56 | $9.40 | $10.91 | $9.71 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.02(2) | 0.21(2) | 0.14 | 0.13 | 0.12 | 0.03 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 0.23 | 2.54 | 1.18 | (1.54) | 1.16 | ||||||||||||||||||||
| Total from Investment Operations | 0.17 | 0.44 | 2.68 | 1.31 | (1.42) | 1.19 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.27) | (0.12) | (0.12) | (0.15) | (0.10) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | 0.01 | 0.01 | ||||||||||||||||||||
| Total Distributions | (0.83) | (0.12) | (0.12) | (0.15) | (0.09) | 0.01 | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.78 | $13.44 | $13.12 | $10.56 | $9.40 | $10.91 | ||||||||||||||||||||
| Total Return* | 1.67% | 3.39% | 25.57% | 14.08% | (13.07)% | 12.36% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $20,780 | $22,197 | $21,548 | $12,927 | $8,146 | $5,558 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $20,532 | $23,448 | $18,086 | $11,089 | $8,914 | $2,807 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.79% | 0.91% | 0.96% | 1.26% | 1.15% | 1.16% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.79% | 0.91% | 0.96% | 1.26% | 1.15% | 1.16% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.32% | 1.51% | 1.17% | 1.17% | 1.12% | 1.10% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, | Janus International Equity Fund | |||||||||||||||||||||||||
| 2015 (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.47 | $13.14 | $10.57 | $9.41 | $10.90 | $9.65 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.02(2) | 0.24(2) | 0.20 | 0.26 | 0.16 | 0.09 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 0.22 | 2.50 | 1.07 | (1.55) | 1.20 | ||||||||||||||||||||
| Total from Investment Operations | 0.17 | 0.46 | 2.70 | 1.33 | (1.39) | 1.29 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.29) | (0.13) | (0.13) | (0.17) | (0.10) | (0.04) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (0.85) | (0.13) | (0.13) | (0.17) | (0.10) | (0.04) | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.79 | $13.47 | $13.14 | $10.57 | $9.41 | $10.90 | ||||||||||||||||||||
| Total Return* | 1.58% | 3.54% | 25.74% | 14.33% | (12.93)% | 13.44% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $68,279 | $82,290 | $51,080 | $54,979 | $111,307 | $131,905 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $72,213 | $69,670 | $50,216 | $107,482 | $142,120 | $110,413 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.80% | 0.80% | 0.86% | 0.99% | 0.90% | 0.99% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.80% | 0.80% | 0.86% | 0.99% | 0.90% | 0.99% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.30% | 1.72% | 1.18% | 1.41% | 1.36% | 1.13% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
| * | 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 September 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. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and | Janus International Equity Fund | |||||||||||||||||
| each year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $13.45 | $13.13 | $10.58 | $9.59 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | 0.03(2) | 0.23(2) | 0.16 | 0.04 | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.14 | 0.23 | 2.54 | 0.95 | ||||||||||||||
| Total from Investment Operations | 0.17 | 0.46 | 2.70 | 0.99 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | (0.29) | (0.14) | (0.15) | – | ||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | ||||||||||||||
| Total Distributions | (0.85) | (0.14) | (0.15) | – | ||||||||||||||
| Net Asset Value, End of Period | $12.77 | $13.45 | $13.13 | $10.58 | ||||||||||||||
| Total Return* | 1.64% | 3.52% | 25.78% | 10.32% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $111,278 | $112,593 | $110,785 | $66,213 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $109,274 | $115,799 | $87,061 | $59,567 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.73% | 0.75% | 0.80% | 0.91% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.73% | 0.75% | 0.80% | 0.91% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.40% | 1.65% | 1.36% | 1.19% | ||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | ||||||||||||||
Class R Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.27 | $12.97 | $10.50 | $9.30 | $10.79 | $9.58 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(2) | 0.14(2) | 0.05 | (0.03) | 0.10 | 0.03 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.15 | 0.21 | 2.54 | 1.29 | (1.56) | 1.18 | ||||||||||||||||||||
| Total from Investment Operations | 0.13 | 0.35 | 2.59 | 1.26 | (1.46) | 1.21 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.23) | (0.05) | (0.12) | (0.06) | (0.03) | – | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(3) | –(3) | –(3) | ||||||||||||||||||||
| Total Distributions | (0.79) | (0.05) | (0.12) | (0.06) | (0.03) | – | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.61 | $13.27 | $12.97 | $10.50 | $9.30 | $10.79 | ||||||||||||||||||||
| Total Return* | 1.27% | 2.74% | 24.81% | 13.63% | (13.58)% | 12.63% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $4,320 | $3,906 | $1,982 | $1,552 | $568 | $764 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $4,046 | $2,798 | $1,768 | $665 | $902 | $672 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.48% | 1.50% | 1.56% | 1.70% | 1.63% | 1.71% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.48% | 1.50% | 1.56% | 1.70% | 1.63% | 1.71% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.33)% | 1.03% | 0.51% | 0.69% | 0.63% | 0.41% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
| * | 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 September 30, 2012. | |
| (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.
Janus Investment Fund | 19
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Financial Highlights (continued)
Class S Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.82 | $13.51 | $10.93 | $9.52 | $11.04 | $9.78 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(1) | 0.17(1) | (0.08) | 0.22 | 0.20 | 0.04 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.16 | 0.24 | 2.80 | 1.24 | (1.67) | 1.23 | ||||||||||||||||||||
| Total from Investment Operations | 0.15 | 0.41 | 2.72 | 1.46 | (1.47) | 1.27 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.24) | (0.10) | (0.14) | (0.05) | (0.05) | (0.01) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(2) | –(2) | –(2) | ||||||||||||||||||||
| Total Distributions | (0.80) | (0.10) | (0.14) | (0.05) | (0.05) | (0.01) | ||||||||||||||||||||
| Net Asset Value, End of Period | $13.17 | $13.82 | $13.51 | $10.93 | $9.52 | $11.04 | ||||||||||||||||||||
| Total Return* | 1.37% | 3.05% | 25.13% | 15.44% | (13.41)% | 13.03% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $12,485 | $13,253 | $8,045 | $3,173 | $2,865 | $6,363 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $12,225 | $10,466 | $5,131 | $2,714 | $5,948 | $5,510 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.23% | 1.25% | 1.30% | 1.01%(3) | 1.38% | 1.46% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.23% | 1.25% | 1.30% | 1.00%(3) | 1.38% | 1.46% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.11)% | 1.19% | 0.83% | 2.19% | 0.84% | 0.63% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
Class T Shares
| For a share outstanding during the period ended March 31, 2015 | Janus International Equity Fund | |||||||||||||||||||||||||
| (unaudited) and each year ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| Net Asset Value, Beginning of Period | $13.35 | $13.02 | $10.50 | $9.34 | $10.86 | $9.64 | ||||||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||||||
| Net investment income/(loss) | 0.01(1) | 0.20(1) | 0.10 | 0.14 | 0.11 | 0.05 | ||||||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.14 | 0.23 | 2.55 | 1.18 | (1.53) | 1.22 | ||||||||||||||||||||
| Total from Investment Operations | 0.15 | 0.43 | 2.65 | 1.32 | (1.42) | 1.27 | ||||||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||||
| Dividends (from net investment income) | (0.25) | (0.10) | (0.13) | (0.16) | (0.10) | (0.05) | ||||||||||||||||||||
| Distributions (from capital gains) | (0.56) | – | – | – | – | – | ||||||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(2) | –(2) | –(2) | ||||||||||||||||||||
| Total Distributions | (0.81) | (0.10) | (0.13) | (0.16) | (0.10) | (0.05) | ||||||||||||||||||||
| Net Asset Value, End of Period | $12.69 | $13.35 | $13.02 | $10.50 | $9.34 | $10.86 | ||||||||||||||||||||
| Total Return* | 1.48% | 3.31% | 25.50% | 14.25% | (13.23)% | 13.22% | ||||||||||||||||||||
| Net Assets, End of Period (in thousands) | $9,281 | $8,929 | $10,173 | $11,027 | $5,184 | $2,137 | ||||||||||||||||||||
| Average Net Assets for the Period (in thousands) | $8,900 | $10,476 | $11,504 | $6,256 | $4,425 | $645 | ||||||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 0.98% | 1.00% | 1.07% | 1.19% | 1.12% | 1.26% | ||||||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 0.98% | 0.99% | 1.07% | 1.19% | 1.12% | 1.26% | ||||||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.16% | 1.46% | 1.03% | 1.28% | 1.13% | 1.14% | ||||||||||||||||||||
| Portfolio Turnover Rate | 30% | 57% | 74% | 57% | 77% | 132% | ||||||||||||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (2) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
| (3) | A non-recurring expense adjustment impacted the Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets and Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets. The ratio would be 1.43% and 1.43%, respectively, without the inclusion of the non-recurring expense adjustment. |
See Notes to Financial Statements.
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus International Equity 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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 at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market
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Notes to Financial Statements (unaudited) (continued)
quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated
22 | MARCH 31, 2015
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets,
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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
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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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Base Fee | ||||||
| Fund | Rate (%) | |||||
| Janus International Equity Fund | 0.68 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus International Equity Fund | MSCI EAFE®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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus International Equity Fund | 0.62 | |||||
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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus International Equity Fund | 0.95 | |||||
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
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Notes to Financial Statements (unaudited) (continued)
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.
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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
26 | MARCH 31, 2015
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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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus International Equity Fund | $ | 1,161 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus International Equity Fund | $ | 2,512 | ||||
As of March 31, 2015, 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 International Equity Fund - Class A Shares | – | % | – | % | ||||||
| Janus International Equity Fund - Class C Shares | – | – | ||||||||
| Janus International Equity Fund - Class D Shares | – | – | ||||||||
| Janus International Equity Fund - Class I Shares | – | – | ||||||||
| Janus International Equity Fund - Class N Shares | 97 | 37 | ||||||||
| Janus International Equity Fund - Class R Shares | – | – | ||||||||
| Janus International Equity Fund - Class S Shares | – | – | ||||||||
| Janus International Equity Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
Janus Investment Fund | 27
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Notes to Financial Statements (unaudited) (continued)
| 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 March 31, 2015 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 International Equity Fund | $ | 257,870,779 | $ | 38,992,701 | $ | (13,181,826) | $ | 25,810,875 | ||||||||||
| 5. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus International Equity Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 290,385 | 1,747,126 | ||||||||
| Reinvested dividends and distributions | 229,898 | 23,779 | ||||||||
| Shares repurchased | (687,580) | (1,464,917) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (167,297) | 305,988 | ||||||||
| Shares Outstanding, Beginning of Period | 3,847,492 | 3,541,504 | ||||||||
| Shares Outstanding, End of Period | 3,680,195 | 3,847,492 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 117,547 | 397,881 | ||||||||
| Reinvested dividends and distributions | 50,785 | – | ||||||||
| Shares repurchased | (236,850) | (262,837) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (68,518) | 135,044 | ||||||||
| Shares Outstanding, Beginning of Period | 1,267,535 | 1,132,491 | ||||||||
| Shares Outstanding, End of Period | 1,199,017 | 1,267,535 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 179,576 | 412,731 | ||||||||
| Reinvested dividends and distributions | 105,448 | 15,830 | ||||||||
| Shares repurchased | (310,719) | (419,502) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (25,695) | 9,059 | ||||||||
| Shares Outstanding, Beginning of Period | 1,651,067 | 1,642,008 | ||||||||
| Shares Outstanding, End of Period | 1,625,372 | 1,651,067 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 941,350 | 3,658,534 | ||||||||
| Reinvested dividends and distributions | 294,260 | 34,046 | ||||||||
| Shares repurchased | (2,006,217) | (1,469,379) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (770,607) | 2,223,201 | ||||||||
| Shares Outstanding, Beginning of Period | 6,110,397 | 3,887,196 | ||||||||
| Shares Outstanding, End of Period | 5,339,790 | 6,110,397 | ||||||||
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| For the period ended March 31 (unaudited) | Janus International Equity Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 292,912 | 537,345 | ||||||||
| Reinvested dividends and distributions | 584,606 | 88,935 | ||||||||
| Shares repurchased | (534,149) | (696,912) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 343,369 | (70,632) | ||||||||
| Shares Outstanding, Beginning of Period | 8,368,212 | 8,438,844 | ||||||||
| Shares Outstanding, End of Period | 8,711,581 | 8,368,212 | ||||||||
| Transactions in Fund Shares – Class R Shares: | ||||||||||
| Shares sold | 87,952 | 174,284 | ||||||||
| Reinvested dividends and distributions | 20,284 | 676 | ||||||||
| Shares repurchased | (59,875) | (33,559) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 48,361 | 141,401 | ||||||||
| Shares Outstanding, Beginning of Period | 294,218 | 152,817 | ||||||||
| Shares Outstanding, End of Period | 342,579 | 294,218 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 173,286 | 574,983 | ||||||||
| Reinvested dividends and distributions | 57,164 | 4,744 | ||||||||
| Shares repurchased | (241,438) | (216,238) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (10,988) | 363,489 | ||||||||
| Shares Outstanding, Beginning of Period | 958,987 | 595,498 | ||||||||
| Shares Outstanding, End of Period | 947,999 | 958,987 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 86,881 | 251,969 | ||||||||
| Reinvested dividends and distributions | 44,922 | 5,927 | ||||||||
| Shares repurchased | (69,427) | (370,411) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 62,376 | (112,515) | ||||||||
| Shares Outstanding, Beginning of Period | 668,886 | 781,401 | ||||||||
| Shares Outstanding, End of Period | 731,262 | 668,886 | ||||||||
| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 International Equity Fund | $ | 87,135,585 | $ | 117,266,047 | $ | – | $ | – | ||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
Janus Investment Fund | 41
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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).
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-0515-87358 | 125-24-93049 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Emerging Markets Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Emerging Markets Fund
| 1 | ||
| 11 | ||
| 14 | ||
| 16 | ||
| 17 | ||
| 18 | ||
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Table of Contents
Janus Emerging Markets Fund (unaudited)
FUND SNAPSHOT We seek to generate strong risk-adjusted returns by investing in stocks with high or expanding profitability at attractive valuations. |  Hiroshi Yoh lead co-portfolio manager |  Wahid Chammas co-portfolio manager |
PERFORMANCE
Janus Emerging Markets Fund’s Class I Shares returned -0.30% for the six-month period ended March 31, 2015. The Fund’s benchmark, the MSCI Emerging Markets Index, returned -2.37%.
MARKET ENVIRONMENT
Emerging market equities declined over the period, in part due to a strengthening of the U.S. dollar, much of which occurred during the latter part of 2014. In fact, emerging market shares largely gained over the past three months, despite having the dollar remain at an elevated level. This is evidence that the oft-cited causal link between emerging market performance and the dollar is not nearly as strong as it is purported to be. What is especially noteworthy is that several emerging market stock indices, especially in Asia, held up during the dollar’s rapid rise. In the turbulent periods of the 1980s and 1990s, a roughly 10% appreciation in the U.S. currency was often enough to sink the prospects of emerging market securities. In the current episode, even as the U.S. dollar recorded double-digit gains against major currencies such as the euro and Japanese yen, emerging market stocks proved more resilient, with China-focused indices recording impressive gains and other Asian markets such as India and Taiwan also firmly in positive territory. Losses for the period were largely concentrated in the commodities producers of Latin America along with Russia, which had the added headwind of economic sanctions. It was a similar story with emerging market currencies as exchange rates against the U.S. dollar for countries including China, India, Taiwan and South Korea recorded mild single-digit losses, in contrast with the sharp fall in the euro and yen. As with equities, Latin American currencies and the Russian ruble fared much worse. The positive development in Asia is owed to substantial improvement in financial positions on both corporate and sovereign balance sheets. Indonesia is a prime example of a country whose currency has depreciated, but company balance sheets have not been stressed. Issuances of local debt, lower overall debt levels and the deployment of hedges, via derivatives or natural, have all made the jobs of senior executives and corporate treasurers much more manageable.
PERFORMANCE DISCUSSION
Led by our selection of industrial and consumer discretionary stocks, the portfolio outperformed its benchmark for the period. Top contributors to portfolio performance were concentrated in Asia, with Cheil Industries, a de facto holding company for conglomerate Samsung, leading the way. The company continued to benefit from the sentiment surrounding its recent initial public offering (IPO). Cheil is structured essentially to aid in transferring ownership of Samsung from one generation of the controlling family to the next. After this period of outperformance, we no longer hold the position in the portfolio.
Another strong contributor was Chinese financial company CITIC Securities. Given its breadth of services, CITIC operates as a proxy for Chinese equities and has benefited from the establishment of the Shanghai-Hong Kong Stock Connect, which has enabled foreigners to invest in much greater volumes in mainland-listed blue-chip companies. CITIC’s stock also rose on several favorable operational metrics, such as higher trading volumes, IPO activity and improving margins.
Staying in China, SAIC Motor Corporation contributed to results as well. The company had been among the cheapest auto companies globally. Its joint ventures with global industry powers Volkswagen and General Motors continue to gain domestic market share. While its own brand continues to register losses, that reality is offset by a highly attractive dividend yield, which has played a role in supporting the stock.
Moving to Europe, Sberbank of Russia was the largest individual detractor. We think this negative sentiment is short-term and rather country specific as opposed to company specific. The company is the leading retail bank in the country and derives very little of its revenue internationally. It is still sustaining double-digit returns on equity even in this difficult environment as it is gaining a
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Janus Emerging Markets Fund (unaudited)
lot of share owing to a “deposit flight-to-quality” on the part of corporates and the broader retail population. They have by far the most robust capital buffers of any financial institution in Russia, and while the still-simmering Ukraine crisis and ruble volatility is not aiding the economy or sentiment short-term, we do think Sberbank will eventually emerge from this crisis with an even stronger competitive moat.
Another detractor was Petroleo Brasileiro (Petrobras). The company was negatively impacted by the period’s extremely weak crude oil environment. Company-specific issues also played a role as a corruption investigation led to extended delays in reporting audited financials results. Still, the company has attractive assets and its downstream operations can break even in the current price environment, but for the upstream divisions, profitability is difficult at current prices.
Turkey’s Ulusoy Elektrik also weighed on performance. The switch maker was adversely impacted by the macroeconomic environment within its country of domicile. Market disappointments with recent political developments, such as pressure exerted on the central bank by government officials, outweighed what should have been the positive benefits of cheap oil. Issues in the country’s near-abroad, such as Syria’s civil war and Iran’s nuclear negotiations, also added to bearishness. These factors overshadowed the favorable profile of Ulusoy: the company has no debt, has a strong net cash position, has generated a robust 20% return on invested capital, and has a sizable payout ratio. In a vote of confidence, management has been buying back stock.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
As evidenced by the ascent of the U.S. dollar and the relaxing of monetary policy in China, we must remain vigilant of macroeconomic risks. Yet our primary job is selecting stocks with the greatest prospects of generating sustainable long-term returns. Even as we manage these macro factors, we continue to identify companies with strong management teams and proven track records in generating attractive returns on invested capital. Presently we see promising companies in China and India, with the latter’s environment being aided by market-friendly reforms. We also believe there is opportunity in Taiwanese technology companies. In Latin America, we favor companies not directly tied to the fortunes of commodities. Within Brazil, banking giant Itau stands out as a well-run company dragged down by macro factors. We also have a positive view toward Chilean stocks. We are less bullish on Mexico given relatively high valuations for the country’s equities and its reliance upon crude production as an economic driver. While we aim to pick companies that can thrive despite whatever noise may be emanating from the broader economic environment at any time, the volatility that often accompanies such periods can provide attractive entry and exit points for companies we favor. We will continue to take advantage of such situations to generate returns for our investors.
Thank you for your investment in Janus Emerging Markets Fund.
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(unaudited)
Janus Emerging Markets Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Cheil Industries, Inc. | 2.26% | |||
| CITIC Securities Co., Ltd. – Class A | 1.00% | |||
| SAIC Motor Corp., Ltd. – Class A | 0.81% | |||
| Daqin Railway Co., Ltd. – Class A | 0.73% | |||
| China Pacific Insurance Group Co., Ltd. – Class A | 0.67% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Sberbank of Russia (ADR) | –0.79% | |||
| Petroleo Brasileiro SA (ADR) | –0.53% | |||
| Ulusoy Elektrik Imalat Taahhut Ve Ticaret AS | –0.53% | |||
| National Bank of Greece SA | –0.47% | |||
| Atlas Mara, Ltd. | –0.43% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI Emerging Markets | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Industrials | 1.58% | 8.95% | 6.65% | |||||||||
| Consumer Discretionary | 1.30% | 17.33% | 9.13% | |||||||||
| Energy | 0.82% | 4.77% | 8.64% | |||||||||
| Health Care | 0.57% | 1.81% | 2.25% | |||||||||
| Telecommunication Services | 0.26% | 0.81% | 7.63% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI Emerging Markets | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Financials | –1.19% | 27.57% | 28.50% | |||||||||
| Information Technology | –0.62% | 20.93% | 18.00% | |||||||||
| Consumer Staples | –0.11% | 7.48% | 8.22% | |||||||||
| Other** | 0.00% | 4.95% | 0.00% | |||||||||
| Materials | 0.07% | 4.34% | 7.55% | |||||||||
| 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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Janus Emerging Markets Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Samsung Electronics Co., Ltd. Technology Hardware, Storage & Peripherals | 3.8% | |||
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) Semiconductor & Semiconductor Equipment | 3.2% | |||
| Tencent Holdings, Ltd. Internet Software & Services | 2.3% | |||
| Qingdao Haier Co., Ltd. – Class A Household Durables | 2.1% | |||
| China Pacific Insurance Group Co., Ltd. – Class A Insurance | 1.9% | |||
| 13.3% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 82.6% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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(unaudited)
Performance
| Expense Ratios – | |||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
| Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
| Janus Emerging Markets Fund – Class A Shares | |||||||||||
| NAV | –0.51% | 2.22% | –2.85% | 1.97% | 1.47% | ||||||
| MOP | –6.28% | –3.64% | –4.19% | ||||||||
| Janus Emerging Markets Fund – Class C Shares | |||||||||||
| NAV | –0.91% | 1.36% | –3.50% | 2.68% | 2.13% | ||||||
| CDSC | –1.90% | 0.36% | –3.50% | ||||||||
| Janus Emerging Markets Fund – Class D Shares(1) | –0.31% | 2.56% | –2.67% | 1.67% | 1.17% | ||||||
| Janus Emerging Markets Fund – Class I Shares | –0.30% | 2.68% | –2.54% | 1.52% | 1.01% | ||||||
| Janus Emerging Markets Fund – Class S Shares | –0.62% | 2.00% | –2.89% | 2.05% | 1.52% | ||||||
| Janus Emerging Markets Fund – Class T Shares | –0.49% | 2.36% | –2.71% | 1.77% | 1.27% | ||||||
| MSCI Emerging Markets IndexSM | –2.37% | 0.44% | –0.94% | ||||||||
| Morningstar Quartile – Class I Shares | – | 1st | 3rd | ||||||||
| Morningstar Ranking – based on total return for Diversified Emerging Markets Funds | – | 169/820 | 332/464 | ||||||||
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 February 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 5
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Janus Emerging Markets Fund (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.
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.
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.
© 2015 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. |
6 | MARCH 31, 2015
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(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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 994.90 | $ | 8.06 | $ | 1,000.00 | $ | 1,016.85 | $ | 8.15 | 1.62% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 990.90 | $ | 11.81 | $ | 1,000.00 | $ | 1,013.06 | $ | 11.94 | 2.38% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 996.90 | $ | 6.57 | $ | 1,000.00 | $ | 1,018.35 | $ | 6.64 | 1.32% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 997.00 | $ | 5.78 | $ | 1,000.00 | $ | 1,019.15 | $ | 5.84 | 1.16% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 993.80 | $ | 8.20 | $ | 1,000.00 | $ | 1,016.70 | $ | 8.30 | 1.65% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 995.10 | $ | 7.01 | $ | 1,000.00 | $ | 1,017.90 | $ | 7.09 | 1.41% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Emerging Markets Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 93.6% | ||||||||||
| Airlines – 0.9% | ||||||||||
| 2,991 | Copa Holdings SA – Class A† | $ | 302,001 | |||||||
| Auto Components – 0.7% | ||||||||||
| 961 | Hyundai Mobis Co., Ltd. | 213,373 | ||||||||
| Automobiles – 5.3% | ||||||||||
| 164,000 | Astra International Tbk PT | 107,456 | ||||||||
| 130,200 | Chongqing Changan Automobile Co., Ltd. – Class Bß | 355,546 | ||||||||
| 2,883 | Hyundai Motor Co. | 437,682 | ||||||||
| 42,100 | Jiangling Motors Corp., Ltd. – Class Bß | 200,274 | ||||||||
| 122,599 | SAIC Motor Corp., Ltd. – Class Aß | 493,672 | ||||||||
| 98,157 | Yulon Motor Co., Ltd. | 133,934 | ||||||||
| 1,728,564 | ||||||||||
| Beverages – 3.4% | ||||||||||
| 40,700 | Fomento Economico Mexicano SAB de CV* | 381,909 | ||||||||
| 396,721 | LT Group, Inc. | 144,458 | ||||||||
| 6,531 | SABMiller PLC | 342,778 | ||||||||
| 117,793 | Vina Concha y Toro SA | 242,892 | ||||||||
| 1,112,037 | ||||||||||
| Capital Markets – 4.5% | ||||||||||
| 68,375 | Atlas Mara, Ltd.* | 478,625 | ||||||||
| 51,500 | CITIC Securities Co., Ltd. | 191,024 | ||||||||
| 40,900 | CITIC Securities Co., Ltd. – Class Aß | 217,872 | ||||||||
| 47,200 | GF Securities Co., Ltd. | 115,923 | ||||||||
| 14,400 | Grupo BTG Pactual | 115,220 | ||||||||
| 516,097 | Haitong International Securities Group, Ltd. | 356,547 | ||||||||
| 1,475,211 | ||||||||||
| Commercial Banks – 14.7% | ||||||||||
| 459,700 | Bank Danamon Indonesia Tbk PT | 180,150 | ||||||||
| 298,400 | Bank Mandiri Persero Tbk PT | 284,484 | ||||||||
| 742,000 | China Construction Bank Corp. – Class H | 616,636 | ||||||||
| 21,027,830 | Corpbanca SA | 222,544 | ||||||||
| 2,005 | Credicorp, Ltd. | 281,963 | ||||||||
| 55,800 | Grupo Financiero Banorte SAB de CV | 323,871 | ||||||||
| 5,376 | Hana Financial Group, Inc. | 139,020 | ||||||||
| 42,485 | ICICI Bank, Ltd. (ADR) | 440,145 | ||||||||
| 715,000 | Industrial & Commercial Bank of China, Ltd. – Class H | 527,815 | ||||||||
| 43,100 | Itau Unibanco Holding SA (ADR) | 476,686 | ||||||||
| 192,700 | Krung Thai Bank PCL | 134,977 | ||||||||
| 91,331 | Metropolitan Bank & Trust Co. | 199,277 | ||||||||
| 80,223 | Sberbank of Russia (ADR) | 352,078 | ||||||||
| 8,542 | Shinhan Financial Group Co., Ltd. | 321,930 | ||||||||
| 50,519 | TCS Group Holding PLC (GDR) | 121,338 | ||||||||
| 28,797 | Turkiye Halk Bankasi A/S | 142,014 | ||||||||
| 4,764,928 | ||||||||||
| Construction & Engineering – 1.5% | ||||||||||
| 1,287,186 | Louis XIII Holdings, Ltd.* | 481,624 | ||||||||
| Construction Materials – 0.5% | ||||||||||
| 185,000 | BBMG Corp. – Class H | 170,527 | ||||||||
| Diversified Telecommunication Services – 0.5% | ||||||||||
| 5,710 | KT Corp.* | 149,251 | ||||||||
| Electric Utilities – 0.6% | ||||||||||
| 76,618 | Power Grid Corp. of India, Ltd. | 177,744 | ||||||||
| Electrical Equipment – 1.7% | ||||||||||
| 39,615 | Finolex Cables, Ltd. | 180,191 | ||||||||
| 90,812 | Ulusoy Elektrik Imalat Taahhut Ve Ticaret AS* | 381,792 | ||||||||
| 561,983 | ||||||||||
| Electronic Equipment, Instruments & Components – 4.0% | ||||||||||
| 76,000 | Chroma ATE, Inc. | 188,449 | ||||||||
| 374,000 | E Ink Holdings, Inc.* | 171,794 | ||||||||
| 139,568 | FIH Mobile, Ltd.* | 74,054 | ||||||||
| 88,480 | Hon Hai Precision Industry Co., Ltd. | 258,695 | ||||||||
| 42,000 | Japan Display, Inc. | 151,264 | ||||||||
| 33,600 | Merry Electronics Co., Ltd. | 107,597 | ||||||||
| 160,000 | WPG Holdings, Ltd. | 205,766 | ||||||||
| 38,100 | Zhen Ding Technology Holding, Ltd. | 123,956 | ||||||||
| 1,281,575 | ||||||||||
| Food & Staples Retailing – 2.3% | ||||||||||
| 2,761 | PriceSmart, Inc. | 234,630 | ||||||||
| 28,280 | Shoprite Holdings, Ltd. | 382,275 | ||||||||
| 9,080 | X5 Retail Group NV (GDR)* | 139,302 | ||||||||
| 756,207 | ||||||||||
| Food Products – 1.8% | ||||||||||
| 12,800 | BRF SA | 253,938 | ||||||||
| 8,840 | Edita Food Industries SAE (GDR)* | 108,555 | ||||||||
| 50,610 | San Miguel Pure Foods Co., Inc. | 231,296 | ||||||||
| 593,789 | ||||||||||
| Hotels, Restaurants & Leisure – 2.3% | ||||||||||
| 1,549,602 | Dubai Parks & Resorts PJSC* | 359,382 | ||||||||
| 86,000 | Genting Bhd | 208,953 | ||||||||
| 10,948 | Orascom Development Holding AG* | 184,714 | ||||||||
| 753,049 | ||||||||||
| Household Durables – 2.1% | ||||||||||
| 161,500 | Qingdao Haier Co., Ltd. – Class Aß | 673,101 | ||||||||
| Independent Power and Renewable Electricity Producers – 0.5% | ||||||||||
| 64,000 | China Resources Power Holdings Co., Ltd. | 160,615 | ||||||||
| Industrial Conglomerates – 1.2% | ||||||||||
| 147,000 | CITIC, Ltd. | 252,022 | ||||||||
| 306,000 | Shun Tak Holdings, Ltd. | 147,669 | ||||||||
| 399,691 | ||||||||||
| Information Technology Services – 2.9% | ||||||||||
| 6,156 | Infosys, Ltd. | 217,883 | ||||||||
| 16,774 | QIWI PLC (ADR) | 402,912 | ||||||||
| 407 | Samsung SDS Co., Ltd. | 97,993 | ||||||||
| 89,659 | SONDA SA | 211,288 | ||||||||
| 930,076 | ||||||||||
| Insurance – 3.3% | ||||||||||
| 113,400 | China Pacific Insurance Group Co., Ltd. – Class Aß | 627,114 | ||||||||
| 562 | Samsung Fire & Marine Insurance Co., Ltd. | 135,505 | ||||||||
| 3,709 | Samsung Life Insurance Co., Ltd. | 322,820 | ||||||||
| 1,085,439 | ||||||||||
| Internet Software & Services – 3.7% | ||||||||||
| 1,589 | Alibaba Group Holding, Ltd. (ADR)*,# | 132,268 | ||||||||
| 364 | NAVER Corp. | 219,723 | ||||||||
| 39,000 | Tencent Holdings, Ltd. | 737,305 | ||||||||
| 7,585 | Youku Tudou, Inc. (ADR)*,# | 94,813 | ||||||||
| 1,184,109 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Machinery – 0.9% | ||||||||||
| 10,416 | Daewoo Shipbuilding & Marine Engineering Co., Ltd. | $ | 169,333 | |||||||
| 13,300 | WEG SA | 132,554 | ||||||||
| 301,887 | ||||||||||
| Metals & Mining – 1.3% | ||||||||||
| 68,594 | Hindustan Zinc, Ltd. | 177,741 | ||||||||
| 529 | POSCO | 116,020 | ||||||||
| 24,001 | Vale SA (ADR)† | 135,606 | ||||||||
| 429,367 | ||||||||||
| Multiline Retail – 2.1% | ||||||||||
| 28,800 | El Puerto de Liverpool SAB de CV* | 339,926 | ||||||||
| 44,720 | SACI Falabella | 342,359 | ||||||||
| 682,285 | ||||||||||
| Oil, Gas & Consumable Fuels – 4.8% | ||||||||||
| 176,600 | China Petroleum & Chemical Corp. – Class H | 140,872 | ||||||||
| 854,000 | China Suntien Green Energy Corp., Ltd. – Class H | 206,781 | ||||||||
| 149,000 | CNOOC, Ltd. | 210,989 | ||||||||
| 14,782 | Cobalt International Energy, Inc.* | 139,099 | ||||||||
| 109,701 | Ophir Energy PLC* | 218,668 | ||||||||
| 160,000 | PetroChina Co., Ltd. – Class H | 177,729 | ||||||||
| 29,559 | Petroleo Brasileiro SA (ADR)†,# | 177,650 | ||||||||
| 21,221 | Reliance Industries, Ltd. | 279,914 | ||||||||
| 1,551,702 | ||||||||||
| Pharmaceuticals – 2.5% | ||||||||||
| 43,800 | Dong-E-E-Jiao Co., Ltd.ß | 294,770 | ||||||||
| 8,898 | Torrent Pharmaceuticals, Ltd. | 164,674 | ||||||||
| 34,173 | Yunnan Baiyao Group Co., Ltd. – Class Aß | 367,342 | ||||||||
| 826,786 | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.7% | ||||||||||
| 188,222 | Emlak Konut Gayrimenkul Yatirim Ortakligi A/S | 213,229 | ||||||||
| Real Estate Management & Development – 2.8% | ||||||||||
| 1,708,600 | Belle Corp. | 164,231 | ||||||||
| 1,296,794 | Central China Real Estate, Ltd. | 328,504 | ||||||||
| 66,000 | China Overseas Land & Investment, Ltd. | 213,494 | ||||||||
| 3,390,000 | CSI Properties, Ltd. | 120,241 | ||||||||
| 369,700 | Siam Future Development PCL* | 78,995 | ||||||||
| 905,465 | ||||||||||
| Road & Rail – 2.3% | ||||||||||
| 210,800 | Daqin Railway Co., Ltd. – Class Aß | 376,320 | ||||||||
| 49,045 | Globaltrans Investment PLC (GDR) | 222,007 | ||||||||
| 14,000 | Localiza Rent a Car SA | 159,275 | ||||||||
| 757,602 | ||||||||||
| Semiconductor & Semiconductor Equipment – 4.9% | ||||||||||
| 11,000 | MediaTek, Inc. | 148,715 | ||||||||
| 9,836 | SK Hynix, Inc. | 402,240 | ||||||||
| 44,290 | Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 1,039,929 | ||||||||
| 1,590,884 | ||||||||||
| Software – 0.9% | ||||||||||
| 9,710 | Linx SA | 142,118 | ||||||||
| 862 | NCSoft Corp. | 140,852 | ||||||||
| 282,970 | ||||||||||
| Specialty Retail – 3.3% | ||||||||||
| 318,000 | Baoxin Auto Group, Ltd. | 171,971 | ||||||||
| 175,800 | Chow Tai Fook Jewellery Group, Ltd.# | 189,263 | ||||||||
| 106,474 | L’Occitane International SA | 303,675 | ||||||||
| 80,676 | PC Jeweller, Ltd. | 408,229 | ||||||||
| 1,073,138 | ||||||||||
| Technology Hardware, Storage & Peripherals – 3.8% | ||||||||||
| 957 | Samsung Electronics Co., Ltd. | 1,240,841 | ||||||||
| Textiles, Apparel & Luxury Goods – 1.6% | ||||||||||
| 17,280 | Cie Financiere Richemont SA | 139,330 | ||||||||
| 106,800 | Samsonite International SA | 370,215 | ||||||||
| 509,545 | ||||||||||
| Thrifts & Mortgage Finance – 1.0% | ||||||||||
| 15,046 | Housing Development Finance Corp., Ltd. | 316,256 | ||||||||
| Tobacco – 0.4% | ||||||||||
| 27,195 | ITC, Ltd. | 141,468 | ||||||||
| Transportation Infrastructure – 0.8% | ||||||||||
| 49,100 | CCR SA | 250,832 | ||||||||
| Wireless Telecommunication Services – 1.1% | ||||||||||
| 27,500 | China Mobile, Ltd. | 358,473 | ||||||||
| Total Common Stocks (cost $31,483,690) | 30,387,624 | |||||||||
| Preferred Stocks – 2.1% | ||||||||||
| Chemicals – 0.8% | ||||||||||
| 1,921 | LG Chem, Ltd. | 262,860 | ||||||||
| Paper & Forest Products – 0.6% | ||||||||||
| 38,800 | Suzano Papel e Celulose SA – Class A | 179,852 | ||||||||
| Technology Hardware, Storage & Peripherals – 0.7% | ||||||||||
| 225 | Samsung Electronics Co., Ltd. | 223,419 | ||||||||
| Total Preferred Stocks (cost $551,533) | 666,131 | |||||||||
| Warrants – 0.1% | ||||||||||
| Capital Markets – 0.1% | ||||||||||
| 69,975 | Atlas Mara Co-Nvest, Ltd. expires 8/21/17* (cost $21,536) | 34,988 | ||||||||
| Investment Companies – 1.6% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 1.4% | ||||||||||
| 443,400 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 443,400 | ||||||||
| Money Markets – 0.2% | ||||||||||
| 76,671 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 76,671 | ||||||||
| Total Investment Companies (cost $520,071) | 520,071 | |||||||||
| Total Investments (total cost $32,576,830) – 97.4% | 31,608,814 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 2.6% | 855,821 | |||||||||
| Net Assets – 100% | $ | 32,464,635 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
As of March 31, 2015
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| China | $ | 8,413,772 | 26 | .6% | ||||
| South Korea | 4,592,862 | 14 | .5 | |||||
| India | 2,504,245 | 7 | .9 | |||||
| Taiwan | 2,378,835 | 7 | .5 | |||||
| Brazil | 2,023,731 | 6 | .4 | |||||
| Hong Kong | 1,739,613 | 5 | .5 | |||||
| Russia | 1,237,637 | 3 | .9 | |||||
| United States | 1,195,801 | 3 | .8 | |||||
| United Kingdom | 1,075,059 | 3 | .4 | |||||
| Mexico | 1,045,706 | 3 | .3 | |||||
| Chile | 1,019,083 | 3 | .2 | |||||
| Philippines | 739,262 | 2 | .4 | |||||
| Turkey | 737,035 | 2 | .3 | |||||
| Indonesia | 572,090 | 1 | .8 | |||||
| South Africa | 382,275 | 1 | .2 | |||||
| United Arab Emirates | 359,382 | 1 | .1 | |||||
| Switzerland | 324,044 | 1 | .0 | |||||
| France | 303,675 | 1 | .0 | |||||
| Peru | 281,963 | 0 | .9 | |||||
| Thailand | 213,972 | 0 | .7 | |||||
| Malaysia | 208,953 | 0 | .7 | |||||
| Japan | 151,264 | 0 | .5 | |||||
| Egypt | 108,555 | 0 | .4 | |||||
| Total | $ | 31,608,814 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Credit Suisse International: Japanese Yen 4/9/15 | 16,439,000 | $ | 137,100 | $ | 730 | |||||||
Total Return Swaps outstanding at March 31, 2015
| Unrealized | |||||||||||||
| Return Paid | Return Received | Notional | Appreciation/ | ||||||||||
| Counterparty | by the Fund | by the Fund | Termination Date | Amount | (Depreciation) | ||||||||
| Credit Suisse International | 1 month USD LIBOR plus 100 basis points | Saudi International Petrochemical Co. | 2/10/16 | $ | 135,124 | $ | (4,661) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
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 | |
| LIBOR | London Interbank Offered Rate | |
| LLC | Limited Liability Company | |
| PCL | Public Company Limited | |
| PJSC | Private Joint Stock Company | |
| PLC | Public Limited Company |
| * | 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Emerging Markets Fund | $ | 381,045 | |||
| ß | Security is illiquid. | |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||||||||
Janus Emerging Markets Fund | ||||||||||||||||||||||
| Janus Cash Collateral Fund LLC | 630,400 | 4,351,682 | (4,538,682) | 443,400 | $ | – | $ | 5,666(1) | $ | 443,400 | ||||||||||||
| Janus Cash Liquidity Fund LLC | 1,938,259 | 9,054,412 | (10,916,000) | 76,671 | – | 394 | 76,671 | |||||||||||||||
| Total | $ | – | $ | 6,060 | $ | 520,071 | ||||||||||||||||
| (1) | Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. |
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Emerging Markets Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Auto Components | $ | – | $ | 213,373 | $ | – | |||||
| Automobiles | – | 1,373,018 | 355,546 | ||||||||
| Beverages | 624,801 | 487,236 | – | ||||||||
| Capital Markets | 709,768 | 765,443 | – | ||||||||
| Commercial Banks | 1,745,209 | 3,019,719 | – | ||||||||
| Construction & Engineering | – | 481,624 | – | ||||||||
| Construction Materials | – | 170,527 | – | ||||||||
| Diversified Telecommunication Services | – | 149,251 | – | ||||||||
| Electric Utilities | – | 177,744 | – | ||||||||
| Electrical Equipment | – | 561,983 | – | ||||||||
| Electronic Equipment, Instruments & Components | – | 1,281,575 | – | ||||||||
| Food & Staples Retailing | 234,630 | 521,577 | – | ||||||||
| Food Products | 362,493 | 231,296 | – | ||||||||
| Hotels, Restaurants & Leisure | – | 753,049 | – | ||||||||
| Household Durables | – | 673,101 | – | ||||||||
| Independent Power and Renewable Electricity Producers | – | 160,615 | – | ||||||||
| Industrial Conglomerates | – | 399,691 | – | ||||||||
| Information Technology Services | 614,200 | 315,876 | – | ||||||||
| Insurance | – | 1,085,439 | – | ||||||||
| Internet Software & Services | 227,081 | 957,028 | – | ||||||||
| Machinery | 132,554 | 169,333 | – | ||||||||
| Metals & Mining | 135,606 | 293,761 | – | ||||||||
| Oil, Gas & Consumable Fuels | 316,749 | 1,234,953 | – | ||||||||
| Pharmaceuticals | – | 826,786 | – | ||||||||
| Real Estate Investment Trusts (REITs) | – | 213,229 | – | ||||||||
| Real Estate Management & Development | – | 905,465 | – | ||||||||
| Road & Rail | 159,275 | 598,327 | – | ||||||||
| Semiconductor & Semiconductor Equipment | 1,039,929 | 550,955 | – | ||||||||
| Software | 142,118 | 140,852 | – | ||||||||
| Specialty Retail | – | 1,073,138 | – | ||||||||
| Technology Hardware, Storage & Peripherals | – | 1,240,841 | – | ||||||||
| Textiles, Apparel & Luxury Goods | – | 509,545 | – | ||||||||
| Thrifts & Mortgage Finance | – | 316,256 | – | ||||||||
| Tobacco | – | 141,468 | – | ||||||||
| Wireless Telecommunication Services | – | 358,473 | – | ||||||||
| All Other | 1,235,118 | – | – | ||||||||
Preferred Stocks | – | 666,131 | – | ||||||||
Warrants | 34,988 | – | |||||||||
Investment Companies | – | 520,071 | – | ||||||||
| Total Investments in Securities | $ | 7,714,519 | $ | 23,538,749 | $ | 355,546 | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 730 | $ | – | |||||
Total Assets | $ | 7,714,519 | $ | 23,539,479 | $ | 355,546 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Outstanding Swap Contracts, at Value | $ | – | $ | 4,661 | $ | – | |||||
| (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 | MARCH 31, 2015
Table of Contents
Level 3 Valuation Reconciliation of Assets (for the fiscal year ended March 31, 2015)
| Change in | |||||||||||||||||||||||
| Realized | Unrealized | Transfers In | |||||||||||||||||||||
| Balance | Gain/ | Appreciation/ | and/or | Balance | |||||||||||||||||||
| at 9/30/14 | Purchases | Sales | (Loss) | Depreciation(1) | Out of Level 3 | at 3/31/15 | |||||||||||||||||
| Janus Emerging Markets Fund | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investments in Securities: | |||||||||||||||||||||||
Common Stocks | |||||||||||||||||||||||
| Automobiles | $ | – | $ | 304,851 | $ | – | $ | – | $ | 50,695 | $ | – | $ | 355,546 | |||||||||
| (1) | Included in “Change in unrealized net appreciation/depreciation of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Operations. |
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Emerging Markets Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 32,576,830 | ||
Unaffiliated investments, at value(1) | $ | 31,088,743 | ||
| Affiliated investments, at value | 520,071 | |||
Cash denominated in foreign currency(2) | 1,339 | |||
| Restricted cash (Note 1) | 1,636,362 | |||
| Forward currency contracts | 730 | |||
| Closed foreign currency contracts | 205 | |||
| Non-interested Trustees’ deferred compensation | 638 | |||
| Receivables: | ||||
| Investments sold | 118,961 | |||
| Fund shares sold | 7,366 | |||
| Dividends | 37,127 | |||
| Dividends from affiliates | 44 | |||
| Foreign dividend tax reclaim | 950 | |||
| Other assets | 8 | |||
| Total Assets | 33,412,544 | |||
| Liabilities: | ||||
| Due to custodian | 13,930 | |||
| Collateral for securities loaned (Note 3) | 443,400 | |||
| Closed foreign currency contracts | 17 | |||
| Outstanding swap contracts, at value | 4,661 | |||
| Payables: | ||||
| Investments purchased | 397,785 | |||
| Fund shares repurchased | 6,152 | |||
| Advisory fees | 2,398 | |||
| Fund administration fees | 275 | |||
| Transfer agent fees and expenses | 7,571 | |||
| 12b-1 Distribution and shareholder servicing fees | 184 | |||
| Non-interested Trustees’ fees and expenses | 207 | |||
| Non-interested Trustees’ deferred compensation fees | 638 | |||
| Foreign tax liability | 3,421 | |||
| Accrued expenses and other payables | 67,270 | |||
| Total Liabilities | 947,909 | |||
| Net Assets | $ | 32,464,635 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Emerging Markets Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 35,811,312 | ||
| Undistributed net investment income/(loss) | (112,763) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (2,248,847) | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (985,067) | |||
| Total Net Assets | $ | 32,464,635 | ||
| Net Assets - Class A Shares | $ | 363,546 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 43,137 | |||
Net Asset Value Per Share(3) | $ | 8.43 | ||
Maximum Offering Price Per Share(4) | $ | 8.94 | ||
| Net Assets - Class C Shares | $ | 89,957 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,715 | |||
Net Asset Value Per Share(3) | $ | 8.40 | ||
| Net Assets - Class D Shares | $ | 9,764,196 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,162,889 | |||
| Net Asset Value Per Share | $ | 8.40 | ||
| Net Assets - Class I Shares | $ | 20,938,947 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,487,484 | |||
| Net Asset Value Per Share | $ | 8.42 | ||
| Net Assets - Class S Shares | $ | 153,722 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 18,335 | |||
| Net Asset Value Per Share | $ | 8.38 | ||
| Net Assets - Class T Shares | $ | 1,154,267 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 137,207 | |||
| Net Asset Value Per Share | $ | 8.41 | ||
| (1) | Includes $423,563 of securities on loan. See Note 3 in Notes to Financial Statements. | |
| (2) | Includes cost of $1,339. | |
| (3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
| (4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statement of Operations
| For the period ended March 31, 2015 (unaudited) | Janus Emerging Markets Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 5,666 | ||
| Dividends | 158,421 | |||
| Dividends from affiliates | 394 | |||
| Other income | 1,582 | |||
| Foreign tax withheld | (18,641) | |||
| Total Investment Income | 147,422 | |||
| Expenses: | ||||
| Advisory fees | 154,442 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 450 | |||
| Class C Shares | 455 | |||
| Class S Shares | 195 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 5,975 | |||
| Class S Shares | 195 | |||
| Class T Shares | 1,461 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 339 | |||
| Class C Shares | 102 | |||
| Class I Shares | 274 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 46 | |||
| Class C Shares | 14 | |||
| Class D Shares | 2,405 | |||
| Class I Shares | 477 | |||
| Class T Shares | 49 | |||
| Registration fees | 49,062 | |||
| Custodian fees | 22,596 | |||
| Professional fees | 28,035 | |||
| Non-interested Trustees’ fees and expenses | 388 | |||
| Fund administration fees | 1,352 | |||
| Other expenses | 6,504 | |||
| Total Expenses | 274,816 | |||
| Less: Excess Expense Reimbursement | (73,195) | |||
| Net Expenses | 201,621 | |||
| Net Investment Income/(Loss) | (54,199) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 323,307 | |||
| Swap contracts | (87,641) | |||
| Total Net Realized Gain/(Loss) on Investments | 235,666 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (331,728) | |||
| Swap contracts | (4,556) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (336,284) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (154,817) | ||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Emerging Markets Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (54,199) | $ | 699,115 | ||||
| Net realized gain/(loss) on investments | 235,666 | 974,377 | ||||||
| Change in unrealized net appreciation/depreciation | (336,284) | 353,360 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | (154,817) | 2,026,852 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (5,186) | (4,884) | ||||||
| Class C Shares | (235) | (2,193) | ||||||
| Class D Shares | (170,413) | (258,184) | ||||||
| Class I Shares | (384,278) | (480,741) | ||||||
| Class S Shares | (2,086) | (9,049) | ||||||
| Class T Shares | (18,448) | (23,419) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (580,646) | (778,470) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 42,270 | 165,868 | ||||||
| Class C Shares | – | 10,255 | ||||||
| Class D Shares | 1,441,080 | 5,366,291 | ||||||
| Class I Shares | 658,344 | 6,318,528 | ||||||
| Class S Shares | 205,307 | 13,922 | ||||||
| Class T Shares | 617,663 | 2,164,453 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 5,155 | 4,844 | ||||||
| Class C Shares | 235 | 2,193 | ||||||
| Class D Shares | 166,920 | 252,962 | ||||||
| Class I Shares | 384,278 | 480,741 | ||||||
| Class S Shares | 2,086 | 9,049 | ||||||
| Class T Shares | 18,271 | 23,354 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (54,251) | (78,576) | ||||||
| Class C Shares | (3,566) | (127,288) | ||||||
| Class D Shares | (2,491,173) | (4,160,205) | ||||||
| Class I Shares | (1,534,380) | (1,749,713) | ||||||
| Class S Shares | (200,160) | (237,440) | ||||||
| Class T Shares | (669,425) | (1,859,175) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (1,411,346) | 6,600,063 | ||||||
| Net Increase/(Decrease) in Net Assets | (2,146,809) | 7,848,445 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 34,611,444 | 26,762,999 | ||||||
| End of period | $ | 32,464,635 | $ | 34,611,444 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (112,763) | $ | 522,082 | ||||
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights
Class A Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.61 | $8.23 | $7.99 | $7.41 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | 0.15(2)(3) | 0.28 | 0.03 | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.02) | 0.39 | (0.01) | 0.62 | (2.58) | |||||||||||||||||
| Total from Investment Operations | (0.05) | 0.54 | 0.27 | 0.65 | (2.59) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.13) | (0.16) | (0.03) | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Total Distributions | (0.13) | (0.16) | (0.03) | (0.07) | – | |||||||||||||||||
| Net Asset Value, End of Period | $8.43 | $8.61 | $8.23 | $7.99 | $7.41 | |||||||||||||||||
| Total Return* | (0.51)% | 6.71% | 3.34% | 8.78% | (25.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $364 | $378 | $275 | $992 | $971 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $361 | $307 | $759 | $1,028 | $1,107 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.06% | 1.97% | 1.81% | 2.37% | 4.16% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.62% | 1.65% | 1.48% | 1.46% | 1.34% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.73)% | 1.73%(3) | 0.06% | 0.47% | 0.81% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
Class C Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.50 | $8.12 | $7.91 | $7.39 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(2) | 0.11(2)(3) | (0.20) | (0.03) | (0.05) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.02) | 0.36 | 0.41 | 0.62 | (2.56) | |||||||||||||||||
| Total from Investment Operations | (0.08) | 0.47 | 0.21 | 0.59 | (2.61) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.02) | (0.09) | – | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Total Distributions | (0.02) | (0.09) | – | (0.07) | – | |||||||||||||||||
| Net Asset Value, End of Period | $8.40 | $8.50 | $8.12 | $7.91 | $7.39 | |||||||||||||||||
| Total Return* | (0.91)% | 5.85% | 2.65% | 7.98% | (26.10)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $90 | $94 | $194 | $771 | $677 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $91 | $185 | $428 | $788 | $838 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.83% | 2.68% | 2.54% | 3.04% | 5.09% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.38% | 2.32% | 2.16% | 2.21% | 1.71%(4) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.48)% | 1.32%(3) | (0.97)% | (0.27)% | 0.33% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
| * | 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 September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%. | |
| (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 have been 2.32% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
Table of Contents
Class D Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.58 | $8.24 | $8.00 | $7.42 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(2) | 0.19(2)(3) | 0.20 | 0.05 | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.02) | 0.37 | 0.09 | 0.60 | (2.59) | |||||||||||||||||
| Total from Investment Operations | (0.04) | 0.56 | 0.29 | 0.65 | (2.60) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.14) | (0.22) | (0.05) | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | 0.02 | |||||||||||||||||
| Total Distributions | (0.14) | (0.22) | (0.05) | (0.07) | 0.02 | |||||||||||||||||
| Net Asset Value, End of Period | $8.40 | $8.58 | $8.24 | $8.00 | $7.42 | |||||||||||||||||
| Total Return* | (0.31)% | 6.98% | 3.56% | 8.76% | (25.80)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $9,764 | $10,889 | $9,136 | $9,359 | $6,699 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $9,986 | $9,995 | $9,679 | $8,963 | $6,847 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.77% | 1.67% | 1.64% | 2.15% | 4.38% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.32% | 1.34% | 1.30% | 1.35% | 1.32%(5) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.42)% | 2.18%(3) | 0.61% | 0.66% | 0.91% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
Class I Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.61 | $8.27 | $8.01 | $7.41 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.01)(2) | 0.20(2)(3) | 0.19 | 0.07 | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.38 | 0.11 | 0.60 | (2.58) | |||||||||||||||||
| Total from Investment Operations | (0.04) | 0.58 | 0.30 | 0.67 | (2.59) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.15) | (0.24) | (0.04) | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | |||||||||||||||||
| Total Distributions | (0.15) | (0.24) | (0.04) | (0.07) | – | |||||||||||||||||
| Net Asset Value, End of Period | $8.42 | $8.61 | $8.27 | $8.01 | $7.41 | |||||||||||||||||
| Total Return* | (0.30)% | 7.19% | 3.78% | 9.05% | (25.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $20,939 | $21,896 | $15,996 | $8,392 | $3,347 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $21,125 | $19,341 | $12,309 | $5,502 | $3,574 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.61% | 1.52% | 1.50% | 1.81% | 3.87% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.16% | 1.18% | 1.14% | 1.19% | 1.33% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.26)% | 2.29%(3) | 1.16% | 0.90% | 0.87% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
| * | 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 September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%. | |
| (4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
| (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 1.59% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class S Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.56 | $8.24 | $7.97 | $7.41 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | 0.18(2)(3) | 0.14 | 0.02 | (0.03) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.36 | 0.14 | 0.61 | (2.56) | |||||||||||||||||
| Total from Investment Operations | (0.06) | 0.54 | 0.28 | 0.63 | (2.59) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.12) | (0.22) | (0.01) | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Total Distributions | (0.12) | (0.22) | (0.01) | (0.07) | – | |||||||||||||||||
| Net Asset Value, End of Period | $8.38 | $8.56 | $8.24 | $7.97 | $7.41 | |||||||||||||||||
| Total Return* | (0.62)% | 6.67% | 3.55% | 8.50% | (25.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $154 | $147 | $337 | $676 | $617 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $157 | $326 | $481 | $676 | $800 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.15% | 2.05% | 1.97% | 2.50% | 4.61% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.65% | 1.54% | 1.48% | 1.64% | 1.39%(4) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.77)% | 2.10%(3) | 0.05% | 0.29% | 0.62% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
Class T Shares
| Janus Emerging | ||||||||||||||||||||||
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Markets Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $8.60 | $8.26 | $7.99 | $7.41 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.02)(2) | 0.19(2)(3) | 0.29 | 0.05 | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.03) | 0.37 | 0.01 | 0.60 | (2.59) | |||||||||||||||||
| Total from Investment Operations | (0.05) | 0.56 | 0.30 | 0.65 | (2.60) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.14) | (0.22) | (0.03) | (0.04) | – | |||||||||||||||||
| Distributions (from capital gains) | – | – | – | (0.03) | – | |||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(5) | 0.01 | |||||||||||||||||
| Total Distributions | (0.14) | (0.22) | (0.03) | (0.07) | 0.01 | |||||||||||||||||
| Net Asset Value, End of Period | $8.41 | $8.60 | $8.26 | $7.99 | $7.41 | |||||||||||||||||
| Total Return* | (0.49)% | 6.92% | 3.73% | 8.78% | (25.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $1,154 | $1,207 | $825 | $2,141 | $1,301 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $1,172 | $1,121 | $2,105 | $2,004 | $1,320 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.87% | 1.77% | 1.70% | 2.13% | 4.08% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.41% | 1.41% | 1.37% | 1.42% | 1.34% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.52)% | 2.19%(3) | (0.19)% | 0.58% | 0.85% | |||||||||||||||||
| Portfolio Turnover Rate | 51% | 59% | 138% | 136% | 160% | |||||||||||||||||
| * | 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 September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%. | |
| (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 have been 1.82% in 2011 without the waiver of these fees and expenses. | |
| (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.
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Emerging Markets 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. 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
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Notes to Financial Statements (unaudited) (continued)
opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
Assets categorized as Level 3 in the hierarchy include equity securities fair valued utilizing a recent transaction price. No quantitative unobservable inputs were significant to the fair value determination.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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 March 31, 2015, the Fund had restricted cash in the amount of $1,636,362. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates, as well as investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 is discussed in further
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Notes to Financial Statements (unaudited) (continued)
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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar
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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 and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Emerging Markets Fund | $ | 305,907 | ||||
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 centrally clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps.
Index swaps, interest rate swaps, and credit default swaps are valued using an approved vendor supplied price. Basket swaps are valued using a broker supplied price. Equity swaps that consist of a single underlying equity are valued either at the closing price, the latest bid price, or the last sale price of the underlying equity. The market value of swap contracts are aggregated by positive and negative values that are disclosed separately as an asset or liability on the Fund’s Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s
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Notes to Financial Statements (unaudited) (continued)
remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period.
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.
The following table provides average ending monthly market value amounts on total return swaps which are long the reference asset during the period ended March 31, 2015.
| Fund | Long | |||||
| Janus Emerging Markets Fund | $ | 2,910 | ||||
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Emerging Markets Fund | ||||||||||||
| Currency Contracts | Forward currency contracts | $ | 730 | |||||||||
| Equity Contracts | Outstanding swap contracts, at value | $ | 4,661 | |||||||||
| Total | $ | 730 | $ | 4,661 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||
| Investments and foreign | ||||||||||||
| Derivatives not accounted for as hedging instruments | currency transactions | Swap contracts | Total | |||||||||
Janus Emerging Markets Fund | ||||||||||||
| Currency Contracts | $ | 46,146 | $ | – | $ | 46,146 | ||||||
| Equity Contracts | – | (87,641 | ) | (87,641 | ) | |||||||
| Total | $ | 46,146 | $ | (87,641 | ) | $ | (41,495 | ) | ||||
| 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 | Swap contracts | Total | |||||||||
Janus Emerging Markets Fund | ||||||||||||
| Currency Contracts | $ | (6,102 | ) | $ | – | $ | (6,102 | ) | ||||
| Equity Contracts | – | (4,556 | ) | (4,556 | ) | |||||||
| Total | $ | (6,102 | ) | $ | (4,556 | ) | $ | (10,658 | ) | |||
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 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2015, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2015, the Fund has available investment quota of $1,178,362. The Fund is subject to certain restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
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
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Notes to Financial Statements (unaudited) (continued)
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
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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 March 31, 2015” 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
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Credit Suisse International | $ | 730 | $ | (730) | $ | – | $ | – | ||||||||||
| Deutsche Bank AG | 423,563 | – | (423,563) | – | ||||||||||||||
| Total | $ | 424,293 | $ | (730) | $ | (423,563) | $ | – | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Credit Suisse International | $ | 4,661 | $ | (730) | $ | – | $ | 3,931 | ||||||||||
| (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.
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.
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
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Notes to Financial Statements (unaudited) (continued)
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 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.
| 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Janus Emerging Markets Fund | 1.00 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Emerging Markets Fund | MSCI Emerging Markets IndexSM | |||||
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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Emerging Markets Fund | 0.94 | |||||
Janus Capital Singapore Pte. Limited (“Janus Singapore”) serves as subadviser and is responsible for a portion of
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the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Singapore is an indirect wholly-owned subsidiary of Janus Capital. Janus Capital pays Janus Singapore a fee equal to one-third of the 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 Janus Singapore 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 February 1, 2016.
| New Expense | Previous | |||||||||
| Limit (%) | Expense | |||||||||
| (February 1, | Limit (%) | |||||||||
| Fund | 2015 to present) | (until February 1, 2015) | ||||||||
| Janus Emerging Markets Fund | 1.11 | 1.25 | ||||||||
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.
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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
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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 March 31, 2015 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. There were no upfront sales charges retained by Janus Distributors during the period ended March 31, 2015.
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 March 31, 2015.
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 March 31, 2015.
As of March 31, 2015, 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 Emerging Markets Fund - Class A Shares | – | % | – | % | ||||||
| Janus Emerging Markets Fund - Class C Shares | – | – | ||||||||
| Janus Emerging Markets Fund - Class D Shares | – | – | ||||||||
| Janus Emerging Markets Fund - Class I Shares | 84 | 54 | ||||||||
| Janus Emerging Markets Fund - Class S Shares | 69 | 0 | ||||||||
| Janus Emerging Markets Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 are noted below.
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Notes to Financial Statements (unaudited) (continued)
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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Emerging Markets Fund | $ | 33,086,441 | $ | 3,346,614 | $ | (4,824,241) | $ | (1,477,627) | ||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of September 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 Schedule
For the year ended September 30, 2014
| Accumulated | |||||||||||||||
| Capital | |||||||||||||||
| Fund | Short-Term | Long-Term | Losses | ||||||||||||
| Janus Emerging Markets Fund | $ | (235,707) | $ | (1,911,949) | $ | (2,147,656) | |||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Emerging Markets Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 5,053 | 19,210 | ||||||||
| Reinvested dividends and distributions | 654 | 588 | ||||||||
| Shares repurchased | (6,434) | (9,343) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (727) | 10,455 | ||||||||
| Shares Outstanding, Beginning of Period | 43,864 | 33,409 | ||||||||
| Shares Outstanding, End of Period | 43,137 | 43,864 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | – | 1,171 | ||||||||
| Reinvested dividends and distributions | 30 | 268 | ||||||||
| Shares repurchased | (431) | (14,256) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (401) | (12,817) | ||||||||
| Shares Outstanding, Beginning of Period | 11,116 | 23,933 | ||||||||
| Shares Outstanding, End of Period | 10,715 | 11,116 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 171,753 | 623,093 | ||||||||
| Reinvested dividends and distributions | 21,264 | 30,849 | ||||||||
| Shares repurchased | (298,672) | (493,770) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (105,655) | 160,172 | ||||||||
| Shares Outstanding, Beginning of Period | 1,268,544 | 1,108,372 | ||||||||
| Shares Outstanding, End of Period | 1,162,889 | 1,268,544 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 78,502 | 754,772 | ||||||||
| Reinvested dividends and distributions | 48,828 | 58,484 | ||||||||
| Shares repurchased | (183,382) | (203,597) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (56,052) | 609,659 | ||||||||
| Shares Outstanding, Beginning of Period | 2,543,536 | 1,933,877 | ||||||||
| Shares Outstanding, End of Period | 2,487,484 | 2,543,536 | ||||||||
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| For the period ended March 31 (unaudited) | Janus Emerging Markets Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 24,646 | 1,628 | ||||||||
| Reinvested dividends and distributions | 266 | 1,103 | ||||||||
| Shares repurchased | (23,802) | (26,382) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,110 | (23,651) | ||||||||
| Shares Outstanding, Beginning of Period | 17,225 | 40,876 | ||||||||
| Shares Outstanding, End of Period | 18,335 | 17,225 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 74,087 | 259,841 | ||||||||
| Reinvested dividends and distributions | 2,322 | 2,841 | ||||||||
| Shares repurchased | (79,512) | (222,192) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (3,103) | 40,490 | ||||||||
| Shares Outstanding, Beginning of Period | 140,310 | 99,820 | ||||||||
| Shares Outstanding, End of Period | 137,207 | 140,310 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Emerging Markets Fund | $ | 15,904,297 | $ | 17,626,674 | $ | – | $ | – | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus 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).
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-0515-87559 | 125-24-93039 05-15 |
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semiannual report
March 31, 2015
Janus Preservation Series – Growth
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Preservation Series - Growth (unaudited)
FUND SNAPSHOT A growth fund with a protection feature that seeks to minimize and cap losses. This fund offers potential upside based on stock market participation and a level of certainty in falling markets. | Jonathan Coleman portfolio manager |
PERFORMANCE REVIEW
Janus Preservation Series – Growth Class I Shares returned 11.46% for the six-month period ended March 31, 2015, versus a return of 8.81% for the Russell 1000 Growth Index, the Fund’s primary benchmark. The Fund’s secondary benchmark, the Preservation Series – Growth Blended Index, returned 5.28% during the period.
INVESTMENT ENVIRONMENT
U.S. equities climbed higher during the period, driven by signs of an improving domestic economy and a strong U.S. consumer. Speculation about how, or when, the Federal Reserve (Fed) would raise interest rates caused volatility, but a historically low interest rate environment in the U.S. and other major global economies was ultimately a supportive backdrop for stocks. Falling oil prices negatively impacted stocks tied to the energy sector, but other pockets of the market fared well in anticipation that lower oil prices would translate into stronger consumer spending. The health care sector also had outsized returns during the period, driven by positive announcements about drug launches and clinical trial results for some companies, and heated merger and acquisition activity within the sector.
PERFORMANCE DISCUSSION
We entered the six-month period at 98.26% exposure to equities, and while that exposure decreased during the period, we ended the period at 97.11% exposure, with the protection component comprising the rest of the portfolio. The protection component can be comprised of cash and cash equivalents, U.S. Treasuries, short index futures and other instruments designed to reduce equity market exposure. Depending on the market environment, the Fund can be invested in any variation in either component. In rising markets, we expect there to be more assets in the equity component as compared with falling markets, during which we expect to have more allocated to the protection component. The protection feature, however, affects the Fund’s ability to respond to changing equity market conditions and the Fund’s ability to capture certain market gains. In declining markets, we expect the protection component to contribute to performance. In rising markets, we expect the protection component to detract from relative performance.
In addition to the protection component allocation, the Fund has a protection feature that is designed to minimize and ultimately cap any losses at a maximum of 20%. As the Net Asset Value (NAV) of the Fund rises to new levels, the Protected NAV (PNAV) also rises. Over time, this could lead to a situation where an investor could potentially limit losses. We feel this is an attractive feature, providing investors with a level of downside protection, given the significant uncertainty evident in the global economy and markets.
While our allocation to the protection component was a drag on relative performance this period, we had strong stock selection in the equity component of our portfolio, which drove outperformance during the quarter. As part of our investment process, we seek companies with clearly definable and sustainable long-term growth drivers. These companies often have a high barrier to entry, a notable competitive edge in an attractive, growing industry, or a strong management team with a clear vision for the future of their company. We believe that over a long time horizon, a collection of companies with these competitive advantages should lead to compounded growth in excess of the market. During the period we were pleased to see a number of companies in our portfolio put up impressive results and further demonstrate their competitive advantages.
Our stock selection in the health care sector was a particularly large driver of relative outperformance. Many of our holdings within the sector fall within a couple of themes. We own a number of mature biotech companies with breakthrough therapies addressing highly unmet medical needs. We also own a number of specialty pharmaceutical companies with smart management teams who are improving operations for their companies and
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Janus Preservation Series - Growth (unaudited)
making what we believe are intelligent acquisitions that help rationalize marketing, sales and research and development costs. Some of our top contributors to the Fund during the period fit within both of these themes.
Pharmacyclics was a large contributor. The stock was up significantly during the first quarter after it was announced that AbbVie had won a bidding war to acquire the company. The high interest Pharmacyclics received from other companies validated our view that its blood cancer treatments offer significant growth potential.
Endo International was another top contributor. The company’s CEO comes from one of the most successful specialty pharmaceutical companies of the last five years. That company had an impressive strategy of driving down its operating expenses and making shrewd acquisitions to help grow the business, and the same strategy is now in practice at Endo. In our view, the company has already made several prudent acquisitions. The stock was up during the first quarter after the company gave an outlook for growth that was better than expected.
Outside of the health care sector, Apple was a top contributor to performance. The stock has been a top contributor in previous periods and our view on the company remains the same. Our basic view is that Apple is a strong brand and that as consumers get more familiar with Apple products, they get more deeply entrenched in the Apple ecosystem, branching out to buy new Apple products and returning to the brand when it is time to update existing ones. Recent innovations by the company, such as its mobile pay service, further entrench customers into that ecosystem. We see evidence of this trend by the fact that household spending on Apple products continues to increase.
While pleased with the performance of most stocks in the portfolio, our holdings in the industrial sector detracted from relative performance during the period. Within the sector, Colfax Corporation, a diversified manufacturing and engineering company, was a top detractor. The stock was down after Colfax missed earnings, due largely to weaker demand from some of its end markets in Europe and also in the oil and gas industry. We continue to like Colfax’s long-term growth potential, however. The chairman of Colfax’s board comes from one of the most successful multi-industrial companies of the past decade. That company had a history of making shrewd acquisitions of industrial companies operating in large, growing addressable markets that were very fragmented. The company would then grow earnings by consolidating these fragmented industries, and also by emphasizing lean and efficient manufacturing improvements with the companies it acquired. The chairman is implementing a similar focus on industry consolidation and lean manufacturing at Colfax, which we believe should lead to steady earnings growth over time.
Precision Castparts was another top detractor. The company makes a number of parts for the aerospace industry and other end markets. The stock was down after the company missed earnings, due in part to lower demand for some of its products that serve the oil and gas markets, and also due to destocking by some of the customers who use Precision Castparts’ products. After reporting disappointing results in recent quarters, we are taking a more critical look at the risk/reward profile of the business.
While our underweight to the energy sector contributed to our relative performance, we still had stocks within the sector that detracted from our performance during the period. Noble Energy was a top detractor. Falling oil prices were a headwind for Noble and other companies in the oil industry.
DERIVATIVES
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
We believe the U.S. is set up for moderate growth for an extended period, and that the country’s economic growth is more dependable than anywhere in the world right now. We are also encouraged by some long-term growth trends we see taking shape in some of the largest sectors of the market. The health care sector is going through dynamic changes. The last decade has brought about rapid changes in the way in which drugs are developed and clinical trials are conducted. This has led to more successful research and development efforts and a wave of breakthrough therapies for serious diseases. Meanwhile, we believe a number of technology companies are poised for growth as electronic devices connect and interact with each other and the world around them. Consumer sectors could also be set up for better near term growth due to the prospects of increased spending by a stronger U.S. consumer. These trends are longer term trends that should benefit large-cap stocks.
In the near-term, we feel there is now greater appreciation for the relative strength of the U.S. economy, and as such, we are unlikely to see macroeconomic factors play as large of a role in pushing all stocks forward. We welcome this environment, as we believe that a market that is
2 | MARCH 31, 2015
Table of Contents
(unaudited)
beginning to differentiate the most successful companies should benefit investors that use a strong, bottom-up research process to identify what we believe are superior growth companies.
Thank you for your investment in Janus Preservation Series – Growth.
Janus Investment Fund | 3
Table of Contents
Janus Preservation Series - Growth (unaudited)
Janus Preservation Series - Growth At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pharmacyclics, Inc. | 1.53% | |||
| Apple, Inc. | 1.40% | |||
| Freescale Semiconductor, Ltd. | 1.04% | |||
| Endo International PLC | 0.87% | |||
| Biogen, Inc. | 0.63% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
S&P 500® E-mini Future – expired March 2015 | –0.39% | |||
| Colfax Corp. | –0.31% | |||
| Noble Energy, Inc. | –0.30% | |||
| Precision Castparts Corp. | –0.25% | |||
| Antero Resources Corp. | –0.25% | |||
5 Top Performers – Sectors*
| Fund Weighting | Russell 1000® Growth | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Health Care | 2.99% | 19.90% | 14.28% | |||||||||
| Information Technology | 1.67% | 31.94% | 28.36% | |||||||||
| Energy | 0.54% | 1.77% | 4.68% | |||||||||
| Materials | 0.51% | 4.30% | 4.03% | |||||||||
| Telecommunication Services | 0.22% | 0.57% | 2.22% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | Russell 1000® Growth | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Protection Component** | –1.37% | 4.60% | 0.00% | |||||||||
| Industrials | –0.95% | 11.20% | 11.99% | |||||||||
| Utilities | 0.01% | –0.04% | 0.09% | |||||||||
| Consumer Staples | 0.05% | 5.09% | 10.60% | |||||||||
| Consumer Discretionary | 0.12% | 16.91% | 18.47% | |||||||||
| 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 | MARCH 31, 2015
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 6.4% | |||
| Endo International PLC Pharmaceuticals | 3.1% | |||
| Comcast Corp. – Class A Media | 2.8% | |||
| Sensata Technologies Holding NV Electrical Equipment | 2.2% | |||
| Home Depot, Inc. Specialty Retail | 2.2% | |||
| 16.7% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (0.2)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
Janus Investment Fund | 5
Table of Contents
Janus Preservation Series - Growth (unaudited)
Performance
| Expense Ratios – | |||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
| Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
| Janus Preservation Series – Growth – Class A Shares | |||||||||||
| NAV | 11.25% | 15.32% | 3.26% | 1.91% | 1.83% | ||||||
| MOP | 4.87% | 8.69% | 1.71% | ||||||||
| Janus Preservation Series – Growth – Class C Shares | |||||||||||
| NAV | 10.82% | 14.51% | 2.48% | 2.65% | 2.57% | ||||||
| CDSC | 9.82% | 13.51% | 2.48% | ||||||||
| Janus Preservation Series – Growth – Class D Shares(1) | 11.39% | 15.56% | 3.42% | 1.81% | 1.63% | ||||||
| Janus Preservation Series – Growth – Class I Shares | 11.46% | 15.74% | 3.52% | 1.65% | 1.58% | ||||||
| Janus Preservation Series – Growth – Class S Shares | 11.19% | 15.16% | 3.14% | 2.07% | 2.00% | ||||||
| Janus Preservation Series – Growth – Class T Shares | 11.32% | 15.39% | 3.33% | 1.81% | 1.75% | ||||||
| Russell 1000® Growth Index | 8.81% | 16.09% | 14.80% | ||||||||
| Preservation Series – Growth Blended Index | 5.28% | 9.51% | 8.86% | ||||||||
| Citigroup 3-Month U.S. Treasury Bill Index | 0.01% | 0.03% | 0.05% | ||||||||
| Morningstar Quartile – Class I Shares | – | 2nd | 4th | ||||||||
| Morningstar Ranking – based on total return for Large Growth Funds | – | 455/1,759 | 1,609/1,615 | ||||||||
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 February 1, 2016, and include a Capital Protection Fee that can fluctuate between 0.60% and 0.75%.
See important disclosures on the next page.
6 | MARCH 31, 2015
Table of Contents
(unaudited)
The Fund is not a capital guaranteed or insured fund. As with all investments, there are inherent risks when investing in the Fund including, but not limited to, allocation risk, maximum settlement amount risk, turnover risk, liquidation risk, opportunity cost risk, capital protection termination risk, underperformance risk and counterparty risk, each as disclosed in the Fund’s Prospectuses. The protection feature only covers shareholders who hold their shares on the termination date, and is subject to various conditions and the financial payment capabilities of BNP Paribas Prime Brokerage, Inc. (the “Capital Protection Provider”).
The Capital Protection Agreement is a financial product that is intended to protect the Fund against significant market declines and does not in any way constitute any form of insurance. The Capital Protection Provider is not an insurance company or an insurance provider, nor is it acting as an adviser or subadviser for the Fund.
The Fund’s asset allocation will vary over time depending on market conditions and therefore the Fund’s allocation to each investment component could change as frequently as daily resulting in a higher portfolio turnover rate than other mutual funds. Increased portfolio turnover may result in higher costs, which may have a negative effect on the Fund’s performance.
Amounts owed by the Capital Protection Provider under the Capital Protection Agreement are owed directly to the Fund and not to the Fund’s shareholders. As a result, a shareholder’s ability to receive the Protected NAV from the Fund is dependent on the Fund’s ability to collect any settlement amount due from the Capital Protection Provider, and/or its parent guarantor pursuant to the terms of the Capital Protection Agreement. Fund transactions involving a counterparty, such as the Capital Protection Provider and/or its parent guarantor, are subject to the risk that the counterparty will not fulfill its obligation to the Fund. Counterparty risk may arise because of the counterparty’s financial condition (i.e. financial difficulties, bankruptcy or insolvency), market activities or developments, or other reasons, whether foreseen or not. As such the Fund’s ability to benefit from the Protection may depend on the Capital Protection Provider’s, as well as its parent guarantor’s, financial condition.
Although the risk allocation methodology is designed so that the NAV of any share class does not fall below its Protected NAV, there is the possibility that the risk allocation methodology may not work as designed and the NAV of any share class may fall below its Protected NAV. If this happens, it is expected that the Fund will receive payment of the Settlement Amount from the Capital Protection Provider, if due, and liquidate as soon as possible following the event.
It is possible that under the terms of the Capital Protection Agreement, the Fund’s allocation to the Equity Component could drop to a low level or be eliminated altogether, especially during periods of heightened volatility in the equity markets. This would reduce the Fund’s ability to participate in upward equity market movements and therefore, represents loss of opportunity compared to a fund that is fully invested in equities and may cause the Fund to underperform its primary benchmark and/or other similarly situated growth funds. As a result, the Fund may not achieve its investment objective.
The Fund uses short index futures and other types of derivatives in attempt to hedge risk. Derivatives can be highly volatile and involve risks in addition to the risks of the underlying referenced securities. Gains or losses from a derivative can be substantially greater than the derivative’s original cost, and can therefore involve leverage.
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.
© 2015 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 4, 2011 | |
| (1) | Closed to new investors. |
Janus Investment Fund | 7
Table of Contents
Janus Preservation Series - 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; the capital protection fee; 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,112.50 | $ | 9.43 | $ | 1,000.00 | $ | 1,016.01 | $ | 9.00 | 1.79% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,108.20 | $ | 13.35 | $ | 1,000.00 | $ | 1,012.27 | $ | 12.74 | 2.54% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,113.90 | $ | 8.49 | $ | 1,000.00 | $ | 1,016.90 | $ | 8.10 | 1.61% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,114.60 | $ | 8.07 | $ | 1,000.00 | $ | 1,017.30 | $ | 7.70 | 1.53% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,111.90 | $ | 10.43 | $ | 1,000.00 | $ | 1,015.06 | $ | 9.95 | 1.98% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,113.20 | $ | 9.11 | $ | 1,000.00 | $ | 1,016.31 | $ | 8.70 | 1.73% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Janus Preservation Series - Growth
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares/Principal/Contract Amounts | Value | |||||||||
| Common Stocks – 97.1% | ||||||||||
| Aerospace & Defense – 3.2% | ||||||||||
| 8,739 | Honeywell International, Inc. | $ | 911,565 | |||||||
| 5,415 | Precision Castparts Corp. | 1,137,150 | ||||||||
| 2,048,715 | ||||||||||
| Auto Components – 0.8% | ||||||||||
| 6,569 | Delphi Automotive PLC | 523,812 | ||||||||
| Beverages – 1.0% | ||||||||||
| 8,942 | Diageo PLC | 246,525 | ||||||||
| 1,746 | Pernod Ricard SA | 206,006 | ||||||||
| 3,391 | SABMiller PLC | 177,422 | ||||||||
| 629,953 | ||||||||||
| Biotechnology – 6.1% | ||||||||||
| 6,785 | Amgen, Inc. | 1,084,582 | ||||||||
| 3,133 | Biogen, Inc.* | 1,322,878 | ||||||||
| 6,436 | Celgene Corp.* | 741,942 | ||||||||
| 591 | Pharmacyclics, Inc.* | 151,266 | ||||||||
| 1,251 | Regeneron Pharmaceuticals, Inc.* | 564,802 | ||||||||
| 3,865,470 | ||||||||||
| Capital Markets – 0.5% | ||||||||||
| 11,011 | Charles Schwab Corp. | 335,175 | ||||||||
| Chemicals – 4.0% | ||||||||||
| 9,137 | Air Products & Chemicals, Inc. | 1,382,246 | ||||||||
| 3,326 | Monsanto Co. | 374,308 | ||||||||
| 3,534 | PPG Industries, Inc. | 797,058 | ||||||||
| 2,553,612 | ||||||||||
| Communications Equipment – 2.5% | ||||||||||
| 10,168 | Motorola Solutions, Inc. | 677,901 | ||||||||
| 12,992 | QUALCOMM, Inc. | 900,865 | ||||||||
| 1,578,766 | ||||||||||
| Electrical Equipment – 2.5% | ||||||||||
| 24,759 | Sensata Technologies Holding NV* | 1,422,405 | ||||||||
| 3,222 | SolarCity Corp.* | 165,224 | ||||||||
| 1,587,629 | ||||||||||
| Electronic Equipment, Instruments & Components – 0.6% | ||||||||||
| 6,522 | Amphenol Corp. – Class A | 384,341 | ||||||||
| Energy Equipment & Services – 0.8% | ||||||||||
| 3,215 | Baker Hughes, Inc. | 204,410 | ||||||||
| 6,412 | Halliburton Co. | 281,358 | ||||||||
| 485,768 | ||||||||||
| Food & Staples Retailing – 2.0% | ||||||||||
| 6,436 | Kroger Co. | 493,384 | ||||||||
| 14,301 | Sysco Corp. | 539,576 | ||||||||
| 4,725 | Whole Foods Market, Inc. | 246,078 | ||||||||
| 1,279,038 | ||||||||||
| Food Products – 1.1% | ||||||||||
| 6,916 | Hershey Co. | 697,894 | ||||||||
| Health Care Equipment & Supplies – 1.0% | ||||||||||
| 20,735 | Boston Scientific Corp.* | 368,046 | ||||||||
| 1,992 | Zimmer Holdings, Inc. | 234,100 | ||||||||
| 602,146 | ||||||||||
| Health Care Technology – 0.9% | ||||||||||
| 4,962 | athenahealth, Inc.* | 592,413 | ||||||||
| Hotels, Restaurants & Leisure – 3.3% | ||||||||||
| 458 | Chipotle Mexican Grill, Inc.* | 297,947 | ||||||||
| 21,484 | Dunkin’ Brands Group, Inc. | 1,021,779 | ||||||||
| 6,160 | Starbucks Corp. | 583,352 | ||||||||
| 2,201 | Starwood Hotels & Resorts Worldwide, Inc. | 183,784 | ||||||||
| 2,086,862 | ||||||||||
| Household Products – 0.6% | ||||||||||
| 4,933 | Colgate-Palmolive Co. | 342,054 | ||||||||
| Information Technology Services – 3.5% | ||||||||||
| 13,350 | MasterCard, Inc. – Class A | 1,153,307 | ||||||||
| 16,244 | Visa, Inc. – Class A | 1,062,520 | ||||||||
| 2,215,827 | ||||||||||
| Insurance – 1.3% | ||||||||||
| 8,755 | Aon PLC | 841,531 | ||||||||
| Internet & Catalog Retail – 2.0% | ||||||||||
| 1,887 | Amazon.com, Inc.* | 702,153 | ||||||||
| 3,063 | Ctrip.com International, Ltd. (ADR)* | 179,553 | ||||||||
| 351 | Priceline Group, Inc.* | 408,616 | ||||||||
| 1,290,322 | ||||||||||
| Internet Software & Services – 7.0% | ||||||||||
| 3,480 | Alibaba Group Holding, Ltd. (ADR)* | 289,675 | ||||||||
| 2,893 | CoStar Group, Inc.* | 572,322 | ||||||||
| 14,726 | Facebook, Inc. – Class A* | 1,210,698 | ||||||||
| 1,686 | Google, Inc. – Class A† | 935,225 | ||||||||
| 2,177 | Google, Inc. – Class C* | 1,192,996 | ||||||||
| 842 | LinkedIn Corp. – Class A* | 210,382 | ||||||||
| 4,411,298 | ||||||||||
| Machinery – 1.6% | ||||||||||
| 21,248 | Colfax Corp.* | 1,014,167 | ||||||||
| Media – 4.7% | ||||||||||
| 31,359 | Comcast Corp. – Class A | 1,770,843 | ||||||||
| 18,631 | Twenty-First Century Fox, Inc. – Class A | 630,473 | ||||||||
| 5,411 | Walt Disney Co. | 567,560 | ||||||||
| 2,968,876 | ||||||||||
| Oil, Gas & Consumable Fuels – 1.5% | ||||||||||
| 8,200 | Antero Resources Corp.* | 289,624 | ||||||||
| 1,045 | EOG Resources, Inc. | 95,816 | ||||||||
| 8,870 | Noble Energy, Inc. | 433,743 | ||||||||
| 6,464 | Southwestern Energy Co.* | 149,900 | ||||||||
| 969,083 | ||||||||||
| Personal Products – 0.6% | ||||||||||
| 4,315 | Estee Lauder Cos., Inc. – Class A | 358,835 | ||||||||
| Pharmaceuticals – 11.2% | ||||||||||
| 9,070 | AbbVie, Inc. | 530,958 | ||||||||
| 3,820 | Actavis PLC* | 1,136,908 | ||||||||
| 13,835 | Bristol-Myers Squibb Co. | 892,358 | ||||||||
| 5,899 | Eli Lilly & Co. | 428,562 | ||||||||
| 21,813 | Endo International PLC* | 1,956,626 | ||||||||
| 3,949 | Jazz Pharmaceuticals PLC* | 682,348 | ||||||||
| 5,394 | Mallinckrodt PLC* | 683,150 | ||||||||
| 637 | Salix Pharmaceuticals, Ltd.* | 110,080 | ||||||||
| 3,189 | Valeant Pharmaceuticals International, Inc. (U.S. Shares)* | 633,399 | ||||||||
| 7,054,389 | ||||||||||
| Professional Services – 1.0% | ||||||||||
| 8,584 | Verisk Analytics, Inc. – Class A* | 612,898 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Preservation Series - Growth
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares/Principal/Contract Amounts | Value | |||||||||
| Real Estate Investment Trusts (REITs) – 1.4% | ||||||||||
| 9,578 | American Tower Corp. | $ | 901,769 | |||||||
| Real Estate Management & Development – 1.0% | ||||||||||
| 16,768 | CBRE Group, Inc. – Class A* | 649,089 | ||||||||
| Road & Rail – 2.3% | ||||||||||
| 3,924 | Canadian Pacific Railway, Ltd. | 718,553 | ||||||||
| 6,606 | Union Pacific Corp. | 715,496 | ||||||||
| 1,434,049 | ||||||||||
| Semiconductor & Semiconductor Equipment – 4.6% | ||||||||||
| 72,147 | ARM Holdings PLC | 1,181,069 | ||||||||
| 41,167 | Atmel Corp. | 338,804 | ||||||||
| 2,152 | Avago Technologies, Ltd. | 273,261 | ||||||||
| 20,484 | Freescale Semiconductor, Ltd.* | 834,928 | ||||||||
| 10,898 | Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 255,885 | ||||||||
| 2,883,947 | ||||||||||
| Software – 7.6% | ||||||||||
| 4,409 | Adobe Systems, Inc.* | 326,002 | ||||||||
| 3,106 | ANSYS, Inc.* | 273,918 | ||||||||
| 74,292 | Cadence Design Systems, Inc.* | 1,369,945 | ||||||||
| 10,579 | NetSuite, Inc.* | 981,308 | ||||||||
| 16,572 | Salesforce.com, Inc.* | 1,107,175 | ||||||||
| 2,303 | ServiceNow, Inc.* | 181,430 | ||||||||
| 3,176 | Ultimate Software Group, Inc.* | 539,777 | ||||||||
| 4,779,555 | ||||||||||
| Specialty Retail – 6.5% | ||||||||||
| 835 | AutoZone, Inc.* | 569,604 | ||||||||
| 12,416 | Home Depot, Inc. | 1,410,582 | ||||||||
| 30,585 | Sally Beauty Holdings, Inc.* | 1,051,206 | ||||||||
| 15,580 | TJX Cos., Inc. | 1,091,379 | ||||||||
| 4,122,771 | ||||||||||
| Technology Hardware, Storage & Peripherals – 6.7% | ||||||||||
| 32,177 | Apple, Inc.† | 4,003,784 | ||||||||
| 8,353 | EMC Corp. | 213,503 | ||||||||
| 4,217,287 | ||||||||||
| Textiles, Apparel & Luxury Goods – 0.5% | ||||||||||
| 10,962 | Gildan Activewear, Inc. | 323,598 | ||||||||
| Trading Companies & Distributors – 0.6% | ||||||||||
| 4,929 | MSC Industrial Direct Co., Inc. – Class A | 355,874 | ||||||||
| Wireless Telecommunication Services – 0.6% | ||||||||||
| 12,490 | T-Mobile U.S., Inc.* | 395,808 | ||||||||
| Total Common Stocks (cost $50,756,386) | 61,394,621 | |||||||||
| U.S. Treasury Notes/Bonds – 1.2% | ||||||||||
| $350,000 | 1.0000%, 9/30/16 | 353,008 | ||||||||
| 420,000 | 0.8750%, 11/30/16 | 422,855 | ||||||||
| Total U.S. Treasury Notes/Bonds (cost $770,486) | 775,863 | |||||||||
| Investment Companies – 1.9% | ||||||||||
| Money Markets – 1.9% | ||||||||||
| 1,187,138 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $1,187,138) | 1,187,138 | ||||||||
| Capital Protection Agreement – 0% | ||||||||||
| 1 | Janus Preservation Series - Growth with BNP Paribas Prime Brokerage, Inc.*,§ exercise price at 3/31/15 $8.61 – $8.96 (cost $0) | 0 | ||||||||
| Total Investments (total cost $52,714,010) – 100.2% | 63,357,622 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0.2)% | (138,259) | |||||||||
| Net Assets – 100% | $ | 63,219,363 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 59,145,937 | 93 | .4% | ||||
| Canada | 1,675,550 | 2 | .7 | |||||
| United Kingdom | 1,605,016 | 2 | .5 | |||||
| China | 469,228 | 0 | .7 | |||||
| Taiwan | 255,885 | 0 | .4 | |||||
| France | 206,006 | 0 | .3 | |||||
| Total | $ | 63,357,622 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 203,700 | $ | 302,096 | $ | 2,129 | |||||||
| Canadian Dollar 4/16/15 | 836,000 | 660,024 | (603) | |||||||||
| 962,120 | 1,526 | |||||||||||
| Credit Suisse International: | ||||||||||||
| British Pound 4/9/15 | 400,000 | 593,247 | 9,258 | |||||||||
| Canadian Dollar 4/9/15 | 1,000,000 | 789,571 | 3,489 | |||||||||
| Chinese Renminbi 4/9/15 | 2,788,000 | 448,935 | (5,656) | |||||||||
| Euro 4/9/15 | 183,000 | 196,763 | 1,871 | |||||||||
| Taiwan Dollar 4/9/15 | 7,501,000 | 239,777 | (2,386) | |||||||||
| 2,268,293 | 6,576 | |||||||||||
| HSBC Securities (USA), Inc.: British Pound 4/9/15 | 408,000 | 605,112 | 9,413 | |||||||||
| Total | $ | 3,835,525 | $ | 17,515 | ||||||||
Schedule of OTC Purchased Options – Zero Strike Calls
| Unrealized | ||||||||||||
| Counterparty/ | Premium to | Appreciation/ | ||||||||||
| Reference Asset | be Paid | Value | (Depreciation) | |||||||||
| BNP Paribas: BNP IVIX Index expires June 2015 504,583 contracts exercise price $0.00 | $ | (1,204,591) | $ | 1,193,300 | $ | (11,291) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| BNP IVIX Index | A volatility strategy index sponsored by BNP Paribas. | |
| Citigroup 3-Month U.S. Treasury Bill Index | An unmanaged index that represents the performance of three-month Treasury bills. The index reflects reinvestment of all distributions and changes in market prices. | |
| Preservation Series – Growth Blended Index | An internally-calculated, hypothetical combination of total returns from the Russell 1000® Growth Index (60%) and the Citigroup 3-Month U.S. Treasury Bill Index (40%). | |
| Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| OTC | Over-the-Counter | |
| PLC | Public Limited Company | |
| U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
| * | Non-income producing security. | |
| † | A portion of this security has been segregated 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Preservation Series - Growth | $ | 1,118,239 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Preservation Series - Growth | ||||||||||||||
| Capital Protection Agreement | 5/4/11 | $ | 0 | $ | 0 | 0.0 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | ||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | |||||||||||||||
Janus Preservation Series – Growth | |||||||||||||||||||||
| Janus Cash Liquidity Fund LLC | – | 14,544,138 | (13,357,000) | 1,187,138 | $ | – | $ | 1,289 | $ | 1,187,138 | |||||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | |||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
| Janus Preservation Series – Growth | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | ||||||||
| Beverages | $ – | $ 629,953 | $– | |||||
| Semiconductor & Semiconductor Equipment | 1,702,878 | 1,181,069 | – | |||||
| All Other | 57,880,721 | – | – | |||||
U.S. Treasury Notes/Bonds | – | 775,863 | – | |||||
Investment Companies | – | 1,187,138 | – | |||||
| Total Investments in Securities | $59,583,599 | $3,774,023 | $– | |||||
Other Financial Instruments(a): | ||||||||
Capital Protection Agreement | $ – | $ – | $0 | |||||
Forward Currency Contracts | – | 26,160 | – | |||||
Total Assets | $59,583,599 | $3,800,183 | $0 | |||||
Liabilities | ||||||||
Other Financial Instruments(a): | ||||||||
Forward Currency Contracts | $ – | $ 8,645 | $– | |||||
OTC Purchased Options – Zero Strike Calls | – | 11,291 | – | |||||
Total Liabilities | $ – | $ 19,936 | $– | |||||
| (a) | Other financial instruments include the capital protection agreement, forward currency, futures, written options, zero strike options, and swap contracts. Forward currency contracts and zero strike options 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. The capital protection agreement, written options and swap contracts are reported at their market value at measurement date. |
12 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| Janus Preservation | ||||
| As of March 31, 2015 (unaudited) | Series - Growth | |||
| Assets: | ||||
| Investments, at cost | $ | 52,714,010 | ||
| Unaffiliated investments, at value | $ | 62,170,484 | ||
| Affiliated investments, at value | 1,187,138 | |||
| Capital protection agreement (Note 1) | 0 | |||
| Cash | 170 | |||
| Restricted cash (Note 1) | 20,000 | |||
| Forward currency contracts | 26,160 | |||
| Closed foreign currency contracts | 3,248 | |||
| Non-interested Trustees’ deferred compensation | 1,243 | |||
| Receivables: | ||||
| Fund shares sold | 33,387 | |||
| Dividends | 35,109 | |||
| Dividends from affiliates | 144 | |||
| Foreign dividend tax reclaim | 2,548 | |||
| Interest | 1,241 | |||
| Other assets | 385 | |||
| Total Assets | 63,481,257 | |||
| Liabilities: | ||||
| Forward currency contracts | 8,645 | |||
| Closed foreign currency contracts | 9,859 | |||
Purchased options - zero strike calls(1) | 11,291 | |||
| Payables: | ||||
| Fund shares repurchased | 48,942 | |||
| Advisory fees | 20,546 | |||
| Capital protection fee | 32,752 | |||
| Fund administration fees | 546 | |||
| Transfer agent fees and expenses | 18,705 | |||
| 12b-1 Distribution and shareholder servicing fees | 20,433 | |||
| Non-interested Trustees’ fees and expenses | 394 | |||
| Non-interested Trustees’ deferred compensation fees | 1,243 | |||
| Accrued expenses and other payables | 88,538 | |||
| Total Liabilities | 261,894 | |||
| Net Assets | $ | 63,219,363 | ||
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)
| Janus Preservation | ||||
| As of March 31, 2015 (unaudited) | Series - Growth | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 51,613,730 | ||
| Undistributed net investment income/(loss) | (925,400) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 1,881,218 | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 10,649,815 | |||
| Total Net Assets | $ | 63,219,363 | ||
| Net Assets - Class A Shares | $ | 16,037,320 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,484,621 | |||
Net Asset Value Per Share(2) | $ | 10.80 | ||
Maximum Offering Price Per Share(3) | $ | 11.46 | ||
Protected Net Asset Value Per Share(4) | $ | 8.87 | ||
| Net Assets - Class C Shares | $ | 18,747,990 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,789,795 | |||
Net Asset Value Per Share(2) | $ | 10.47 | ||
Protected Net Asset Value Per Share(4) | $ | 8.61 | ||
| Net Assets - Class D Shares | $ | 10,542,083 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 969,738 | |||
| Net Asset Value Per Share | $ | 10.87 | ||
Protected Net Asset Value Per Share(4) | $ | 8.93 | ||
| Net Assets - Class I Shares | $ | 8,702,677 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 797,610 | |||
| Net Asset Value Per Share | $ | 10.91 | ||
Protected Net Asset Value Per Share(4) | $ | 8.96 | ||
| Net Assets - Class S Shares | $ | 3,678,282 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 342,234 | |||
| Net Asset Value Per Share | $ | 10.75 | ||
Protected Net Asset Value Per Share(4) | $ | 8.83 | ||
| Net Assets - Class T Shares | $ | 5,511,011 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 508,817 | |||
| Net Asset Value Per Share | $ | 10.83 | ||
Protected Net Asset Value Per Share(4) | $ | 8.90 | ||
| (1) | Premium to be paid $1,204,591. | |
| (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. | |
| (4) | The Protected NAV is the protection feature of the Fund and is calculated at 80% of the highest previously achieved NAV, reduced for dividends, distributions, any extraordinary expenses, and certain extraordinary items. Shareholders cannot transact purchases or redemptions at the Protected NAV. |
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statement of Operations
| Janus Preservation | ||||
| For the period ended March 31, 2015 (unaudited) | Series - Growth | |||
| Investment Income: | ||||
| Interest | $ | 3,496 | ||
| Dividends | 252,742 | |||
| Dividends from affiliates | 1,289 | |||
| Other income | 14 | |||
| Foreign tax withheld | (902) | |||
| Total Investment Income | 256,639 | |||
| Expenses: | ||||
| Advisory fees | 198,727 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 20,882 | |||
| Class C Shares | 91,889 | |||
| Class S Shares | 4,327 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 5,589 | |||
| Class S Shares | 4,327 | |||
| Class T Shares | 7,234 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 4,311 | |||
| Class C Shares | 4,104 | |||
| Class I Shares | 1,900 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 1,116 | |||
| Class C Shares | 1,473 | |||
| Class D Shares | 700 | |||
| Class I Shares | 154 | |||
| Class S Shares | 6 | |||
| Class T Shares | 46 | |||
| Capital protection fee | 188,963 | |||
| Shareholder reports expense | 22,115 | |||
| Registration fees | 57,937 | |||
| Custodian fees | 2,791 | |||
| Professional fees | 24,321 | |||
| Non-interested Trustees’ fees and expenses | 684 | |||
| Fund administration fees | 2,567 | |||
| Other expenses | 17,784 | |||
| Total Expenses | 663,947 | |||
| Less: Excess Expense Reimbursement | (56,782) | |||
| Net Expenses | 607,165 | |||
| Net Investment Income/(Loss) | (350,526) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 3,381,889 | |||
| Futures contracts | (153,794) | |||
| Purchased options - zero strike calls | (192,890) | |||
| Total Net Realized Gain/(Loss) on Investments | 3,035,205 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,758,300 | |||
| Purchased options - zero strike calls | 98,805 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 3,857,105 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 6,541,784 | ||
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
| Janus Preservation | ||||||||
| Series - Growth | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (350,526) | $ | (739,565) | ||||
| Net realized gain/(loss) on investments | 3,035,205 | 8,349,007 | ||||||
| Change in unrealized net appreciation/depreciation | 3,857,105 | (1,573,904) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 6,541,784 | 6,035,538 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (787,700) | – | ||||||
| Class C Shares | (889,857) | – | ||||||
| Class D Shares | (424,397) | – | ||||||
| Class I Shares | (391,688) | – | ||||||
| Class S Shares | (160,820) | – | ||||||
| Class T Shares | (247,524) | – | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (2,901,986) | – | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 137,946 | 968,692 | ||||||
| Class C Shares | 549,649 | 1,221,801 | ||||||
| Class D Shares | 1,595,561 | 2,123,347 | ||||||
| Class I Shares | 730,162 | 1,288,130 | ||||||
| Class T Shares | 80,394 | 335,391 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 773,429 | – | ||||||
| Class C Shares | 762,395 | – | ||||||
| Class D Shares | 423,908 | – | ||||||
| Class I Shares | 306,954 | – | ||||||
| Class S Shares | 160,820 | – | ||||||
| Class T Shares | 247,524 | – | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (3,921,276) | (6,620,702) | ||||||
| Class C Shares | (1,788,033) | (4,991,180) | ||||||
| Class D Shares | (569,188) | (2,034,630) | ||||||
| Class I Shares | (1,081,841) | (3,997,021) | ||||||
| Class T Shares | (3,263,170) | (5,033,402) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (4,854,766) | (16,739,574) | ||||||
| Net Increase/(Decrease) in Net Assets | (1,214,968) | (10,704,036) | ||||||
| Net Assets: | ||||||||
| Beginning of period | 64,434,331 | 75,138,367 | ||||||
| End of period | $ | 63,219,363 | $ | 64,434,331 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (925,400) | $ | (574,874) | ||||
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Preservation Series - Growth | |||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $10.19 | $9.33 | $8.83 | $8.61 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | (0.09)(2) | –(3) | (0.05) | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.15 | 0.95 | 0.50 | 0.27 | (1.38) | |||||||||||||||||
| Total from Investment Operations | 1.10 | 0.86 | 0.50 | 0.22 | (1.39) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.80 | $10.19 | $9.33 | $8.83 | $8.61 | |||||||||||||||||
| Total Return* | 11.25% | 9.22% | 5.66% | 2.56% | (13.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $16,037 | $18,045 | $21,859 | $46,314 | $31,514 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $16,752 | $20,065 | $33,076 | $46,797 | $11,929 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.96% | 1.91% | 1.82% | 1.93% | 3.36% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.79% | 1.80% | 1.75% | 1.72% | 1.66% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.97)% | (0.92)% | (0.96)% | (1.12)% | (0.90)% | |||||||||||||||||
| Portfolio Turnover Rate | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Preservation Series - Growth | |||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.93 | $9.16 | $8.74 | $8.59 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.09)(2) | (0.16)(2) | (0.12) | (0.11) | (0.03) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.12 | 0.93 | 0.54 | 0.26 | (1.38) | |||||||||||||||||
| Total from Investment Operations | 1.03 | 0.77 | 0.42 | 0.15 | (1.41) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.47 | $9.93 | $9.16 | $8.74 | $8.59 | |||||||||||||||||
| Total Return* | 10.82% | 8.41% | 4.81% | 1.75% | (14.10)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $18,748 | $18,215 | $20,391 | $34,567 | $23,354 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $18,428 | $19,226 | $25,502 | $33,689 | $10,505 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.71% | 2.65% | 2.61% | 2.68% | 4.07% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.54% | 2.55% | 2.51% | 2.47% | 2.39% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.71)% | (1.67)% | (1.72)% | (1.87)% | (1.61)% | |||||||||||||||||
| Portfolio Turnover Rate | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
| * | 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 4, 2011 (inception date) through September 30, 2011. | |
| (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 | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Preservation Series - Growth | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $10.24 | $9.36 | $8.85 | $8.62 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(2) | (0.07)(2) | 0.06 | (0.04) | (0.02) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.16 | 0.95 | 0.45 | 0.27 | (1.36) | |||||||||||||||||
| Total from Investment Operations | 1.12 | 0.88 | 0.51 | 0.23 | (1.38) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.87 | $10.24 | $9.36 | $8.85 | $8.62 | |||||||||||||||||
| Total Return* | 11.39% | 9.40% | 5.76% | 2.67% | (13.80)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $10,542 | $8,505 | $7,679 | $7,289 | $5,604 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $9,340 | $8,219 | $7,217 | $7,170 | $5,579 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.87% | 1.81% | 1.73% | 1.92% | 3.48% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.61% | 1.60% | 1.61% | 1.60% | 1.52% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.78)% | (0.72)% | (0.83)% | (1.00)% | (0.52)% | |||||||||||||||||
| Portfolio Turnover Rate | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Preservation Series - Growth | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $10.27 | $9.38 | $8.86 | $8.62 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(2) | (0.07)(2) | 0.06 | (0.06) | (0.01) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.17 | 0.96 | 0.46 | 0.30 | (1.37) | |||||||||||||||||
| Total from Investment Operations | 1.13 | 0.89 | 0.52 | 0.24 | (1.38) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.91 | $10.27 | $9.38 | $8.86 | $8.62 | |||||||||||||||||
| Total Return* | 11.46% | 9.49% | 5.87% | 2.78% | (13.80)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $8,703 | $8,222 | $10,124 | $17,922 | $26,506 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $8,479 | $8,912 | $14,828 | $23,996 | $12,205 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.70% | 1.65% | 1.59% | 1.66% | 3.06% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.53% | 1.55% | 1.49% | 1.47% | 1.48% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.70)% | (0.67)% | (0.71)% | (0.90)% | (0.73)% | |||||||||||||||||
| Portfolio Turnover Rate | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
| * | 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 4, 2011 (inception date) through September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
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Class S Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Preservation Series - Growth | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $10.15 | $9.30 | $8.81 | $8.61 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.06)(2) | (0.10)(2) | 0.04 | (0.09) | (0.03) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.15 | 0.95 | 0.45 | 0.29 | (1.36) | |||||||||||||||||
| Total from Investment Operations | 1.09 | 0.85 | 0.49 | 0.20 | (1.39) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.75 | $10.15 | $9.30 | $8.81 | $8.61 | |||||||||||||||||
| Total Return* | 11.19% | 9.14% | 5.56% | 2.32% | (13.90)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $3,678 | $3,308 | $3,032 | $2,873 | $3,588 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,471 | $3,213 | $2,914 | $3,348 | $3,933 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.15% | 2.07% | 2.06% | 2.11% | 3.33% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.98% | 1.85% | 1.88% | 1.90% | 1.73% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.15)% | (0.97)% | (1.10)% | (1.32)% | (0.68)% | |||||||||||||||||
| Portfolio Turnover Rate** | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
Class T Shares
| For a share outstanding during the period ended March 31, 2015 | Janus Preservation Series - Growth | |||||||||||||||||||||
| (unaudited) and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $10.21 | $9.34 | $8.84 | $8.62 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | (0.08)(2) | 0.04 | (0.06) | (0.02) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 1.16 | 0.95 | 0.46 | 0.28 | (1.36) | |||||||||||||||||
| Total from Investment Operations | 1.11 | 0.87 | 0.50 | 0.22 | (1.38) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.49) | – | – | – | – | |||||||||||||||||
| Total Distributions | (0.49) | – | – | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.83 | $10.21 | $9.34 | $8.84 | $8.62 | |||||||||||||||||
| Total Return* | 11.32% | 9.31% | 5.66% | 2.55% | (13.80)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $5,511 | $8,140 | $12,053 | $15,537 | $12,986 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,803 | $10,395 | $13,394 | $17,794 | $8,438 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 1.88% | 1.81% | 1.76% | 1.85% | 3.14% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.73% | 1.68% | 1.69% | 1.71% | 1.58% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.94)% | (0.80)% | (0.91)% | (1.12)% | (0.73)% | |||||||||||||||||
| Portfolio Turnover Rate | 28% | 114% | 119% | 170% | 149% | |||||||||||||||||
| * | 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 4, 2011 (inception date) through September 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
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Preservation Series – Growth (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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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.
Capital Protection Agreement
BNP Paribas Prime Brokerage, Inc., a U.S. registered broker-dealer, is the Fund’s Capital Protection Provider. Pursuant to the Capital Protection Agreement entered into by the Capital Protection Provider and the Fund, the Capital Protection Provider has agreed to provide capital protection to protect against a decrease in the NAV per share for each share class of the Fund below 80% of the highest NAV per share for the share class attained since the inception of the share class, reduced for dividends, distributions, any extraordinary expenses, and certain extraordinary items, provided the terms and conditions of the Capital Protection Agreement are satisfied and the agreement is not otherwise void. For this capital protection, the Fund pays the Capital Protection Provider, under the Capital Protection Agreement, a fee equal to 0.75% of the aggregate protected amount, which is calculated daily and paid monthly. Because the capital protection fee is based on the aggregate protected assets of the Fund rather than on the Fund’s total net assets, it can fluctuate between 0.60% and 0.75% of the Fund’s total net assets.
BNP Paribas, the Parent Guarantor and the Capital Protection Provider’s ultimate parent company, has provided an irrevocable guaranty pursuant to which it guarantees any and all financial obligations of the Capital Protection Provider to pay or deliver payment on its obligations under the Capital Protection Agreement to the extent that the Capital Protection Provider is obligated to pay. The Capital Protection Provider is a subsidiary of the Parent Guarantor and is a U.S. registered broker-dealer. Under the Parent Guaranty, the Parent Guarantor can assert the same defenses, rights, set offs, or counterclaims as the Capital Protection Provider would have under the Capital Protection Agreement.
Neither the Capital Protection Provider nor the Parent Guarantor is an insurance company or an insurance provider. Nor is the Capital Protection Provider, the Parent Guarantor, or any of their affiliates acting as an investment adviser or subadviser to the Fund. The Settlement Amount under the Capital Protection Agreement is owed directly to the Fund and not the Fund’s investors. Therefore, as a shareholder you will not have any action against or recourse to the Capital Protection Provider or the Parent
20 | MARCH 31, 2015
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Guarantor. Further, no shareholder will have any right to receive payment, or any other rights whatsoever, under the Capital Protection Agreement or the Parent Guaranty.
The Capital Protection Agreement is valued at the greater of $0.00 or the Protected NAV less the NAV per share, which approximates fair value.
The Protected NAV for each share class, as well as the percentages of the Fund’s assets that are allocated between the Equity Component and the Protection Component, will be posted on the Janus websites at janus.com/advisor/mutual-funds (or janus.com/allfunds for shareholders of Class D Shares). Please refer to the Fund’s Prospectuses for information regarding how the Protection works in the event it is triggered and the Fund proceeds to liquidation, as well as how the Protection is calculated to help you understand the 80% protection of the NAV per share.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price
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Notes to Financial Statements (unaudited) (continued)
(or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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. Expenses include the fee paid to the Capital Protection Provider. Because the fee is based on the aggregate protected assets of the Fund, it can fluctuate between 0.60% and 0.75%.
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.
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
Because the payment of dividends and distributions could have the effect of reducing the Fund’s NAV as a result of the reduction in the aggregate value of the Fund’s assets, any such distribution made during the term of the Capital Protection Agreement, including distributions made before the investment by the shareholder, will reduce the Protected NAV of each share class and therefore the amount of protection afforded to the Fund by the Capital Protection Provider. This means that the Protected NAV could be less than 80% of the highest previously attained NAV. Janus Capital intends to estimate dividends payable prior to any distribution date in an effort to minimize the impact of such distributions to the Protected NAV. There is no guarantee that Janus Capital will be successful in doing so. Incorrect estimates could impact the dividend calculation methodology and affect the Protected NAV per share. Please refer to the Fund’s Prospectuses for additional examples of how distributions will affect the Protected NAV.
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 March 31, 2015, the Fund had restricted cash in the amount of $20,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
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Notes to Financial Statements (unaudited) (continued)
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 – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. | |
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease
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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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Preservation Series - Growth | $ | 547,932 | ||||
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/(depreciation) is reported on the Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
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 sold futures contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Preservation Series - Growth | $ | 233,783 | ||||
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk,
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Notes to Financial Statements (unaudited) (continued)
and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by such Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on various equity indices for the purpose of increasing exposure to broad equity risk.
The following table provides average ending monthly market value amounts on purchased call options during the period ended March 31, 2015.
| Purchased Zero-Strike | ||||||
| Fund | Call Options | |||||
| Janus Preservation Series - Growth | $ | 1,006,151 | ||||
Volatility Investments
The Fund may also utilize swaps, options, exchange-traded funds, exchange-traded notes, or other instruments for exposure to the Chicago Board Options Exchange Market Volatility Index (“VIX”) or another volatility index. Such investments would be used in accordance with the risk methodology under the Capital Protection Agreement and would be designed in an effort to limit losses in a sharp market decline. There is no guarantee that using such instruments would be effective in limiting losses, and the use of such instruments could impact the ability to increase returns. There are costs associated with entering into such investments, which can impact returns. The Capital Protection Provider may be the entity used to enter into a transaction related to the VIX and, if so, would receive compensation.
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Preservation Series - Growth | ||||||||||||
| Capital Protection Agreement | Capital protection agreement | $ | 0 | |||||||||
| Currency Contracts | Forward currency contracts | 26,160 | Forward currency contracts | $ | 8,645 | |||||||
| Equity Contracts | Purchased options - zero strike calls | 11,291 | ||||||||||
| Total | $ | 26,160 | $ | 19,936 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||
| Investments and foreign | Purchased options - | |||||||||||||||
| Derivatives not accounted for as hedging instruments | currency transactions | Futures contracts | zero strike calls | Total | ||||||||||||
Janus Preservation Series - Growth | ||||||||||||||||
| Currency Contracts | $ | 848 | $ | – | $ | – | $ | 848 | ||||||||
| Equity Contracts | – | (153,794 | ) | (192,890 | ) | (346,684 | ) | |||||||||
| Total | $ | 848 | $ | (153,794 | ) | $ | (192,890 | ) | $ | (345,836 | ) | |||||
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| Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income | ||||||||||||||||
| Investments, foreign | ||||||||||||||||
| currency translations and | ||||||||||||||||
| non-interested Trustees’ | Purchased options - | |||||||||||||||
| Derivatives not accounted for as hedging instruments | deferred compensation | Futures contracts | zero strike calls | Total | ||||||||||||
Janus Preservation Series - Growth | ||||||||||||||||
| Capital Protection Agreement | $ | 0 | $ | – | $ | – | $ | 0 | ||||||||
| Currency Contracts | 17,515 | – | – | 17,515 | ||||||||||||
| Equity Contracts | – | – | 98,805 | 98,805 | ||||||||||||
| Total | $ | 17,515 | $ | – | $ | 98,805 | $ | 116,320 | ||||||||
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
As with all investments, there are inherent risks when investing in the Fund. The Fund’s participation in the Capital Protection Agreement also subjects the Fund to certain risks not generally associated with equity funds, including, but not limited to, allocation risk, maximum settlement amount risk, turnover risk, liquidation risk, opportunity cost risk, capital protection termination risk, underperformance risk, and counterparty risk. For information relating to these and other risks of investing in the Fund, as well as other general information about the Fund, please refer to the Fund’s Prospectuses and Statement of Additional Information.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. Redemptions, particularly a large redemption, may impact the allocation process, and the NAV of any share class may fall below its Protected NAV. If this happens, it is expected that the Fund will receive payment of the Settlement Amount from the Capital Protection Provider, if due, and liquidate as soon as possible following the event. 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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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, such as the Capital Protection Provider, 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 shareholder’s ability to receive the Protected NAV from the Fund is dependent on the Fund’s ability to collect any settlement from the Capital Protection Provider pursuant to the terms of the Capital Protection Agreement or from BNP Paribas, the parent company of the Capital Protection Provider (the “Parent Guarantor”), under a separate parent guaranty. As such, the Fund’s ability to benefit from the Protection may depend on the Capital Protection Provider’s, as well as its parent company’s, financial condition. As an added measure of protection, the Parent Guarantor has issued an absolute, irrevocable and continuing guaranty pursuant to which it guarantees any and all financial obligations of the Capital Protection Provider under the Capital Protection Agreement. There is, however, a risk that the Capital Protection Provider’s parent company may not fulfill its obligations under the guaranty it has issued. 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, 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. Under the terms of the Capital Protection Agreement, the Protected NAV of each share class will be reduced by any reductions in the NAV per share resulting from such events as, but not limited to, (i) the bankruptcy, insolvency, reorganization or default of a contractual counterparty of the Fund, including counterparties to derivatives transactions, and entities that hold cash or other assets of the Fund; (ii) any trade or pricing error of the Fund; and (iii) any realized or unrealized losses on any investment of the Fund in money market funds.
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 March 31, 2015” 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
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ 2,129 | $ (603) | $– | $ 1,526 | ||||||||||||||
| Credit Suisse International | 14,618 | (8,042) | – | 6,576 | ||||||||||||||
| HSBC Securities (USA), Inc. | 9,413 | – | – | 9,413 | ||||||||||||||
| Total | $26,160 | $(8,645) | $– | $17,515 | ||||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| �� | ||||||||||||||||||
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ 603 | $ (603) | $ – | $– | ||||||||||||||
| BNP Paribas | 11,291 | – | (11,291) | – | ||||||||||||||
| Credit Suisse International | 8,042 | (8,042) | – | – | ||||||||||||||
| Total | $19,936 | $(8,645) | $(11,291) | $– | ||||||||||||||
| (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,
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Notes to Financial Statements (unaudited) (continued)
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.
| 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 Preservation Series - Growth | All Asset Levels | 0.64 | ||||||||
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 and the capital protection 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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Janus Preservation Series - Growth | 1.47-1.62* | |||||
| * | Varies based on the amount of the Capital Protection Fee. |
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
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in
Janus Investment Fund | 31
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Notes to Financial Statements (unaudited) (continued)
the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Preservation Series - Growth | $ | 499 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Preservation Series - Growth | $ | 971 | ||||
As of March 31, 2015, 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 Preservation Series - Growth - Class A Shares | 23 | % | 6 | % | ||||||
| Janus Preservation Series - Growth - Class C Shares | 19 | 6 | ||||||||
| Janus Preservation Series - Growth - Class D Shares | 35 | 6 | ||||||||
| Janus Preservation Series - Growth - Class I Shares | 43 | 6 | ||||||||
| Janus Preservation Series - Growth - Class S Shares | 100 | 6 | ||||||||
| Janus Preservation Series - Growth - Class T Shares | 67 | 6 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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.
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| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Preservation Series - Growth | $53,610,524 | $10,707,265 | $(960,167) | $9,747,098 | ||||||||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Preservation Series - Growth | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 13,335 | 97,489 | ||||||||
| Reinvested dividends and distributions | 77,810 | – | ||||||||
| Shares repurchased | (377,763) | (668,568) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (286,618) | (571,079) | ||||||||
| Shares Outstanding, Beginning of Period | 1,771,239 | 2,342,318 | ||||||||
| Shares Outstanding, End of Period | 1,484,621 | 1,771,239 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 55,749 | 127,967 | ||||||||
| Reinvested dividends and distributions | 78,923 | – | ||||||||
| Shares repurchased | (179,431) | (518,653) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (44,759) | (390,686) | ||||||||
| Shares Outstanding, Beginning of Period | 1,834,554 | 2,225,240 | ||||||||
| Shares Outstanding, End of Period | 1,789,795 | 1,834,554 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 150,830 | 215,995 | ||||||||
| Reinvested dividends and distributions | 42,391 | – | ||||||||
| Shares repurchased | (53,981) | (205,774) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 139,240 | 10,221 | ||||||||
| Shares Outstanding, Beginning of Period | 830,498 | 820,277 | ||||||||
| Shares Outstanding, End of Period | 969,738 | 830,498 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 69,837 | 128,054 | ||||||||
| Reinvested dividends and distributions | 30,604 | – | ||||||||
| Shares repurchased | (103,342) | (406,270) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (2,901) | (278,216) | ||||||||
| Shares Outstanding, Beginning of Period | 800,511 | 1,078,727 | ||||||||
| Shares Outstanding, End of Period | 797,610 | 800,511 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | – | – | ||||||||
| Reinvested dividends and distributions | 16,244 | – | ||||||||
| Shares repurchased | – | – | ||||||||
| Net Increase/(Decrease) in Fund Shares | 16,244 | – | ||||||||
| Shares Outstanding, Beginning of Period | 325,990 | 325,990 | ||||||||
| Shares Outstanding, End of Period | 342,234 | 325,990 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 7,683 | 33,467 | ||||||||
| Reinvested dividends and distributions | 24,827 | – | ||||||||
| Shares repurchased | (320,840) | (526,520) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (288,330) | (493,053) | ||||||||
| Shares Outstanding, Beginning of Period | 797,147 | 1,290,200 | ||||||||
| Shares Outstanding, End of Period | 508,817 | 797,147 | ||||||||
Janus Investment Fund | 33
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Notes to Financial Statements (unaudited) (continued)
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Preservation Series - Growth | $16,873,757 | $26,031,478 | $– | $653,789 | ||||||||||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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).
Annual Report of BNP Paribas Prime Brokerage, Inc.
Janus Investment Fund, on behalf of Janus Preservation Series – Global and Janus Preservation Series – Growth, will supply the most recent annual reports of the Capital Protection Provider (or any successor or substituted entity thereto), free of charge, upon a shareholder’s 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
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Additional Information (unaudited) (continued)
selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed 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. |
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| • | 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 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. |
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Additional Information (unaudited) (continued)
| • | 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 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. |
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| • | 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 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 |
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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 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 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
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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 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. |
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Additional Information (unaudited) (continued)
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 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 |
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| Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit 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 Janus Capital has contractually agreed to limit 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. |
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Additional Information (unaudited) (continued)
| • | 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. |
| • | 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’
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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 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
Janus Investment Fund | 47
Table of Contents
Useful Information About Your Fund Report (unaudited) (continued)
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.
48 | MARCH 31, 2015
Table of Contents
Notes
Janus Investment Fund | 49
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).
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-0515-87562 | 125-24-93052 05-15 |
Table of Contents
semiannual report
March 31, 2015
Janus Asia Equity Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
Table of Contents
Janus Asia Equity Fund
| 1 | ||
| 10 | ||
| 12 | ||
| 14 | ||
| 15 | ||
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| 41 |
Table of Contents
Janus Asia Equity Fund (unaudited)
FUND SNAPSHOT We seek to generate strong risk-adjusted returns by investing in stocks with high or expanding profitability at attractive valuations. | Hiroshi Yoh portfolio manager |
PERFORMANCE SUMMARY
Janus Asia Equity Fund’s Class I Shares returned 8.53% for the six-month period ended March 31, 2015. The Fund’s benchmark, the MSCI All Country Asia ex-Japan Index, returned 5.01%.
MARKET ENVIRONMENT
Asian equities registered gains over the period, despite the looming strength of the U.S. dollar. This is evidence that the oft-cited causal link between emerging market performance and the dollar is not nearly as strong as it is purported to be. What is especially noteworthy is that Asian stocks held up given the rapid rise of the dollar beginning in the latter part of 2014. In the turbulent periods of the 1980s and 1990s, a roughly 10% appreciation in the U.S. currency was often enough to sink the prospects of Asian and other emerging market securities. In the current episode, even as the U.S. dollar recorded double-digit gains against major developed market currencies such as the euro and Japanese yen, not only did Asian stocks prove resilient, so did the region’s currencies. This development is owed to substantial improvement in financial positions on both corporate and sovereign balance sheets. Indonesia is a prime example of a country whose currency has depreciated, but local company balance sheets have not been stressed. Issuances of domestic debt, lower overall debt levels and the deployment of hedges, via derivatives or natural, have all made the jobs of senior executives and corporate treasurers much more manageable.
PERFORMANCE DISCUSSION
On a country basis, our selection of Chinese and South Korean stocks helped drive relative outperformance, while our holdings in Taiwan and Hong Kong were relative detractors. With regard to sectors, stock selection in industrials and consumer discretionary contributed, while holdings in information technology and telecommunications weighed on relative results.
Cheil Industries, a de facto holding company for conglomerate Samsung, was the leading individual contributor for the period. The company continued to benefit from the sentiment surrounding its recent initial public offering (IPO). Cheil is structured essentially to aid in transferring ownership of Samsung from one generation of the controlling family to the next. After this period of outperformance, we no longer hold the position in the portfolio.
Among the top performers in the Chinese market were two financial companies. CITIC Securities, given its breadth of services, operates as a proxy for Chinese equities and has benefited from the establishment of the Shanghai-Hong Kong Stock Connect, which has enabled foreigners to invest in much greater volumes in mainland-listed blue-chip companies. CITIC’s stock also rose on several favorable operational metrics, such as higher trading volumes, IPO activity and improving margins. Insurer China Pacific also contributed. We continue to believe that China Pacific remains one of the best managed insurance companies in China, as it is more focused on creating business value than selling low-margin products.
South Korea’s Hana Financial detracted during the period. The company reported disappointed earnings from the fourth quarter 2014. While loan growth lagged the industry average and net interest margin contracted slightly, many of the reasons for the earnings miss were one-offs such as impairment charges and severance-related adjustments. Of greater consequence was a court action favoring a labor union, which put up a roadblock in a proposed merger with Korea Exchange Bank.
Gaming and hotel company Louis XIII Holdings weighed on performance. While conspicuous consumption has diminished in the wake of the anti-corruption crackdown by China’s central government, the companies operating in Macau that concentrate on the VIP segment are the ones that appear most vulnerable, in our view. Louis XIII, however, focuses on the premium mass market segment, which should be more insulated from the government’s
Janus Investment Fund | 1
Table of Contents
Janus Asia Equity Fund (unaudited)
actions. The company may also benefit from the recent loosening of monetary policy by the People’s Bank of China, aimed at reinvigorating the economy.
Chinese car dealership operator Baoxin Auto Group detracted from performance. Concerns about a slowing domestic economy, along with worries that the anti-corruption campaign would further cool consumption of luxury goods, weighed on the stock.
OUTLOOK
As evidenced by the ascent of the U.S. dollar and the relaxing of monetary policy in China, we must remain vigilant of macroeconomic risks. Yet our primary job is selecting stocks with the greatest prospects of generating sustainable long-term returns. Even as we manage these macro factors, we continue to identify companies with strong management teams and proven track records in generating attractive returns on invested capital. Presently we see promising companies in China and India, with the latter’s environment being aided by market-friendly reforms. We also believe there is opportunity in Taiwanese technology companies. While we aim to pick companies that can thrive despite whatever broad economic noise may be present at any time, the volatility that often accompanies such periods can provide attractive entry and exit points for companies we favor. We will continue to take advantage of such situations to generate returns for our investors.
Thank you for your investment in Janus Asia Equity Fund.
2 | MARCH 31, 2015
Table of Contents
(unaudited)
Janus Asia Equity Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Cheil Industries, Inc. | 2.30% | |||
| CITIC Securities Co., Ltd. – Class A | 1.36% | |||
| China Pacific Insurance Group Co., Ltd. – Class A | 1.10% | |||
| Daqin Railway Co., Ltd. – Class A | 1.01% | |||
| SAIC Motor Corp., Ltd. – Class A | 0.94% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Hana Financial Group, Inc. | –0.55% | |||
| Louis XIII Holdings, Ltd. | –0.42% | |||
| POSCO | –0.36% | |||
| Baoxin Auto Group, Ltd. | –0.30% | |||
| Japan Display, Inc. | –0.26% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI All Country | |||||||||||
| Fund Contribution | (Average % of Equity) | Asia ex-Japan Index Weighting | ||||||||||
| Industrials | 2.55% | 8.82% | 8.40% | |||||||||
| Consumer Discretionary | 2.05% | 15.65% | 8.76% | |||||||||
| Health Care | 0.67% | 2.16% | 1.90% | |||||||||
| Financials | 0.59% | 29.01% | 32.91% | |||||||||
| Energy | 0.42% | 5.30% | 5.16% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI All Country | |||||||||||
| Fund Contribution | (Average % of Equity) | Asia ex-Japan Index Weighting | ||||||||||
| Information Technology | –0.92% | 23.47% | 21.85% | |||||||||
| Other** | –0.58% | 5.71% | 0.00% | |||||||||
| Telecommunication Services | –0.10% | 1.79% | 6.77% | |||||||||
| Consumer Staples | 0.02% | 3.33% | 5.29% | |||||||||
| Utilities | 0.04% | 1.31% | 4.15% | |||||||||
| Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
| * | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
| ** | Not a GICS classified sector. |
Janus Investment Fund | 3
Table of Contents
Janus Asia Equity Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Samsung Electronics Co., Ltd. Technology Hardware, Storage & Peripherals | 4.2% | |||
| Taiwan Semiconductor Manufacturing Co., Ltd. Semiconductor & Semiconductor Equipment | 4.1% | |||
| Tencent Holdings, Ltd. Internet Software & Services | 3.0% | |||
| China Pacific Insurance Group Co., Ltd. – Class A Insurance | 2.6% | |||
| Industrial & Commercial Bank of China, Ltd. – Class H Commercial Banks | 2.3% | |||
| 16.2% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 78.8% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
4 | MARCH 31, 2015
Table of Contents
(unaudited)
Performance
| Expense Ratios – | |||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
| Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
| Janus Asia Equity Fund – Class A Shares | |||||||||||
| NAV | 8.32% | 14.15% | 3.24% | 2.49% | 1.51% | ||||||
| MOP | 2.07% | 7.55% | 1.59% | ||||||||
| Janus Asia Equity Fund – Class C Shares | |||||||||||
| NAV | 7.91% | 13.27% | 2.53% | 3.24% | 2.24% | ||||||
| CDSC | 6.91% | 12.27% | 2.53% | ||||||||
| Janus Asia Equity Fund – Class D Shares(1) | 8.44% | 14.37% | 3.39% | 2.31% | 1.40% | ||||||
| Janus Asia Equity Fund – Class I Shares | 8.53% | 14.46% | 3.54% | 2.15% | 1.24% | ||||||
| Janus Asia Equity Fund – Class S Shares | 8.20% | 14.03% | 3.13% | 2.58% | 1.74% | ||||||
| Janus Asia Equity Fund – Class T Shares | 8.46% | 14.29% | 3.35% | 2.44% | 1.49% | ||||||
| MSCI All Country Asia ex-Japan Index | 5.01% | 10.73% | 3.14% | ||||||||
| Morningstar Quartile – Class I Shares | – | 1st | 2nd | ||||||||
| Morningstar Ranking – based on total return for Pacific/Asia ex-Japan Stock Funds | – | 11/87 | 38/76 | ||||||||
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 February 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 5
Table of Contents
Janus Asia Equity Fund (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.
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.
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.
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.
© 2015 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 is 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 29, 2011 | |
| (1) | Closed to new investors. |
6 | MARCH 31, 2015
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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,083.20 | $ | 8.00 | $ | 1,000.00 | $ | 1,017.25 | $ | 7.75 | 1.54% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,079.10 | $ | 11.35 | $ | 1,000.00 | $ | 1,014.01 | $ | 11.00 | 2.19% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,084.40 | $ | 7.02 | $ | 1,000.00 | $ | 1,018.20 | $ | 6.79 | 1.35% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,085.30 | $ | 6.19 | $ | 1,000.00 | $ | 1,019.00 | $ | 5.99 | 1.19% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,082.00 | $ | 8.72 | $ | 1,000.00 | $ | 1,016.55 | $ | 8.45 | 1.68% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,084.60 | $ | 7.64 | $ | 1,000.00 | $ | 1,017.60 | $ | 7.39 | 1.47% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 Asia Equity Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Common Stocks – 95.3% | ||||||||||
| Auto Components – 0.9% | ||||||||||
| 421 | Hyundai Mobis Co., Ltd. | $ | 93,475 | |||||||
| Automobiles – 6.0% | ||||||||||
| 80,900 | Astra International Tbk PT | 53,007 | ||||||||
| 44,500 | Chongqing Changan Automobile Co., Ltd. – Class Bß | 121,519 | ||||||||
| 1,135 | Hyundai Motor Co. | 172,310 | ||||||||
| 14,100 | Jiangling Motors Corp., Ltd. – Class Bß | 67,075 | ||||||||
| 42,800 | SAIC Motor Corp., Ltd. – Class Aß | 172,344 | ||||||||
| 44,000 | Yulon Motor Co., Ltd. | 60,038 | ||||||||
| 646,293 | ||||||||||
| Beverages – 0.4% | ||||||||||
| 127,000 | LT Group, Inc. | 46,245 | ||||||||
| Capital Markets – 2.4% | ||||||||||
| 9,000 | CITIC Securities Co., Ltd. | 33,383 | ||||||||
| 18,700 | CITIC Securities Co., Ltd. – Class Aß | 99,613 | ||||||||
| 175,755 | Haitong International Securities Group, Ltd.# | 121,421 | ||||||||
| 254,417 | ||||||||||
| Chemicals – 1.2% | ||||||||||
| 627 | LG Chem, Ltd. | 127,559 | ||||||||
| Commercial Banks – 14.7% | ||||||||||
| 155,900 | Bank Danamon Indonesia Tbk PT | 61,095 | ||||||||
| 117,100 | Bank Mandiri Persero Tbk PT | 111,639 | ||||||||
| 18,000 | BOC Hong Kong Holdings, Ltd. | 64,267 | ||||||||
| 285,000 | China Construction Bank Corp. – Class H | 236,847 | ||||||||
| 88,534 | CTBC Financial Holding Co., Ltd. | 58,746 | ||||||||
| 12,000 | DBS Group Holdings, Ltd. | 177,616 | ||||||||
| 6,109 | Hana Financial Group, Inc. | 157,975 | ||||||||
| 24,706 | ICICI Bank, Ltd. | 124,471 | ||||||||
| 340,000 | Industrial & Commercial Bank of China, Ltd. – Class H | 250,989 | ||||||||
| 225,700 | Krung Thai Bank PCL | 158,093 | ||||||||
| 32,634 | Metropolitan Bank & Trust Co. | 71,205 | ||||||||
| 2,813 | Shinhan Financial Group Co., Ltd. | 106,016 | ||||||||
| 1,578,959 | ||||||||||
| Construction & Engineering – 2.1% | ||||||||||
| 28,200 | IJM Corp. Bhd | 54,849 | ||||||||
| 448,871 | Louis XIII Holdings, Ltd.* | 167,953 | ||||||||
| 222,802 | ||||||||||
| Construction Materials – 0.6% | ||||||||||
| 65,500 | BBMG Corp. – Class H | 60,376 | ||||||||
| Diversified Telecommunication Services – 1.5% | ||||||||||
| 74,000 | China Unicom Hong Kong, Ltd. | 112,700 | ||||||||
| 1,950 | KT Corp.* | 50,970 | ||||||||
| 163,670 | ||||||||||
| Electric Utilities – 0.5% | ||||||||||
| 25,452 | Power Grid Corp. of India, Ltd. | 59,045 | ||||||||
| Electrical Equipment – 1.0% | ||||||||||
| 18,696 | Crompton Greaves, Ltd. | 49,533 | ||||||||
| 13,503 | Finolex Cables, Ltd. | 61,419 | ||||||||
| 110,952 | ||||||||||
| Electronic Equipment, Instruments & Components – 5.1% | ||||||||||
| 15,000 | Chroma ATE, Inc. | 37,194 | ||||||||
| 126,000 | E Ink Holdings, Inc.* | 57,877 | ||||||||
| 48,546 | FIH Mobile, Ltd.* | 25,758 | ||||||||
| 37,312 | Hon Hai Precision Industry Co., Ltd. | 109,092 | ||||||||
| 14,700 | Japan Display, Inc. | 52,942 | ||||||||
| 15,800 | Merry Electronics Co., Ltd. | 50,596 | ||||||||
| 73,000 | WPG Holdings, Ltd. | 93,881 | ||||||||
| 35,600 | Zhen Ding Technology Holding, Ltd. | 115,822 | ||||||||
| 543,162 | ||||||||||
| Food Products – 1.7% | ||||||||||
| 120,000 | Golden Agri-Resources, Ltd. | 37,193 | ||||||||
| 30,840 | San Miguel Pure Foods Co., Inc. | 140,943 | ||||||||
| 178,136 | ||||||||||
| Health Care Providers & Services – 0.6% | ||||||||||
| 76,182 | Religare Health Trust | 60,493 | ||||||||
| Hotels, Restaurants & Leisure – 0.7% | ||||||||||
| 33,200 | Genting Bhd | 80,666 | ||||||||
| Household Durables – 2.1% | ||||||||||
| 55,300 | Qingdao Haier Co., Ltd. – Class Aß | 230,480 | ||||||||
| Independent Power and Renewable Electricity Producers – 0.9% | ||||||||||
| 40,000 | China Resources Power Holdings Co., Ltd. | 100,384 | ||||||||
| Industrial Conglomerates – 2.2% | ||||||||||
| 17,000 | CITIC, Ltd. | 29,145 | ||||||||
| 5,000 | Hutchison Whampoa, Ltd. | 69,166 | ||||||||
| 11,000 | Keppel Corp., Ltd. | 71,966 | ||||||||
| 133,500 | Shun Tak Holdings, Ltd. | 64,425 | ||||||||
| 234,702 | ||||||||||
| Information Technology Services – 1.0% | ||||||||||
| 1,993 | Infosys, Ltd. | 70,539 | ||||||||
| 145 | Samsung SDS Co., Ltd. | 34,912 | ||||||||
| 105,451 | ||||||||||
| Insurance – 6.4% | ||||||||||
| 38,800 | AIA Group, Ltd. | 243,187 | ||||||||
| 50,800 | China Pacific Insurance Group Co., Ltd. – Class Aß | 280,930 | ||||||||
| 195 | Samsung Fire & Marine Insurance Co., Ltd. | 47,017 | ||||||||
| 1,278 | Samsung Life Insurance Co., Ltd. | 111,233 | ||||||||
| 682,367 | ||||||||||
| Internet Software & Services – 5.4% | ||||||||||
| 679 | Alibaba Group Holding, Ltd. (ADR)*,# | 56,520 | ||||||||
| 176 | NAVER Corp. | 106,240 | ||||||||
| 1,246 | Qihoo 360 Technology Co., Ltd. (ADR)* | 63,795 | ||||||||
| 16,800 | Tencent Holdings, Ltd. | 317,608 | ||||||||
| 3,017 | Youku Tudou, Inc. (ADR)* | 37,713 | ||||||||
| 581,876 | ||||||||||
| Machinery – 0.5% | ||||||||||
| 3,570 | Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 58,038 | ||||||||
| Marine – 0.6% | ||||||||||
| 128,411 | First Steamship Co., Ltd.* | 67,862 | ||||||||
| Metals & Mining – 1.5% | ||||||||||
| 21,973 | Hindustan Zinc, Ltd. | 56,937 | ||||||||
| 468 | POSCO | 102,641 | ||||||||
| 159,578 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares | Value | |||||||||
| Multiline Retail – 1.3% | ||||||||||
| 429 | Hyundai Department Store Co., Ltd. | $ | 57,532 | |||||||
| 47,000 | Lifestyle International Holdings, Ltd. | 83,678 | ||||||||
| 141,210 | ||||||||||
| Oil, Gas & Consumable Fuels – 3.7% | ||||||||||
| 66,400 | China Petroleum & Chemical Corp. – Class H | 52,967 | ||||||||
| 645,000 | China Suntien Green Energy Corp., Ltd. – Class H | 156,176 | ||||||||
| 40,000 | PetroChina Co., Ltd. – Class H | 44,432 | ||||||||
| 10,646 | Reliance Industries, Ltd. | 140,425 | ||||||||
| 394,000 | ||||||||||
| Pharmaceuticals – 2.8% | ||||||||||
| 15,500 | Dong-E-E-Jiao Co., Ltd.ß | 104,314 | ||||||||
| 2,965 | Torrent Pharmaceuticals, Ltd. | 54,873 | ||||||||
| 12,700 | Yunnan Baiyao Group Co., Ltd. – Class Aß | 136,518 | ||||||||
| 295,705 | ||||||||||
| Real Estate Investment Trusts (REITs) – 0.5% | ||||||||||
| 51,079 | AIMS AMP Capital Industrial REIT | 55,435 | ||||||||
| Real Estate Management & Development – 5.3% | ||||||||||
| 406,188 | Belle Corp. | 39,043 | ||||||||
| 463,440 | Central China Real Estate, Ltd. | 117,399 | ||||||||
| 2,601,359 | Century Properties Group, Inc. | 54,132 | ||||||||
| 22,000 | China Overseas Land & Investment, Ltd. | 71,165 | ||||||||
| 3,000 | CK Hutchison Holdings, Ltd. | 61,376 | ||||||||
| 2,420,000 | CSI Properties, Ltd. | 85,836 | ||||||||
| 145,500 | Langham Hospitality Investments and Langham Hospitality Investments, Ltd. | 68,463 | ||||||||
| 129,750 | Siam Future Development PCL* | 27,724 | ||||||||
| 3,000 | Sun Hung Kai Properties, Ltd. | 46,185 | ||||||||
| 571,323 | ||||||||||
| Road & Rail – 1.9% | ||||||||||
| 116,000 | Daqin Railway Co., Ltd. – Class Aß | 207,083 | ||||||||
| Semiconductor & Semiconductor Equipment – 7.1% | ||||||||||
| 13,000 | MediaTek, Inc. | 175,754 | ||||||||
| 3,470 | SK Hynix, Inc. | 141,904 | ||||||||
| 95,000 | Taiwan Semiconductor Manufacturing Co., Ltd. | 440,806 | ||||||||
| 758,464 | ||||||||||
| Software – 0.5% | ||||||||||
| 328 | NCSoft Corp. | 53,596 | ||||||||
| Specialty Retail – 3.9% | ||||||||||
| 158,500 | Baoxin Auto Group, Ltd. | 85,715 | ||||||||
| 81,200 | Chow Tai Fook Jewellery Group, Ltd. | 87,418 | ||||||||
| 34,706 | L’Occitane International SA | 98,985 | ||||||||
| 28,398 | PC Jeweller, Ltd. | 143,697 | ||||||||
| 415,815 | ||||||||||
| Technology Hardware, Storage & Peripherals – 4.2% | ||||||||||
| 349 | Samsung Electronics Co., Ltd. | 452,512 | ||||||||
| Textiles, Apparel & Luxury Goods – 1.4% | ||||||||||
| 42,900 | Samsonite International SA | 148,710 | ||||||||
| Thrifts & Mortgage Finance – 1.0% | ||||||||||
| 4,995 | Housing Development Finance Corp., Ltd. | 104,991 | ||||||||
| Tobacco – 0.5% | ||||||||||
| 9,427 | ITC, Ltd. | 49,039 | ||||||||
| Wireless Telecommunication Services – 1.2% | ||||||||||
| 9,500 | China Mobile, Ltd. | 123,836 | ||||||||
| Total Common Stocks (cost $9,449,154) | 10,218,707 | |||||||||
| Preferred Stocks – 1.1% | ||||||||||
| Technology Hardware, Storage & Peripherals – 1.1% | ||||||||||
| 120 | Samsung Electronics Co., Ltd. (cost $108,881) | 119,157 | ||||||||
| Investment Companies – 1.2% | ||||||||||
| Investments Purchased with Cash Collateral from Securities Lending – 1.1% | ||||||||||
| 114,650 | Janus Cash Collateral Fund LLC, 0.1041%°°,£ | 114,650 | ||||||||
| Money Markets – 0.1% | ||||||||||
| 9,000 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ | 9,000 | ||||||||
| Total Investment Companies (cost $123,650) | 123,650 | |||||||||
| Total Investments (total cost $9,681,685) – 97.6% | 10,461,514 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 2.4% | 261,947 | |||||||||
| Net Assets – 100% | $ | 10,723,461 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| China | $ | 3,371,026 | 32 | .2% | ||||
| South Korea | 1,993,087 | 19 | .1 | |||||
| Hong Kong | 1,337,843 | 12 | .8 | |||||
| Taiwan | 1,267,668 | 12 | .1 | |||||
| India | 914,969 | 8 | .7 | |||||
| Singapore | 402,703 | 3 | .8 | |||||
| Philippines | 351,568 | 3 | .4 | |||||
| Indonesia | 225,741 | 2 | .2 | |||||
| Thailand | 185,817 | 1 | .8 | |||||
| Malaysia | 135,515 | 1 | .3 | |||||
| United States | 123,650 | 1 | .2 | |||||
| France | 98,985 | 0 | .9 | |||||
| Japan | 52,942 | 0 | .5 | |||||
| Total | $ | 10,461,514 | 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 All Country Asia ex-Japan Index | A free float-adjusted, market capitalization weighted index that is designed to measure the equity market performance of Asia, excluding Japan. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| PCL | Public Company Limited |
| * | Non-income producing security. |
| ß | Security is illiquid. | |
°° | Rate shown is the 7-day yield as of March 31, 2015. | |
| # | Loaned security; a portion of the security is on loan at March 31, 2015. |
| £ | 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||||||||
Janus Asia Equity Fund | ||||||||||||||||||||||
| Janus Cash Collateral Fund LLC | 230,825 | 385,225 | (501,400) | 114,650 | $ | – | $ | 971(1) | $ | 114,650 | ||||||||||||
| Janus Cash Liquidity Fund LLC | 487,094 | 15,326,177 | (15,804,271) | 9,000 | – | 183 | 9,000 | |||||||||||||||
| Total | $ | – | $ | 1,154 | $ | 123,650 | ||||||||||||||||
| (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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Asia Equity Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Auto Components | $ | – | $ | 93,475 | $ | – | |||||
| Automobiles | – | 524,774 | 121,519 | ||||||||
| Beverages | – | 46,245 | – | ||||||||
| Capital Markets | – | 254,417 | – | ||||||||
| Chemicals | – | 127,559 | – | ||||||||
| Commercial Banks | – | 1,578,959 | – | ||||||||
| Construction & Engineering | – | 222,802 | – | ||||||||
| Construction Materials | – | 60,376 | – | ||||||||
10 | MARCH 31, 2015
Table of Contents
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Diversified Telecommunication Services | – | 163,670 | – | ||||||||
| Electric Utilities | – | 59,045 | – | ||||||||
| Electrical Equipment | – | 110,952 | – | ||||||||
| Electronic Equipment, Instruments & Components | – | 543,162 | – | ||||||||
| Food Products | – | 178,136 | – | ||||||||
| Health Care Providers & Services | – | 60,493 | – | ||||||||
| Hotels, Restaurants & Leisure | – | 80,666 | – | ||||||||
| Household Durables | – | 230,480 | – | ||||||||
| Independent Power and Renewable Electricity Producers | – | 100,384 | – | ||||||||
| Industrial Conglomerates | – | 234,702 | – | ||||||||
| Information Technology Services | – | 105,451 | – | ||||||||
| Insurance | – | 682,367 | – | ||||||||
| Internet Software & Services | 158,028 | 423,848 | – | ||||||||
| Machinery | – | 58,038 | – | ||||||||
| Marine | – | 67,862 | – | ||||||||
| Metals & Mining | – | 159,578 | – | ||||||||
| Multiline Retail | – | 141,210 | – | ||||||||
| Oil, Gas & Consumable Fuels | – | 394,000 | – | ||||||||
| Pharmaceuticals | – | 295,705 | – | ||||||||
| Real Estate Investment Trusts (REITs) | – | 55,435 | – | ||||||||
| Real Estate Management & Development | – | 571,323 | – | ||||||||
| Road & Rail | – | 207,083 | – | ||||||||
| Semiconductor & Semiconductor Equipment | – | 758,464 | – | ||||||||
| Software | – | 53,596 | – | ||||||||
| Specialty Retail | – | 415,815 | – | ||||||||
| Technology Hardware, Storage & Peripherals | – | 452,512 | – | ||||||||
| Textiles, Apparel & Luxury Goods | – | 148,710 | – | ||||||||
| Thrifts & Mortgage Finance | – | 104,991 | – | ||||||||
| Tobacco | – | 49,039 | – | ||||||||
| Wireless Telecommunication Services | – | 123,836 | – | ||||||||
Preferred Stocks | – | 119,157 | – | ||||||||
Investment Companies | – | 123,650 | – | ||||||||
Total Assets | $ | 158,028 | $ | 10,181,967 | $ | 121,519 | |||||
Level 3 Valuation Reconciliation of Assets (for the period ended March 31, 2015)
| Change in | |||||||||||||||||||||||
| Unrealized | Transfers In | ||||||||||||||||||||||
| Balance | Realized | Appreciation/ | and/or | Balance | |||||||||||||||||||
| at 9/30/14 | Purchases | Sales | Gain/(Loss) | Depreciation(a) | Out of Level 3 | at 3/31/15 | |||||||||||||||||
| Janus Asia Equity Fund | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investments in Securities: | |||||||||||||||||||||||
Common Stocks | |||||||||||||||||||||||
| Automobiles | $ | – | $ | 150,841 | $ | – | $ | – | $ | (29,322) | $ | – | $ | 121,519 | |||||||||
| (a) | Included in “Change in unrealized net appreciation/depreciation of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Operations. |
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
| As of March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||
| Assets: | ||||
| Investments, at cost | $ | 9,681,685 | ||
Unaffiliated investments, at value(1) | $ | 10,337,864 | ||
| Affiliated investments, at value | 123,650 | |||
Cash denominated in foreign currency(2) | 441 | |||
| Restricted cash (Note 1) | 418,594 | |||
| Non-interested Trustees’ deferred compensation | 211 | |||
| Receivables: | ||||
| Investments sold | 57,146 | |||
| Fund shares sold | 4,498 | |||
| Dividends | 16,114 | |||
| Due from adviser | 18,891 | |||
| Other assets | 172 | |||
| Total Assets | 10,977,581 | |||
| Liabilities: | ||||
| Due to custodian | 9,617 | |||
| Collateral for securities loaned (Note 2) | 114,650 | |||
| Payables: | ||||
| Investments purchased | 53,803 | |||
| Fund shares repurchased | 1,299 | |||
| Advisory fees | 9,323 | |||
| Fund administration fees | 94 | |||
| Transfer agent fees and expenses | 5,339 | |||
| 12b-1 Distribution and shareholder servicing fees | 464 | |||
| Non-interested Trustees’ fees and expenses | 78 | |||
| Non-interested Trustees’ deferred compensation fees | 211 | |||
| Foreign tax liability | 11,627 | |||
| Accrued expenses and other payables | 47,615 | |||
| Total Liabilities | 254,120 | |||
| Net Assets | $ | 10,723,461 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| As of March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 9,806,943 | ||
| Undistributed net investment income/(loss) | (53,449) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | 207,720 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(3) | 762,247 | |||
| Total Net Assets | $ | 10,723,461 | ||
| Net Assets - Class A Shares | $ | 371,913 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,136 | |||
Net Asset Value Per Share(4) | $ | 10.01 | ||
Maximum Offering Price Per Share(5) | $ | 10.62 | ||
| Net Assets - Class C Shares | $ | 363,365 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 36,221 | |||
Net Asset Value Per Share(4) | $ | 10.03 | ||
| Net Assets - Class D Shares | $ | 6,061,885 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 602,627 | |||
| Net Asset Value Per Share | $ | 10.06 | ||
| Net Assets - Class I Shares | $ | 2,975,755 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 295,448 | |||
| Net Asset Value Per Share | $ | 10.07 | ||
| Net Assets - Class S Shares | $ | 373,124 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,305 | |||
| Net Asset Value Per Share | $ | 10.00 | ||
| Net Assets - Class T Shares | $ | 577,419 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 58,121 | |||
| Net Asset Value Per Share | $ | 9.93 | ||
| (1) | Includes $106,800 of securities on loan. See Note 2 in Notes to Financial Statements. | |
| (2) | Includes cost of $441. | |
| (3) | Includes $11,627 of foreign tax on investments. | |
| (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 March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||
| Investment Income: | ||||
| Affiliated securities lending income, net | $ | 971 | ||
| Dividends | 32,757 | |||
| Dividends from affiliates | 183 | |||
| Other income | 754 | |||
| Foreign tax withheld | (5,373) | |||
| Total Investment Income | 29,292 | |||
| Expenses: | ||||
| Advisory fees | 49,658 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 556 | |||
| Class C Shares | 1,709 | |||
| Class S Shares | 449 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 3,469 | |||
| Class S Shares | 449 | |||
| Class T Shares | 627 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 230 | |||
| Class I Shares | 26 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 53 | |||
| Class C Shares | 26 | |||
| Class D Shares | 1,659 | |||
| Class I Shares | 66 | |||
| Class T Shares | 34 | |||
| Registration fees | 15,482 | |||
| Custodian fees | 25,968 | |||
| Professional fees | 28,796 | |||
| Non-interested Trustees’ fees and expenses | 118 | |||
| Fund administration fees | 436 | |||
| Other expenses | 3,659 | |||
| Total Expenses | 133,470 | |||
| Less: Excess Expense Reimbursement | (62,395) | |||
| Net Expenses | 71,075 | |||
| Net Investment Income/(Loss) | (41,783) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 378,796 | |||
| Total Net Realized Gain/(Loss) on Investments | 378,796 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 442,220 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 442,220 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 779,233 | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Janus Asia Equity Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (41,783) | $ | 383,251 | ||||
| Net realized gain/(loss) on investments | 378,796 | 332,406 | ||||||
| Change in unrealized net appreciation/depreciation | 442,220 | 713,773 | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 779,233 | 1,429,430 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (8,039) | (15,019) | ||||||
| Class C Shares | (1,661) | (6,667) | ||||||
| Class D Shares | (99,803) | (137,939) | ||||||
| Class I Shares | (54,233) | (22,736) | ||||||
| Class S Shares | (6,040) | (10,968) | ||||||
| Class T Shares | (5,134) | (17,303) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (17,352) | (34,349) | ||||||
| Class C Shares | (12,715) | (28,359) | ||||||
| Class D Shares | (198,823) | (291,794) | ||||||
| Class I Shares | (103,632) | (43,943) | ||||||
| Class S Shares | (13,114) | (27,742) | ||||||
| Class T Shares | (7,149) | (35,229) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (527,695) | (672,048) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 17,229 | 251,874 | ||||||
| Class C Shares | 5,118 | – | ||||||
| Class D Shares | 1,181,181 | 4,951,918 | ||||||
| Class I Shares | 841,186 | 2,456,090 | ||||||
| Class S Shares | 186,807 | – | ||||||
| Class T Shares | 3,245,418 | 6,800,728 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 25,391 | 49,368 | ||||||
| Class C Shares | 14,376 | 35,026 | ||||||
| Class D Shares | 291,399 | 424,519 | ||||||
| Class I Shares | 157,865 | 66,679 | ||||||
| Class S Shares | 19,154 | 38,710 | ||||||
| Class T Shares | 12,283 | 52,532 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (136,899) | (846,709) | ||||||
| Class C Shares | – | (568,982) | ||||||
| Class D Shares | (4,619,367) | (3,976,895) | ||||||
| Class I Shares | (1,002,141) | (1,217,736) | ||||||
| Class S Shares | (184,730) | (536,218) | ||||||
| Class T Shares | (3,410,092) | (7,894,990) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | (3,355,822) | 85,914 | ||||||
| Net Increase/(Decrease) in Net Assets | (3,104,284) | 843,296 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 13,827,745 | 12,984,449 | ||||||
| End of period | $ | 10,723,461 | $ | 13,827,745 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (53,449) | $ | 163,244 | ||||
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 March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.79 | $9.44 | $9.25 | $7.43 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | 0.23(2)(3) | 0.07 | 0.14 | (0.23) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.81 | 0.59 | 0.20 | 1.68 | (2.34) | |||||||||||||||||
| Total from Investment Operations | 0.76 | 0.82 | 0.27 | 1.82 | (2.57) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.17) | (0.14) | (0.08) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Total Distributions | (0.54) | (0.47) | (0.08) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.01 | $9.79 | $9.44 | $9.25 | $7.43 | |||||||||||||||||
| Total Return* | 8.32% | 9.06% | 2.88% | 24.50% | (25.70)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $372 | $456 | $973 | $878 | $619 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $446 | $1,053 | $1,063 | $768 | $724 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.71% | 2.49% | 2.03% | 4.43% | 28.35% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.54% | 1.38% | 1.52% | 1.55% | 1.35% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.98)% | 2.35%(3) | 0.51% | 0.87% | 0.85% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.72 | $9.38 | $9.18 | $7.43 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.08)(2) | 0.16(2)(3) | –(4) | 0.06 | (0.23) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.81 | 0.59 | 0.21 | 1.69 | (2.34) | |||||||||||||||||
| Total from Investment Operations | 0.73 | 0.75 | 0.21 | 1.75 | (2.57) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.05) | (0.08) | (0.01) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Total Distributions | (0.42) | (0.41) | (0.01) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.03 | $9.72 | $9.38 | $9.18 | $7.43 | |||||||||||||||||
| Total Return* | 7.91% | 8.22% | 2.24% | 23.55% | (25.70)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $363 | $332 | $804 | $775 | $619 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $343 | $802 | $815 | $716 | $724 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.42% | 3.24% | 2.77% | 5.45% | 29.12% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.19% | 2.12% | 2.23% | 2.30% | 1.38%(5) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.61)% | 1.68%(3) | (0.20)% | 0.08% | 0.82% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
| * | 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 29, 2011 (inception date) through September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%. | |
| (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 2.34% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
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Class D Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.84 | $9.48 | $9.26 | $7.42 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.04)(2) | 0.24(2)(3) | 0.05 | 0.25 | (0.18) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.82 | 0.61 | 0.23 | 1.59 | (2.40) | |||||||||||||||||
| Total from Investment Operations | 0.78 | 0.85 | 0.28 | 1.84 | (2.58) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.19) | (0.16) | (0.06) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Redemption fees | N/A | N/A | N/A | –(4) | –(4) | |||||||||||||||||
| Total Distributions | (0.56) | (0.49) | (0.06) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.06 | $9.84 | $9.48 | $9.26 | $7.42 | |||||||||||||||||
| Total Return* | 8.44% | 9.26% | 3.01% | 24.80% | (25.80)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $6,062 | $9,084 | $7,477 | $3,394 | $1,035 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $5,797 | $8,635 | $7,523 | $2,654 | $963 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.54% | 2.31% | 1.91% | 2.77% | 31.23% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.35% | 1.25% | 1.40% | 1.53% | 1.39%(5) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.79)% | 2.52%(3) | 0.63% | 1.33% | 0.90% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.85 | $9.49 | $9.27 | $7.43 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | 0.26(2)(3) | 0.04 | 0.19 | (0.23) | �� | ||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.81 | 0.60 | 0.26 | 1.65 | (2.34) | |||||||||||||||||
| Total from Investment Operations | 0.78 | 0.86 | 0.30 | 1.84 | (2.57) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.19) | (0.17) | (0.08) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Total Distributions | (0.56) | (0.50) | (0.08) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.07 | $9.85 | $9.49 | $9.27 | $7.43 | |||||||||||||||||
| Total Return* | 8.53% | 9.43% | 3.21% | 24.76% | (25.70)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $2,976 | $2,899 | $1,295 | $1,145 | $619 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,066 | $2,751 | $1,549 | $848 | $724 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.40% | 2.15% | 1.70% | 3.63% | 28.10% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.19% | 1.07% | 1.26% | 1.29% | 1.34% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.62)% | 2.75%(3) | 0.55% | 1.19% | 0.86% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
| * | 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 29, 2011 (inception date) through September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%. | |
| (4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
| (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 2.26% in 2011 without the waiver of these fees and expenses. |
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 March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.79 | $9.43 | $9.23 | $7.43 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | 0.23(2)(3) | 0.05 | 0.10 | (0.23) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.80 | 0.59 | 0.22 | 1.70 | (2.34) | |||||||||||||||||
| Total from Investment Operations | 0.75 | 0.82 | 0.27 | 1.80 | (2.57) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.17) | (0.13) | (0.07) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Total Distributions | (0.54) | (0.46) | (0.07) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $10.00 | $9.79 | $9.43 | $9.23 | $7.43 | |||||||||||||||||
| Total Return* | 8.20% | 9.02% | 2.86% | 24.23% | (25.70)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $373 | $345 | $791 | $769 | $619 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $360 | $752 | $874 | $710 | $724 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.89% | 2.58% | 2.21% | 4.97% | 28.59% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.68% | 1.46% | 1.65% | 1.75% | 1.36%(4) | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.09)% | 2.42%(3) | 0.29% | 0.63% | 0.84% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
Class T Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) | Janus Asia Equity Fund | |||||||||||||||||||||
| and each year or period ended September 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
| Net Asset Value, Beginning of Period | $9.81 | $9.45 | $9.25 | $7.43 | $10.00 | |||||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | 0.24(2)(3) | 0.13 | 0.15 | (0.23) | |||||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.81 | 0.61 | 0.15 | 1.67 | (2.34) | |||||||||||||||||
| Total from Investment Operations | 0.76 | 0.85 | 0.28 | 1.82 | (2.57) | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||
| Dividends (from net investment income) | (0.27) | (0.16) | (0.08) | – | – | |||||||||||||||||
| Distributions (from capital gains) | (0.37) | (0.33) | – | – | – | |||||||||||||||||
| Total Distributions | (0.64) | (0.49) | (0.08) | – | – | |||||||||||||||||
| Net Asset Value, End of Period | $9.93 | $9.81 | $9.45 | $9.25 | $7.43 | |||||||||||||||||
| Total Return* | 8.46% | 9.37% | 2.99% | 24.50% | (25.70)% | |||||||||||||||||
| Net Assets, End of Period (in thousands) | $577 | $712 | $1,644 | $861 | $619 | |||||||||||||||||
| Average Net Assets for the Period (in thousands) | $503 | $1,357 | $1,331 | $798 | $724 | |||||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.47% | 2.44% | 2.05% | 4.33% | 28.34% | |||||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.47% | 1.26% | 1.43% | 1.54% | 1.35% | |||||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.04)% | 2.49%(3) | 0.63% | 0.89% | 0.85% | |||||||||||||||||
| Portfolio Turnover Rate | 40% | 72% | 104% | 75% | 2% | |||||||||||||||||
| * | 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 29, 2011 (inception date) through September 30, 2011. | |
| (2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
| (3) | Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. in December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%. | |
| (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 have been 1.84% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
18 | MARCH 31, 2015
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Asia Equity 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. 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
Janus Investment Fund | 19
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Notes to Financial Statements (unaudited) (continued)
opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
Assets categorized as Level 3 in the hierarchy include equity securities fair valued utilizing a recent transaction price. No quantitative unobservable inputs were significant to the fair value determination.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” and “Level 3 Valuation Reconciliation of Assets” 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 | |||||
| Janus Asia Equity Fund | $ | 98,823 | ||||
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.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the
20 | MARCH 31, 2015
Table of Contents
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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 March 31, 2015, the Fund had restricted cash in the amount of $418,594. The restricted cash represents collateral pledged in relation to investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
Janus Investment Fund | 21
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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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2015, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2015, the Fund has available investment quota of $418,594. The Fund is subject to certain
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restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
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
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities (also known as “A Shares”).
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
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
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 | ||||||||||||||
| Deutsche Bank AG | $ | 106,800 | $ | – | $ | (106,800) | $ | – | ||||||||||
| (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
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.
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
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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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
| Fund | Base Fee Rate (%) | |||||
| Janus Asia Equity Fund | 0.92 | |||||
The investment advisory fee rate is determined by calculating a base fee (shown in the table above) and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. 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 | |||||
| Janus Asia Equity Fund | MSCI All Country Asia ex-Japan 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 March 31, 2015 is below:
| Performance Adjusted | ||||||
| Investment Advisory | ||||||
| Fund | Fee Rate (%) | |||||
| Janus Asia Equity Fund | 0.95 | |||||
Janus Capital Singapore Pte. Limited (“Janus Singapore”) serves as subadviser to the Fund. Janus Singapore provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Singapore is an indirect wholly-owned subsidiary of Janus Capital. Janus Capital pays Janus Singapore a fee equal to 50% of the 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 Janus Singapore 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
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Notes to Financial Statements (unaudited) (continued)
below. Janus Capital has agreed to continue the waiver until at least February 1, 2016.
| New Expense | Previous Expense | |||||||||
| Limit (%) | Limit (%) | |||||||||
| (February 1, | (until February | |||||||||
| Fund | 2015 to present) | 1, 2015) | ||||||||
| Janus Asia Equity Fund | 1.28 | 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 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
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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. There were no upfront sales charges retained by Janus Distributors during the period ended March 31, 2015.
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 March 31, 2015.
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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. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended March 31, 2015.
As of March 31, 2015, 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 Asia Equity Fund - Class A Shares | 24 | % | 1 | % | ||||||
| Janus Asia Equity Fund - Class C Shares | 94 | 3 | ||||||||
| Janus Asia Equity Fund - Class D Shares | – | – | ||||||||
| Janus Asia Equity Fund - Class I Shares | 81 | 22 | ||||||||
| Janus Asia Equity Fund - Class S Shares | 100 | 3 | ||||||||
| Janus Asia Equity Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Asia Equity Fund | $ | 9,759,361 | $ | 1,390,258 | $ | (688,105) | $ | 702,153 | ||||||||||
| 5. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Asia Equity Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 1,750 | 25,160 | ||||||||
| Reinvested dividends and distributions | 2,769 | 5,360 | ||||||||
| Shares repurchased | (13,980) | (86,977) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (9,461) | (56,457) | ||||||||
| Shares Outstanding, Beginning of Period | 46,597 | 103,054 | ||||||||
| Shares Outstanding, End of Period | 37,136 | 46,597 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 515 | – | ||||||||
| Reinvested dividends and distributions | 1,561 | 3,807 | ||||||||
| Shares repurchased | – | (55,423) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,076 | (51,616) | ||||||||
| Shares Outstanding, Beginning of Period | 34,145 | 85,761 | ||||||||
| Shares Outstanding, End of Period | 36,221 | 34,145 | ||||||||
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| For the period ended March 31 (unaudited) | Janus Asia Equity Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 120,343 | 498,409 | ||||||||
| Reinvested dividends and distributions | 31,639 | 45,894 | ||||||||
| Shares repurchased | (472,593) | (409,486) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (320,611) | 134,817 | ||||||||
| Shares Outstanding, Beginning of Period | 923,238 | 788,421 | ||||||||
| Shares Outstanding, End of Period | 602,627 | 923,238 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 84,723 | 269,453 | ||||||||
| Reinvested dividends and distributions | 17,141 | 7,216 | ||||||||
| Shares repurchased | (100,660) | (118,830) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,204 | 157,839 | ||||||||
| Shares Outstanding, Beginning of Period | 294,244 | 136,405 | ||||||||
| Shares Outstanding, End of Period | 295,448 | 294,244 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 18,947 | – | ||||||||
| Reinvested dividends and distributions | 2,088 | 4,203 | ||||||||
| Shares repurchased | (18,947) | (52,881) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,088 | (48,678) | ||||||||
| Shares Outstanding, Beginning of Period | 35,217 | 83,895 | ||||||||
| Shares Outstanding, End of Period | 37,305 | 35,217 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 335,108 | 706,412 | ||||||||
| Reinvested dividends and distributions | 1,351 | 5,704 | ||||||||
| Shares repurchased | (350,975) | (813,491) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (14,516) | (101,375) | ||||||||
| Shares Outstanding, Beginning of Period | 72,637 | 174,012 | ||||||||
| Shares Outstanding, End of Period | 58,121 | 72,637 | ||||||||
| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Asia Equity Fund | $ | 4,234,146 | $ | 8,906,187 | $ | – | $ | – | ||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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
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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).
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-0515-87734 | 125-24-93036 05-15 |
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semiannual report
March 31, 2015
Janus Preservation Series – Global
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Janus Preservation Series - Global (unaudited)
FUND SNAPSHOT A global growth fund with a protection feature that seeks to minimize and cap losses. This fund offers potential upside based on stock market participation and a level of certainty in falling markets. | Jonathan Coleman portfolio manager |
PERFORMANCE REVIEW
For the period ended March 31, 2015, Janus Preservation Series – Global Class I Shares returned 4.96% versus a return of 3.35% for the MSCI World Index, the Fund’s primary benchmark. The Fund’s secondary benchmark, the Preservation Series – Global Blended Index, returned 2.05% during the period.
INVESTMENT ENVIRONMENT
Global equity markets started the period with a surge in volatility, which soon subsided as investors were comforted by a series of accommodative measures by major central banks. The European Central Bank (ECB) announced that it would raise the level of its balance sheet by 1 trillion euros; the Bank of Japan enacted unprecedented easing; and the People’s Bank of China unexpectedly lowered a key interest rate. These initiatives diverged from the path taken by the U.S. Federal Reserve (Fed), which remained on track to initiate rate hikes in 2015. Volatility spiked again in January as investors feared that crude oil’s precipitous slide could be a consequence of slowing global growth, rather than solely of elevated North American production. Indeed, growth data outside of the U.S. remained muted. China’s fourth quarter GDP expanded by 7.3%, well below its 25-year average. Europe contributed to market angst as prices within the eurozone entered deflationary territory and Syriza, an anti-austerity party, emerged victorious in Greece’s parliamentary election. European stocks regained favor upon the ECB announcement that it would christen its own version of quantitative easing by purchasing 60 billion euros in bonds monthly. As yields on many short- and mid-term European bonds turned negative, the region’s stocks took off. The corresponding slide in the euro drove the U.S. dollar to levels that caused investors to worry that U.S. corporate earnings would suffer. Shrugging this off, U.S. indices reached record levels in early March. Despite yet another strong jobs report, which fueled speculation of a June rate increase, the Fed’s late-March statement included downwardly revised growth expectations, which investors interpreted as dovish.
PERFORMANCE DISCUSSION
Janus Preservation Series – Global is a unique product in that it has two primary features designed to provide a level of downside protection and grow investors’ capital over the long term. It has a disciplined allocation process that determines how much of the portfolio will be invested in its equity component and how much will be invested in its protection component. Additionally, the Fund has a protection feature that is designed to minimize and ultimately cap any losses at a maximum of 20%. As the Net Asset Value (NAV) of the Fund rises to new levels, the Protected NAV (PNAV) also rises to new levels. We feel this is an attractive feature, providing investors with a level of downside protection, given the significant uncertainty evident in the global economy and markets.
As markets were more volatile, we decreased our exposure to equities during the period. We entered the most recent period at approximately 96.18% exposure to equities and ended at approximately 77.65% exposure. If the Fund would have been able to have a heavier weighting in the equity component during the period, it may have been able to benefit from rising markets and had better performance.
The protection component comprised the remainder of the portfolio. The protection component can be comprised of cash and cash equivalents, U.S. Treasuries, short index futures and other instruments designed to reduce equity market exposure. Depending on the market environment, the Fund can be invested in any variation in either component. In rising markets, the Fund will tend to be invested primarily in equities. In falling markets, the Fund will tend to predominantly hold more of the protection component, in an effort to de-risk the portfolio. The protection feature, however, affects the Fund’s ability to respond to changing equity market conditions and its ability to capture certain market gains.
While our allocation to the protection component was a drag on relative performance this period, we had strong stock selection in the equity component of our portfolio, which drove outperformance during the quarter. For the
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Janus Preservation Series - Global (unaudited)
core group of stocks in our portfolio, their long-term growth prospects are underpinned by competitive dynamics such as high barriers to entry, recurring revenue streams, strong management teams, or attractive industries with high growth potential. We continue to believe that such long duration drivers of growth will help these companies outperform over the longer investment horizon that we tend to hold them.
Our outperformance for the period was driven by strong stock selection in the health care and technology sectors. The catalyst for the health care sector was robust merger and acquisition activity, as evidenced by our top contributor, Pharmacyclics. The biotechnology company’s stock surged in January on consensus-beating earnings from the prior quarter as well as upbeat guidance for its blood-cancer drug, Imbruvica. It was then announced that AbbVie would acquire Pharmacyclics for $21 billion. We sold our position after the announcement.
Apple was also a strong performer. The electronic-device company benefited from positive sentiment in the aftermath of its astounding fourth quarter earnings results, the first full reporting period to include its highly popular iPhone 6, launched in September. In February, the company’s stock reached a new record, pushing its market capitalization above $700 billion. We think Apple still has strong opportunities as its ecosystem continues to attract new and potentially long-term subscribers onto its platform and increase its addressable market as lower price points draw new customers.
U.S. supermarket chain Kroger contributed to relative outperformance as well. The company’s gains were partly a consequence of investors’ rising confidence in management, which has translated into a rerating of its stock. The company has been able to expand margins and is doing well against mainline supermarket competitors in addition to down-market retailers. The continued strength of the U.S. consumer has been an additional tailwind.
While generally pleased with the performance of our equity holdings, we did have stocks that fell during the period and detracted from results. Canadian Pacific was a large detractor. The sustained pressure on global crude oil prices has caused concern that shipping volumes of North American crude will decline in the near term, especially those emanating from North Dakota’s Bakken formation. The company transports a wide range of materials on its network, including energy products such as crude and coal, but also non-energy products such as grains, potash, forest products and intermodal containers. We continue to favor the company due to the industry’s barriers to entry and management’s commitment to improving performance and capital allocation decisions.
We also had some detractors from the energy sector, which was weighed down by the collapse in crude prices that accelerated in autumn. MEG Energy was a large detractor. Even in a tepid energy price environment, we like this company as it remains profitable with a price per barrel in the $50 range. Management has been disciplined in reining in capital expenditure during this period of low prices as the company sees the value of keeping assets in the ground until market conditions are more favorable. The company’s balance sheet is excellent with its first bonds not maturing until 2021.
Noble Energy also weighed on performance. While we like that Noble has a diversified, global production base, making the company less exposed than other energy firms to a single commodity price in one region, we exited the position during the period in favor of energy companies with more attractive risk/return profiles in the current oil price environment.
DERIVATIVE USE
This Fund invests in derivatives, primarily futures to periodically hedge market risk. The Fund may also utilize options or other instruments for exposure to the Chicago Board Options Exchange Market Volatility Index (VIX) or another volatility index. Such investments would be used in accordance with the risk methodology under the Capital Protection Agreement and would be designed in an effort to limit losses in a sharp market decline. The Fund also uses forward exchange contracts to hedge currency risk in the portfolio. There is no guarantee that using such instruments would be effective in limiting losses, and the use of such instruments could negatively impact returns. During the period, this strategy detracted from results.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
Most equity markets were positive for the period, with Europe experiencing strong gains in the wake of the ECB’s monetary policy announcement. We had expected that a lower euro could drive export growth and highlight operating leverage in many companies that had improved cost structures. We think profit growth could surprise at many companies in Europe. With regard to Greece, we expect that the country’s and European politicians lower the stakes and do what they do so well: find an interim solution to kick the problem down the road.
2 | MARCH 31, 2015
Table of Contents
(unaudited)
The Japanese market has been strong while the yen falls but we are missing the structural reform the country needs. Japan needs to break its deflationary spiral and improve its economy. A weaker yen helps competitiveness but without reform to labor rules, to corporate taxation, to the pension and health care system, and to other core issues, the country risks a short-term boost without a long-term solution. There are some bright spots for equities. For one, there are a lot of buyers as companies, the government pension plans and central banks are buying shares.
In the U.S., the Fed left some uncertainty about when it would lift rates, leading to some concern about the economic recovery. The corporate outlook has become less sanguine in some sectors. Energy clearly is under pressure. Industrial firms face the double barrel pressure of a slowdown in their sales to oil companies and a loss of global competitiveness with a stronger dollar. Similarly, China is no longer the growth engine it once was for U.S. firms.
We cannot argue valuations are cheap, save for a few areas such as financials and deeply cyclical, commodity-exposed companies. But valuations are not extreme either, especially compared to the alternative asset classes. Our belief in alpha, not beta, holds.
Biotech merger and acquisition activity is continuing but we will see deals elsewhere and that will drive valuation. The Kraft-Heinz deal announced in March valued a slow-growing but quality brand-name business at more than 20 times earnings. Multiples remain close together: Find the companies that have a path to growth or that can help another company grow and you have the potential to make money in equities.
Thank you for your investment in Janus Preservation Series – Global.
Janus Investment Fund | 3
Table of Contents
Janus Preservation Series - Global (unaudited)
Janus Preservation Series - Global At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Pharmacyclics, Inc. | 0.67% | |||
| Apple, Inc. | 0.55% | |||
| Kroger Co. | 0.55% | |||
| Valeant Pharmaceuticals International, Inc. | 0.44% | |||
| United Continental Holdings, Inc. | 0.40% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
S&P 500® E-mini Future – expired March 2015 | –3.11% | |||
| Canadian Pacific Railway, Ltd. | –0.27% | |||
| MEG Energy Corp. | –0.27% | |||
| Noble Energy, Inc. | –0.26% | |||
| Royal Dutch Shell PLC (ADR) | –0.26% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Health Care | 1.97% | 13.14% | 12.88% | |||||||||
| Information Technology | 1.36% | 14.80% | 13.27% | |||||||||
| Financials | 1.21% | 17.45% | 20.72% | |||||||||
| Consumer Staples | 0.43% | 7.26% | 9.94% | |||||||||
| Materials | 0.42% | 3.72% | 5.23% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI World | |||||||||||
| Fund Contribution | (Average % of Equity) | IndexSM Weighting | ||||||||||
| Protection Component** | –1.68% | 8.96% | 0.00% | |||||||||
| Consumer Discretionary | –0.42% | 13.72% | 12.31% | |||||||||
| Industrials | –0.31% | 11.43% | 10.91% | |||||||||
| Energy | –0.15% | 8.21% | 8.07% | |||||||||
| Utilities | 0.11% | –0.17% | 3.30% | |||||||||
| 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 | MARCH 31, 2015
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Apple, Inc. Technology Hardware, Storage & Peripherals | 2.1% | |||
| Canadian Pacific Railway, Ltd. Road & Rail | 1.9% | |||
| AIA Group, Ltd. Insurance | 1.8% | |||
| Brenntag AG Trading Companies & Distributors | 1.6% | |||
| Kroger Co. Food & Staples Retailing | 1.4% | |||
| 8.8% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
*Includes Other of (0.2)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
Janus Investment Fund | 5
Table of Contents
Janus Preservation Series - Global (unaudited)
Performance
| Expense Ratios – | |||||||||||
| Average Annual Total Return – for the periods ended March 31, 2015 | per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
| Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
| Janus Preservation Series – Global – Class A Shares | |||||||||||
| NAV | 4.83% | 6.30% | 8.61% | 3.08% | 1.98% | ||||||
| MOP | –1.21% | 0.17% | 6.68% | ||||||||
| Janus Preservation Series – Global – Class C Shares | |||||||||||
| NAV | 4.41% | 5.56% | 7.82% | 3.80% | 2.71% | ||||||
| CDSC | 3.44% | 4.57% | 7.82% | ||||||||
| Janus Preservation Series – Global – Class D Shares(1) | 4.82% | 6.46% | 8.69% | 3.09% | 1.82% | ||||||
| Janus Preservation Series – Global – Class I Shares | 4.96% | 6.60% | 8.89% | 2.76% | 1.69% | ||||||
| Janus Preservation Series – Global – Class S Shares | 4.68% | 6.07% | 8.43% | 3.26% | 2.18% | ||||||
| Janus Preservation Series – Global – Class T Shares | 4.81% | 6.37% | 8.71% | 3.01% | 1.94% | ||||||
| MSCI World IndexSM | 3.35% | 6.03% | 16.02% | ||||||||
| Preservation Series – Global Blended Index | 2.05% | 3.67% | 9.51% | ||||||||
| Morningstar Quartile – Class I Shares | – | 2nd | 4th | ||||||||
| Morningstar Ranking – based on total return for World Stock Funds | – | 350/1,213 | 897/947 | ||||||||
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 February 1, 2016, and include a Capital Protection Fee that can fluctuate between 0.60% and 0.75%.
See important disclosures on the next page.
6 | MARCH 31, 2015
Table of Contents
(unaudited)
The Fund is not a capital guaranteed or insured fund. As with all investments, there are inherent risks when investing in the Fund including, but not limited to, allocation risk, maximum settlement amount risk, turnover risk, liquidation risk, opportunity cost risk, capital protection termination risk, underperformance risk and counterparty risk, each as disclosed in the Fund’s Prospectuses. The protection feature only covers shareholders who hold their shares on the termination date, and is subject to various conditions and the financial payment capabilities of BNP Paribas Prime Brokerage, Inc. (the “Capital Protection Provider”).
The Capital Protection Agreement is a financial product that is intended to protect the Fund against significant market declines and does not in any way constitute any form of insurance. The Capital Protection Provider is not an insurance company or an insurance provider, nor is it acting as an adviser or subadviser for the Fund.
The Fund’s asset allocation will vary over time depending on market conditions and therefore the Fund’s allocation to each investment component could change as frequently as daily resulting in a higher portfolio turnover rate than other mutual funds. Increased portfolio turnover may result in higher costs, which may have a negative effect on the Fund’s performance.
Amounts owed by the Capital Protection Provider under the Capital Protection Agreement are owed directly to the Fund and not to the Fund’s shareholders. As a result, a shareholder’s ability to receive the Protected NAV from the Fund is dependent on the Fund’s ability to collect any settlement amount due from the Capital Protection Provider, and/or its parent guarantor pursuant to the terms of the Capital Protection Agreement. Fund transactions involving a counterparty, such as the Capital Protection Provider and/or its parent guarantor, are subject to the risk that the counterparty will not fulfill its obligation to the Fund. Counterparty risk may arise because of the counterparty’s financial condition (i.e. financial difficulties, bankruptcy or insolvency), market activities or developments, or other reasons, whether foreseen or not. As such the Fund’s ability to benefit from the Protection may depend on the Capital Protection Provider’s, as well as its parent guarantor’s, financial condition.
Although the risk allocation methodology is designed so that the NAV of any share class does not fall below its Protected NAV, there is the possibility that the risk allocation methodology may not work as designed and the NAV of any share class may fall below its Protected NAV. If this happens, it is expected that the Fund will receive payment of the Settlement Amount from the Capital Protection Provider, if due, and liquidate as soon as possible following the event.
It is possible that under the terms of the Capital Protection Agreement, the Fund’s allocation to the Equity Component could drop to a low level or be eliminated altogether, especially during periods of heightened volatility in the equity markets. This would reduce the Fund’s ability to participate in upward equity market movements and therefore, represents loss of opportunity compared to a fund that is fully invested in equities and may cause the Fund to underperform its primary benchmark and/or other similarly situated growth funds. As a result, the Fund may not achieve its investment objective.
The Fund uses short index futures and other types of derivatives in attempt to hedge risk. Derivatives can be highly volatile and involve risks in addition to the risks of the underlying referenced securities. Gains or losses from a derivative can be substantially greater than the derivative’s original cost, and can therefore involve leverage.
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.
© 2015 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. |
Janus Investment Fund | 7
Table of Contents
Janus Preservation Series - Global (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; the capital protection fee; 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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 1,048.30 | $ | 9.86 | $ | 1,000.00 | $ | 1,015.31 | $ | 9.70 | 1.93% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 1,044.10 | $ | 13.66 | $ | 1,000.00 | $ | 1,011.57 | $ | 13.44 | 2.68% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 1,048.20 | $ | 8.94 | $ | 1,000.00 | $ | 1,016.21 | $ | 8.80 | 1.75% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 1,049.60 | $ | 8.48 | $ | 1,000.00 | $ | 1,016.65 | $ | 8.35 | 1.66% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 1,046.80 | $ | 10.92 | $ | 1,000.00 | $ | 1,014.26 | $ | 10.75 | 2.14% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 1,048.10 | $ | 9.65 | $ | 1,000.00 | $ | 1,015.51 | $ | 9.50 | 1.89% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Janus Preservation Series - Global
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares/Principal/Contract Amounts | Value | |||||||||
| Common Stocks – 88.5% | ||||||||||
| Aerospace & Defense – 1.1% | ||||||||||
| 482 | Precision Castparts Corp. | $ | 101,220 | |||||||
| 631 | United Technologies Corp. | 73,953 | ||||||||
| 175,173 | ||||||||||
| Air Freight & Logistics – 0.8% | ||||||||||
| 843 | Panalpina Welttransport Holding AG | 123,015 | ||||||||
| Airlines – 1.0% | ||||||||||
| 2,337 | United Continental Holdings, Inc.* | 157,163 | ||||||||
| Auto Components – 1.2% | ||||||||||
| 7,300 | NGK Spark Plug Co., Ltd. | 196,415 | ||||||||
| Beverages – 2.8% | ||||||||||
| 1,825 | PepsiCo, Inc.† | 174,507 | ||||||||
| 1,007 | Pernod Ricard SA | 118,813 | ||||||||
| 3,182 | SABMiller PLC | 166,487 | ||||||||
| 459,807 | ||||||||||
| Biotechnology – 5.3% | ||||||||||
| 702 | Actelion, Ltd.* | 81,307 | ||||||||
| 1,061 | Amgen, Inc. | 169,601 | ||||||||
| 544 | Biogen, Inc.* | 229,698 | ||||||||
| 1,239 | Celgene Corp.* | 142,832 | ||||||||
| 7,296 | Ironwood Pharmaceuticals, Inc.* | 116,736 | ||||||||
| 247 | Regeneron Pharmaceuticals, Inc.* | 111,516 | ||||||||
| 851,690 | ||||||||||
| Capital Markets – 2.5% | ||||||||||
| 2,735 | Deutsche Bank AG | 95,142 | ||||||||
| 4,241 | E*TRADE Financial Corp.* | 121,102 | ||||||||
| 9,936 | UBS Group AG* | 186,533 | ||||||||
| 402,777 | ||||||||||
| Chemicals – 1.9% | ||||||||||
| 917 | Air Products & Chemicals, Inc. | 138,724 | ||||||||
| 17,661 | Alent PLC | 97,597 | ||||||||
| 807 | LyondellBasell Industries NV – Class A | 70,855 | ||||||||
| 307,176 | ||||||||||
| Commercial Banks – 5.5% | ||||||||||
| 2,388 | Citigroup, Inc. | 123,030 | ||||||||
| 15,889 | HSBC Holdings PLC | 135,200 | ||||||||
| 10,329 | ING Groep NV* | 151,477 | ||||||||
| 2,054 | JPMorgan Chase & Co. | 124,431 | ||||||||
| 66,991 | Lloyds Banking Group PLC* | 77,744 | ||||||||
| 39,000 | Seven Bank, Ltd. | 192,629 | ||||||||
| 2,192 | U.S. Bancorp | 95,725 | ||||||||
| 900,236 | ||||||||||
| Communications Equipment – 0.8% | ||||||||||
| 2,185 | CommScope Holding Co., Inc.* | 62,360 | ||||||||
| 990 | Motorola Solutions, Inc. | 66,003 | ||||||||
| 128,363 | ||||||||||
| Consumer Finance – 0.6% | ||||||||||
| 1,174 | American Express Co. | 91,713 | ||||||||
| Containers & Packaging – 0.9% | ||||||||||
| 2,590 | Crown Holdings, Inc.* | 139,912 | ||||||||
| Diversified Financial Services – 0.7% | ||||||||||
| 488 | Intercontinental Exchange, Inc. | 113,836 | ||||||||
| Electrical Equipment – 1.6% | ||||||||||
| 1,301 | Schneider Electric SE | 101,182 | ||||||||
| 2,691 | Sensata Technologies Holding NV* | 154,598 | ||||||||
| 255,780 | ||||||||||
| Electronic Equipment, Instruments & Components – 1.5% | ||||||||||
| 300 | Keyence Corp. | 163,883 | ||||||||
| 1,172 | TE Connectivity, Ltd. (U.S. Shares) | 83,939 | ||||||||
| 247,822 | ||||||||||
| Energy Equipment & Services – 0.7% | ||||||||||
| 1,795 | Baker Hughes, Inc. | 114,126 | ||||||||
| Food & Staples Retailing – 1.9% | ||||||||||
| 3,032 | Kroger Co.† | 232,433 | ||||||||
| 1,401 | Whole Foods Market, Inc. | 72,964 | ||||||||
| 305,397 | ||||||||||
| Food Products – 1.1% | ||||||||||
| 1,726 | Hershey Co. | 174,171 | ||||||||
| Health Care Equipment & Supplies – 1.0% | ||||||||||
| 9,104 | Boston Scientific Corp.* | 161,596 | ||||||||
| Health Care Providers & Services – 1.0% | ||||||||||
| 2,756 | Catamaran Corp. (U.S. Shares)* | 164,092 | ||||||||
| Hotels, Restaurants & Leisure – 1.1% | ||||||||||
| 26,355 | Bwin.Party Digital Entertainment PLC | 31,329 | ||||||||
| 1,574 | Starbucks Corp. | 149,058 | ||||||||
| 180,387 | ||||||||||
| Household Durables – 0.4% | ||||||||||
| 2,400 | Sony Corp.* | 64,171 | ||||||||
| Household Products – 1.0% | ||||||||||
| 2,313 | Colgate-Palmolive Co. | 160,383 | ||||||||
| Information Technology Services – 2.4% | ||||||||||
| 1,502 | Amdocs, Ltd. (U.S. Shares) | 81,709 | ||||||||
| 2,228 | MasterCard, Inc. – Class A | 192,477 | ||||||||
| 1,860 | Visa, Inc. – Class A | 121,662 | ||||||||
| 395,848 | ||||||||||
| Insurance – 3.9% | ||||||||||
| 45,000 | AIA Group, Ltd. | 282,047 | ||||||||
| 1,740 | Aon PLC | 167,249 | ||||||||
| 7,466 | Prudential PLC | 184,834 | ||||||||
| 634,130 | ||||||||||
| Internet & Catalog Retail – 0.8% | ||||||||||
| 174 | Amazon.com, Inc.* | 64,745 | ||||||||
| 59 | Priceline Group, Inc.* | 68,685 | ||||||||
| 133,430 | ||||||||||
| Internet Software & Services – 2.2% | ||||||||||
| 793 | Alibaba Group Holding, Ltd. (ADR)* | 66,009 | ||||||||
| 976 | Facebook, Inc. – Class A* | 80,242 | ||||||||
| 179 | Google, Inc. – Class A | 99,291 | ||||||||
| 189 | Google, Inc. – Class C* | 103,572 | ||||||||
| 349,114 | ||||||||||
| Leisure Products – 0.3% | ||||||||||
| 2,454 | Mattel, Inc. | 56,074 | ||||||||
| Machinery – 1.2% | ||||||||||
| 1,560 | Colfax Corp.* | 74,459 | ||||||||
| 821 | Dover Corp. | 56,747 | ||||||||
| 2,194 | Rexnord Corp.* | 58,558 | ||||||||
| 189,764 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Preservation Series - Global
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares/Principal/Contract Amounts | Value | |||||||||
| Media – 3.5% | ||||||||||
| 813 | CBS Corp. – Class B | $ | 49,292 | |||||||
| 2,053 | Comcast Corp. – Class A | 115,933 | ||||||||
| 867 | Liberty Global PLC – Class A* | 44,624 | ||||||||
| 1,538 | Liberty Global PLC – Class C* | 76,608 | ||||||||
| 359 | Time Warner Cable, Inc. | 53,807 | ||||||||
| 3,140 | Twenty-First Century Fox, Inc. – Class A | 106,258 | ||||||||
| 1,136 | Walt Disney Co. | 119,155 | ||||||||
| 565,677 | ||||||||||
| Metals & Mining – 0.5% | ||||||||||
| 3,325 | ThyssenKrupp AG | 87,297 | ||||||||
| Oil, Gas & Consumable Fuels – 6.9% | ||||||||||
| 2,259 | Anadarko Petroleum Corp. | 187,068 | ||||||||
| 2,534 | Exxon Mobil Corp.† | 215,390 | ||||||||
| 7,100 | Inpex Corp. | 78,344 | ||||||||
| 1,820 | Koninklijke Vopak NV | 100,563 | ||||||||
| 4,722 | MEG Energy Corp.* | 76,289 | ||||||||
| 2,203 | Phillips 66 | 173,156 | ||||||||
| 3,167 | Royal Dutch Shell PLC (ADR) | 188,911 | ||||||||
| 1,541 | Valero Energy Corp. | 98,038 | ||||||||
| 1,117,759 | ||||||||||
| Pharmaceuticals – 5.5% | ||||||||||
| 1,861 | Eli Lilly & Co. | 135,202 | ||||||||
| 2,402 | Endo International PLC* | 215,459 | ||||||||
| 6,335 | Meda AB – Class A | 100,193 | ||||||||
| 398 | Roche Holding AG | 109,780 | ||||||||
| 2,168 | Teva Pharmaceutical Industries, Ltd. (ADR) | 135,066 | ||||||||
| 988 | Valeant Pharmaceuticals International, Inc.* | 195,205 | ||||||||
| 890,905 | ||||||||||
| Professional Services – 0.9% | ||||||||||
| 490 | IHS, Inc. – Class A* | 55,742 | ||||||||
| 1,341 | Verisk Analytics, Inc. – Class A* | 95,748 | ||||||||
| 151,490 | ||||||||||
| Real Estate Investment Trusts (REITs) – 1.5% | ||||||||||
| 980 | American Tower Corp. | 92,267 | ||||||||
| 4,627 | Lexington Realty Trust | 45,483 | ||||||||
| 523 | Simon Property Group, Inc. | 102,320 | ||||||||
| 240,070 | ||||||||||
| Real Estate Management & Development – 2.3% | ||||||||||
| 2,785 | Brookfield Asset Management, Inc. – Class A (U.S. Shares) | 149,304 | ||||||||
| 801 | Jones Lang LaSalle, Inc. | 136,490 | ||||||||
| 4,000 | �� | Mitsubishi Estate Co., Ltd. | 92,855 | |||||||
| 378,649 | ||||||||||
| Road & Rail – 2.8% | ||||||||||
| 1,320 | Canadian National Railway Co. | 88,410 | ||||||||
| 1,673 | Canadian Pacific Railway, Ltd. | 306,356 | ||||||||
| 602 | Kansas City Southern | 61,452 | ||||||||
| 456,218 | ||||||||||
| Semiconductor & Semiconductor Equipment – 2.8% | ||||||||||
| 10,178 | ARM Holdings PLC | 166,617 | ||||||||
| 6,608 | Atmel Corp. | 54,384 | ||||||||
| 399 | Avago Technologies, Ltd. | 50,665 | ||||||||
| 1,750 | Freescale Semiconductor, Ltd.* | 71,330 | ||||||||
| 24,000 | Taiwan Semiconductor Manufacturing Co., Ltd. | 111,361 | ||||||||
| 454,357 | ||||||||||
| Software – 1.7% | ||||||||||
| 399 | NetSuite, Inc.* | 37,011 | ||||||||
| 500 | Nintendo Co., Ltd. | 73,593 | ||||||||
| 2,264 | Oracle Corp. | 97,692 | ||||||||
| 1,270 | Solera Holdings, Inc. | 65,608 | ||||||||
| 273,904 | ||||||||||
| Specialty Retail – 2.8% | ||||||||||
| 48,200 | Chow Tai Fook Jewellery Group, Ltd. | 51,891 | ||||||||
| 35,500 | L’Occitane International SA | 101,250 | ||||||||
| 2,163 | Lowe’s Cos., Inc. | 160,906 | ||||||||
| 935 | Tiffany & Co. | 82,289 | ||||||||
| 803 | Williams-Sonoma, Inc. | 64,007 | ||||||||
| 460,343 | ||||||||||
| Technology Hardware, Storage & Peripherals – 3.3% | ||||||||||
| 2,685 | Apple, Inc.† | 334,094 | ||||||||
| 2,226 | EMC Corp. | 56,897 | ||||||||
| 108 | Samsung Electronics Co., Ltd. | 140,032 | ||||||||
| 531,023 | ||||||||||
| Textiles, Apparel & Luxury Goods – 2.8% | ||||||||||
| 971 | Cie Financiere Richemont SA | 78,195 | ||||||||
| 3,320 | Gildan Activewear, Inc. | 98,006 | ||||||||
| 984 | NIKE, Inc. – Class B | 98,725 | ||||||||
| 10,100 | Prada SpA | 61,170 | ||||||||
| 35,998 | Samsonite International SA | 124,785 | ||||||||
| 460,881 | ||||||||||
| Trading Companies & Distributors – 2.5% | ||||||||||
| 4,278 | Brenntag AG | 256,432 | ||||||||
| 993 | MSC Industrial Direct Co., Inc. – Class A | 71,695 | ||||||||
| 3,319 | NOW, Inc.* | 71,823 | ||||||||
| 399,950 | ||||||||||
| Wireless Telecommunication Services – 1.5% | ||||||||||
| 3,268 | T-Mobile U.S., Inc.* | 103,563 | ||||||||
| 77,000 | Tower Bersama Infrastructure Tbk PT | 55,810 | ||||||||
| 26,820 | Vodafone Group PLC | 87,637 | ||||||||
| 247,010 | ||||||||||
| Total Common Stocks (cost $12,091,419) | 14,349,094 | |||||||||
| Preferred Stocks – 1.1% | ||||||||||
| Automobiles – 1.1% | ||||||||||
| 671 | Volkswagen AG (cost $167,214) | 178,536 | ||||||||
| U.S. Treasury Notes/Bonds – 0.2% | ||||||||||
| $15,000 | 0.8750%, 11/30/16 | 15,102 | ||||||||
| 15,000 | 1.3750%, 11/30/18 | 15,146 | ||||||||
| Total U.S. Treasury Notes/Bonds (cost $29,942) | 30,248 | |||||||||
| Investment Companies – 10.4% | ||||||||||
| Money Markets – 10.4% | ||||||||||
| 1,686,335 | Janus Cash Liquidity Fund LLC, 0.1097%°°,£ (cost $1,686,335) | 1,686,335 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares/Principal/Contract Amounts | Value | |||||||||
| Capital Protection Agreement – 0% | ||||||||||
| 1 | Janus Preservation Series - Global with BNP Paribas Prime Brokerage, Inc.*,§ exercise price at 3/31/15 $9.51 – $9.85 (cost $0) | $ | 0 | |||||||
| Total Investments (total cost $13,974,910) – 100.2% | 16,244,213 | |||||||||
| Liabilities, net of Cash, Receivables and Other Assets – (0.2)% | (31,079) | |||||||||
| Net Assets – 100% | $ | 16,213,134 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United States | $ | 10,270,419 | 63 | .2% | ||||
| United Kingdom | 1,136,356 | 7 | .0 | |||||
| Canada | 1,077,662 | 6 | .6 | |||||
| Japan | 861,890 | 5 | .3 | |||||
| Germany | 617,407 | 3 | .8 | |||||
| Switzerland | 578,830 | 3 | .6 | |||||
| Hong Kong | 458,723 | 2 | .8 | |||||
| France | 321,245 | 2 | .0 | |||||
| Netherlands | 252,040 | 1 | .6 | |||||
| South Korea | 140,032 | 0 | .9 | |||||
| Israel | 135,066 | 0 | .8 | |||||
| Taiwan | 111,361 | 0 | .7 | |||||
| Sweden | 100,193 | 0 | .6 | |||||
| China | 66,009 | 0 | .4 | |||||
| Italy | 61,170 | 0 | .4 | |||||
| Indonesia | 55,810 | 0 | .3 | |||||
| Total | $ | 16,244,213 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
| Unrealized | ||||||||||||
| Currency | Currency | Appreciation/ | ||||||||||
| Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
| Bank of America: | ||||||||||||
| British Pound 4/16/15 | 250,000 | $ | 370,760 | $ | 2,925 | |||||||
| Israeli Shekel 4/16/15 | 180,000 | 45,268 | (493) | |||||||||
| 416,028 | 2,432 | |||||||||||
| Credit Suisse International: | ||||||||||||
| British Pound 4/9/15 | 267,000 | 395,993 | 6,180 | |||||||||
| Canadian Dollar 4/9/15 | 750,000 | 592,178 | 2,617 | |||||||||
| Chinese Renminbi 4/9/15 | 398,400 | 64,152 | (859) | |||||||||
| Euro 4/9/15 | 909,000 | 977,362 | 9,052 | |||||||||
| Hong Kong Dollar 4/9/15 | 4,535,000 | 584,969 | (385) | |||||||||
| Indonesian Rupiah 4/9/15 | 690,900,000 | 52,827 | (637) | |||||||||
| Israeli Shekel 4/9/15 | 130,000 | 32,693 | (293) | |||||||||
| Japanese Yen 4/9/15 | 99,245,000 | 827,694 | (6,600) | |||||||||
| South Korean Won 4/9/15 | 145,795,000 | 131,409 | (464) | |||||||||
| Swedish Krona 4/9/15 | 831,000 | 96,553 | 1,377 | |||||||||
| Swiss Franc 4/9/15 | 547,000 | 563,227 | (6,738) | |||||||||
| Taiwan Dollar 4/9/15 | 3,318,000 | 106,063 | (1,063) | |||||||||
| 4,425,120 | 2,187 | |||||||||||
| HSBC Securities (USA), Inc.: | ||||||||||||
| British Pound 4/9/15 | 219,000 | 324,803 | 5,053 | |||||||||
| Canadian Dollar 4/9/15 | 498,400 | 393,522 | 1,004 | |||||||||
| 718,325 | 6,057 | |||||||||||
| JPMorgan Chase & Co.: Israeli Shekel 4/16/15 | 130,000 | 32,693 | 182 | |||||||||
| RBC Capital Markets Corp.: Israeli Shekel 4/16/15 | 71,000 | 17,856 | (365) | |||||||||
| Total | $ | 5,610,022 | $ | 10,493 | ||||||||
Schedule of Futures – Short
| Unrealized | ||||
| Appreciation/ | ||||
| Description | (Depreciation) | |||
EURO STOXX 50® expires June 2015 15 contracts principal amount $580,540 value $585,550 | $ | (5,010) | ||
mini MSCI Emerging Markets IndexSM expires June 2015 3 contracts principal amount $143,570 value $145,860 | (2,290) | |||
S&P 500® E-mini expires June 2015 12 contracts principal amount $1,232,650 value $1,236,480 | (3,830) | |||
| Total Futures – Short | $ | (11,130) | ||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Preservation Series - Global
Schedule of Investments (unaudited)
As of March 31, 2015
Schedule of OTC Purchased Options – Zero Strike Calls
| Unrealized | ||||||||||||
| Counterparty/ | Premium to | Appreciation/ | ||||||||||
| Reference Asset | be Paid | Value | (Depreciation) | |||||||||
| BNP Paribas: BNP IVIX Index expires June 2015 128,248 contracts exercise price $0.00 | $ | (306,166) | $ | 303,296 | $ | (2,870) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| BNP IVIX Index | A volatility strategy index sponsored by BNP Paribas. | |
| EURO STOXX 50® Index | Provides a blue-chip representation of supersector leaders in the euro zone. The index covers 50 stocks from 12 euro zone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. | |
| MSCI Emerging Markets IndexSM | A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. | |
| 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. | |
| Preservation Series – Global Blended Index | An internally-calculated, hypothetical combination of total returns from the MSCI World Index (60%) and the Citigroup 3-Month U.S. Treasury Bill Index (40%). | |
| S&P 500® Index | Measures broad U.S. equity performance. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| OTC | Over-the-Counter | |
| PLC | Public Limited Company | |
| U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
| * | Non-income producing security. | |
| † | A portion of this security has been segregated 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 March 31, 2015, is noted below. |
| Fund | Aggregate Value | ||||
| Janus Preservation Series - Global | $ | 628,431 | |||
°° | Rate shown is the 7-day yield as of March 31, 2015. |
| § | Schedule of Restricted and Illiquid Securities (as of March 31, 2015) |
| Acquisition | Acquisition | Value as a | ||||||||||||
| Date | Cost | Value | % of Net Assets | |||||||||||
Janus Preservation Series - Global | ||||||||||||||
| Capital Protection Agreement | 12/15/11 | $ | 0 | $ | 0 | 0.0 | % | |||||||
The Fund has registration rights for certain restricted securities held as of March 31, 2015. 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 March 31, 2015. Unless otherwise indicated, all information in the table is for the period ended March 31, 2015. |
| Share | Share | |||||||||||||||
| Balance | Balance | Realized | Dividend | Value | ||||||||||||
| at 9/30/14 | Purchases | Sales | at 3/31/15 | Gain/(Loss) | Income | at 3/31/15 | ||||||||||
Janus Preservation Series – Global | ||||||||||||||||
| Janus Cash Liquidity Fund LLC | 470,750 | 5,882,585 | (4,667,000) | 1,686,335 | $– | $658 | $1,686,335 | |||||||||
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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Janus Preservation Series – Global | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Air Freight & Logistics | $ | – | $ | 123,015 | $ | – | |||||
| Auto Components | – | 196,415 | – | ||||||||
| Beverages | 174,507 | 285,300 | – | ||||||||
| Biotechnology | 770,383 | 81,307 | – | ||||||||
| Capital Markets | 121,102 | 281,675 | – | ||||||||
| Chemicals | 209,579 | 97,597 | – | ||||||||
| Commercial Banks | 343,186 | 557,050 | – | ||||||||
| Electrical Equipment | 154,598 | 101,182 | – | ||||||||
| Electronic Equipment, Instruments & Components | 83,939 | 163,883 | – | ||||||||
| Hotels, Restaurants & Leisure | 149,058 | 31,329 | – | ||||||||
| Household Durables | – | 64,171 | – | ||||||||
| Insurance | 167,249 | 466,881 | – | ||||||||
| Metals & Mining | – | 87,297 | – | ||||||||
| Oil, Gas & Consumable Fuels | 938,852 | 178,907 | – | ||||||||
| Pharmaceuticals | 680,932 | 209,973 | – | ||||||||
| Real Estate Management & Development | 285,794 | 92,855 | – | ||||||||
| Semiconductor & Semiconductor Equipment | 176,379 | 277,978 | – | ||||||||
| Software | 200,311 | 73,593 | – | ||||||||
| Spectialty Retail | 307,202 | 153,141 | – | ||||||||
| Technology Hardware, Storage & Peripherals | 390,991 | 140,032 | – | ||||||||
| Textiles, Apparel & Luxury Goods | 196,731 | 264,150 | – | ||||||||
| Trading Companies & Distributors | 143,518 | 256,432 | – | ||||||||
| Wireless Telecommunication Services | 103,563 | 143,447 | – | ||||||||
| All Other | 4,423,610 | – | – | ||||||||
Preferred Stocks | – | 178,536 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 30,248 | – | ||||||||
Investment Companies | – | 1,686,335 | – | ||||||||
| Total Investments in Securities | $ | 10,021,484 | $ | 6,222,729 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Capital Protection Agreement | $ | – | $ | – | $ | 0 | |||||
Forward Currency Contracts | – | 28,390 | – | ||||||||
Variation Margin Receivable | – | 13,962 | – | ||||||||
Total Assets | $ | 10,021,484 | $ | 6,265,081 | $ | 0 | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 17,897 | $ | – | |||||
OTC Purchased Options – Zero Strike Calls | – | 2,870 | – | ||||||||
Total Liabilities | $ | – | $ | 20,767 | $ | – | |||||
| (a) | Other financial instruments include the capital protection agreement, forward currency, futures, written options, zero strike options, and swap contracts. Forward currency contracts and zero strike options 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. The capital protection agreement, written options and swap contracts are reported at their market value at measurement date. |
14 | MARCH 31, 2015
Table of Contents
Statement of Assets and Liabilities
| Janus Preservation | ||||
| As of March 31, 2015 (unaudited) | Series - Global | |||
| Assets: | ||||
| Investments, at cost | $ | 13,974,910 | ||
| Unaffiliated investments, at value | $ | 14,557,878 | ||
| Affiliated investments, at value | 1,686,335 | |||
| Capital protection agreement (Note 1) | 0 | |||
| Cash | 1,127 | |||
Cash denominated in foreign currency(1) | 293 | |||
| Forward currency contracts | 28,390 | |||
| Closed foreign currency contracts | 5,535 | |||
| Variation margin receivable | 13,962 | |||
| Non-interested Trustees’ deferred compensation | 319 | |||
| Receivables: | ||||
| Fund shares sold | 5,201 | |||
| Dividends | 17,087 | |||
| Dividends from affiliates | 108 | |||
| Foreign dividend tax reclaim | 7,470 | |||
| Interest | 113 | |||
| Other assets | 298 | |||
| Total Assets | 16,324,116 | |||
| Liabilities: | ||||
| Forward currency contracts | 17,897 | |||
| Closed foreign currency contracts | 899 | |||
Purchased options - zero strike calls(2) | 2,870 | |||
| Payables: | ||||
| Fund shares repurchased | 4,051 | |||
| Advisory fees | 5,185 | |||
| Capital protection fee | 8,313 | |||
| Fund administration fees | 139 | |||
| Transfer agent fees and expenses | 8,130 | |||
| 12b-1 Distribution and shareholder servicing fees | 3,451 | |||
| Non-interested Trustees’ fees and expenses | 97 | |||
| Non-interested Trustees’ deferred compensation fees | 319 | |||
| Accrued expenses and other payables | 59,631 | |||
| Total Liabilities | 110,982 | |||
| Net Assets | $ | 16,213,134 | ||
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 Preservation | ||||
| As of March 31, 2015 (unaudited) | Series - Global | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 14,382,937 | ||
| Undistributed net investment income/(loss) | (77,499) | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (357,194) | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 2,264,890 | |||
| Total Net Assets | $ | 16,213,134 | ||
| Net Assets - Class A Shares | $ | 3,217,386 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 268,585 | |||
Net Asset Value Per Share(3) | $ | 11.98 | ||
Maximum Offering Price Per Share(4) | $ | 12.71 | ||
Protected Net Asset Value Per Share(5) | $ | 9.76 | ||
| Net Assets - Class C Shares | $ | 2,735,851 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 234,428 | |||
Net Asset Value Per Share(3) | $ | 11.67 | ||
Protected Net Asset Value Per Share(5) | $ | 9.51 | ||
| Net Assets - Class D Shares | $ | 3,329,890 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 277,158 | |||
| Net Asset Value Per Share | $ | 12.01 | ||
Protected Net Asset Value Per Share(5) | $ | 9.79 | ||
| Net Assets - Class I Shares | $ | 2,596,402 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 214,744 | |||
| Net Asset Value Per Share | $ | 12.09 | ||
Protected Net Asset Value Per Share(5) | $ | 9.85 | ||
| Net Assets - Class S Shares | $ | 2,066,623 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 173,495 | |||
| Net Asset Value Per Share | $ | 11.91 | ||
Protected Net Asset Value Per Share(5) | $ | 9.70 | ||
| Net Assets - Class T Shares | $ | 2,266,982 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 188,640 | |||
| Net Asset Value Per Share | $ | 12.02 | ||
Protected Net Asset Value Per Share(5) | $ | 9.79 | ||
| (1) | Includes cost of $293. | |
| (2) | Premium to be paid $306,166. | |
| (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. | |
| (5) | The Protected NAV is the protection feature of the Fund and is calculated at 80% of the highest previously achieved NAV, reduced for dividends, distributions, any extraordinary expenses, and certain extraordinary items. Shareholders cannot transact purchases or redemptions at the Protected NAV. |
See Notes to Financial Statements.
16 | MARCH 31, 2015
Table of Contents
Statement of Operations
| Janus Preservation | ||||
| For the period ended March 31, 2015 (unaudited) | Series - Global | |||
| Investment Income: | ||||
| Interest | $ | 178 | ||
| Dividends | 90,745 | |||
| Dividends from affiliates | 658 | |||
| Other income | 19 | |||
| Foreign tax withheld | (2,935) | |||
| Total Investment Income | 88,665 | |||
| Expenses: | ||||
| Advisory fees | 50,423 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 4,022 | |||
| Class C Shares | 12,896 | |||
| Class S Shares | 2,498 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 1,935 | |||
| Class S Shares | 2,498 | |||
| Class T Shares | 2,736 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 454 | |||
| Class C Shares | 252 | |||
| Class I Shares | 74 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 267 | |||
| Class C Shares | 243 | |||
| Class D Shares | 311 | |||
| Class I Shares | 155 | |||
| Class T Shares | 23 | |||
| Capital protection fee | 48,565 | |||
| Shareholder reports expense | 11,400 | |||
| Registration fees | 63,590 | |||
| Custodian fees | 15,812 | |||
| Professional fees | 27,267 | |||
| Non-interested Trustees’ fees and expenses | 182 | |||
| Fund administration fees | 652 | |||
| Other expenses | 6,148 | |||
| Total Expenses | 252,403 | |||
| Less: Excess Expense Reimbursement | (95,342) | |||
| Net Expenses | 157,061 | |||
| Net Investment Income/(Loss) | (68,396) | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | 441,510 | |||
| Futures contracts | (212,951) | |||
| Purchased options - zero strike calls | (47,032) | |||
| Total Net Realized Gain/(Loss) on Investments | 181,527 | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 604,378 | |||
| Futures contracts | (11,310) | |||
| Purchased options - zero strike calls | 23,974 | |||
| Total Change in Unrealized Net Appreciation/Depreciation | 617,042 | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 730,173 | ||
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statements of Changes in Net Assets
| Janus Preservation | ||||||||
| Series - Global | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | (68,396) | $ | (52,442) | ||||
| Net realized gain/(loss) on investments | 181,527 | 1,068,828 | ||||||
| Change in unrealized net appreciation/depreciation | 617,042 | (66,244) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | 730,173 | 950,142 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (218,876) | (70,330) | ||||||
| Class C Shares | (174,962) | (51,088) | ||||||
| Class D Shares | (216,113) | (53,242) | ||||||
| Class I Shares | (169,635) | (46,193) | ||||||
| Class S Shares | (133,792) | (39,759) | ||||||
| Class T Shares | (146,300) | (42,275) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (1,059,678) | (302,887) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 108,916 | 256,809 | ||||||
| Class C Shares | 165,849 | 230,737 | ||||||
| Class D Shares | 148,422 | 1,012,037 | ||||||
| Class I Shares | 286,166 | 515,176 | ||||||
| Class T Shares | 42,294 | 204,113 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 218,876 | 69,810 | ||||||
| Class C Shares | 174,962 | 51,088 | ||||||
| Class D Shares | 215,969 | 53,228 | ||||||
| Class I Shares | 145,440 | 46,193 | ||||||
| Class S Shares | 133,792 | 39,759 | ||||||
| Class T Shares | 146,300 | 42,275 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (316,373) | (401,029) | ||||||
| Class C Shares | (111,959) | (100,229) | ||||||
| Class D Shares | (184,328) | (427,856) | ||||||
| Class I Shares | (248,571) | (370,166) | ||||||
| Class T Shares | (15,452) | (225,714) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 910,303 | 996,231 | ||||||
| Net Increase/(Decrease) in Net Assets | 580,798 | 1,643,486 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 15,632,336 | 13,988,850 | ||||||
| End of period | $ | 16,213,134 | $ | 15,632,336 | ||||
| Undistributed Net Investment Income/(Loss) | $ | (77,499) | $ | (9,103) | ||||
See Notes to Financial Statements.
18 | MARCH 31, 2015
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Financial Highlights
Class A Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.26 | $11.73 | $10.50 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | (0.04)(2) | (0.01) | (0.03) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.60 | 0.82 | 1.24 | 0.53 | ||||||||||||||
| Total from Investment Operations | 0.55 | 0.78 | 1.23 | 0.50 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $11.98 | $12.26 | $11.73 | $10.50 | ||||||||||||||
| Total Return* | 4.83% | 6.75% | 11.71% | 5.00% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $3,217 | $3,278 | $3,204 | $3,186 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,226 | $3,366 | $3,226 | $2,002 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.16% | 3.08% | 2.97% | 4.80% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.93% | 1.92% | 1.91% | 1.90% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.81)% | (0.32)% | (0.64)% | (0.70)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.01 | $11.58 | $10.44 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.09)(2) | (0.13)(2) | (0.07) | (0.08) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.58 | 0.81 | 1.21 | 0.52 | ||||||||||||||
| Total from Investment Operations | 0.49 | 0.68 | 1.14 | 0.44 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $11.67 | $12.01 | $11.58 | $10.44 | ||||||||||||||
| Total Return* | 4.41% | 5.97% | 10.92% | 4.40% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $2,736 | $2,571 | $2,303 | $1,953 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,586 | $2,498 | $2,123 | $1,410 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.89% | 3.80% | 3.73% | 5.63% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.68% | 2.66% | 2.65% | 2.62% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.55)% | (1.05)% | (1.36)% | (1.44)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
| * | 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 September 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 | 19
Table of Contents
Financial Highlights (continued)
Class D Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.29 | $11.74 | $10.48 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.04)(2) | (0.02)(2) | 0.02 | (0.05) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.59 | 0.82 | 1.24 | 0.53 | ||||||||||||||
| Total from Investment Operations | 0.55 | 0.80 | 1.26 | 0.48 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $12.01 | $12.29 | $11.74 | $10.48 | ||||||||||||||
| Total Return* | 4.82% | 6.92% | 12.02% | 4.80% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $3,330 | $3,213 | $2,454 | $1,901 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $3,234 | $2,918 | $2,224 | $1,560 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.94% | 3.09% | 3.24% | 5.58% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.75% | 1.75% | 1.77% | 2.02% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.62)% | (0.13)% | (0.47)% | (0.83)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.35 | $11.78 | $10.51 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.03)(2) | –(2)(3) | 0.03 | (0.03) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.60 | 0.82 | 1.24 | 0.54 | ||||||||||||||
| Total from Investment Operations | 0.57 | 0.82 | 1.27 | 0.51 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $12.09 | $12.35 | $11.78 | $10.51 | ||||||||||||||
| Total Return* | 4.96% | 7.07% | 12.08% | 5.10% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $2,596 | $2,460 | $2,157 | $1,707 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,555 | $2,361 | $1,954 | $1,322 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.87% | 2.76% | 2.68% | 4.77% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.66% | 1.62% | 1.64% | 1.65% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.53)% | (0.03)% | (0.33)% | (0.47)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
| * | 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 September 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.
20 | MARCH 31, 2015
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Class S Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.21 | $11.70 | $10.47 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.06)(2) | (0.05)(2) | (0.01) | (0.06) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.59 | 0.81 | 1.24 | 0.53 | ||||||||||||||
| Total from Investment Operations | 0.53 | 0.76 | 1.23 | 0.47 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $11.91 | $12.21 | $11.70 | $10.47 | ||||||||||||||
| Total Return* | 4.68% | 6.60% | 11.75% | 4.70% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $2,067 | $1,974 | $1,851 | $1,658 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,004 | $1,960 | $1,741 | $1,294 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.35% | 3.26% | 3.18% | 5.26% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.14% | 2.00% | 2.03% | 2.14% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.01)% | (0.40)% | (0.75)% | (0.96)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
Class T Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each | Janus Preservation Series - Global | |||||||||||||||||
| year or period ended September 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
| Net Asset Value, Beginning of Period | $12.30 | $11.75 | $10.49 | $10.00 | ||||||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||||||
| Net investment income/(loss) | (0.05)(2) | (0.02)(2) | 0.02 | (0.04) | ||||||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | 0.60 | 0.82 | 1.24 | 0.53 | ||||||||||||||
| Total from Investment Operations | 0.55 | 0.80 | 1.26 | 0.49 | ||||||||||||||
| Less Distributions: | ||||||||||||||||||
| Dividends (from net investment income) | – | – | – | – | ||||||||||||||
| Distributions (from capital gains) | (0.83) | (0.25) | – | – | ||||||||||||||
| Total Distributions | (0.83) | (0.25) | – | – | ||||||||||||||
| Net Asset Value, End of Period | $12.02 | $12.30 | $11.75 | $10.49 | ||||||||||||||
| Total Return* | 4.81% | 6.92% | 12.01% | 4.90% | ||||||||||||||
| Net Assets, End of Period (in thousands) | $2,267 | $2,136 | $2,020 | $1,685 | ||||||||||||||
| Average Net Assets for the Period (in thousands) | $2,195 | $2,119 | $1,817 | $1,324 | ||||||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.11% | 3.01% | 2.93% | 5.03% | ||||||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.89% | 1.76% | 1.79% | 1.90% | ||||||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.77)% | (0.15)% | (0.49)% | (0.71)% | ||||||||||||||
| Portfolio Turnover Rate | 39% | 82% | 141% | 124% | ||||||||||||||
| * | 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 September 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 | 21
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Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Janus Preservation Series – Global (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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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.
Capital Protection Agreement
BNP Paribas Prime Brokerage, Inc., a U.S. registered broker-dealer, is the Fund’s Capital Protection Provider. Pursuant to the Capital Protection Agreement entered into by the Capital Protection Provider and the Fund, the Capital Protection Provider has agreed to provide capital protection to protect against a decrease in the NAV per share for each share class of the Fund below 80% of the highest NAV per share for the share class attained since the inception of the share class, reduced for dividends, distributions, any extraordinary expenses, and certain extraordinary items, provided the terms and conditions of the Capital Protection Agreement are satisfied and the agreement is not otherwise void. For this capital protection, the Fund pays the Capital Protection Provider, under the Capital Protection Agreement, a fee equal to 0.75% of the aggregate protected amount, which is calculated daily and paid monthly. Because the capital protection fee is based on the aggregate protected assets of the Fund rather than on the Fund’s total net assets, it can fluctuate between 0.60% and 0.75% of the Fund’s total net assets.
BNP Paribas, the Parent Guarantor and the Capital Protection Provider’s ultimate parent company, has provided an irrevocable guaranty pursuant to which it guarantees any and all financial obligations of the Capital Protection Provider to pay or deliver payment on its obligations under the Capital Protection Agreement to the extent that the Capital Protection Provider is obligated to pay. The Capital Protection Provider is a subsidiary of the Parent Guarantor and is a U.S. registered broker-dealer. Under the Parent Guaranty, the Parent Guarantor can assert the same defenses, rights, set offs, or counterclaims as the Capital Protection Provider would have under the Capital Protection Agreement.
Neither the Capital Protection Provider nor the Parent Guarantor is an insurance company or an insurance provider. Nor is the Capital Protection Provider, the Parent Guarantor, or any of their affiliates acting as an investment adviser or subadviser to the Fund. The Settlement Amount under the Capital Protection Agreement is owed directly to the Fund and not the Fund’s investors. Therefore, as a shareholder you will not have any action against or recourse to the Capital Protection Provider or the Parent
22 | MARCH 31, 2015
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Guarantor. Further, no shareholder will have any right to receive payment, or any other rights whatsoever, under the Capital Protection Agreement or the Parent Guaranty.
The Capital Protection Agreement is valued at the greater of $0.00 or the Protected NAV less the NAV per share, which approximates fair value.
The Protected NAV for each share class, as well as the percentages of the Fund’s assets that are allocated between the Equity Component and the Protection Component, will be posted on the Janus websites at janus.com/advisor/mutual-funds (or janus.com/allfunds for shareholders of Class D Shares). Please refer to the Fund’s Prospectuses for information regarding how the Protection works in the event it is triggered and the Fund proceeds to liquidation, as well as how the Protection is calculated to help you understand the 80% protection of the NAV per share.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price
Janus Investment Fund | 23
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Notes to Financial Statements (unaudited) (continued)
(or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of 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. Expenses include the fee paid to the Capital Protection Provider. Because the fee is based on the aggregate protected assets of the Fund, it can fluctuate between 0.60% and 0.75%.
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.
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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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
Because the payment of dividends and distributions could have the effect of reducing the Fund’s NAV as a result of the reduction in the aggregate value of the Fund’s assets, any such distribution made during the term of the Capital Protection Agreement, including distributions made before the investment by the shareholder, will reduce the Protected NAV of each share class and therefore the amount of protection afforded to the Fund by the Capital Protection Provider. This means that the Protected NAV could be less than 80% of the highest previously attained NAV. Janus Capital intends to estimate dividends payable prior to any distribution date in an effort to minimize the impact of such distributions to the Protected NAV. There is no guarantee that Janus Capital will be successful in doing so. Incorrect estimates could impact the dividend calculation methodology and affect the Protected NAV per share. Please refer to the Fund’s Prospectuses for additional examples of how distributions will affect the Protected NAV.
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.
| 2. | Derivative Instruments |
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2015 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 purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
| • | Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund. |
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Notes to Financial Statements (unaudited) (continued)
| • | Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations. | |
| • | Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment. | |
| • | Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market. | |
| • | Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index. | |
| • | Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease. | |
| • | Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested. | |
| • | Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. |
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported on the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to 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 currency contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Preservation Series - Global | $ | 801,432 | ||||
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Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/(depreciation) is reported on the Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
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 sold futures contracts during the period ended March 31, 2015.
| Fund | Sold | |||||
| Janus Preservation Series - Global | $ | 587,706 | ||||
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) “exercises” the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used.
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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Notes to Financial Statements (unaudited) (continued)
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by such Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on various equity indices for the purpose of increasing exposure to broad equity risk.
The following table provides average ending monthly market value amounts on purchased call options during the period ended March 31, 2015.
| Purchased Zero-Strike | ||||||
| Fund | Call Options | |||||
| Janus Preservation Series - Global | $ | 252,227 | ||||
Volatility Investments
The Fund may also utilize swaps, options, exchange-traded funds, exchange-traded notes, or other instruments for exposure to the Chicago Board Options Exchange Market Volatility Index (“VIX”) or another volatility index. Such investments would be used in accordance with the risk methodology under the Capital Protection Agreement and would be designed in an effort to limit losses in a sharp market decline. There is no guarantee that using such instruments would be effective in limiting losses, and the use of such instruments could impact the ability to increase returns. There are costs associated with entering into such investments, which can impact returns. The Capital Protection Provider may be the entity used to enter into a transaction related to the VIX and, if so, would receive compensation.
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 March 31, 2015.
Fair Value of Derivative Instruments as of March 31, 2015
| 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 Preservation Series - Global | ||||||||||||
| Capital Protection Agreement | Capital protection agreement | $ | 0 | |||||||||
| Currency Contracts | Forward currency contracts | 28,390 | Forward currency contracts | $ | 17,897 | |||||||
| Equity Contracts | Variation margin receivable | 13,962 | Purchased options - zero strike calls | 2,870 | ||||||||
| Total | $ | 42,352 | $ | 20,767 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended March 31, 2015
| Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||
| Derivatives not accounted for as | Investments and foreign | Purchased options - | ||||||||||||||
| hedging instruments | currency transactions | Futures contracts | zero strike calls | Total | ||||||||||||
Janus Preservation Series - Global | ||||||||||||||||
| Currency Contracts | $ | 8,087 | $ | – | $ | – | $ | 8,087 | ||||||||
| Equity Contracts | – | (212,951 | ) | (47,032 | ) | (259,983 | ) | |||||||||
| Total | $ | 8,087 | $ | (212,951 | ) | $ | (47,032 | ) | $ | (251,896 | ) | |||||
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| Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income | ||||||||||||||||
| Investments, foreign | ||||||||||||||||
| currency translations and | ||||||||||||||||
| Derivatives not accounted for as | non-interested Trustees’ | Purchased options - | ||||||||||||||
| hedging instruments | deferred compensation | Futures contracts | zero strike calls | Total | ||||||||||||
Janus Preservation Series - Global | ||||||||||||||||
| Capital Protection Agreement | $ | 0 | $ | – | $ | – | $ | 0 | ||||||||
| Currency Contracts | 10,493 | – | – | 10,493 | ||||||||||||
| Equity Contracts | – | (11,310 | ) | 23,974 | 12,664 | |||||||||||
| Total | $ | 10,493 | $ | (11,310 | ) | $ | 23,974 | $ | 23,157 | |||||||
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
As with all investments, there are inherent risks when investing in the Fund. The Fund’s participation in the Capital Protection Agreement also subjects the Fund to certain risks not generally associated with equity funds, including, but not limited to, allocation risk, maximum settlement amount risk, turnover risk, liquidation risk, opportunity cost risk, capital protection termination risk, underperformance risk, and counterparty risk. For information relating to these and other risks of investing in the Fund, as well as other general information about the Fund, please refer to the Fund’s Prospectuses and Statement of Additional Information.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. Redemptions, particularly a large redemption, may impact the allocation process, and the NAV of any share class may fall below its Protected NAV. If this happens, it is expected that the Fund will receive payment of the Settlement Amount from the Capital Protection Provider, if due, and liquidate as soon as possible following the event. 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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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, such as the Capital Protection Provider, 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 shareholder’s ability to receive the Protected NAV from the Fund is dependent on the Fund’s ability to collect any settlement from the Capital Protection Provider pursuant to the terms of the Capital Protection Agreement or from BNP Paribas, the parent company of the Capital Protection Provider (the “Parent Guarantor”), under a separate parent guaranty. As such, the Fund’s ability to benefit from the Protection may depend on the Capital Protection Provider’s, as well as its parent company’s, financial condition. As an added measure of protection, the Parent Guarantor has issued an absolute, irrevocable and continuing guaranty pursuant to which it guarantees any and all financial obligations of the Capital Protection Provider under the Capital Protection Agreement. There is, however, a risk that the Capital Protection Provider’s parent company may not fulfill its obligations under the guaranty it has issued. 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, 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. Under the terms of the Capital Protection Agreement, the Protected NAV of each share class will be reduced by any reductions in the NAV per share resulting from such events as, but not limited to, (i) the bankruptcy, insolvency, reorganization or default of a contractual counterparty of the Fund, including counterparties to derivatives transactions, and entities that hold cash or other assets of the Fund; (ii) any trade or pricing error of the Fund; and (iii) any realized or unrealized losses on any investment of the Fund in money market funds.
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 March 31, 2015” 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
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ | 2,925 | $ | (493) | $ | – | $ | 2,432 | ||||||||||
| Credit Suisse International | 19,226 | (17,039) | – | 2,187 | ||||||||||||||
| HSBC Securities (USA), Inc. | 6,057 | – | – | 6,057 | ||||||||||||||
| JPMorgan Chase & Co. | 182 | – | – | 182 | ||||||||||||||
| Total | $ | 28,390 | $ | (17,532) | $ | – | $ | 10,858 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
| Gross Amounts | ||||||||||||||||||
| Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
| Bank of America | $ | 493 | $ | (493) | $ | – | $ | – | ||||||||||
| BNP Paribas | 2,870 | – | – | 2,870 | ||||||||||||||
| Credit Suisse International | 17,039 | (17,039) | – | – | ||||||||||||||
| RBC Capital Markets Corp. | 365 | – | – | 365 | ||||||||||||||
| Total | $ | 20,767 | $ | (17,532) | $ | – | $ | 3,235 | ||||||||||
| (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
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Notes to Financial Statements (unaudited) (continued)
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.
| 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 Preservation Series - Global | All Asset Levels | 0.64 | ||||||||
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 and the capital protection 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 February 1, 2016.
| New Expense Limit (%) | Previous Expense | |||||||||
| (February 1, 2015 | Limit (%) (until | |||||||||
| Fund | to present) | February 1, 2015) | ||||||||
| Janus Preservation Series - Global | 1.67-1.82* | 1.60-1.75* | ||||||||
| * | Varies based on the amount of the Capital Protection Fee. |
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.
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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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep
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Notes to Financial Statements (unaudited) (continued)
program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered 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 March 31, 2015 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 March 31, 2015, Janus Distributors retained the following upfront sales charges:
| Upfront | ||||||
| Fund (Class A Shares) | Sales Charge | |||||
| Janus Preservation Series - Global | $ | 4 | ||||
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 March 31, 2015.
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 March 31, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
| Fund (Class C Shares) | CDSC | |||||
| Janus Preservation Series - Global | $ | 22 | ||||
As of March 31, 2015, 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 Preservation Series - Global - Class A Shares | 65 | % | 13 | % | ||||||
| Janus Preservation Series - Global - Class C Shares | 74 | 13 | ||||||||
| Janus Preservation Series - Global - Class D Shares | 62 | 13 | ||||||||
| Janus Preservation Series - Global - Class I Shares | 81 | 13 | ||||||||
| Janus Preservation Series - Global - Class S Shares | 100 | 13 | ||||||||
| Janus Preservation Series - Global - Class T Shares | 92 | 13 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 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
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are wash sale loss deferrals and investments in passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Janus Preservation Series - Global | $ | 14,361,230 | $ | 2,360,243 | $ | (477,260) | $ | 1,882,983 | ||||||||||
| 6. | Capital Share Transactions |
| For the period ended March 31 (unaudited) | Janus Preservation Series - Global | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 8,900 | 20,948 | ||||||||
| Reinvested dividends and distributions | 19,250 | 5,941 | ||||||||
| Shares repurchased | (26,905) | (32,560) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,245 | (5,671) | ||||||||
| Shares Outstanding, Beginning of Period | 267,340 | 273,011 | ||||||||
| Shares Outstanding, End of Period | 268,585 | 267,340 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 14,364 | 19,212 | ||||||||
| Reinvested dividends and distributions | 15,762 | 4,416 | ||||||||
| Shares repurchased | (9,720) | (8,424) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 20,406 | 15,204 | ||||||||
| Shares Outstanding, Beginning of Period | 214,022 | 198,818 | ||||||||
| Shares Outstanding, End of Period | 234,428 | 214,022 | ||||||||
| Transactions in Fund Shares �� Class D Shares: | ||||||||||
| Shares sold | 12,254 | 83,206 | ||||||||
| Reinvested dividends and distributions | 18,945 | 4,530 | ||||||||
| Shares repurchased | (15,562) | (35,258) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 15,637 | 52,478 | ||||||||
| Shares Outstanding, Beginning of Period | 261,521 | 209,043 | ||||||||
| Shares Outstanding, End of Period | 277,158 | 261,521 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 23,764 | 42,168 | ||||||||
| Reinvested dividends and distributions | 12,680 | 3,915 | ||||||||
| Shares repurchased | (20,869) | (29,992) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 15,575 | 16,091 | ||||||||
| Shares Outstanding, Beginning of Period | 199,169 | 183,078 | ||||||||
| Shares Outstanding, End of Period | 214,744 | 199,169 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | – | – | ||||||||
| Reinvested dividends and distributions | 11,830 | 3,398 | ||||||||
| Shares repurchased | – | – | ||||||||
| Net Increase/(Decrease) in Fund Shares | 11,830 | 3,398 | ||||||||
| Shares Outstanding, Beginning of Period | 161,665 | 158,267 | ||||||||
| Shares Outstanding, End of Period | 173,495 | 161,665 | ||||||||
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Notes to Financial Statements (unaudited) (continued)
| For the period ended March 31 (unaudited) | Janus Preservation Series - Global | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 3,385 | 16,789 | ||||||||
| Reinvested dividends and distributions | 12,822 | 3,595 | ||||||||
| Shares repurchased | (1,298) | (18,602) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 14,909 | 1,782 | ||||||||
| Shares Outstanding, Beginning of Period | 173,731 | 171,949 | ||||||||
| Shares Outstanding, End of Period | 188,640 | 173,731 | ||||||||
| 7. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 Preservation Series - Global | $5,765,051 | $7,624,910 | $– | $– | ||||||
| 8. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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).
Annual Report of BNP Paribas Prime Brokerage, Inc.
Janus Investment Fund, on behalf of Janus Preservation Series – Global and Janus Preservation Series – Growth, will supply the most recent annual reports of the Capital Protection Provider (or any successor or substituted entity thereto), free of charge, upon a shareholder’s 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
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Additional Information (unaudited) (continued)
selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed 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. |
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| • | 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 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. |
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Additional Information (unaudited) (continued)
| • | 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 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. |
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| • | 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 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 |
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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 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 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
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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 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. |
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Additional Information (unaudited) (continued)
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 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 |
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| Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit 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 Janus Capital has contractually agreed to limit 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. |
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Additional Information (unaudited) (continued)
| • | 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. |
| • | 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’
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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 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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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Useful Information About Your Fund Report (unaudited) (continued)
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
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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).
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-0515-87359 | 125-24-93051 05-15 |
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semiannual report
March 31, 2015
Perkins International Value Fund
highlights
| • | Portfolio management perspective |
| • | Investment strategy behind your fund |
| • | Fund performance, characteristics and holdings |
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Perkins International 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. | Tadd Chessen co-portfolio manager | Christian Kirtley co-portfolio manager | Gregory Kolb co-portfolio manager |
PERFORMANCE OVERVIEW
Perkins International Value Fund’s Class I Shares returned -0.34% over the six-month period ended March 31, 2015, underperforming its primary benchmark, the MSCI EAFE Index, which returned 1.13% during the period. The Fund outperformed its secondary benchmark, the MSCI All Country World ex-U.S. Index, which returned -0.51% in the period. In an environment which we believe is short on bargains and long on risk, we have positioned the portfolio in such a manner that it can participate should further gains lie ahead, while at the same time attempts to limit our exposure to turbulence or outright drawdown should a more negative scenario unfold.
MARKET & ECONOMIC COMMENTARY
On a recent research trip to Japan, we were struck by one area of Prime Minister Shinzo Abe’s structural reform agenda that seems to be making real, tangible progress: corporate governance. This appears to be a high priority for the government, with the ultimate goals of boosting industrial competitiveness and luring more Japanese investors to their own stock market, where allocations are low relative to other developed nations. The latest initiative, Japan’s first-ever “Corporate Governance Code,” which takes effect in June, urges companies to actively engage with their minority shareholders, take on at least two independent board directors (only 35% of listed firms meet this requirement), reconsider anti-takeover measures, and disclose annually the economic rationale behind their cross-shareholdings. On the last point in particular, we are hopeful that this disclosure and explanation requirement will encourage companies to liquidate shares where ownership rationale is questionable. Unwinding of cross-shareholdings should result in major improvements in capital efficiency and potentially lead to increased mergers and acquisitions activity. The new Corporate Governance Code complements two important governance-related initiatives introduced in 2014: the Stewardship Code, which urges institutional investors to engage with their portfolio companies; and the launch of a major new stock market index (the JPX-Nikkei 400, also known as the “shame index”), which emphasizes return on equity and governance factors in its weightings, in addition to market capitalization. Exclusion from this index has prompted several Japanese firms to boost shareholder returns for the first time. Importantly, the Abe administration has convinced the GPIF, the country’s leading public pension fund, to increasingly benchmark domestic equities with this benchmark rather than the Nikkei or TOPIX, so that the shame of being left out or receiving a low weighting is compounded by the prospect of capital outflows. While we have doubts about other elements of Abenomics, and whether it can put Japan on a sustainably better macroeconomic path, we do believe the corporate governance initiatives have the potential to unlock considerable corporate value over time.
Japan posted the best returns of the major global developed markets during the period, with the TOPIX Index returning 17% in yen and a little over 7% in U.S. dollars. The U.S. stock market also performed well, returning roughly 6% and continuing a rally that has now entered its seventh year. Europe’s STOXX 600 Index returned 17% in euros, as the European Central Bank’s introduction of its quantitative easing program and its impact on eurozone bond yields seemed to outweigh continued weak economic performance and the increasingly fractious relationship between Greece and the rest of the currency bloc. However, this strong performance in local terms was negated by weakness in the euro, with the STOXX slightly negative in U.S. dollars.
DETRACTORS FROM PERFORMANCE
Stock selection in consumer discretionary, telecommunication services and consumer staples hurt relative performance. From a country perspective, stock selection in Canada and Mexico detracted from relative performance. Our substantial cash holdings, which
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Perkins International Value Fund (unaudited)
averaged roughly 16% during the period, also detracted modestly from relative performance.
The largest individual detractor was Cenovus Energy, an integrated oil and gas company based in Canada. Formed in 2009 after splitting from Encana, the company has a strong production growth profile with low cost and long-lived oil sands reserves. Global oil and gas companies have suffered mightily in the face of the approximately 50% drop in global crude oil prices since mid-2014, and Cenovus has been no exception. During the period, management reduced its 2015 cash flow and capital expenditure guidance, now based on $50/barrel West Texas Intermediate. Cash flow is expected to be more than 50% below the levels Cenovus achieved in 2012 and 2013, making its cash flow-based debt metrics worse. Because of this and management’s desire to maintain an adequate capital buffer as it continues to invest in its long-lived assets, the company later announced an equity financing that is 8% to 9% dilutive. While this move caught us and the market by surprise (we do not believe they needed it), we continue to see a good risk-reward ratio in the company’s world-class asset base.
Another leading detractor, America Movil, is one of the world’s largest integrated telecommunications companies with over 368 million access lines in 25 countries, principally in Latin America. The shares underperformed in the period on the back of the announcement that AT&T will acquire Nextel’s Mexican business, which was near bankruptcy. While AT&T had already signaled its ambition to compete with America Movil in Mexico (through its earlier acquisition of a 50% stake in Iusacell), AT&T’s purchase of the Nextel assets could mean that America Movil has a harder time receiving fair value for the disposal of a portion of its own Mexican asset base (which it is doing to appease regulators). The significant weakening of the Mexican peso during the period, which fell more than 10% against the U.S. dollar, also negatively impacted performance. On the positive side, America Movil announced a larger-than-expected regular dividend, an additional special dividend, and a buyback program, which taken together will return approximately 7% of the company’s market value to shareholders.
Rounding out the leading detractors was Royal Dutch Shell, an oil and gas super-major based in the UK. Following a series of operational missteps over the past few years that allowed us to build a large position on attractive terms, new CEO Ben van Beurden appears to be setting the company on a better path by streamlining the asset base and lowering overall capital intensity. During the first quarter of 2015, the company reported weak operating results as lower commodity prices and higher exploration expenses weighed on profits. The stock also reacted poorly to management’s decision to reinstate its scrip dividend program, in which shareholders may elect to receive additional shares in lieu of cash dividends. While the scrip program gives the company increased financial flexibility, investors were surprised by the announcement given the retirement of the previous scrip program in May 2014.
CONTRIBUTORS TO PERFORMANCE
Stock selection in financials, industrials, and materials contributed to relative performance. Stock selection in the UK also aided relative returns.
Individually, Nintendo led our contributors. The Japanese maker of gaming hardware and software outperformed significantly during the first quarter of 2015 after announcing a major strategic shift. After years of pursuing a console-based gaming strategy, which may be in structural decline due to the onset of smartphone-based games and apps, Nintendo announced a new partnership with DeNA (also of Japan) to develop new smartphone-based games based on its deep library of characters and content. We believe this is value-enhancing in that it allows Nintendo to monetize one of its most valuable assets – its intellectual property of characters such as Super Mario, Pokemon, Zelda, Donkey Kong, Sonic, etc. Although the magnitude and pace of this change have yet to be determined, and the shift will likely cannibalize Nintendo’s console business, we view the development favorably as the addressable market is multiples of the console market.
CK Hutchison Holdings, another top contributor, is a diversified conglomerate based in Hong Kong. The company has interests spanning property, retail, wireless telecommunications, container ports and energy, and is controlled by Li Ka-shing, a self-made multi-billionaire and one of the more astute capital allocators in the world. In January, Li Ka-shing announced that he would merge his two primary listed investment vehicles, Cheung Kong Holdings and Hutchison Whampoa, and then later spinoff all of the property assets into a separate vehicle. The market celebrated this decision as it makes the various components easier to value and thus reduces the “double discount” that the previous structure engendered.
Tesco, which also aided performance, is a grocery and general merchandise retailer based in the UK. For the past 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. 2014 proved to be an annus horribilis
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(unaudited)
for Tesco, with multiple profit warnings, accounting irregularities, and ultimately, the firing of previous management. During the most recent quarter, however, some positives have begun to emerge. For the first time in many quarters, Tesco’s UK market share and sales data have begun to improve. Investors have some reason to hope this will continue as highly respected retailer Matt Davies (most recently CEO of Halfords) has been appointed to run the UK business. The company also announced a raft of cost savings measures and potential asset sales that should allow it to fund its turnaround internally, without issuing expensive equity.
PORTFOLIO POSITIONING & OUTLOOK
With global stock indices up strongly over the last six years and the U.S. Federal Reserve (Fed) potentially embarking on a monetary tightening cycle following years of ultra-accommodative policy, we believe the investment climate calls for caution. Tightening too soon potentially risks sending a deflationary impulse through the global economy at a time of already feeble growth. On the other hand, to not tighten means the Fed would have little ammunition to stimulate the economy the next time a recession strikes. (In the past, the U.S. has been able to cut rates to combat economic downturns.) It is a real conundrum for policy makers, and how they navigate this period will likely have ramifications for equity markets. At Perkins, we also worry about higher-than-average equity valuations almost everywhere, high corporate profit margins, ongoing dysfunction in the eurozone currency union, the effective tightening of monetary conditions in emerging markets due to the recent strengthening of the U.S. dollar, and geopolitical tensions in the Middle East and elsewhere, to name a few of the more visible risks.
We continue to hold significant stakes in European multinationals, stocks which typically exhibit stable cash flows that are relatively less economically sensitive than the broad market. Our exposure to Japan is lower than it was 12 to 18 months ago given trims after the strong run in many of our holdings. We remain very selective with our emerging market positions. Cash continues to run high due to a lack of bargain securities. In building the portfolio, we try to maintain the mindset that “things change” – including the global financial markets. As such, we are aiming to be prepared for whatever comes our way over the next few years.
Thank you for your investment and continued confidence in Perkins International Value Fund.
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Perkins International Value Fund At A Glance
5 Top Performers – Holdings
| Contribution | ||||
| Nintendo Co., Ltd. | 0.45% | |||
| CK Hutchison Holdings, Ltd. | 0.44% | |||
| Tesco PLC | 0.42% | |||
| Michael Page International PLC | 0.31% | |||
| Sompo Japan Nipponkoa Holdings, Inc. | 0.28% | |||
5 Bottom Performers – Holdings
| Contribution | ||||
| Cenovus Energy, Inc. | –0.68% | |||
| America Movil SAB de CV – Series L | –0.61% | |||
| Royal Dutch Shell PLC – Class A | –0.51% | |||
| Orkla ASA | –0.33% | |||
| Stock Spirits Group PLC | –0.31% | |||
5 Top Performers – Sectors*
| Fund Weighting | MSCI EAFE® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Financials | 0.75% | 4.51% | 25.82% | |||||||||
| Materials | 0.61% | 4.12% | 7.58% | |||||||||
| Industrials | 0.58% | 18.64% | 12.54% | |||||||||
| Information Technology | 0.44% | 2.71% | 4.73% | |||||||||
| Utilities | 0.22% | 1.37% | 3.79% | |||||||||
5 Bottom Performers – Sectors*
| Fund Weighting | MSCI EAFE® | |||||||||||
| Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
| Consumer Discretionary | –1.31% | 5.66% | 12.38% | |||||||||
| Telecommunication Services | –0.89% | 10.83% | 4.98% | |||||||||
| Consumer Staples | –0.76% | 18.54% | 11.17% | |||||||||
| Health Care | –0.33% | 9.54% | 11.20% | |||||||||
| Energy | –0.31% | 7.94% | 5.81% | |||||||||
| 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 codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. |
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of March 31, 2015
| Novartis AG Pharmaceuticals | 2.9% | |||
| America Movil SAB de CV – Series L Wireless Telecommunication Services | 2.7% | |||
| GlaxoSmithKline PLC Pharmaceuticals | 2.7% | |||
| Danone SA Food Products | 2.6% | |||
| G4S PLC Commercial Services & Supplies | 2.5% | |||
| 13.4% |
Asset Allocation – (% of Net Assets)
As of March 31, 2015
Emerging markets comprised 6.8% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of March 31, 2015
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Performance
| Average Annual Total Return – for the periods ended March 31, 2015 | Expense Ratios – per the January 28, 2015 prospectuses | ||||||||||
| Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
| Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
| Perkins International Value Fund – Class A Shares | |||||||||||
| NAV | –0.47% | –1.16% | 7.36% | 2.20% | 1.24% | ||||||
| MOP | –6.22% | –6.83% | 4.22% | ||||||||
| Perkins International Value Fund – Class C Shares | |||||||||||
| NAV | –0.82% | –1.77% | 6.54% | 3.02% | 1.99% | ||||||
| CDSC | –1.77% | –2.71% | 6.54% | ||||||||
| Perkins International Value Fund – Class D Shares(1) | –0.38% | –0.99% | 7.48% | 2.44% | 1.17% | ||||||
| Perkins International Value Fund – Class I Shares | –0.34% | –0.86% | 7.61% | 2.14% | 0.98% | ||||||
| Perkins International Value Fund – Class N Shares | –0.33% | –0.85% | 7.65% | 2.16% | 0.99% | ||||||
| Perkins International Value Fund – Class S Shares | –0.53% | –1.30% | 7.19% | 2.49% | 1.50% | ||||||
| Perkins International Value Fund – Class T Shares | –0.46% | –1.07% | 7.40% | 2.29% | 1.23% | ||||||
| MSCI EAFE® Index | 1.13% | –0.92% | 8.18% | ||||||||
| MSCI All Country World ex-U.S. IndexSM | –0.51% | –1.01% | 5.67% | ||||||||
| Morningstar Quartile – Class I Shares | – | 1st | 3rd | ||||||||
| Morningstar Ranking – based on total return for Foreign Large Value Funds | – | 55/364 | 192/364 | ||||||||
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 February 1, 2016.
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.
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.
Until three years from inception, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2015 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 – April 1, 2013 | |
| (1) | Closed to new investors. |
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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 | ||||||||||||||||||||||||
| (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14) | (3/31/15) | (10/1/14 - 3/31/15)† | (10/1/14 - 3/31/15) | ||||||||||||||||||||||||
| Class A Shares | $ | 1,000.00 | $ | 995.30 | $ | 6.32 | $ | 1,000.00 | $ | 1,018.60 | $ | 6.39 | 1.27% | |||||||||||||||||
| Class C Shares | $ | 1,000.00 | $ | 991.80 | $ | 9.93 | $ | 1,000.00 | $ | 1,014.96 | $ | 10.05 | 2.00% | |||||||||||||||||
| Class D Shares | $ | 1,000.00 | $ | 996.20 | $ | 5.82 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.89 | 1.17% | |||||||||||||||||
| Class I Shares | $ | 1,000.00 | $ | 996.60 | $ | 5.28 | $ | 1,000.00 | $ | 1,019.65 | $ | 5.34 | 1.06% | |||||||||||||||||
| Class N Shares | $ | 1,000.00 | $ | 996.70 | $ | 4.98 | $ | 1,000.00 | $ | 1,019.95 | $ | 5.04 | 1.00% | |||||||||||||||||
| Class S Shares | $ | 1,000.00 | $ | 994.70 | $ | 7.36 | $ | 1,000.00 | $ | 1,017.55 | $ | 7.44 | 1.48% | |||||||||||||||||
| Class T Shares | $ | 1,000.00 | $ | 995.40 | $ | 6.12 | $ | 1,000.00 | $ | 1,018.80 | $ | 6.19 | 1.23% | |||||||||||||||||
| † | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 182/365 (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 | MARCH 31, 2015
Table of Contents
Perkins International Value Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Common Stocks – 84.6% | ||||||||||
| Aerospace & Defense – 3.8% | ||||||||||
| 33,440 | BAE Systems PLC | $ | 259,227 | |||||||
| 14,222 | Cobham PLC | 64,115 | ||||||||
| 2,191 | Safran SA | 153,098 | ||||||||
| 476,440 | ||||||||||
| Air Freight & Logistics – 1.2% | ||||||||||
| 1,024 | Panalpina Welttransport Holding AG | 149,427 | ||||||||
| Automobiles – 1.3% | ||||||||||
| 1,024 | Hyundai Motor Co. | 155,458 | ||||||||
| Beverages – 2.9% | ||||||||||
| 8,856 | Diageo PLC | 244,155 | ||||||||
| 36,380 | Stock Spirits Group PLC | 111,536 | ||||||||
| 355,691 | ||||||||||
| Chemicals – 1.9% | ||||||||||
| 4,600 | Nippon Fine Chemical Co., Ltd. | 35,152 | ||||||||
| 7,200 | Nitto FC Co., Ltd. | 46,643 | ||||||||
| 4,606 | Potash Corp. of Saskatchewan, Inc. | 148,502 | ||||||||
| 230,297 | ||||||||||
| Commercial Services & Supplies – 4.1% | ||||||||||
| 69,762 | G4S PLC | 305,931 | ||||||||
| 2,300 | Secom Co., Ltd. | 153,723 | ||||||||
| 1,700 | Secom Joshinetsu Co., Ltd. | 44,645 | ||||||||
| 504,299 | ||||||||||
| Communications Equipment – 0.4% | ||||||||||
| 1,800 | Icom, Inc. | 43,218 | ||||||||
| Construction Materials – 1.9% | ||||||||||
| 1,654 | HeidelbergCement AG | 131,206 | ||||||||
| 1,472 | Vicat | 107,887 | ||||||||
| 239,093 | ||||||||||
| Diversified Consumer Services – 0.2% | ||||||||||
| 658 | Daekyo Co., Ltd. | 4,055 | ||||||||
| 4,100 | Shingakukai Co., Ltd. | 18,319 | ||||||||
| 22,374 | ||||||||||
| Diversified Financial Services – 1.2% | ||||||||||
| 1,796 | Deutsche Boerse AG | 146,851 | ||||||||
| Diversified Telecommunication Services – 2.2% | ||||||||||
| 54,000 | Singapore Telecommunications, Ltd. | 172,175 | ||||||||
| 4,997 | Telenor ASA | 101,039 | ||||||||
| 273,214 | ||||||||||
| Electrical Equipment – 2.1% | ||||||||||
| 8,718 | ABB, Ltd.* | 185,026 | ||||||||
| 6,300 | Cosel Co., Ltd. | 70,714 | ||||||||
| 255,740 | ||||||||||
| Electronic Equipment, Instruments & Components – 0.2% | ||||||||||
| 2,751 | Kitagawa Industries Co., Ltd. | 29,139 | ||||||||
| Food & Staples Retailing – 2.4% | ||||||||||
| 82,273 | Tesco PLC | 294,391 | ||||||||
| Food Products – 8.1% | ||||||||||
| 4,873 | Danone SA | 327,892 | ||||||||
| 3,241 | Nestle SA | 244,769 | ||||||||
| 29,132 | Orkla ASA | 220,471 | ||||||||
| 5,087 | Unilever NV | 212,778 | ||||||||
| 1,005,910 | ||||||||||
| Health Care Equipment & Supplies – 0.5% | ||||||||||
| 150 | Medikit Co., Ltd. | 4,654 | ||||||||
| 1,600 | Nakanishi, Inc. | 62,327 | ||||||||
| 66,981 | ||||||||||
| Health Care Providers & Services – 0.8% | ||||||||||
| 3,074 | As One Corp. | 93,140 | ||||||||
| Industrial Conglomerates – 1.2% | ||||||||||
| 8,794 | Smiths Group PLC | 145,588 | ||||||||
| Insurance – 1.2% | ||||||||||
| 4,700 | Sompo Japan Nipponkoa Holdings, Inc. | 146,177 | ||||||||
| Machinery – 0.6% | ||||||||||
| 929 | Pfeiffer Vacuum Technology AG | 79,064 | ||||||||
| Marine – 1.1% | ||||||||||
| 30,170 | Irish Continental Group PLC | 134,597 | ||||||||
| Media – 2.6% | ||||||||||
| 6,099 | Grupo Televisa SAB (ADR)* | 201,328 | ||||||||
| 15,507 | UBM PLC | 121,643 | ||||||||
| 322,971 | ||||||||||
| Multi-Utilities – 1.2% | ||||||||||
| 3,913 | GDF Suez | 77,417 | ||||||||
| 4,241 | Suez Environment Co. | 72,816 | ||||||||
| 150,233 | ||||||||||
| Oil, Gas & Consumable Fuels – 6.7% | ||||||||||
| 7,244 | BP PLC (ADR) | 283,313 | ||||||||
| 4,885 | Canadian Natural Resources, Ltd. | 149,744 | ||||||||
| 8,630 | Cenovus Energy, Inc. | 145,491 | ||||||||
| 8,443 | Royal Dutch Shell PLC – Class A | 250,882 | ||||||||
| 829,430 | ||||||||||
| Personal Products – 0.6% | ||||||||||
| 1,500 | Pola Orbis Holdings, Inc. | 79,636 | ||||||||
| Pharmaceuticals – 8.0% | ||||||||||
| 14,744 | GlaxoSmithKline PLC | 337,590 | ||||||||
| 3,592 | Novartis AG | 355,319 | ||||||||
| 610 | Roche Holding AG | 168,255 | ||||||||
| 1,354 | Sanofi | 133,216 | ||||||||
| 994,380 | ||||||||||
| Professional Services – 2.2% | ||||||||||
| 34,966 | Michael Page International PLC | 270,052 | ||||||||
| Real Estate Management & Development – 2.5% | ||||||||||
| 6,058 | Brookfield Real Estate Services, Inc. | 67,163 | ||||||||
| 12,000 | CK Hutchison Holdings, Ltd. | 245,503 | ||||||||
| 312,666 | ||||||||||
| Software – 2.1% | ||||||||||
| 5,597 | Lectra | 78,821 | ||||||||
| 1,200 | Nintendo Co., Ltd. | 176,622 | ||||||||
| 255,443 | ||||||||||
| Specialty Retail – 2.1% | ||||||||||
| 5,202 | Matas A/S | 118,647 | ||||||||
| 2,100 | Nitori Holdings Co., Ltd. | 142,483 | ||||||||
| 261,130 | ||||||||||
| Technology Hardware, Storage & Peripherals – 1.0% | ||||||||||
| 3,600 | Canon, Inc. | 127,326 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins International Value Fund
Schedule of Investments (unaudited)
As of March 31, 2015
| Shares or Principal Amount | Value | |||||||||
| Tobacco – 5.5% | ||||||||||
| 6,513 | Imperial Tobacco Group PLC | $ | 285,872 | |||||||
| 1,773 | KT&G Corp. | 141,774 | ||||||||
| 8,735 | Swedish Match AB | 257,061 | ||||||||
| 684,707 | ||||||||||
| Trading Companies & Distributors – 0.2% | ||||||||||
| 1,800 | Kuroda Electric Co., Ltd. | 28,831 | ||||||||
| Transportation Infrastructure – 3.1% | ||||||||||
| 33,867 | BBA Aviation PLC | 168,880 | ||||||||
| 155 | Flughafen Zuerich AG | 122,144 | ||||||||
| 4,531 | Hamburger Hafen und Logistik AG | 95,202 | ||||||||
| 386,226 | ||||||||||
| Wireless Telecommunication Services – 7.5% | ||||||||||
| 330,681 | America Movil SAB de CV – Series L | 339,545 | ||||||||
| 7,662 | NTT DOCOMO, Inc. | 133,143 | ||||||||
| 7,703 | Rogers Communications, Inc. – Class B | 257,902 | ||||||||
| 61,768 | Vodafone Group PLC | 201,833 | ||||||||
| 932,423 | ||||||||||
| Total Common Stocks (cost $10,223,516) | 10,482,543 | |||||||||
| Repurchase Agreements – 9.7% | ||||||||||
| $1,200,000 | Undivided interest of 2% in a joint repurchase agreement (principal amount $50,000,000 with a maturity value of $50,000,111) with ING Financial Markets LLC, 0.0800%, dated 3/31/15, maturing 4/1/15 to be repurchased at $1,200,003 collateralized by $39,980,000 in U.S. Treasuries, 3.7500% – 4.2500%, 5/15/39 – 11/15/43, with a value of $51,005,640 (cost $1,200,000) | 1,200,000 | ||||||||
| Total Investments (total cost $11,423,516) – 94.3% | 11,682,543 | |||||||||
| Cash, Receivables and Other Assets, net of Liabilities – 5.7% | 707,769 | |||||||||
| Net Assets – 100% | $ | 12,390,312 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
| % of Investment | ||||||||
| Country | Value | Securities | ||||||
| United Kingdom | $ | 3,345,008 | 28 | .6% | ||||
| Japan | 1,435,892 | 12 | .3 | |||||
| Switzerland | 1,224,940 | 10 | .5 | |||||
| United States | 1,200,000 | 10 | .3 | |||||
| France | 951,147 | 8 | .1 | |||||
| Canada | 768,802 | 6 | .6 | |||||
| Mexico | 540,873 | 4 | .6 | |||||
| Germany | 452,323 | 3 | .9 | |||||
| Norway | 321,510 | 2 | .7 | |||||
| South Korea | 301,287 | 2 | .6 | |||||
| Sweden | 257,061 | 2 | .2 | |||||
| Hong Kong | 245,503 | 2 | .1 | |||||
| Netherlands | 212,778 | 1 | .8 | |||||
| Singapore | 172,175 | 1 | .5 | |||||
| Ireland | 134,597 | 1 | .2 | |||||
| Denmark | 118,647 | 1 | .0 | |||||
| Total | $ | 11,682,543 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | MARCH 31, 2015
Table of Contents
Notes to Schedule of Investments and Other Information (unaudited)
| MSCI All Country World ex-U.S. IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
| 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. | |
| ADR | American Depositary Receipt | |
| LLC | Limited Liability Company | |
| PLC | Public Limited Company |
| * | 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 March 31, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of March 31, 2015)
| Level 2 – Other Significant | Level 3 – Significant | ||||||||||
| Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
| Perkins International Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
| Aerospace & Defense | $ | – | $ | 476,440 | $ | – | |||||
| Air Freight & Logistics | – | 149,427 | – | ||||||||
| Automobiles | – | 155,458 | – | ||||||||
| Beverages | – | 355,691 | – | ||||||||
| Chemicals | 148,502 | 81,795 | – | ||||||||
| Commercial Services & Supplies | – | 504,299 | – | ||||||||
| Communications Equipment | – | 43,218 | – | ||||||||
| Construction Materials | – | 239,093 | – | ||||||||
| Diversified Consumer Services | – | 22,374 | – | ||||||||
| Diversified Financial Services | – | 146,851 | – | ||||||||
| Diversified Telecommunication Services | – | 273,214 | – | ||||||||
| Electrical Equipment | – | 255,740 | – | ||||||||
| Electronic Equipment, Instruments & Components | – | 29,139 | – | ||||||||
| Food & Staples Retailing | – | 294,391 | – | ||||||||
| Food Products | – | 1,005,910 | – | ||||||||
| Health Care Equipment & Supplies | – | 66,981 | – | ||||||||
| Health Care Providers & Services | – | 93,140 | – | ||||||||
| Industrial Conglomerates | – | 145,588 | – | ||||||||
| Insurance | – | 146,177 | – | ||||||||
| Machinery | – | 79,064 | – | ||||||||
| Marine | – | 134,597 | – | ||||||||
| Media | 201,328 | 121,643 | – | ||||||||
| Multi-Utilities | – | 150,233 | – | ||||||||
| Oil, Gas & Consumable Fuels | 578,548 | 250,882 | – | ||||||||
| Personal Products | – | 79,636 | – | ||||||||
| Pharmaceuticals | – | 994,380 | – | ||||||||
| Professional Services | – | 270,052 | – | ||||||||
| Real Estate Management & Development | 67,163 | 245,503 | – | ||||||||
| Software | – | 255,443 | – | ||||||||
| Specialty Retail | – | 261,130 | – | ||||||||
| Technology Hardware, Storage & Peripherals | – | 127,326 | – | ||||||||
| Tobacco | – | 684,707 | – | ||||||||
| Trading Companies & Distributors | – | 28,831 | – | ||||||||
| Transportation Infrastructure | – | 386,226 | – | ||||||||
| Wireless Telecommunication Services | 597,447 | 334,976 | – | ||||||||
Repurchase Agreements | – | 1,200,000 | – | ||||||||
Total Assets | $ | 1,592,988 | $ | 10,089,555 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
| Perkins International | ||||
| As of March 31, 2015 (unaudited) | Value Fund | |||
| Assets: | ||||
Investments, at cost(1) | $ | 11,423,516 | ||
| Investments, at value | $ | 10,482,543 | ||
| Repurchase agreements, at value | 1,200,000 | |||
| Cash | 732,312 | |||
Cash denominated in foreign currency(2) | 1,947 | |||
| Non-interested Trustees’ deferred compensation | 244 | |||
| Receivables: | ||||
| Investments sold | 21,434 | |||
| Fund shares sold | 230 | |||
| Dividends | 26,971 | |||
| Foreign dividend tax reclaim | 15,900 | |||
| Due from adviser | 19,408 | |||
| Other assets | 113 | |||
| Total Assets | 12,501,102 | |||
| Liabilities: | ||||
| Payables: | ||||
| Investments purchased | 50,845 | |||
| Fund shares repurchased | 12,400 | |||
| Advisory fees | 8,304 | |||
| Fund administration fees | 104 | |||
| Transfer agent fees and expenses | 2,449 | |||
| 12b-1 Distribution and shareholder servicing fees | 312 | |||
| Non-interested Trustees’ fees and expenses | 72 | |||
| Non-interested Trustees’ deferred compensation fees | 244 | |||
| Accrued expenses and other payables | 36,060 | |||
| Total Liabilities | 110,790 | |||
| Net Assets | $ | 12,390,312 | ||
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | MARCH 31, 2015
Table of Contents
| Perkins International | ||||
| As of March 31, 2015 (unaudited) | Value Fund | |||
| Net Assets Consist of: | ||||
| Capital (par value and paid-in surplus) | $ | 12,165,751 | ||
| Undistributed net investment income/(loss) | 39,735 | |||
| Undistributed net realized gain/(loss) from investments and foreign currency transactions | (72,964) | |||
| Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 257,790 | |||
| Total Net Assets | $ | 12,390,312 | ||
| Net Assets - Class A Shares | $ | 233,662 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 21,488 | |||
Net Asset Value Per Share(3) | $ | 10.87 | ||
Maximum Offering Price Per Share(4) | $ | 11.53 | ||
| Net Assets - Class C Shares | $ | 249,864 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 23,096 | |||
Net Asset Value Per Share(3) | $ | 10.82 | ||
| Net Assets - Class D Shares | $ | 2,653,252 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 244,534 | |||
| Net Asset Value Per Share | $ | 10.85 | ||
| Net Assets - Class I Shares | $ | 6,621,876 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 610,366 | |||
| Net Asset Value Per Share | $ | 10.85 | ||
| Net Assets - Class N Shares | $ | 1,517,382 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 139,721 | |||
| Net Asset Value Per Share | $ | 10.86 | ||
| Net Assets - Class S Shares | $ | 232,431 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 21,367 | |||
| Net Asset Value Per Share | $ | 10.88 | ||
| Net Assets - Class T Shares | $ | 881,845 | ||
| Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 81,277 | |||
| Net Asset Value Per Share | $ | 10.85 | ||
| (1) | Includes cost of repurchase agreements of $1,200,000. | |
| (2) | Includes cost of $1,947. | |
| (3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
| (4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
| Perkins International | ||||
| For the period ended March 31, 2015 (unaudited) | Value Fund | |||
| Investment Income: | ||||
| Interest | $ | 449 | ||
| Dividends | 126,227 | |||
| Other income | 39 | |||
| Foreign tax withheld | (10,201) | |||
| Total Investment Income | 116,514 | |||
| Expenses: | ||||
| Advisory fees | 47,465 | |||
| 12b-1 Distribution and shareholder servicing fees: | ||||
| Class A Shares | 285 | |||
| Class C Shares | 1,227 | |||
| Class S Shares | 283 | |||
| Transfer agent administrative fees and expenses: | ||||
| Class D Shares | 1,296 | |||
| Class S Shares | 283 | |||
| Class T Shares | 1,003 | |||
| Transfer agent networking and omnibus fees: | ||||
| Class A Shares | 23 | |||
| Class C Shares | 10 | |||
| Class I Shares | 2,510 | |||
| Other transfer agent fees and expenses: | ||||
| Class A Shares | 22 | |||
| Class C Shares | 18 | |||
| Class D Shares | 750 | |||
| Class I Shares | 227 | |||
| Class N Shares | 112 | |||
| Class T Shares | 20 | |||
| Registration fees | 60,642 | |||
| Custodian fees | 3,556 | |||
| Professional fees | 19,995 | |||
| Non-interested Trustees’ fees and expenses | 133 | |||
| Fund administration fees | 489 | |||
| Other expenses | 3,451 | |||
| Total Expenses | 143,800 | |||
| Less: Excess Expense Reimbursement | (77,588) | |||
| Net Expenses | 66,212 | |||
| Net Investment Income/(Loss) | 50,302 | |||
| Net Realized Gain/(Loss) on Investments: | ||||
| Investments and foreign currency transactions | (34,528) | |||
| Total Net Realized Gain/(Loss) on Investments | (34,528) | |||
| Change in Unrealized Net Appreciation/Depreciation: | ||||
| Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (89,509) | |||
| Total Change in Unrealized Net Appreciation/Depreciation | (89,509) | |||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (73,735) | ||
See Notes to Financial Statements.
14 | MARCH 31, 2015
Table of Contents
Statements of Changes in Net Assets
| Perkins International | ||||||||
| Value Fund | ||||||||
| For the period ended March 31 (unaudited) and the year ended September 30 | 2015 | 2014 | ||||||
| Operations: | ||||||||
| Net investment income/(loss) | $ | 50,302 | $ | 244,224 | ||||
| Net realized gain/(loss) on investments | (34,528) | 330,004 | ||||||
| Change in unrealized net appreciation/depreciation | (89,509) | (37,233) | ||||||
| Net Increase/(Decrease) in Net Assets Resulting from Operations | (73,735) | 536,995 | ||||||
| Dividends and Distributions to Shareholders: | ||||||||
| Net Investment Income | ||||||||
| Class A Shares | (4,238) | (1,050) | ||||||
| Class C Shares | (3,081) | – | ||||||
| Class D Shares | (39,851) | (9,902) | ||||||
| Class I Shares | (144,615) | (53,773) | ||||||
| Class N Shares | (28,807) | (7,593) | ||||||
| Class S Shares | (4,247) | (90) | ||||||
| Class T Shares | (14,338) | (3,741) | ||||||
| Net Realized Gain from Investment Transactions | ||||||||
| Class A Shares | (5,707) | (1,983) | ||||||
| Class C Shares | (6,128) | (2,201) | ||||||
| Class D Shares | (51,367) | (11,255) | ||||||
| Class I Shares | (174,654) | (53,603) | ||||||
| Class N Shares | (34,715) | (7,748) | ||||||
| Class S Shares | (5,634) | (1,844) | ||||||
| Class T Shares | (18,384) | (5,341) | ||||||
| Net Decrease from Dividends and Distributions to Shareholders | (535,766) | (160,124) | ||||||
| Capital Share Transactions: | ||||||||
| Shares Sold | ||||||||
| Class A Shares | 7,001 | – | ||||||
| Class C Shares | 1,507 | 40,001 | ||||||
| Class D Shares | 991,792 | 1,789,445 | ||||||
| Class I Shares | 75,025 | 5,082,931 | ||||||
| Class N Shares | 220,095 | 503,933 | ||||||
| Class S Shares | 20,000 | – | ||||||
| Class T Shares | 195,295 | 209,201 | ||||||
| Reinvested Dividends and Distributions | ||||||||
| Class A Shares | 9,945 | 3,033 | ||||||
| Class C Shares | 9,209 | 2,201 | ||||||
| Class D Shares | 88,945 | 20,309 | ||||||
| Class I Shares | 319,269 | 104,591 | ||||||
| Class N Shares | 63,522 | 15,341 | ||||||
| Class S Shares | 9,881 | 1,934 | ||||||
| Class T Shares | 32,722 | 9,082 | ||||||
| Shares Repurchased | ||||||||
| Class A Shares | (1,564) | (296,976) | ||||||
| Class C Shares | (1,507) | (273,500) | ||||||
| Class D Shares | (656,993) | (935,629) | ||||||
| Class I Shares | (648,208) | (768,366) | ||||||
| Class N Shares | (73,067) | (19,825) | ||||||
| Class S Shares | – | (277,656) | ||||||
| Class T Shares | (49,264) | (488,793) | ||||||
| Net Increase/(Decrease) from Capital Share Transactions | 613,605 | 4,721,257 | ||||||
| Net Increase/(Decrease) in Net Assets | 4,104 | 5,098,128 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 12,386,208 | 7,288,080 | ||||||
| End of period | $ | 12,390,312 | $ | 12,386,208 | ||||
| Undistributed Net Investment Income/(Loss) | $ | 39,735 | $ | 228,610 | ||||
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 March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.42 | $10.98 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.04(2) | 0.21(2) | 0.10 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.11) | 0.38 | 0.88 | |||||||||||
| Total from Investment Operations | (0.07) | 0.59 | 0.98 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.20) | (0.05) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.48) | (0.15) | – | |||||||||||
| Net Asset Value, End of Period | $10.87 | $11.42 | $10.98 | |||||||||||
| Total Return* | (0.47)% | 5.45% | 9.80% | |||||||||||
| Net Assets, End of Period (in thousands) | $234 | $229 | $508 | |||||||||||
| Average Net Assets for the Period (in thousands) | $229 | $258 | $460 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.62% | 2.20% | 12.52% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.27% | 1.20% | 1.36% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.69% | 1.80% | 1.80% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
Class C Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.34 | $10.94 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | –(2)(3) | 0.12(2) | 0.07 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.38 | 0.87 | |||||||||||
| Total from Investment Operations | (0.10) | 0.50 | 0.94 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.14) | – | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.42) | (0.10) | – | |||||||||||
| Net Asset Value, End of Period | $10.82 | $11.34 | $10.94 | |||||||||||
| Total Return* | (0.82)% | 4.59% | 9.40% | |||||||||||
| Net Assets, End of Period (in thousands) | $250 | $252 | $469 | |||||||||||
| Average Net Assets for the Period (in thousands) | $246 | $277 | $447 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 3.34% | 3.02% | 13.51% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 2.00% | 2.00% | 2.06% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | (0.05)% | 1.04% | 1.14% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Period from April 1, 2013 (inception date) through September 30, 2013. | |
| (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.
16 | MARCH 31, 2015
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Class D Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.40 | $10.98 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.04(2) | 0.22(2) | 0.06 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.39 | 0.92 | |||||||||||
| Total from Investment Operations | (0.06) | 0.61 | 0.98 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.21) | (0.09) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.49) | (0.19) | – | |||||||||||
| Net Asset Value, End of Period | $10.85 | $11.40 | $10.98 | |||||||||||
| Total Return* | (0.38)% | 5.59% | 9.80% | |||||||||||
| Net Assets, End of Period (in thousands) | $2,653 | $2,346 | $1,439 | |||||||||||
| Average Net Assets for the Period (in thousands) | $2,165 | $1,816 | $931 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.36% | 2.44% | 11.24% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.17% | 1.17% | 1.16% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.83% | 1.92% | 1.48% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
Class I Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.41 | $11.00 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.05(2) | 0.27(2) | 0.03 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.34 | 0.97 | |||||||||||
| Total from Investment Operations | (0.05) | 0.61 | 1.00 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.23) | (0.10) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.51) | (0.20) | – | |||||||||||
| Net Asset Value, End of Period | $10.85 | $11.41 | $11.00 | |||||||||||
| Total Return* | (0.34)% | 5.61% | 10.00% | |||||||||||
| Net Assets, End of Period (in thousands) | $6,622 | $7,239 | $2,583 | |||||||||||
| Average Net Assets for the Period (in thousands) | $6,806 | $6,812 | $967 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.38% | 2.14% | 6.34% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.06% | 0.99% | 0.92% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.89% | 2.34% | 1.49% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Period from April 1, 2013 (inception date) through September 30, 2013. | |
| (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
Table of Contents
Financial Highlights (continued)
Class N Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.42 | $11.00 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.05(2) | 0.26(2) | 0.08 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.36 | 0.92 | |||||||||||
| Total from Investment Operations | (0.05) | 0.62 | 1.00 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.23) | (0.10) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.51) | (0.20) | – | |||||||||||
| Net Asset Value, End of Period | $10.86 | $11.42 | $11.00 | |||||||||||
| Total Return* | (0.33)% | 5.68% | 10.00% | |||||||||||
| Net Assets, End of Period (in thousands) | $1,517 | $1,375 | $844 | |||||||||||
| Average Net Assets for the Period (in thousands) | $1,421 | $1,119 | $595 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.35% | 2.16% | 11.22% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.00% | 0.99% | 1.02% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.97% | 2.23% | 1.82% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
Class S Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.44 | $10.97 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.03(2) | 0.19(2) | 0.10 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.38 | 0.87 | |||||||||||
| Total from Investment Operations | (0.07) | 0.57 | 0.97 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.21) | –(3) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.49) | (0.10) | – | |||||||||||
| Net Asset Value, End of Period | $10.88 | $11.44 | $10.97 | |||||||||||
| Total Return* | (0.53)% | 5.27% | 9.70% | |||||||||||
| Net Assets, End of Period (in thousands) | $232 | $213 | $473 | |||||||||||
| Average Net Assets for the Period (in thousands) | $227 | $240 | $467 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.83% | 2.49% | 13.17% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.48% | 1.34% | 1.56% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.48% | 1.66% | 1.65% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Period from April 1, 2013 (inception date) through September 30, 2013. | |
| (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.
18 | MARCH 31, 2015
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Class T Shares
| For a share outstanding during the period ended March 31, 2015 (unaudited) and each year or | Perkins International Value Fund | |||||||||||||
| period ended September 30 | 2015 | 2014 | 2013(1) | |||||||||||
| Net Asset Value, Beginning of Period | $11.41 | $10.99 | $10.00 | |||||||||||
| Income/(Loss) from Investment Operations: | ||||||||||||||
| Net investment income/(loss) | 0.04(2) | 0.22(2) | 0.07 | |||||||||||
| Net gain/(loss) on investments (both realized and unrealized) | (0.10) | 0.37 | 0.92 | |||||||||||
| Total from Investment Operations | (0.06) | 0.59 | 0.99 | |||||||||||
| Less Distributions: | ||||||||||||||
| Dividends (from net investment income) | (0.22) | (0.07) | – | |||||||||||
| Distributions (from capital gains) | (0.28) | (0.10) | – | |||||||||||
| Total Distributions | (0.50) | (0.17) | – | |||||||||||
| Net Asset Value, End of Period | $10.85 | $11.41 | $10.99 | |||||||||||
| Total Return* | (0.46)% | 5.42% | 9.90% | |||||||||||
| Net Assets, End of Period (in thousands) | $882 | $733 | $972 | |||||||||||
| Average Net Assets for the Period (in thousands) | $805 | $702 | $762 | |||||||||||
| Ratio of Gross Expenses (Absent the Waiver of Certain Fees and Expense Offsets) to Average Net Assets** | 2.63% | 2.29% | 11.54% | |||||||||||
| Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets** | 1.23% | 1.19% | 1.27% | |||||||||||
| Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.74% | 1.89% | 1.48% | |||||||||||
| Portfolio Turnover Rate | 5% | 37% | 7% | |||||||||||
| * | Total return not annualized for periods of less than one full year. | |
| ** | Annualized for periods of less than one full year. | |
| (1) | Period from April 1, 2013 (inception date) through September 30, 2013. | |
| (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
Notes to Financial Statements (unaudited)
| 1. | Organization and Significant Accounting Policies |
Perkins International 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.
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, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
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 N Shares also are available to Janus proprietary products.
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. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be valued on an amortized cost basis. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in
20 | MARCH 31, 2015
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good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2015 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net
Janus Investment Fund | 21
Table of Contents
Notes to Financial Statements (unaudited) (continued)
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 unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually.
The Fund may 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.
| 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 could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets,
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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”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. As a result, financial markets in the EU have been subject to increased 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.
Emerging Market Investing
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is 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,
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Notes to Financial Statements (unaudited) (continued)
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.
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 | $ | 1,200,000 | $ | – | $ | (1,200,000) | $ | – | ||||||||||
| (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
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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 (%) | ||||||||
| Perkins International Value Fund | All Asset Levels | 0.80 | ||||||||
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 (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 February 1, 2016.
| Expense | ||||||
| Fund | Limit (%) | |||||
| Perkins International Value Fund | 0.98 | |||||
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. If applicable, this amount is disclosed as “Recoupment expense” on the Statement of Operations. During the period ended March 31, 2015, Janus Capital reimbursed the Fund $77,588 of fees and expenses that are eligible for recoupment. As of March 31, 2015, the aggregate amount of recoupment that may potentially be made to Janus Capital is $429,040. The recoupment of such reimbursements expires April 1, 2016.
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
Janus Investment Fund | 25
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Notes to Financial Statements (unaudited) (continued)
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 $307,757 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2015. 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 March 31, 2015 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 March 31, 2015 are included in “Non-interested Trustees’ fees and
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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 $135,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2015.
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 March 31, 2015.
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 March 31, 2015.
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 March 31, 2015.
As of March 31, 2015, 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 International Value Fund - Class A Shares | 81 | % | 2 | % | ||||||
| Perkins International Value Fund - Class C Shares | 84 | 2 | ||||||||
| Perkins International Value Fund - Class D Shares | – | – | ||||||||
| Perkins International Value Fund - Class I Shares | – | – | ||||||||
| Perkins International Value Fund - Class N Shares | 33 | 4 | ||||||||
| Perkins International Value Fund - Class S Shares | 91 | 2 | ||||||||
| Perkins International Value Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets.
| 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 March 31, 2015 are noted below.
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Notes to Financial Statements (unaudited) (continued)
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 passive foreign investment companies.
| Net Tax | ||||||||||||||||||
| Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||||||
| Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||||
| Perkins International Value Fund | $ | 11,471,323 | $ | 923,333 | $ | (712,113) | $ | 211,220 | ||||||||||
| 5. | Capital Share Transactions |
| Perkins International | ||||||||||
| For the period ended March 31 (unaudited) | Value Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class A Shares: | ||||||||||
| Shares sold | 626 | – | ||||||||
| Reinvested dividends and distributions | 945 | 274 | ||||||||
| Shares repurchased | (149) | (26,445) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 1,422 | (26,171) | ||||||||
| Shares Outstanding, Beginning of Period | 20,066 | 46,237 | ||||||||
| Shares Outstanding, End of Period | 21,488 | 20,066 | ||||||||
| Transactions in Fund Shares – Class C Shares: | ||||||||||
| Shares sold | 143 | 3,604 | ||||||||
| Reinvested dividends and distributions | 878 | 199 | ||||||||
| Shares repurchased | (144) | (24,441) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 877 | (20,638) | ||||||||
| Shares Outstanding, Beginning of Period | 22,219 | 42,857 | ||||||||
| Shares Outstanding, End of Period | 23,096 | 22,219 | ||||||||
| Transactions in Fund Shares – Class D Shares: | ||||||||||
| Shares sold | 90,829 | 154,859 | ||||||||
| Reinvested dividends and distributions | 8,479 | 1,841 | ||||||||
| Shares repurchased | (60,484) | (81,967) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 38,824 | 74,733 | ||||||||
| Shares Outstanding, Beginning of Period | 205,710 | 130,977 | ||||||||
| Shares Outstanding, End of Period | 244,534 | 205,710 | ||||||||
| Transactions in Fund Shares – Class I Shares: | ||||||||||
| Shares sold | 6,993 | 457,205 | ||||||||
| Reinvested dividends and distributions | 30,436 | 9,482 | ||||||||
| Shares repurchased | (61,434) | (67,237) | ||||||||
| Net Increase/(Decrease) in Fund Shares | (24,005) | 399,450 | ||||||||
| Shares Outstanding, Beginning of Period | 634,371 | 234,921 | ||||||||
| Shares Outstanding, End of Period | 610,366 | 634,371 | �� | |||||||
| Transactions in Fund Shares – Class N Shares: | ||||||||||
| Shares sold | 20,116 | 43,945 | ||||||||
| Reinvested dividends and distributions | 6,050 | 1,390 | ||||||||
| Shares repurchased | (6,828) | (1,706) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 19,338 | 43,629 | ||||||||
| Shares Outstanding, Beginning of Period | 120,383 | 76,754 | ||||||||
| Shares Outstanding, End of Period | 139,721 | 120,383 | ||||||||
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| Perkins International | ||||||||||
| For the period ended March 31 (unaudited) | Value Fund | |||||||||
| and the year ended September 30 | 2015 | 2014 | ||||||||
| Transactions in Fund Shares – Class S Shares: | ||||||||||
| Shares sold | 1,840 | – | ||||||||
| Reinvested dividends and distributions | 939 | 175 | ||||||||
| Shares repurchased | – | (24,749) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 2,779 | (24,574) | ||||||||
| Shares Outstanding, Beginning of Period | 18,588 | 43,162 | ||||||||
| Shares Outstanding, End of Period | 21,367 | 18,588 | ||||||||
| Transactions in Fund Shares – Class T Shares: | ||||||||||
| Shares sold | 18,527 | 18,484 | ||||||||
| Reinvested dividends and distributions | 3,116 | 823 | ||||||||
| Shares repurchased | (4,615) | (43,499) | ||||||||
| Net Increase/(Decrease) in Fund Shares | 17,028 | (24,192) | ||||||||
| Shares Outstanding, Beginning of Period | 64,249 | 88,441 | ||||||||
| Shares Outstanding, End of Period | 81,277 | 64,249 | ||||||||
| 6. | Purchases and Sales of Investment Securities |
For the period ended March 31, 2015, 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 International Value Fund | $ | 935,288 | $ | 488,533 | $ | – | $ | – | ||||||
| 7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to March 31, 2015 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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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)
Management Commentary
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2015. 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.
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.
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).
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
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Useful Information About Your Fund Report (unaudited) (continued)
notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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(s) and/or
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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).
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-0515-87465 | 125-24-93058 05-15 |
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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. |
| 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. |
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| 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: May 29, 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: May 29, 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: May 29, 2015